So the first sound bites have hit the street from the Sunshine Act. If you are in the Pharmaceutical or Medical devices industries you will have known this has been coming for some time (since 2010 when the act was adopted) although the final regulations where not released until 2013.

So what is the Sunshine Act and what is all the noise about?

To put it simply the regulators mandated that all Medical device and pharmaceutical companies will submit annual reports to CMS of “payments or other transfers of value” made to physicians or teaching hospitals. “Payments or other transfers of value” include the transfer of anything of value, although certain identified payments are excluded (such as those less than $10/$100 aggregate annual, certain educational materials, and in-kind items for charity care).

So what does this mean for the industry, the health care community and the role of the Pharmaceutical representative or “ drug rep”?

Firstly it’s important to understand that since the inception of the Pharmaceutical promotional model the humble drug rep has been an integral part of the mix. Since as far back as the 1850’s the industry has developed its promotional strategies with the detail man front and center. The model really started to hit its stride in the 1920’s when there were 2000 “detail men” in the US, escalating to 15000 in the 1950’s. Today (although it’s a moving target there are some 400 000 “ drug reps” globally).

As the number of interactions between the industry and the medical fraternity increased dramatically so too did the competitive pressure on the companies for the time, attention and hopefully prescription preferences of the physician. In the early days of the industry the physician/prescriber was often the dispenser and hence a commercial transaction was expected in the form of an order for the detail mans products. Over time this changed (as the obvious conflict of interest became apparent) and the role of the detail man morphed into one of chief counsel, sounding board, bearer of hospital gossip and of course prescribing information and product “ details”.

As this model flourished in the 1980’s and beyond, drug reps could be found in abundant numbers in GP clinics hospitals and surgeries with their tell tale “detail bag” in hand. Apart from the all-important scientific details of a product (and their clinical advantages over other similar products) the Pharmaceutical detailer often delivered “ brand reminders” in the form of stationary (pens, pads, post its) and a range of other promotional items. Whilst such items served a valuable purpose in the office of the physician (i.e. an over supply of pens) most physicians when researched acknowledge that it did little to influence prescribing habits. On occasion the drug rep would also supply the coffee and donuts as an adjunct to giving an in-service (pharm speak for a scientific lecture to the hospital or clinic staff).

So what’s all the fuss about right – surely not some pens and donuts!

The short answer is no!

The industry also provides funding to the medical fraternity in the form of research grants, scientific journal subscriptions and travel to attend scientific meetings. Such meetings are organized by medical associations where health care workers from around the world come together to network and hear the latest scientific information in their chosen field.

Other forms of funding include “ honorarium” – fees for speakers who prepare presentations on the latest research and then present that at scientific meetings. Whilst it would appear that this might give rise to a conflict of interest (would a researcher be unbiased about a companies product if they were paying the bills?) the simple fact is that it doesn’t. Physicians and researchers take their responsibilities very seriously when it comes to clinical information and its impact on patients. Physicians who are sponsored to give a lecture (in my experience) are very careful to ensure that they present the facts (after all their professional reputation is worth much more than a mere hotel room and airline ticket).

So where does this leave us? On first appearances a little confused. The objective behind the Sunshine Act seems clear (at least to the regulators) but the implementation is problematic. For a start the systems required to manage this are complex (the current database is confusing and cumbersome). What we do know is that the data is incomplete and therefore controversial. However the data shows that the industry spent 3.5 billion in 5 months on 546 000 physicians and 1360 research institutions. What does this tell us – well not a lot actually, the system lists all manner of payments to physicians but does not articulate the critical details of why such transactions occurred beyond a rudimentary description. Still this is a first pass and it is promised that the system will become more workable.

Whilst the industry has not been completely faultless in the past it must be understood that in this new era of transparency (which isn’t limited to financial transactions) the industry as a whole has taken giant leaps in ensuring that its systems and policies make it clear that any form of financial transactions with the medical fraternity is in strict adherence with the moral and legal standards of the day. It should be noted that this level of scrutiny is being applied to many other industries from defence to civil engineering contractors and everything in between.

Whilst the behavioral standards that companies are held to today are different to that of 100, 50 or even 30 years ago we should be careful not to judge the sins of the past on todays standards of conduct and enact a McCarthy era style witch hunt.

For the industry the way forward is not always clear as it struggles with its promotional model and an increasingly hostile environment with regards to payors, regulators and policy makers.

One thing is certain though – the role of the “ drug rep” (or whatever we call it in the future) remains an integral part of the interface between the medical community and the industry. So too does the role of sponsorship’s to clinical meetings, hospital grants and research funding. It is difficult to imagine what would happen if the industry did not put some of its profits back into these areas. The gap in funding would have to be picked up somewhere and it would appear that cash strapped health care budgets around the world are not in a position to accommodate this deficit.

Both companies and the medical community to which they serve must take the appropriate steps to ensure they have the correct systems in place that demonstrate they remain compliant in every aspect of their interactions.

Whilst the Sunshine Act in principal is a giant step towards public transparency, it should be noted that the industry at large has already (for the most part) taken a zero tolerance stance by way of internal policy towards non-compliant behavior. It is difficult to imagine any company in the future would tolerate compliance breaches or that they haven’t taken internal steps in terms of systems and policy implementation to ensure that they remain above all else, an icon of scientific achievement that impacts the lives of every person on the planet who has ever used a pharmaceutical product.