Aggregate Spend
Encyclopedia
Aggregate Spend is the process used to aggregate and monitor total amount spent by healthcare manufacturers on individual Healthcare Professionals and Organizations (HCP/O) through payments, gifts, honoraria, travel and other means. Also often referred to as the Physician Spend Sunshine Law, this initiative is a growing body of Federal and State legislations that collectively address all or some of the following goals: (a) Provide transparency with regard to who, in the life sciences industry, is contributing what benefits to which physician; (b) Mandate statutory reports at least once a year; and, (c) Limit spend per physician. “Aggregate Spend” is the total, collective, cumulative amount spent by healthcare manufacturers (pharmaceutical, biotechnology and medical device organizations) on individual Healthcare Professionals and Organizations (HCP/O) through payments, gifts, honoraria, travel and other means. Organizations monitored include (Pharmaceutical, Biotechnology
and, in some states, Medical Device organizations).
(R-Iowa) introduced the Physician Payments Sunshine Act of 2007 (S. 2029). In March 2008, Rep. Peter DeFazio
(D-Oregon) and Rep. Pete Stark
(D-California) introduced a slightly different companion bill in the House of Representatives. (H.R. 5605). These bills were reintroduced in 111th Congress as the Physician Payments Sunshine Act of 2009 (S. 301 and H.R. 3138), again by Senator Chuck Grassley and in the House of Representatives by Rep. Baron Hill
(D-Indiana). The bills all aimed to replace the differing state legislations with a single law, common to all 50 states. According to Ashley Glacel, the press secretary for the Senate Aging Committee, whose chairman, Herb Kohl, co-sponsored the bill, the Senate bill is more expansive because it also include Medical Device makers.
The bills would amend the Social Security Act "to provide for transparency in the relationship between physicians and manufacturers of drugs, devices, or medical supplies for which payment is made under Medicare, Medicaid, or SCHIP." The bill proposed that each quarter, beginning January 1, 2008, companies or their agents that manufacture drugs, medical devices, or medical supplies would be required to disclose all payments over $25 in value made to "to a physician, or to an entity that a physician is employed by, has tenure with, or has an ownership interest in."
The bill would also require manufacturers to provide details on the date, value and nature of the payment, such as whether it was for "food, entertainment, or gifts", "trips or travel", "a product or other item provided for less than market value", "participation in a medical conference, continuing medical education, or other educational or informational program or seminar, provision of materials related to such a conference or educational or informational program or seminar, or remuneration for promoting or participating in such a conference or educational or informational program or seminar", "product rebates or discounts", "consulting fees or honoraria" or "any other economic benefit." Companies would be required to submit a summary report in electronic format. The proposed penalties for breaches were "not less than $10,000, but not more than $100,000, for each such failure.
The proposed federal law would undermine a stronger Vermont law if passed, according to state officials and advocacy groups. The reporting threshold under the proposed federal law is $500 - much higher than the $25 threshold found in a similar Vermont law passed five years ago. If passed, the federal bill would preempt the state law.
In May 2008, the Pharmaceutical Research and Manufacturers of America stated that they supported a revised version of the bill,, but only on condition of "the continued inclusion of the provision that preempts state law". In a media statement, PhRMA President Billy Tauzin stated that "PhRMA believes that preempting local and state marketing reporting or disclosure laws that have been enacted or are pending avoids a confusing myriad of local, state and federal requirements that confuse patients accessing the information and are overly burdensome and costly for those required to report."
Biotechnology
Biotechnology is a field of applied biology that involves the use of living organisms and bioprocesses in engineering, technology, medicine and other fields requiring bioproducts. Biotechnology also utilizes these products for manufacturing purpose...
and, in some states, Medical Device organizations).
U.S. Federal Laws
On September 6, 2007, Senator Chuck GrassleyChuck Grassley
Charles Ernest "Chuck" Grassley is the senior United States Senator from Iowa . A member of Republican Party, he previously served in the served in the United States House of Representatives and the Iowa state legislature...
(R-Iowa) introduced the Physician Payments Sunshine Act of 2007 (S. 2029). In March 2008, Rep. Peter DeFazio
Peter DeFazio
Peter Anthony DeFazio is the U.S. Representative for , serving since 1987. He is a member of the Democratic Party. The district includes Eugene, Springfield, Roseburg and part of Corvallis. As Oregon's most senior member of Congress, he is the dean of Oregon's House of Representatives delegation...
(D-Oregon) and Rep. Pete Stark
Pete Stark
Fortney Hillman "Pete" Stark, Jr. is the U.S. Representative for , serving since 1973. He is a member of the Democratic Party. Currently he is the 5th most senior Representative, as well as 6th most senior member of Congress overall...
(D-California) introduced a slightly different companion bill in the House of Representatives. (H.R. 5605). These bills were reintroduced in 111th Congress as the Physician Payments Sunshine Act of 2009 (S. 301 and H.R. 3138), again by Senator Chuck Grassley and in the House of Representatives by Rep. Baron Hill
Baron Hill
Baron Paul Hill is the former U.S. Representative for , serving from 1999 to 2005 and from 2007 to 2011. He is a member of the Democratic Party....
