Shining the light on physician-pharmaceutical and medical device industry financial relationships

Long subject to legal scrutiny under the federal Anti-Kickback Statute, financial ties between physicians and drug manufacturers have recently come under additional pressure as a result of recently enacted state and federal disclosure laws and state gift restrictions, the latest coming in connection with the Federal Health Reform Law. These "sunshine" laws have been motivated by the concern that gifts and payments by manufacturers to physicians may lead to conflicts of interest and improperly influence physicians in their drug- or device-prescribing decisions. As a backdrop to these new laws, it is helpful to review prior guidance regarding manufacturer-physician financial relationships, both from the federal government and the industry itself. These laws do not prohibit physician involvement with industry in research and education, but they impose various new compliance requirements on these relationships, and also in many cases, require public disclosure of arrangements that previously were treated as confidential. It is still too early to tell if these laws will stifle innovation, but they do require a heightened degree of diligence to avoid, at a minimum, adverse publicity and embarrassment and, at worst, criminal and civil liability.