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Calls for industry transparency likely to increase

Pharma Compliance Alert, November 12, 2008

Transparency will be a huge frontier for pharmaceutical companies over the next three to four years and the key questions revolve around what transparency will look like at each company and how is it going to change company policies and procedures.

“I think we are going to be baring our souls” on grants and payments, Arjun Rajaratnam, JD, compliance officer for GlaxoSmithKline’s (GSK) US pharmaceutical sector, said during the Pharmaceutical Regulatory and Compliance Congress in Washington, D.C., October 27-29. Rajaratnam added the “implications of that are still uncertain.”

Mary Riordan, JD, senior counsel for the OIG, said she fully expects some kind of federal legislation to promote transparency. The Physician Payments Sunshine Act is currently under consideration in both the House and Senate. The bill would require pharmaceutical and medical device companies to disclose payments to healthcare professionals.

Riordan said she expects more companies to announce plans to disclose payments. Merck, Eli Lilly, Johnson & Johnson, and GSK have already announced plans to reveal funding in 2009. AstraZeneca already posts contributions to non-profit organizations and educational grants.

John T. Bentivoglio, JD, co-chair of King and Spaulding’s FDA/Healthcare Group, said he can’t emphasis the importance of transparency enough. “[Transparency] is the single most powerful trend affecting this industry,” he said. Bentivoglio added the intense pressure companies are under to disclose payments will only increase.

While disclosure requirements may seem like a burden, they can also benefit the industry. Transparency is an opportunity to readily identify who gets the most money and who speaks the most, Riordan said. That information can help the government identify people it should visit and may help the government investigate physicians who are looking for a handout from the industry.

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