Support for the Physician Payments Sunshine Act, S.2029
In addition, in a hearing of the Senate Special Committee on Aging to be held this
morning, Zimmer Holdings Inc. will voice its “strong support” for the Physician Payments
Sunshine Act (S.2029). The legislation would require pharmaceutical drug, medical device and
biotechnology companies to disclose payments to physicians.
In recent years, the Department of Justice has settled several lawsuits with companies for
improperly compensating medical doctors. Last September, Senator Grassley and Senator Herb
Kohl, Chairman of the Special Committee on Aging, introduced S.2029 to throw a spotlight on
the ways companies compensate doctors. These payments have been found in some cases to
alter medical judgment in ways that benefit companies at the expense of patient care.
Here is Senator Grassley’s comment:
“These device makers deserve a lot of credit for getting ahead on this important issue and
endorsing the objectives of our legislation. It’s good to see corporate support for bringing
transparency to practices in the pharmaceutical drug, device and biotechnology industry.”
The text of the statements from Medtronic, Inc and AdvaMed is below, along with a
summary of S.2029.
Medtronic Statement Regarding Senate Hearings on Industry and Physician Relationships
MINNEAPOLIS - In advance of hearings on Wednesday, February 27, in the Senate
Special Committee on Aging, Medtronic, Inc. (NYSE:MDT), today issued the following
On Wednesday, February 27, the Senate Special Committee on Aging will explore
relationships between industry and physicians and consider the proposed "Sunshine Act"
(S.2029) introduced earlier this year by Senators Chuck Grassley (R-IA) and Herb Kohl (D-WI).
The Sunshine Act would require industry to publicly disclose via the Internet certain
payments made to physicians in return for their time and expertise with product development,
research and training. For decades, the innovative power and clinical expertise of physicians
have produced technologies that industry has brought to patients around the world, and
Medtronic believes these vital collaborations must be protected.
The Sunshine Act is aimed at curbing inappropriate relationships or conflicts of interests
between industry and physicians, an effort that Medtronic - one of the world's leading medical
technology companies - supports.
Medtronic believes, however, the bill can and should go even further by requiring the
same level of disclosure by all companies in the industry, regardless of size and including those
companies owned in whole or in part by physicians. Companies with yearly revenues less than
$100 million and physician-owned companies are currently excluded from the bill, and they
account for more than 75 percent of the companies in the industry.
Medtronic believes a level playing field for all companies is appropriate and that these
entities should operate under the same disclosure requirements, recognizing that transparency
can help alleviate any real or perceived conflicts of interest with these types of companies as
"We have been pleased to work with the members of the Senate Special Committee on
Aging, the Senate Finance Committee, and members of the House of Representatives and Senate
on this legislation," said Bill Hawkins, president and CEO of Medtronic. "We will continue to
work with the sponsors of this legislation to incorporate all companies in the industry into the
bill and bring greater transparency to these important relationships."
Medtronic, Inc. (www.medtronic.com), headquartered in Minneapolis, is the global
leader in medical technology - alleviating pain, restoring health and extending life for millions of
people around the world.
Any forward-looking statements are subject to risks and uncertainties such as those
described in Medtronic's Annual Report on Form 10-K for the year ended April 27, 2007. Actual
results may differ materially from anticipated results.
Medtronic, Inc. Rob Clark, 763-505-2635 Government Affairs or Martha Goldberg
Aronson, 763-505-2694 Investor Relations
AdvaMed Suggests Changing Disclosure Bill
Saying it supports appropriate disclosure of medical device industry financial
relationships with doctors, AdvaMed released recommendations for seven changes to the
Physician Payment Sunshine Act (S. 2029). The release came the day before the association was
to testify at a Senate Special Committee on Aging 2/27 hearing on the issue.
“Continued innovation in medical technology relies on direct interaction with physicians
who have first-hand clinical experience with advanced medical treatments in their practice of
patient care,” said AdvaMed CEO Stephen Ubl. “Our industry works closely with physicians to
invent new medical devices, improve existing technologies, and provide training to physicians to
ensure they can use devices safely and effectively. The importance of the relationship between
physicians and medical technology innovators cannot be understated. It is a critical component
of the engine that drives the next wave of medical advancements. In an effort to underscore the
importance of physician/medical innovator collaboration, and to ensure openness with these
relationships, AdvaMed would support S. 2029 provided that key changes are made to the bill.”
Ubl said the bill could be significantly improved by: expressly preempting state
disclosure laws to ensure consistency in application and patient understanding; applying the
requirements to all companies that make a significant amount of aggregate payments to
physicians, while excluding those that do not; requiring compliance by physician-owned
manufacturers, distributors, and group purchasing organizations; displaying disclosure
information in a meaningful and easily-understood format that provides the appropriate context
for patient education; protecting manufacturers’ proprietary information for technologies under
development by ensuring that disclosure of consulting arrangements for clinical trials and
product development agreements are required only after a product is cleared or approved by
FDA; exempting reporting of medical textbooks, anatomical models, or items having a fair
market value of less than $100 that benefit patients, relate to physicians’ work, or serve an
educational function; and exempting certain items, such as demonstration units and models for
physician and patient evaluation.
Meanwhile, Medtronic, which also is to testify at the hearing, said the legislation should
go further by requiring the same level of disclosure by all companies in the industry, regardless
of size and including those companies owned in whole or in part by physicians. Medtronic said
the bill as drafted exempts companies with yearly revenues less than $100 million and
physician-owned companies, but they account for more than 75% of the industry’s companies.
“Medtronic believes a level playing field for all companies is appropriate and that these entities
should operate under the same disclosure requirements, recognizing that transparency can help
alleviate any real or perceived conflicts of interest with these types of companies as well,” the
Medtronic statement said.
Summary of S. 2029, as introduced.
Physician Payments Sunshine Act of 2007
(a) REPORTING: requires drug and device companies to report, on a fiscal-year quarterly
basis, any payment or transfer of value to any physician.
a. Each electronic disclosure must include:
i. Name of physician or entity;
ii. Physical address;
iii. The facility with which the physician is affiliated, if any;
iv. The value of the payment or other transfer of value;
v. The date on which the payment or transfer was made;
vi. description of the nature of the payment, including compensation, food,
entertainment, or gifts, trips or travel, a product or other item at less than
market value, educational programs, product rebates, consulting fees or
honoraria, or any other benefit as defined by the secretary; and
vii. The medical issue or condition addressed, if any.
(b) SUMMARY: each manufacturer must submit an annual summary report.
(c) PENALTIES: $10,000 to $100,000 for failure to report.
(d) WEBSITE: the Secretary shall establish procedures to ensure that the
information is made accessible to the public through a website that
is searchable, downloadable, and understandable.
(e) REPORT TO CONGRESS: no later than April 1 of each year beginning in 2009, the
Secretary shall report to congress a summary of the data
reported and enforcement actions taken
Posted: February 2008