Comments to the Centers for Medicare and Medicaid Services on Transparency Reports and Reporting of Physician Ownership or Investment Interests

Marilyn Tavenner

Acting Administrator and Chief Operating Officer

Centers for Medicare & Medicaid Services

Department of Health and Humans Services

Room 445-G

Hubert H. Humphrey Building

200 Independence Ave, SW

Washington, DC 20201

Comments of the Patient, Consumer, and Public Health Coalition on Medicare, Medicaid, Children’s Health Insurance Programs; Transparency Reports and Reporting of Physician Ownership or Investment Interests

File code CMS-5060-P


Dear Ms. Tavenner,

As members of the Patient, Consumer, and Public Health Coalition, we are writing to comment on the Centers for Medicare & Medicaid Services’ (CMS) proposed rule on transparency reports and the reporting of physician ownership or investments.  We strongly support the goals of the Physician Payments Sunshine Act, codified as Section 1128G of the Social Security Act.

Patients and consumers need and deserve information about the payments that drug and device companies make to physicians, because those payments can influence the medical care and advice that the physician provides.  It is important that the Department of Health and Human Services (HHS) promulgate regulations as quickly as possible, and HHS should require manufacturers to retroactively report all payments made in 2012.  Improved disclosure (transparency) and public access to the information is needed to expose inappropriate relationships and to discourage conflicts of interest.  Unfortunately, patients whose physicians have financial ties to companies are left wondering if those financial ties have biased the medical care that they are receiving, and there is no way to know the answer to that question.  For that reason, we hope that the disclosure will have a chilling effect on those financial ties.

Disclose Third Party Payments

We support CMS’s interpretation that a manufacturer must report payments that are made to a recipient by a third party, if the manufacturer knows the identity of the recipient.  This will help prevent companies from funneling payments through third parties in an attempt to avoid reporting requirements.

However, we urge CMS to be more inclusive. All payments need to be disclosed.  When payments are made to a third party intermediary, whether it is a medical school, hospital, or other entity, it is essential that the name of the physicians ultimately receiving those payments be listed.

For research payments made to a teaching hospital or other third party for which a physician is the principal investigator who will in turn be paid by the third party, CMS proposes that the report include the physician recipient’s name under an “indirect payment” category. We oppose that, because it would not require that the company report the amount of the research payment that will be given to the physician as payment.  It also would allow companies to avoid listing other physicians who will be paid indirectly through those research contracts.

All third party payments should be listed, even if the manufacturers do not receive that information until a later date.  In addition, CMS should not exempt reporting of medical textbooks and other educational materials, even if they are not provided directly to patients.

Precise Definitions

CMS should provide clear definitions for each “nature of payment” category listed in the statute. Draft regulations propose the use of dictionary definitions to determine under which category they should report the nature of payment, and have also proposed an “other” category.  But, dictionaries often provide several definitions for a term, and common usage might interpret the term in other ways as well.  If the definitions are not precise and consistent (e.g. “consultant”), it will be difficult to make sense of the information.

CMS proposes to require that each payment that the manufacturers report be assigned only one “nature of payment” category and that the categories be mutually exclusive. HHS also proposes that for lump sum payments or other transfers of value, that the manufacturer be required to report each disparate aspect of a payment as a separate line item that includes form of payment as well as the nature of the payment. This is very important, because it will help prevent “check all that apply” designations that would make the data less useful to patients.

We agree with “nature of payment” comments being submitted concurrently by Community Catalyst concerning detailed definitions.  Community Catalyst has written clear and consistent definitions for the following “nature of payment” terms: gifts, food and beverage, travel and lodging, education, consulting fees, research, and direct compensation for serving on the faculty or as a speaker for a medical education program.  These precisely defined categories will improve the clarity of industry’s reporting.

Inclusive Definition of Applicable Manufacturers

Because of the rapidly growing global market in the manufacturing of drugs and medical devices, we strongly support CMS’s proposed definition of “applicable manufacturer” that is broadly inclusive of manufacturers regardless of where the products are made, or how they are purchased by Medicare or Medicaid.

