The actual passing of the federal Physician Payments Sunshine Act, which would require companies to report gifts and payments to surgeons, might still be a ways away from being passed, if it ever is, but Massachusetts already is implementing its own statewide disclosure method aimed at both pharma and medical device companies.

The move was approved recently by the Massachusetts Public Health Council, and prohibits gifts by drug and device makers that aren't true compensation for services. In essence, companies can no longer pay providers to attend entertainment events or to travel.

In addition, the state requires the disclosure of the value, nature, purpose and receipt of any payment, subsidy or economic benefit over $50 a move similar to what the Advanced Medical Technology Association (AdvaMed; Washington) and some companies have already voluntarily gotten behind.

Legislators claim that the measure is aimed at controlling costs by prohibiting the unnecessary prescribing of expensive drugs and to severely reduce if not eliminate doctors' potential conflicts of interest.

"At the state level, this is the first we're seeing of this kind of measure aimed at both the pharma and med-tech industries," Jennifer Colapietro, a director in the Pharmaceuticals and LifeSciences practice for PricewaterhouseCoopers (New York), told Medical Device Daily.

PricewaterhouseCoopers works closely with medical device and pharmaceutical companies on responding to increasing state and federal scrutiny over their interaction with healthcare providers.

Colapietro said that in 2008 there were 20 states with such laws on the books, but this is one of the first times the life sciences industries have seen such legislation.

Massachusetts' law parrots the proposed Sunshine Act by Sens. Chuck Grassley (R-Iowa) and Herb Kohl (D-Wisconsin) and would require both drug and device makers to report payments and gifts to physicians to the Department of Health and Human Services.

"What we're seeing is the industry taking a step back," Colapietro said. "Now it's becoming time intensive to follow the states' requirements and the [proposed] federal requirements." [Companies are saying] let's get some visibility to [show] what we're doing."

By visibility, she said that companies are now getting their infrastructures in place to properly submit disclosures to interested parties.

Heart valve maker Edwards Lifesciences (Irvine, California) said late last year that it would voluntarily begin to post on its web site its financial relationships with physicians who receive $5,000 or more a year in consulting fees, royalties or honoraria from the company (Medical Device Daily, Dec. 29, 2008).

Edwards started tracking the data on Jan. 1 and will publish it annually beginning in the second half of this year.

Medtronic (Minneapolis) also has adopted a plan that would track payments that have passed the $5,000 mark (MDD, Feb. 27, 2009).

On the pharma side, Eli Lily & Co. (Indianapolis) and Pfizer (New York) already have volunteered to disclose payments they make to doctors.

All of the companies' efforts are voluntary, but they come on the heels of AdvaMed's recent revision of its code of ethics for device firms (MDD, Dec. 22, 2008).

With the Sunshine Act struggling to come into being, states could take a page out of Massachusetts' book and openly have such strong statewide policies. But a big impediment is the ailing economy and lack of funding available to states.

"A lot of states want to have control of the reports in the industry, but because of the lack of funding to implement the departments that could track this spending ... that could be a roadblock," Colapietro said.

Concerns also have been raised that the administrative burden of tracking and reporting these items will increase the cost of prescription drugs, biologics and medical devices even though the data collected could ultimately help reduce costs.

"There are short-term costs for the industry," she said. "But none of what we've seen so far is going to increase [the cost of] products from companies."

The new regulations for Massachusetts take effect July 1, and public reporting of payments to providers begins on June 1, 2010.