In his health care reform proposal to Congress and the nation revealed today, President Obama has included requirements for pharmaceutical and medical device companies to disclose payments to health care providers and hospitals. These ‘Sunshine provisions,’ modeled after a bill introduced in the Senate in 2007 by Senators Herb Kohl and Charles Grassley, have bipartisan, bicameral support, and were included in the health care reform bills passed by both the House and Senate this winter.
Here’s the language:
To prevent conflicts of interests and insure full transparency and information for patients, the Act requires all drug companies, device, and medical supply manufacturers to fully disclose and report any gifts they make or financial arrangements they have with doctors, a physician practice or group.
The proposal, released ahead of a much-awaited bipartisan health care reform summit at Blair House this week, reflects a growing national consensus about the need for robust transparency of the financial relationships between providers and the pharmaceutical and device industries, including recommendations by the Institute of Medicine and the Medicare Payment Advisory Commission.
The President’s health care reform proposal also requires pharmacy benefit managers to disclose information about negotations and drug pricing deals they make, a component of the original House bill passed in November.
President Obama’s proposal goes beyond the Senate bill on prescription drugs in two other important ways: closing the Medicare Part-D ‘doughnut hole,’ and banning pay-for-delay settlements that keep drug costs artificially high.
By closing the doughnut hole, the President’s plan would save the 8 million seniors who exhaust their prescription drug benefits each year an average of $4,080 a year by 2020. Like today, seniors will still have a 25 percent co-insurance obligation until ‘catastrophic’ coverage kicks in, unless they qualify for low-income subsidized coverage.
The proposal also grants the Federal Trade Commission the authority to police drug company patent settlements for “collusion” to keep generics off the market. FTC estimated that such a reform would save $35 billion over the next decade, and Obama’s proposal would give FTC the authority to prevent these settlements unless proven to increase competition.
–Kate Petersen, PostScript blogger