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Sunshine Act exemption for CME payments could shift marketing

By Jaimy Lee
Posted: June 28, 2014 - 12:01 am ET

A CMS rule that exempts drug and medical-device companies from having to disclose indirect payments to physicians for accredited continuing medical education could prompt manufacturers to shift their marketing dollars toward CME and away from direct promotional programs for their products, experts say.

If that occurs, it would reverse a yearslong trend of manufacturers pulling back on CME grants.

Drug and device companies pay hundreds of millions of dollars a year to for-profit companies and not-for-profit organizations such as academic medical centers that educate physicians about new treatment options and help them hone their skills as part of accredited or certified CME programs. The CME providers then hire and pay doctors to lead the sessions.

Manufacturers are exempt from reporting these indirect CME payments to doctors under the Physician Payments Sunshine Act, which generally requires public disclosure of industry payments to physicians and teaching hospitals starting in September. Companies will still have to report the value of some meals they provide to all physicians at CME events.

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Some experts worry that the CMS exemption for reporting CME payments will create a loophole for manufacturers to influence doctors without having to disclose their involvement.

“It's a lot of money that's being put into CME by industry,” said Dr. Daniel Carlat, director of the Prescription Project at Pew Charitable Trusts. “There's a chance to look for opportunities where money cannot be disclosed.” There's been increasing concern in academia that industry payments for CME bias these programs, and that biased sessions lead the doctors attending the sessions “to unduly prescribe products that industry is pushing,” he added.

Pew and the American Medical Student Association have called for ending industry funding for accredited CME.

But CME providers and their accrediting organizations say they have strong voluntary standards in place that prevent manufacturers from shaping the content of their CME programs or influencing the selection of the physicians who speak at the sessions. Those standards were the reason why the CMS rule implementing the Sunshine Act exempted manufacturers' payments for accredited CME to physicians from public disclosure, they say.

“The rule reflected standards that were already in our rules,” said Dr. Murray Kopelow, president and CEO of the Accreditation Council for Continuing Medical Education, the largest of the five organizations that the CMS lists as an approved accreditor of CME providers under the exemption. “Accredited providers are responsible for ensuring that each individual activity meets the appropriate standards.”

“We are a very strong advocate for high ethical standards,” said Andrew Rosenberg, senior adviser for the CME Coalition, a trade group representing CME organizations and manufacturers that fund CME. “A commercial supporter has no input into who participates and isn't able to choose the speakers or in any way influence the curriculum.”


Some experts worry that the CMS exemption will create a loophole for drug and devicemakers to influence doctors without having to disclose their involvement.

Influencing CME content

Critics say, however, that manufacturers still can influence CME content indirectly by supporting CME programs in clinical areas where they have dominant products.

The Sunshine Act, which is a section of the Patient Protection and Affordable Care Act, grew out of widespread concern that financial relationships between doctors and manufacturers have driven up healthcare costs. Critics say doctors disproportionately use pricey drugs and devices made by companies that pay them to participate in their promotional and marketing programs. Some say industry-funded CME programs are part of the problem.

Under the Sunshine Act, nearly all “transfers of value”—including gifts, consulting and speaking fees, and meals worth more than $10—from industry to physicians and teaching hospitals must be reported and will then be disclosed in a public database. Funding of accredited CME programs is exempt from that mandate.

Experts say the Sunshine Act disclosures and increased awareness among consumers, lawmakers, researchers and the media about these relationships between doctors and industry likely will change how companies market drugs and devices. But while gifts, travel and consulting fees are easy conflicts of interest to identify, conflicts related to CME payments are less clear-cut.

CME is considered an integral part of medical education in the U.S. Most states require doctors to complete a set number of hours of accredited CME to maintain their medical licenses.

In accredited and certified CME programs, manufacturers commonly provide grants to third-party CME providers such as for-profit medical communications firms and not-for-profits such as academic medical centers, medical schools and disease awareness organizations to develop CME programs around specific therapeutic or disease categories. The accredited CME providers then hire speakers, usually doctors, and develop the content for live or online events attended by physicians or other healthcare professionals.

Significant players in the for-profit medical communications industry include WebMD's Medscape business unit, the Postgraduate Institute for Medicine, and Research to Practice. They each received at least $10 million in grants from industry for CME in 2010, according to a study published last year in JAMA. WebMD declined to comment for this article.

The number of accredited CME providers in the U.S. fell 13% from 2,300 in 2008 to 2,000 in 2012, and the number of accredited CME events dropped about 11% from 150,000 in 2008 to 133,000 in 2012, according to the ACCME.