Subsidiaries Defined

We support CMS’s broad definition of subsidiaries as an entity “under common ownership.”   This proposal will help to ensure that corporations with complicated ownership structures still disclose payments they make to doctors.

Accessible Public Database with Accurate Information

In the final regulation, CMS should provide more details about how it will present payment information on the public web site. Since the intent of the law is to make information on payments easy to read and understand, we need more information about the format and information in order to determine if this will be done appropriately.  In 2012, HHS should hold a public forum to discuss web site design and formatting details to receive feedback on how easy proposed formats are to navigate and understand.

We support the CMS proposal to require that each report, including any subsequent correction to a filed report, must include a certification by the Chief Executive Officer, Chief Financial Officer, or Chief Compliance Officer of the applicable manufacturer or applicable group purchasing organization, that the information is true, correct, and complete to the best of his or her knowledge and belief.  We also support HHS’ decision to refuse to mediate data disputes between manufacturers and recipients

Clarity Needed on Medical Devices

The section on medical devices (page 78765) states that “We propose…limiting covered devices (including medical supplies) to those that require premarket approval by or notification to the FDA.”   That wording is unclear.  We recommend clarifying that 510(k) cleared medical devices are included as covered devices.  We suggest the following language:  “We propose…limiting covered devices (including medical supplies) to those that require premarket approval (PMA) or a Premarket Notification (510(k)) by the FDA.”

Delayed Disclosure

We are also concerned about the “Delayed Publication for Payments Made Pursuant to Product Research or Development Agreements and Clinical Investigations” section (page 78756).  This section appears to allow a delay in public disclosure of the payment of more than 4 years for “‘potential products” and other research that is not concretely linked to a pending product approval. The broad definition used for medical technology would allow delayed public disclosure for a “payment . . . for services . . . in connection with research on a potential drugs, devices, biologicals, or medical supplies, as well as new application of an existing drugs, devices, biological, or medical supplies.” This seems to apply to off-label uses, since these could be described as “new applications,’ especially in situations when a company is applying for FDA approval for a new indication that is currently off label.

Payments related to off-label use of existing drugs or medical technologies should be disclosed immediately, not eligible for delayed disclosures. Once products are on the market payments should be disclosed. Prompt disclosure is essential to advocates, patients, and public health groups, if they are to effectively use the web site to screen for conflicts of interest.  Consumers have been harmed by off-label prescribing promoted by financial relationships as has been documented by investigations and prosecutions of drug manufacturers.[1],[2]


We agree with the Institute of Medicine and the Medicare Payment Advisory Commission (MedPAC) that “enhanced disclosure and transparency [is needed] to discourage the inappropriate use of financial incentives and lessen the risk of such incentives interfering with medical judgment and patient care.”[3]  This proposed rule would require manufacturers of medical products to disclose payments to physicians or teaching hospitals, and would require manufacturers and group purchasing organization (GPOs) to report physician ownership or investment interests; and most importantly, it would make this information available on a public web site.  While we strongly support the proposed rule overall, there are several major loopholes that need to be fixed, as described above.

Breast Cancer Action

Cancer Prevention and Treatment Fund

Center for Medical Consumers

Community Access National Network

National Research Center for Women & Families

National Women’s Health Network

Public Citizen

Dr. Rita Redberg, University of California San Francisco Medical Center & WomenHeart SAB

Reproductive Health Technologies Project

THE TMJ Association


For more information, contact Paul Brown at (22) 223-4000 or


[1] Sammy Almashat, M.D., M.P.H, et. al., Rapidly Increasing Criminal and Civil Monetary Penalties Against the Pharmaceutical Industry: 1991 to 2010, Public Citizen’s Health Research Group, December 16, 2010, available at

[2] David Evans, Pfizer Broke the Law by Promoting Drugs for Unapproved Uses,, available at

[3] Federal Register (December 19, 2011).   Proposed Rule: Transparency Reports and Reporting of Physician Ownership or Investment Interests.

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