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Healthcare Transparency Reporting - driving informed choice or a road to know(where)?

By Colin Loveday, Alexandra Rose & Richard Abraham
Posted: 10th December 2014 09:13
Even some of the harshest critics of the life sciences industry recognise that there is a legitimate role to be played by healthcare professionals engaging with industry and, that such engagement and communication of ideas and experience can lead to better patient outcomes.  However, there is an increasing global trend requiring life science companies to publically disclose payments or benefits provided to healthcare professionals.
Everyone accepts that patients should be able to make informed decisions about their healthcare and that an element of informed decision making should include some clarity around the relationship a healthcare professional has with industry.  But do the reporting systems currently in play achieve the desired purpose of enhancing public confidence and trust, and what is the real cost?  More importantly, do we have better patient outcomes or do we now just have a further layer of regulation that increases the cost of healthcare?
In the United States, it has been estimated that the disclosure and reporting of payments by industry to healthcare professionals required by the Physician Payments Sunshine Act will cost a staggering $US269 million in the first year and $US180 million in each subsequent year (Affordable Care Act Section 6002 Final Rule).  Numerous other jurisdictions including Japan and multiple European countries either have, or are looking to establish, reporting and disclosure systems.
The current Australian experience demonstrates the difficulties in designing and implementing a system to enhance public confidence and trust without inflicting an undue burden on industry.  It reflects in many ways the international experience.
The legal framework that regulates pharmaceuticals in Australia is already complex, as it is in many countries.  Direct to consumer advertising of prescription medicines is prohibited and marketing of medicines directed to healthcare professionals is heavily scrutinised.  Regulation of advertising and interactions with healthcare professionals is primarily achieved via an industry code, the Medicines Australia Code of Conduct (MA Code), which has been the focus of a recent transparency debate.  The current debate around transparency forms part of a broader and ongoing debate around the appropriateness of industry self-regulation.
In 2013 Medicines Australia member companies were required to disclose certain aggregate payments to doctors and consumer organisations.  The Australian Competition and Consumer Commission (ACCC) also gave Medicines Australia the clear direction that it expected further transparency measures to be implemented within two years.  That process has been led by the Transparency Working Group, which has culminated in a set of transparency reporting provisions contained in Edition 18 of the MA Code.
The ACCC, Australia's anti-trust regulator, must authorise the MA Code.  Edition 18 of the MA Code is currently before the ACCC.  Subject to receiving authorisation, Edition 18 of the MA Code is due to commence in January 2015, with the transparency provisions taking effect from as early as October 2015.
However, in a draft determination issued in October 2014 (Draft Determination), the ACCC has requested further amendments to Edition 18 of the MA Code to include additional obligations on industry, and has indicated that it will not grant authorisation unless those changes are made.  The MA Code proposes reporting only where the member company has received informed consent from the recipient healthcare practitioner.  The ACCC wants a requirement that MA members must not make any transfers of value unless the healthcare practitioner agrees to that public reporting.
This debate is expected to be settled by the time this paper is published and indeed Medicines Australia has indicated that it will agree to a compromise position where the model contained in Edition 18 will operate from 1 October 2015 to 1 October 2016, with adoption of the ACCC position to be deferred until 1 October 2016.  Medicines Australia claims that deferral is appropriate to allow member companies and the industry, including healthcare professionals, adequate time to adapt to the new reporting requirements.  The final position will be clear following the completion of the authorisation process.
Getting the cost benefit ratio right
Will the proposed regime achieve the desired benefits of enhancing public confidence and trust?  At what cost does this all come?
There is clearly merit in investing in measures that promote public confidence in the healthcare system and foster meaningful and informed relationships between healthcare professionals and their patients.  Equally, the contribution that healthcare professionals make to the work of industry by sharing their experience and concerns is critical.  It ultimately benefits patient outcomes and ought not to be discouraged.
Against these benefits must be weighed against the known costs of transparency obligations.  As noted above, the US experience has highlighted some very large compliance costs - $US269 million in the first year and $US180 million in each subsequent year.
On the other side of the ledger, the US Department of Health and Human Services acknowledges that there is no way to quantify the benefits of disclosure.  It states that it delivers "nonmonetary benefits".  Those benefits centre on the ability of patients to make informed decisions as well as the role that disclosure arguably plays in deterring inappropriate financial relationships which are said to sometimes lead to increased healthcare costs.
So, on the one hand, there is a clear additional cost in the delivery of healthcare.  However, on the other hand the supposed benefits are much less clear.  How much information is needed to satisfy the court of public opinion that the dealings between industry and healthcare professionals are sufficiently transparent?
In setting the parameters of disclosure, the real rather than the stated reasons for transparency need to be kept in mind, as do the costs that will be incurred.  Disclosure per se will not enhance reputations or benefit patient outcomes.  A transparent system does not need to capture or disclose every payment made to a healthcare professional.  It should not demand that companies invest a disproportionate amount of money or resources to maintain reporting.  It should be enough that amounts above a set threshold are reported, that payments focus squarely on educational, advisory and consulting services and that the information remains available for a set and not indefinite period.
As more is learnt from international markets where reporting and disclosure has begun in earnest and the market starts to use (or not use) the information that is so costly to collate, decisions in Australia can be made to better sculpt an approach to transparency that strikes a fair and appropriate balance.

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