Roughly a decade ago, countries such as the USA and France introduced ground-breaking transparency and disclosure legislation under so-called “Sunshine Acts.” Broadly speaking, such legislation made it mandatory for pharmaceutical companies to publish records of payments or other transfers of value made to healthcare professionals (HCPs) and healthcare organizations (HCOs).
The UK followed a subtly different route, by relying on self-regulatory industry-led disclosure initiatives. The most prominent of these is Disclosure UK – the disclosure scheme and platform that pharmaceutical companies must use if they are members of the Association of the British Pharmaceutical Industry (ABPI). Companies who voluntarily adhere to the ABPI Code also use this platform. However, companies who are neither ABPI members nor voluntarily adhere to the ABPI Code are not subject to the same disclosure or transparency obligations. Unless they choose to do so under their own initiative, these companies do not publish details of payments or transfers of value to the healthcare community.
This may change soon. In September 2023, the UK Department of Health and Social Care (DHSC) launched a public consultation, indicating a likely change of approach. The consultation relates to proposed new legislation, which for the first time in the UK would make it a legal requirement to disclose financial and other benefits flowing from pharmaceutical or medical device companies to HCPs and HCOs.
The proposals consulted upon aim to address potential conflicts of interest in the supply chain, particularly for medical device suppliers, for whom no voluntary or mandatory reporting system is in place.
Significantly Broader Scope
According to the consultation, 145 companies published voluntary transfer of value disclosures on Disclosure UK in 2022. If implemented, the UK’s healthcare transparency rules will expand this to a much larger scale in two key respects:
- First, the categories of companies who would be subject to mandatory disclosure would be far broader. Currently, Disclosure UK typically applies to ABPI Members (or voluntary adherents to the ABPI Code). Generally, these are innovative pharmaceutical companies responsible for the manufacture and/or first supply of branded medicines. The proposed new legislation widens this significantly to cover suppliers of generic and unbranded medicines, medical devices, so-called “borderline” products, such as some cosmetics, and foods for special medical purposes that are purchased by healthcare systems.
- Second, the proposed new disclosure obligations would apply to “every manufacturer and commercial supplier […] as well as their subsidiaries and parent businesses.” Therefore importers, wholesalers, and other distribution partners may also now be in scope, not just marketing authorization holders or those that promote the relevant products to HCPs.
Why the Changes?
Trust and confidence in the healthcare sector are the main drivers behind the proposals. The intention is to set a universal reporting standard across much of the healthcare supply chain. That standard would require medical device and generics suppliers, amongst others, to adhere to similar standards to those currently in place for branded prescription medicines under the ABPI Code. The broad coverage is considered key to maintaining trust in the system.
The desire to extend this high standard to manufacturers and suppliers of medical devices is a particular priority. This is responsive to the 2020 Independent Medicines and Medical Devices Safety Review report, led by Baroness Cumberlege, which raised concerns about actual or perceived conflicts of interest relating to payments or payments in kind from device manufacturers to teaching hospitals, research institutions and individuals.
Readers should note that the overarching power to require disclosure already exists under UK law. The Health and Care Act 2022 empowers the Secretary of State to pass secondary legislation to require the disclosure of payments or benefits to any person either providing healthcare or related to providing healthcare in the UK.
Focus of Consultation
The consultation focuses upon some key questions, including the following:
- Is the proposed scope of the reporting requirement appropriate (i.e., companies supplying medicines, devices, and borderline substances)?
- What kinds of recipients of payments/benefits are in scope? Does it matter, for example, if a HCP or HCO operates entirely within the private sector? Should payments to individuals or entities related to healthcare provision, such as those involved in medical research, training, charity arms of hospitals or similar organizations, also be disclosable?
- How often should businesses be required to make disclosures?
- Currently, the proposal contemplates businesses publishing their payment statistics on their own websites. The consultation also considers whether companies should instead use approved third-party schemes (such as the ABPI’s Disclosure UK tool).
- What information is required to constitute adequate disclosure?
- What is the appropriate extent of disclosure for individual recipients, taking into account data protection issues?
Watch this Space
The consultation closed on 16 October 2023 and we expect the outcome to be published in the coming months.
The outcome of the consultation may result in new rules affecting a large number and broad base of healthcare suppliers, including in particular businesses supplying medical devices and medical foods.
Covington will continue to follow developments and provide further updates.