But the amount of money spent on CME remains very significant for manufacturers, CME providers, and physicians. A total of $2.47 billion was spent on accredited CME in 2012, according to ACCME data, and one-quarter of that revenue came from industry support. The share of CME costs paid by manufacturers is down from previous years, when drug company spending made up half of all CME grants.

The JAMA study found that 14 drug and device companies paid $657 million in grants to CME providers in 2010. For-profit medical communication firms received about 77% of that total, with the rest going to academic medical centers and disease-targeted organizations.

In total, the pharmaceutical industry spent about $27 billion on drug promotion in 2012, with nearly all of that spending going toward marketing to physicians, according to Pew data. This figure does not include CME, which Pew considers indirect marketing.

CME traditionally has been viewed as one of the industry's primary marketing tools when launching or promoting a drug, said Eric Campbell, director of research for the Mongan Institute of Health Policy at Massachusetts General Hospital.

Some for-profit medical communication companies provide accredited CME and unaccredited promotional and marketing programs. In the latter types of programs, drug and device companies have control over the content and the speakers, and payments to physicians who speak must be disclosed under the Sunshine Act. But accreditation standards prohibit employees at these companies from working on both sides of the business, and the accredited CME and promotional arms must be organized as separate corporations.

Preventing bias

Accredited and certified CME programs are required by CME accrediting organizations to be independent of industry influence. Under accreditation standards, CME providers cannot allow sponsoring manufacturers to play any role in selecting program speakers or shaping the content. But some experts say the standards currently in place aren't sufficient to prevent bias toward the sponsoring company's products or services.

“There's no real question in anybody's mind … that companies focus their CME spending on products in therapeutic areas that will make them money,” Pew Charitable Trusts' Carlat said.

Pew and the American Medical Student Association have urged academic medical centers to establish “additional safeguards beyond” what the ACCME requires.

Most academic medical centers and medical schools continue to receive funding from industry for the accredited CME programs. Notable exceptions include the University of Michigan, which accepts no industry funding for CME, and Stanford University, which has restrictive policies that have discouraged industry support for CME.

There also has been an increase in the number of hospital systems and academic medical centers that don't allow their affiliated physicians to participate in both manufacturer-paid promotional work and teaching accredited CME programs. The concern “is that physicians who market products for companies are more likely to give biased CME presentations, especially if the CME is funded by those same companies,” Carlat said.

There have been cases that have raised questions about the integrity of CME. In 2010, AstraZeneca reached a $520 million settlement with the U.S. Justice Department over allegations related to the marketing of its blockbuster anti-psychotic Seroquel. The settlement said the British drugmaker “improperly and unduly” influenced the choice of content and speakers for CME programs that it funded.

The new reporting requirements, increasing media attention to such relationships between doctors and industry, and the decline of the traditional blockbuster- drug sales model already have led to shifts in how some drug and device companies market their products.

Late last year, drugmaker GlaxoSmithKline announced it would stop direct payments to healthcare professionals for speaking engagements and attendance at medical conferences by the start of 2016. Instead, the company said, it would increase efforts to support medical education, which may include promotional and unbranded programs as well as accredited CME. Pfizer previously said it would not fund CME courses offered by for-profit companies. Both drugmakers also said they would no longer pay for meals served to doctors at CME events, the value of which must be reported to the Open Payments database, which the CMS is expected to launch Sept. 30.

“Companies are taking matters into their own hands as they see the public perception of some of this funding is becoming sour,” Carlat said. “As long as CME is a safe harbor in the Sunshine Act, it's possible that the industry will look for more ways to spend money on CME.”

Effect of new requirements

Experts say that while industry funding for accredited CME has dropped in recent years, the new reporting requirements may prompt them to boost their support. “The non-accredited activities (such as) promotional activities, I've been told, are going to diminish because they don't have the protections in the exemption of the Sunshine Act,” the ACCME's Kopelow said.

Kathleen Marley-Matts, managing director of CME business at Quintiles, a North Carolina-based provider of accredited CME, product development and marketing services, said her company's business hasn't changed. But she says there is plenty of speculation in her industry about whether manufacturers will choose to spend more money on CME because it is exempt from reporting requirements.

Critics say that manufacturers should not be involved at all in funding accredited CME, and that physicians should shell out for their own continuing education, just as other professionals do. “Physicians should pay for this,” Campbell said. “This is an investment in their human capital that they reap back in the form of a salary.”

Correction: The article “Sunshine Act exemption for CME payments could shift marketing” (June 28, p. 16) incorrectly stated that the Association of American Medical Colleges has called for ending industry funding for accredited CME. It has not.

Follow Jaimy Lee on Twitter: @MHjlee

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