The EU's Newest 'Sunshine Act' Is Coming Soon: Is the Industry Ready?
Giuseppe Saporito, Attorney-At-Law
Oct 30, 2019

Italy could be the next country to adopt American-style transparency legislation, and the still-to-be-decided outcome could have significant implications for healthcare companies operating not only in the European Union, but worldwide.

Although the Life Sciences industry couldn’t have guessed at the time, the 2010 passage of the U.S. Physicians Payments Sunshine Act marked a watershed moment in global transparency regulation. In the nearly decade since then, other countries have adopted similar requirements, building on and, in many cases, expanding out the American parameters for reporting interactions between manufacturers and healthcare professionals (HCPs) and healthcare institutions (HCOs).

In the E.U., adoption of Sunshine Act-type legislation is growing, even as the industry has ramped up country-specific as well as Eurozone-wide self-regulation, such as the EFPIA Code of Practice (formerly “Disclosure Code”) developed by the European Federation of Pharmaceutical Industries and Associations.

A 2018 research paper published in the International Journal of Health Policy and Management examined transparency protocols as enacted and observed by nine different E.U. member states: Germany, Spain, France, Italy, Latvia, the Netherlands, Sweden, the United Kingdom and Portugal. In all but three — France, Latvia and Portugal — industry-led regulation governs pharmaceutical and other healthcare company oversight, but recent trends indicate that the tide is changing. Although the industry has led the way for developing transparency and reporting guidelines, lawmakers are exhibiting a growing appetite to take over this role and relegate it to the realm of government affairs.

The most recent example of this is playing out in Italy, and the end result will be an important indication of the current sentiment towards American-style HCP and HCO regulation, and a glimpse into the direction such legislation may take in the future. Industry stakeholders on both sides of the Atlantic should pay attention to this unfolding process.

In April, the Italian Chamber Assembly (a governing body akin to one of the U.S. Congressional houses) mandated that manufacturers publicly disclose payments to along with formal relationships and contracts with HCPs and HCOs. Although trade groups for the pharmaceutical and device manufacturing industry had approved transparency reporting requirements in advance of lawmakers’ taking up this issue, the new legislation will supersede it if approved by Italy’s Senate, which currently (as of Oct. 2019) has the proposed law in discussion.

The wide-ranging legislation is said to have broad support among Italian lawmakers, making it likely that some version of this legislation will come into play, albeit with possible amendments that would provide a modicum of additional flexibility for healthcare companies. This categorical push for more wide-ranging regulation should put pharmaceutical firms and other healthcare industry suppliers on notice, since there will be only a short window of time for implementing new compliance-related protocols and practices before the law’s requirements — and its stiff penalties for noncompliance — take effect.

As proposed and passed by the Italian Chamber Assembly, the forthcoming regulation would require that companies report and disclose via a central reporting platform, called “Sanità Trasparente”, any and all Transfers of Value (TOVs) — including monetary payments as well as in-kind, goods, services or other benefits — to individuals that exceed €50 per transaction, or €500 annually. The TOV threshold for each HCO interaction is €500 per TOV or €2,500 annually. Proposed amendments currently under consideration by lawmakers would raise the individual HCP thresholds to €100 and €1,000, respectively; HCO thresholds would be raised to €1,000 and €5,000, respectively.

Manufacturers also must disclose all agreements that confer direct or indirect advantages to HCPs or HCOs, including congress and other educational event participation, scientific committee and advisory board participation, research, consulting and speaking engagements. Licensing fees and ownership — via shares or bonds — must likewise be disclosed.

Similar to other Eurozone transparency laws, these disclosures would need to be reported on a biannual basis, although another proposed amendment would change this to an annualized basis, the same as its American counterpart. If this “Sunshine Act” is passed into law without the amendments by the end of the 2019 calendar year, it is expected that the Sanità Trasparente would be developed and go live within six months of the law’s passage. Data that companies would be required to collect and report includes the name of the individual or institution receiving the TOV, along with their tax identification and professional order, as well as the amount, date and nature of the expense. Companies would be required to submit this information electronically. The first period for which healthcare industry companies would be required to submit all disclosures would be January through June of 2021, with reporting due by December 21, 2021.

Two additional proposed amendments would, respectively, render the database non-indexable by search engines and create a register of industry lobbyists. The status of both of these proposals is still pending.

Failing to follow these rules could result in serious penalties: For either omissions or incomplete reporting of engagements, companies could face fines as high as 20 times the amount of the TOV in question, plus an additional sanction of €1,000 per infraction. Instances of false reporting would trigger fines starting at €5,000 and going all the way up to €100,000.

These amounts are not trivial, and the public nature of these disclosures engineers a tacit pressure on HCPs, HCOs, manufacturers and other stakeholders to comply — indeed, even an inadvertent error could elicit significant financial and public relations consequences. To this end, it is imperative that pharmaceutical and medical devicecompanies align themselves with partners that can accurately and rapidly deploy and scale compliance-centric solutions in this new regime.

For more information about IQVIA Commercial Compliance, please email or visit our webpage. Our experts leverage the industry’s leading technologies to deliver streamlined processes and improved efficiencies that solve your toughest engagement and transparency challenges. From automating and managing the entire HCP/O contracting lifecycle, to capturing, collecting, and reporting global spend; to planning efficient and compliant HCP meetings and engagements—discover how our solutions can make compliance easier for you.

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