Improving Value

Disclosing Conflicts of Interest/Sunshine Laws

Sunshine laws are disclosure policies that require certain information pertaining to government or business to be made available to the public. For example, these laws can be used to require physicians to disclose financial relationships that could potentially create conflicts of interest. Examples of these relationships include:

• Accepting gifts from pharmaceutical companies, including meals and drug samples;
• Helping develop or invent drugs or medical devices;
• Investing in drug or biotechnology companies; and
• Owning testing treatment centers that provide healthcare services.¹ 

Data collected by the Centers for Medicare & Medicaid Services reveals that, each year, approximately half of U.S. physicians receive payments from drug and medical device companies. Members of clinical practice guideline committees, formulary committees, scientific advisory committees and prestigious hospital boards have received hundreds of thousands of dollars from these companies, as well.

While not all of these payments are objectionable, studies have documented an association between industry payments and greater prescribing of opioids, cancer therapies and other drugs.² Some evidence suggests that some of this prescribing may be inappropriate, raising costs and lowering quality of care.³ Industry payments may even bias the development of clinical practice guidelines within certain specialties.⁴ 

Limited evidence suggests that disclosure policies curtail referrals and treatment decisions that represent a conflict. A University of Michigan study found that doctors in Massachusetts prescribed significantly fewer name-brand drugs after a 2009 sunshine law was passed.⁵ Some doctors shifted to prescribing generic drugs (the producers of which generally do not pay physicians), while others wrote fewer prescriptions overall. More research is needed to determine whether sunshine laws might result in under-prescribing.

One criticism of disclosure policies is that they don't go far enough. The majority of laws at the federal and state levels require drug companies, device manufacturers and/or physicians to disclose gifts and payments, but they don't prohibit monetary transactions that could create a conflict of interest. As of 2018, Vermont has one of the strictest laws, explicitly banning certain gifts from drug and medical device companies to physicians.⁶ 

While sometimes overlooked, strong conflict-of-interest laws are a critical part of the full spectrum of health system transparency efforts.

More information on health care transparency efforts can be found here. 

 

Notes

1. There is a large volume of research indicating that self-referral has a major effect on increasing medical costs. See: Levin, David C., and Vijay M. Rao, "Turf Wars in Radiology: Updated Evidence on the Relationship Between Self-Referral and the Overutilization of Imaging," Journal of the American College of Radiology, Vol. 5, No. 7 (July 2008). 

2. Kanter, Genevieve P., and George Loewenstein, "Evaluating Open Payments," JAMA, Vol. 322, No. 5 (July 1, 2019). See also: Yeh, James S., et al., "Association of Industry Payments to Physicians with the Prescribing of Brand-Name Statins in Massachusetts," JAMA Internal Medicine, Vol. 176, No. 6 (June 2016), and Wood, Susan F., et al., "Influence of Pharmaceutical Marketing on Medicare Prescriptions in the District of Columbia," PLoS ONE, Vol. 12, No. 10 (October 24, 2017). 

3. Brax, Hneine, et al., "Association Between Physicians' Interaction with Pharmaceutical Companies and their Clinical Practices: A Systematic Review and Meta-Analysis," PLoS ONE, Vol. 12, No. 4 (April 13, 2017). 

4. Checketts, Jake X., Matthew Thomas Sims and Matt Vassar, "Evaluating Industry Payments Among Dermatology Clinical Practice Guidelines Authors," JAMA Dermatology, Vol. 153, No. 12 (December 2017). 

5. Guo, Tong, et al., "'Let the Sun Shine In': The Impact of Industry Payment Disclosure on Physician Prescription Behavior," (February 25, 2019). 

6. "Guide to Vermont's Prescribed Products Gift Ban and Disclosure Law for Disclosures of 2017 Data," Vermont Office of the Attorney General (December 21, 2017). 

More on this Topic

• Policy & Medicine: Overview of State Regulations with Respect to Physician Reporting of Conflicts-of-Interest (May 6, 2018). 
• Health Affairs Blog: What Can Patients Do In the Face of Physician Conflict of Interest? (April 10, 2015).