Life Science Compliance Update

July 27, 2017

Large Canadian Drug Companies Begin Voluntarily Disclosing Information


Ten well-known drug companies in Canada have started to voluntarily disclose how much money they pay to physicians, hospitals, and health care groups, with the information posted on their websites. The ten companies participating in the voluntary disclosure are: GlaxoSmithKline, Amgen, Bristol-Myers Squibb, Gilead, Eli Lilly, Merck, Novartis, Purdue, Roche, and AbbVie Corp.

There are three different categories that the voluntary disclosure covers: fees for health care professional services/transfer of value to Canadian health care professionals; funding to health care organizations; and sponsorship of Canadian health care professionals travel.

The fees for service category covers any direct or indirect payments made to a Canadian health care provider, defined as: a payment to the HCP as an individual; a payment to the HCP’s incorporated name or business name for services rendered by that HCP; a payment indirectly to the HCP through a third-party intermediary; or a payment made to a health care organization for services rendered by an HCP associated with or employed by the health care organization.

The funding to health care organizations covers any direct or indirect funding to a health care organization for supporting efforts related, but not limited, to charitable, educational, and scientific activities. The provision specifically excludes any funding resulting a purchase/exchange of goods or services, such as commercial booths or business to business/partnership agreements; all funding related to clinical trials; and payments made to a Canadian health care organization for services rendered by a HCP and which have already been disclosed under the first category.

Sponsorship of travel is defined as a direct or indirect provision of financial assistance to a Canadian health care provider for the purpose of attending an international congress for expenses related to travel, accommodation, meals, and congress registration fees.

GlaxoSmithKline (GSK Canada) spearheaded the voluntarily disclosure, revealing it paid a little over $2 million to health care providers and organizations in 2016. Approximately $1.19 million of that went to fund health care organizations, while it paid roughly $943,000 in fees for health care professional services. GSK Canada paid $0 in “Sponsorship of HCP Travel.”

Merck Canada made roughly $9 million in payments, with over $7 million going toward health care professional services and $2 million to patient groups and health organizations.

Roche Canada made $8 million in payments to doctors and health organization groups. That amount was broken down into the three categories, with roughly $6.14 million in fees to healthcare providers (including payments for services, such as the provision of unfunded medical services, and speaking and/or consulting engagements); $2.17 million for funding to health care organizations (including grants and donations that support efforts such as philanthropic, educational, and/or scientific activities); and $267k in sponsorship of health care provider travel (funding to support provider travel to attend international congresses and/or global standalone meetings hosted by Roche).

The ten companies made $48 million in payments throughout 2016, though not all companies were able to include figures for the entire year. The ten companies announced – through an industry group Innovative Medicines Canada – that they would all begin to release the numbers, as they are all committed to “enhancing trust by disclosing the payment voluntarily.”

More countries are passing Sunshine-style transparency reporting programs with each passing year. These Canadian companies have decided to take the initiative to disclose these payments without any legal requirement, more likely than not, in an attempt to pre-empt any legislative efforts to mandate it.

July 26, 2017

Ontario Enters the Transparency Spotlight


Over three years ago, the Toronto Star filed a freedom of information (FIPPA) request with the Health Ministry in Ontario, Canada, seeking physician-identified data on the top 100 billers. Last year, the information and privacy commissioner ordered the disclosure of the top billers’ identities, along with amounts each receives in payments from the taxpayer-funded insurance plan.

The Health Ministry allowed partial access to the Star, including payments and most medical specialties, withholding physician names. The Ministry withheld the names as it determined releasing the names would be an “unjustified invasion of privacy.”

However, two groups of doctors, along with the Ontario Medical Association, fought the disclosure all the way to Ontario’s Divisional Court. The three-judge panel dismissed an application to quash the aforementioned order from the Information and Privacy Commissioner. The panel ruled that the order was a reasonable one, and that the ministry shall release the names of the highest-paid physicians public.

The groups opposing the release of information argued that an adjudicator with the Information and Privacy Commissioner erred in departing from previous commission orders that found such information was personal. That adjudicator, John Higgins, concluded that physicians receive OHIP payments in relation to their business or profession. Further, he noted that the money does not reflect the actual income of the physicians, because doctors pay overhead expenses out of the payments received.

The lawyers argued that,

The adjudicator’s determination that the information being sought was not ‘personal information’ is wrong as a matter of both fact and law and is clearly unreasonable. While he recognized the existence of those prior determinations … he chose to ignore or distinguish them on specious grounds while ignoring the overwhelming weight of authority they supply.

They also argued that publishing the names of the top billers “accomplishes nothing other than naming and shaming.” The lawyer for the groups argued in front of the judges – “who really cares what the names are? The question is whether or not the ministry is properly administering a multibillion fund and whether the question of the proper operation of that fund…can be accomplished without disclosing names.”

The Court rejected the argument made by the doctors that the Star had failed to establish a proper rationale for the disclosure. It found that the argument ignores the well-established rationale that underlies access to information legislation. The decision states, “[t]he rationale is that the public is entitled to information in the possession of their governments so that the public may, among other things, hold their governments accountable.”

Justice Ian Nordheimer stated that the Star did not even need a reason to obtain access to the information. The FIPPA requires that the information be provided unless a privacy exemption is demonstrated. However, once it is determined that the information is not personal information, there is no statutory basis to refuse to provide it. The decision further notes, “The proper question to be asked in this context … is not ‘why do you need it?’ but rather ‘why should you not have it.”

This ruling will affect other Information and Privacy Commissioner cases, including an appeal made by the Star, seeking the release of physician-identified billings for all Ontario doctors. The Commissioner previously put this appeal on hold, pending the outcome of this case.

LSCU SPECIAL FEATURE: Into the Nexus - Anti-Kickback Statute ("AKS") versus Value-Driven Health Care


Part 2: The Tension Increases - Online Auctions Violate the AKS

We have noted in previous articles that there is an increasing tension between efforts to reduce healthcare costs and assuring those efforts are not improper inducements under the Anti-Kickback Statute’s (“AKS”). In a recent opinion by the Federal District Court in Connecticut, that tension ratcheted up several notches with the Court’s novel application of the AKS to certain e-commerce arrangements.

The decision in, Inc. v. Becton, Dickinson & Co was originally decided in March 2017 and reaffirmed in April. Judge Michael Shea’s decision resolved a contract dispute between MedPricer, a company that provides an online portal for the auctioning of medical supplies and equipment, and Becton, Dickinson & Company (“BD”), a medical products provider.

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