Medical Meetings: Something’s New Under the Sunshine ActApril 1, 2013

But Planners Worry It Won’t Be Alright for Pharma Meetings By
April 1, 2013

Medical Meetings: Something’s New Under the Sunshine Act

But Planners Worry It Won’t Be Alright for Pharma Meetings



“Here Comes the Sun” for the pharmaceutical meeting industry this year, as companies will have to report their payments and transfers of value made to physicians (of $10 or more) to the government under the Physician Payment Sunshine Act. According to the “final rule” issued by the Centers for Medicare and Medicaid Services (CMS) in February, the recording of spend is to begin August 1, 2013 with reports of data collected from August 1 through the end of 2013 due by March 31, 2014. The CMS will then begin publishing the data on a public website on September 30, 2014, following a legally required 45-day period in which physicians can review the data.

Physician Concerns

But while the well-known Beatles song is hopeful and uplifting, some pharmaceutical meeting planners feel the opposite way about the Sunshine Act. Many physicians, it is feared, will not want to participate in clinical trials and other key meetings held by pharma companies once they learn that all the spend data related to them will be publicized, since they will see it as negative press suggesting they are being “bought” by pharma companies. Granted, many physicians are still unaware of the new policy. According to global technology company MMIS’ third-annual survey of doctors and their knowledge of the Sunshine Act, released in February, over half of the 1,000 physicians questioned admitted they didn’t know about the annual public reporting requirement. However, 63 percent said they were “deeply concerned” that such data would be available in a publicly searchable database, according to MMIS.

By receiving meetings-related transfers of value, the physicians would “be perceived as doing something unethical when they are not,” says Judith Benaroche Johnson, CMP, president and CEO of Rx Meetings Worldwide. “A person can look up his doctor and say, ‘Oh, so that’s why my medicine costs so much; my doctor is gallivanting all over the country, and they spent $200,000 on her this year.’ But I’m not corrupting that money as a physician; it’s just what it cost me to go participate in the trial to bring new drugs to the market.”

Johnson also worries that ultimately many physicians will decide they do not have the time to review and dispute any inaccurate payments or transfers of value reported: “Let’s say that a physician attends a 2½-day meeting and the reported value transferred is $1,000. She says, ‘Wait a minute, I did not stay that last half day, I didn’t eat breakfast, I didn’t eat lunch,’ etc., and needs that corrected. But she doesn’t have the time to do that. These physicians who do clinical trial meetings are the cream of the crop and they are very busy,” Johnson explains. In any case, pharmaceutical meetings are not lavish affairs, she adds. “I wish that the senators that came up with this act could go to a meeting and see the lack of perks. Pharma meal costs have not even increased in the last four years, and you are asking the hotels to produce, four years later, the same meals at no increase in revenue. So nothing fancy is going on here.”

Nonetheless, the perception issue, which planners are all too familiar with after the AIG incident, will “have a huge impact on our industry,” asserts Kathy Truelove, president of Universal Meeting Management. Effectively, the government will be “promoting that pharmaceutical companies are spending too much money buying physicians to write their products, when that’s not the case: They are educating physicians on new drug studies and products. Personally, I don’t want to go to a physician who is not educated.”

Impact on Meetings

It is likely too soon to determine whether and to what extent the Sun­shine Act will adversely affect physician-attended meetings, in terms of a possible reduction in number of events held or in attendance. “I have not seen any major changes at this stage, but since it’s just going into effect, if we see any changes it would probably be next year,” says Bonnie Weiss, director, Global Pharmaceutical Sales, Americas, Hyatt Hotels.
However, Universal Meeting Manage­ment has seen “about a 20 percent drop in pharmaceutical meetings on the marketing and clinical side and about a 10 percent drop on the sales meeting side,” notes Truelove. “That’s how our numbers have trended. I think certainly the economy plays a role in every industry these days, but specifically for pharmaceuticals, I really think the biggest impact has been because of the Sunshine Act that goes into effect this year. I think leading up to this year people knew that it was coming and everyone started holding back a little bit more.”
And while the Sunshine Act would primarily affect physician-attended meetings, there may be a side effect on internal meetings, Truelove supposes. “There is now so much visibility in the pharmaceutical meetings industry, even for their incentive programs. So consumers are questioning, ‘Why are you taking 3,000 sales reps to Las Vegas?’ It’s identical (to the AIG scenario).”

CME Exemption

One type of industry event that in many cases will not be subject to the new reporting requirement is the Continuing Medical Education (CME) meeting. Exempt are CME providers whose programs are accredited or certified by the Accreditation Council for CME, the American Academy of Family Physicians, the American Dental Association’s Continuing Education Recognition Program, the American Medical Association or the American Osteopathic Association. In addition, the pharma company must not pay the CME speaker directly, choose the speaker nor provide a group of speakers for the CME provider to select from as it pertains to program.
As for non-accredited and non-certified CME providers, as well as those who run various other types of physician-attended programs, it is key to raise awareness of the due diligence that will come into play. Indeed, the most fundamental response to the impending policy change under the Sunshine Act is education in the industry. While large pharma companies who already have corporate integrity agreements in place with the government tend to be quite aware of the act, Johnson finds that smaller companies and biotech firms “have very little knowledge of what’s going on, so we’re trying to educate our smaller clients” on the reporting requirements.

