Jan 23, 2012

The Obama Administration has announced plans to require medical device and pharmaceutical companies to report payments they make to US doctor and other health care providers for research, consulting and travel.

According to a recent New York Times report (tiered subscription required), the new rules are designed to tackle influence these payments have on doctors’ treatment decisions; payment from a medical device manufacturer to a doctor has the potential to make it likelier that that doctor will prescribe that manufacturer’s device instead of cheaper alternatives, evidence suggests.

The new rules will require companies with at least one product covered by Medicare or Medicaid to disclose all payments to doctors who are not their own employees. Payment data they provide will be published online.

Types of payments falling under these requirements include compensation for development, assessment or promotion of new products as well as royalty payments to inventors, payments to teaching hospitals for research and even “$25 worth of bagels and coffee to a doctor’s office for a meeting.” Companies’ chief executives, chief financial officers and/or chief compliance officers must attest to each report’s accuracy.

Administration officials believe more than 1,100 firms will be impacted by the new rules; failure to comply will incur penalties of up to $10,000 for each payment a firm fails to disclose. Knowingly failing to report payments will incur penalties of up to $100,000 per violation, capped at $1 million per year.

The Centers for Medicare & Medicaid Services (CMS) is accepting public comment on the rules through February 17th, after which final rules will be implemented. 


  • Stewart Eisenhart