(D-Indiana). The bills all aimed to replace the differing state legislations with a single law, common to all 50 states. According to Ashley Glacel, the press secretary for the Senate Aging Committee, whose chairman, Herb Kohl, co-sponsored the bill, the Senate bill is more expansive because it also include Medical Device makers.
The bills would amend the Social Security Act "to provide for transparency in the relationship between physicians and manufacturers of drugs, devices, or medical supplies for which payment is made under Medicare, Medicaid, or SCHIP." The bill proposed that each quarter, beginning January 1, 2008, companies or their agents that manufacture drugs, medical devices, or medical supplies would be required to disclose all payments over $25 in value made to "to a physician, or to an entity that a physician is employed by, has tenure with, or has an ownership interest in."
The bill would also require manufacturers to provide details on the date, value and nature of the payment, such as whether it was for "food, entertainment, or gifts", "trips or travel", "a product or other item provided for less than market value", "participation in a medical conference, continuing medical education, or other educational or informational program or seminar, provision of materials related to such a conference or educational or informational program or seminar, or remuneration for promoting or participating in such a conference or educational or informational program or seminar", "product rebates or discounts", "consulting fees or honoraria" or "any other economic benefit." Companies would be required to submit a summary report in electronic format. The proposed penalties for breaches were "not less than $10,000, but not more than $100,000, for each such failure.
The proposed federal law would undermine a stronger Vermont law if passed, according to state officials and advocacy groups. The reporting threshold under the proposed federal law is $500 - much higher than the $25 threshold found in a similar Vermont law passed five years ago. If passed, the federal bill would preempt the state law.
In May 2008, the Pharmaceutical Research and Manufacturers of America stated that they supported a revised version of the bill,, but only on condition of "the continued inclusion of the provision that preempts state law". In a media statement, PhRMA President Billy Tauzin stated that "PhRMA believes that preempting local and state marketing reporting or disclosure laws that have been enacted or are pending avoids a confusing myriad of local, state and federal requirements that confuse patients accessing the information and are overly burdensome and costly for those required to report."
PPACA
The Federal Bill finally passed on March 21, 2010 as a provision under the Patient Protection and Affordable Care (PPAC) Act (https://www.cms.gov/LegislativeUpdate/downloads/PPACA.pdf), and several States — including, but not limited to, California, Massachusetts, Minnesota, Maine, District of Columbia, West Virginia, Vermont and Nevada — have already passed their versions of the Sunshine Law. The Federal Law goes into effect from January 1, 2012, with the earliest reports (covering Jan-Dec 2012) mandated on or before March 31, 2013. The penalties range from $10,000 to $100,000 for each violation, and can go up to $1 million.U.S. State Laws
Aggregate Spend compliance has been affected by individual state law compliance, which requires Healthcare Manufacturers to address and collect distinct spend types to comply with disclosure requirements at the HCP/O aggregate level. Minnesota, Maine, West Virginia, Vermont, California, Nevada, and Washington D.C. all have some type of gift-giving limit or disclosure law. Starting July 2009 Massachusetts and Vermont Gift ban law became active with bans of $5,000 and $10,000 per violation respectively. Other states are evaluating similar options as well.Implementation Challenges for Life Science Companies
This regulatory compliance requirement is especially challenging because of (a) DATA DISCREPANCIES across diverse sources of record; (b) STATE TO STATE VARIATIONS of the law; and, (c) the sheer VOLUME OF DATA that must be aggregated, cleansed, processed and filed.Implementation Challenges for the Federal Government
The government has not yet (as of April 2011) provided or developed any standards which all companies should follow while submitting the data. This introduces the challenge of how the massively voluminous data -- which will reach the Department of Health & Human Services (HHS) by March 31, 2013 -- can be effectively analyzed for violations quickly enough. The Object Management Group (OMG) has offered to develop a standard, and discussions are underway.External links
- Aggregate Spend Audio Conference 2011
- CBI Aggregate Spend Conference
- "Tracking of Spend Data Widens" Pharmaceutical Executive Feb 20, 2008
- United States Senate Special Committee on Aging, June 27, 2007
- Surgeons for Sale: Conflicts and Consultant Payments in the Medical Device Industry
- "A Free Lunch", Forbes, February 25, 2008
- “Minnesota Limit on Gifts to Doctors May Catch On” New York Times, October 12, 2007
- "Supporting Life Science Companies with Fast and Easy Sunshine Act Compliance", Mendix 2011
Further reading
- "What's All the Commotion Over Aggregate Spend?" Thought Leadership Sales and Marketing Compliance, Volume 3, Issue 1, Fall 2009
- “Sales & Marketing Compliance: Keeping up with Global and Local Challenges” PharmaVOICE January 2007
- “Pharmaceutical Company Payments to Physicians: Early Experiences With Disclosure Laws in Vermont and Minnesota” JAMA, Vol. 297 No. 11, March 21, 2007