LawFlash

Senate Bill Would Require Disclosure of Payments to Patient Advocacy Organizations Under Sunshine Act

June 29, 2018

Recently introduced legislation would expand the US Physician Payments Sunshine Act to include reporting of financial ties between pharmaceutical and medical device manufacturers and patient advocacy organizations. Any such increased reporting requirements would impose additional burdens on industry and could expose patient advocacy organizations to concerns about industry-focused bias in their program activities. 

Amid expanding scrutiny of financial relationships between patient advocacy organizations and the pharmaceutical and medical device industries, Senator Claire McCaskill (D-Mo.), ranking member of the US Senate Committee on Homeland Security and Governmental Affairs, recently introduced the Patient Advocacy Transparency Act (S.3000). Senator McCaskill’s bill is in direct response to a Senate report that emphasized the lack of transparency around industry donations to patient advocacy organizations.[1]

Although there has been significant focus recently on charity patient assistance programs, Senator McCaskill’s bill goes well beyond such organizations to include more “traditional” patient advocacy organizations. Historically, industry support has been an important funding source for patient advocacy organizations, and increased attention and focus on these relationships have ignited calls for mandatory transparency obligations to shed light on potential institutional conflicts of interest.

Amendments to the Sunshine Act

Under the Sunshine Act, certain pharmaceutical and medical device manufacturers are required annually to disclose payments and other transfers of value provided to “covered recipients,” which currently are defined as US-licensed physicians and US teaching hospitals. At present, patient advocacy organizations are not required publicly to disclose donor information, and applicable manufacturers generally are not required publicly to report payments or other transfers of value to patient advocacy organizations.

The Patient Advocacy Transparency Act would amend the Sunshine Act by broadening the definition of covered recipients to include, among other entities, the following:

  • Patient advocacy organizations, consumer advocacy organizations, and voluntary health agencies, including disease-specific advocacy organizations, or a coalition of such organizations
  • Co-pay assistance organizations or other organizations providing financial assistance to patients
  • Patient education organizations

Additionally, the bill proposes to broaden the Sunshine Act’s “Nature of Payment” categories (which define the types of payments or other transfers of value to covered recipients that must be reported) by changing the definition of “grants” to include “an education grant or capacity building grant” and by expanding the Nature of Payment categories to include fundraising event sponsorships, expenses related to meetings or conferences, and funding of marketing activities, public relations activities, television programs or website placements, and social media support.

Potential Compliance Implications

Although patient advocacy organizations typically have been viewed as passionate representatives of patient interests and wellbeing, this bill comes at a time of increased surveillance of pharmaceutical and medical device industry influence. Many patient advocacy organizations, including disease-specific organizations, depend on various types of industry funding and other support to supplement their operations and advocacy budgets in carrying out their patient-focused missions. Mandatory public reporting of extensive engagement with industry, however, has the potential to undermine the credibility and independence of such organizations. Whether or not the Patient Advocacy Transparency Act moves successfully through Congress, patient advocacy organizations should begin to think critically about implementing compliance controls and conflicts processes to counter concerns related to industry-focused bias.

Pharmaceutical and medical device manufacturers that aren’t already voluntarily publicly disclosing their payments or other transfers of value to patient advocacy organizations will likely need to modify their systems and processes for data capture, aggregation, and reporting to comply with the proposed Sunshine Act amendments. Manufacturers may also seek to critically examine the nature and extent of support for such organizations.

If enacted, this bill would require manufacturers to begin reporting these payments to the Centers for Medicare and Medicaid Services as early as March 2023, with payment tracking beginning in 2022.

S.3000 has been referred to the US Senate Committee on Finance, where it awaits further action. There is no scheduled date for voting on the proposed legislation at this time. Morgan Lewis will continue tracking the status of this bill.

Contacts

If you have any questions or would like more information on the issues discussed in this LawFlash or on any other federal, state, or local transparency-related matter, please contact either of the following Morgan Lewis lawyers:

Washington, DC
Scott Memmott
Jonelle Saunders



[1] Exposing the Financial Ties Between Opioid Manufacturers and Third Party Advocacy Groups, United States Congress, Senate Committee on Homeland Security and Governmental Affairs.