Since hoteliers will be instrumental in the reporting initiative, “we are trying to educate our hotels so that when they get a lead for a meeting that includes health care professionals, they know how to respond to it and understand that in many cases we have to perhaps put together a special menu of pricing issues that we are going to have to work through,” Weiss notes.
Weiss does not expect that the reporting will be too much of an operational stretch for many pharma clients, who had “internal compliance procedures that had to be met before there was a government reporting requirement.” In many cases, those compliance procedures are part of companies’ strategic meeting management programs; after all, SMMPs began with large pharma firms. But procedures relating to spend tracking and reporting tend not to be the most developed aspect of SMMPs, some planners feel.

“Most companies have some semblance of an SMMP, but very few have a full-fledged SMMP,” says Johnson. “And the first component that is usually in place is the travel policies to dictate exactly when people can travel and what types of transportation they can use. The second thing that goes into place is the expense policies,” she says.

Truelove adds, “The big factor that no one has really mastered is consolidating a lot of the expenses. A lot of meeting management software tools have a good registration program but none of them have a good budgeting program or a good spend tracking and reporting program.”
Thus, achieving the kind of transparency required by the Sunshine Act will entail a significant additional investment of time and resources for many companies. An advantage does go to those large firms that are already publicly reporting their physician-related payments and transfers of value. “We voluntarily have been disclosing information about our work with physicians since 2009, and we believe this has helped us to prepare for the new Sunshine Act,” notes a spokesperson for GlaxoSmithKline.

Expense Tracking and Opt-Out Programs

In anticipation of August 1, Uni­versal Meeting Management added a new feature last fall to its proprietary meeting management tech platform, MeetingSmart, in view of the Sunshine Act. “We developed an opt-out program at registration,” says Truelove. “When physicians go into the system to register, all the transfer-of-value items are listed there, including the estimated costs for meals and other functions. And then they can opt out of all those different functions.” The response to the feature has been quite favorable, according to Truelove, and it has another advantage. “We started the program because we wanted to give physicians an option of not having that transfer of value if they didn’t want to, but it turned into something much better in that now we have such great cost optimization for our meetings. We found that attendees were opting out of functions that, in most cases, they were not going to attend anyway, so we no longer have to guarantee those.”

Also last fall, Hyatt Hotels & Resorts introduced a new Group Bill tool that should help with the more detailed tracking of physician-related spend. The traditional event bill is typically a large paper folio containing several bills in different formats, but under the new system, the planner receives an interactive PDF bill with a table of contents, summaries and hyperlinks. What’s more, planners can track all charges in real time under different expense categories, down to individual room bills and line-item coffee-break charges. The data also can be exported into an Excel spreadsheet. “The timing of this is perfect. We were not putting together the group bill because of what’s going on with the Sunshine Act; it was a coincidence,” Weiss says. “It’s going to help planners access the specific information they need and to break down that information the way they need it to be broken down.”

Among the expense categories are familiar ones such as air travel, ground transportation, lodging, and food and beverage, but the monetary figures will be much more granular. “What is different under the Sunshine Act is that we will have to break down the bill per physician, and then per hotel, F&B and other spend categories for each physician,” Johnson explains. “It’s really detailed information that will be submitted to the government.” And that report will reference government-assigned physician numbers. “Let’s say that Dr. Smith goes to 10 meetings a year produced by four or five different companies like ours. The doctor’s number would have to be the same for each company’s report to the government, because the government doesn’t care who produced the meeting,” she adds.

Sunshine Act Strategies

Given the worry that physician attendance will significantly diminish once more of them become aware of what the Sunshine Act entails, a couple of strategies appear to be sensible for pharma companies. First, meetings might be held more cost-effectively, so as to reduce transfer of value to physicians and assuage concerns about public perception. However, pharma companies have already been paring down their meeting budgets, Truelove notes. “They started doing that probably eight years ago when there was a lot of visibility for pharmaceutical meetings. The standards of how the programs are run are already in place, and I don’t think there is any change there that really needs to occur.” For example, clinical meetings tend to have extensive breakout needs, and going to an airport hotel, despite savings in room rates and ground transportation, would not be an option if the property has limited or inflexible meeting space.

A second possible strategy might be to ramp up virtual meeting offerings, since these evade much transfer of value to physicians. Yet Johnson is skeptical as to the viability of that medium in the case of physician-attended meetings. Virtual meetings would be missing “the face-to-face collaboration that comes when you have your top physician going over something so critical as a drug trial,” she says. “You take those same attendees and try to sit them down in front of a computer screen to watch a protocol being done; I just don’t see that happening.”


Not reporting physician payments and transfers of value simply isn’t an option, and the deterrent is a civil penalty of up to $150,000 per year or a fine of up to $1 million for those who are determined to have knowingly failed to report, according to the CMS. Furthermore, the CMS retains the right to “audit, evaluate or inspect” an organization for compliance with the Sunshine Act. As to the coauthors of the act, Sen. Chuck Grassley (R-Iowa) and former Sen. Herb Kohl (D-Wisc.), they have promised to “stay vigilant about how this law is implemented,” according to a recent statement. The senators clearly see the act as a positive one that “brings about accountability, and accountability will strengthen the credibility of medical research, the marketing of ideas and, ultimately, the practice of medicine.”


Of course, an important pillar of that practice is the education and research that happens at pharma meetings. As the spokesperson for GlaxoSmithKline notes, “Health care professionals lead programs that deliver important information, which can translate to improved patient care. We assess the needs for such programs annually and focus our programs in particular on new medicines and new label information.” And if the payments reported under the Sunshine Act end up compromising physician participation in such programs through negative public perception, that may well undercut the goal cited by Grassley and Kohl. It remains to be seen whether the reporting will have that repercussion, but pharma companies and meeting planners do have a legitimate concern. C&IT

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