Proposed US Patient Advocacy Bill Will Toughen Financial Reporting Obligations For Pharma


Sen. Claire McCaskill, D-Mo., announces her findings from an investigation into opioid prescriptions, Wednesday, Sept. 6, 2017, on Capitol Hill in Washington. (AP Photo/Jacquelyn Martin)

In response to concerns that pharmaceutical industry payments could be unduly influencing medical research and practice,  US Senator Claire McCaskill of Missouri on June 6 proposed the “Patient Advocacy Transparency Act of 2018”.  If adopted, this piece of legislation will require pharmaceutical manufacturers to report payments made to nonprofit organizations and patient advocacy groups, professional societies, clinical trial organizations, and continuing medical education providers.

This new proposed legislation comes as a follow-up to the congressional investigations of several pharmaceutical manufacturers and distributors of opioid drugs that have heavily contributed to nonprofit organizations and patient advocacy groups.  Many pharmaceutical manufacturers are also currently under investigation by the Department of Justice for providing financial funding to different nonprofit organizations and patient advocacy groups that were used to promote their product.

The proposed bill will enhance the 2010 Sunshine Act, which was designed to increase transparency of financial relationships between pharmaceutical manufacturers and health care providers, and requires pharmaceutical manufacturers to disclose data on payment and transfers of value made to physicians and teaching hospitals–such as travel, research gifts, speaking fees and meals.

Patient advocacy groups, professional societies, clinical trial organizations, and continuing medical education providers are not covered by the Sunshine Act and, due to their classification under the U.S. tax code, these groups have no obligation to disclose their donors and financial support. As a result, each group maintains different levels of transparency regarding its financial connections to the pharmaceutical industry and has no obligation to publicly disclose their funding sources. These organizations have the ability to selectively disclose donors, donations, and other support, but they can also choose not to do so.

The New England Journal of Medicine analyzed the Tax Forms 990 (which discloses an organization’s activities, governance and detailed financial information), annual reports, and websites of 104 U.S.-based patient-advocacy organizations. Overall, 86 of the 104 patient-advocacy organizations (83%) reported receiving financial support from industry but only 59 (57%) of the organizations published the amount of donations received.  Of the 59 organizations that published the amount of donations, 23 (39%) reported receiving at least $1 million annually from industry donations; 13 (22%) reported receiving less than $1 million; and 23 (39%) reported information that did not allow a determination of whether industry donations were less than $1 million or at least $1 million.[1]

In proposing the legislation, Senator McCaskill said, “We passed a law ensuring the public had information on payments to doctors by pharmaceutical companies, and I can’t imagine why the same shouldn’t be done in this space.”

If approved, the bill will require the pharmaceutical companies to add additional layer of reporting disclosure, including:

  • Payments or transfer of value to patient advocacy organizations, consumer advocacy organizations, disease-specific advocacy organizations, patient education organizations and other similar associations and organizations
  • Payments related to sponsorships of fundraising events, funding of marketing placements on television programs or internet websites
  • Payments related to education grants and capacity building grants

In order to comply with this bill, pharmaceutical companies will have to enhance their transparency reporting under the Sunshine Act to develop and implement additional policy and procedures to track, review and report the payments or transfers of value as required by the bill.

Martina Rozumbervoka is a Director for Compliance, Forensics and Intelligence at Control Risks, the global specialist risk consulting firm. She is based in Boston.



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