[StarTribune, January 16, 2012] To head off medical conflicts of interest, the Obama administration is poised to require drug companies and manufacturers of medical devices to disclose the payments they make to doctors for research, consulting, speaking, travel and entertainment. (See MMA President Lyle Swenson’s letter to the editor addressing a similar article in the St. Paul Pioneer Press).

Minnesota has required pharmaceutical companies -- but not device makers -- to report payments they make to local physicians since 1993. The reports are filed annually with the state Board of Pharmacy.

Consumer advocates and members of Congress say patients may benefit from the new standards, being issued by the government under the new health care law. Federal officials said the disclosures would increase the likelihood that doctors would make decisions in the best interests of patients, without regard to the doctors' financial interests.

Under the new federal standards, if a company has even just one product covered by Medicare or Medicaid, it will have to disclose all its payments to doctors other than its own employees. The federal government will post the payment data on a website where it will be available to the public. Manufacturers of prescription drugs and devices will have to report if they pay a doctor to help develop, assess and promote new products -- or if, for example, a pharmaceutical sales agent delivers $25 worth of bagels and coffee to a doctor's office for a meeting. Royalty payments to doctors, for inventions or discoveries, and payments to teaching hospitals for research or other activities will also have to be reported.

The Obama administration estimates that more than 1,100 drug, device and medical supply companies will have to file reports, generating "large amounts of new data." Federal officials said they would inspect and audit drug company records to make sure the reports were accurate and complete. Companies will be subject to a penalty up to $10,000 for each payment they fail to report. A company that knowingly fails to report payments will be subject to a penalty up to $100,000 for each violation, up to a total of $1 million a year.

The new requirements, or something very similar, will take effect soon; in fact, they are overdue. Under the new health care law, the administration was supposed to establish payment-reporting procedures by Oct. 1, 2011. The public will have until Feb. 17 to comment on the proposals, which are broadly consistent with the expectations of industry and consumer groups. After considering the comments, Medicare officials will issue final rules with the force of law.

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