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[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 301 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 301

      To amend title XI of the Social Security Act to provide for 
 transparency in the relationship between physicians and manufacturers 
 of drugs, devices, biologicals, or medical supplies for which payment 
              is made under Medicare, Medicaid, or SCHIP.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                            January 22, 2009

Mr. Grassley (for himself, Mr. Kohl, and Ms. Klobuchar) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL

 
      To amend title XI of the Social Security Act to provide for 
 transparency in the relationship between physicians and manufacturers 
 of drugs, devices, biologicals, or medical supplies for which payment 
              is made under Medicare, Medicaid, or SCHIP.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Physician Payments Sunshine Act of 
2009''.

SEC. 2. TRANSPARENCY REPORTS AND REPORTING OF PHYSICIAN OWNERSHIP OR 
              INVESTMENT INTERESTS.

    Part A of title XI of the Social Security Act (42 U.S.C. 1301 et 
seq.) is amended by inserting after section 1128F the following new 
section:

``SEC. 1128G. TRANSPARENCY REPORTS AND REPORTING OF PHYSICIAN OWNERSHIP 
              OR INVESTMENT INTERESTS.

    ``(a) Transparency Reports.--
            ``(1) Payments or other transfers of value.--
                    ``(A) In general.--Except as provided in subsection 
                (e), on March 31, 2011, and on the 90th day of each 
                calendar year beginning thereafter, any applicable 
                manufacturer that provides a payment or other transfer 
                of value to a covered recipient (or to an entity or 
                individual at the request of or designated on behalf of 
                a covered recipient), shall submit to the Secretary, in 
                such electronic form as the Secretary shall require, 
                the following information with respect to the preceding 
                calendar year:
                            ``(i) The name of the covered recipient.
                            ``(ii) The business address of the covered 
                        recipient and, in the case of a covered 
                        recipient who is a physician, the specialty and 
                        Medicare billing number of the covered 
                        recipient.
                            ``(iii) The value of the payment or other 
                        transfer of value.
                            ``(iv) The dates on which the payment or 
                        other transfer of value was provided to the 
                        covered recipient.
                            ``(v) A description of the form of the 
                        payment or other transfer of value, indicated 
                        (as appropriate for all that apply) as--
                                    ``(I) cash or a cash equivalent;
                                    ``(II) in-kind items or services;
                                    ``(III) stock, a stock option, or 
                                any other ownership interest, dividend, 
                                profit, or other return on investment; 
                                or
                                    ``(IV) any other form of payment or 
                                other transfer of value (as defined by 
                                the Secretary).
                            ``(vi) A description of the nature of the 
                        payment or other transfer of value, indicated 
                        (as appropriate for all that apply) as--
                                    ``(I) consulting fees;
                                    ``(II) compensation for services 
                                other than consulting;
                                    ``(III) honoraria;
                                    ``(IV) gift;
                                    ``(V) entertainment;
                                    ``(VI) food;
                                    ``(VII) travel;
                                    ``(VIII) education;
                                    ``(IX) research;
                                    ``(X) charitable contribution;
                                    ``(XI) royalty or license;
                                    ``(XII) current or prospective 
                                ownership or investment interest;
                                    ``(XIII) compensation for serving 
                                as faculty or as a speaker for a 
                                continuing medical education program;
                                    ``(XIV) grant; or
                                    ``(XV) any other nature of the 
                                payment or other transfer of value (as 
                                defined by the Secretary).
                            ``(vii) If the payment or other transfer of 
                        value is related to marketing, education, or 
                        research specific to a covered drug, device, 
                        biological, or medical supply, the name of that 
                        covered drug, device, biological, or medical 
                        supply.
                            ``(viii) Any other categories of 
                        information regarding the payment or other 
                        transfer of value the Secretary determines 
                        appropriate.
                    ``(B) Aggregate reporting.--Information submitted 
                by an applicable manufacturer under subparagraph (A) 
                shall include the aggregate amount of all payments or 
                other transfers of value provided by the applicable 
                manufacturer to covered recipients (and to entities or 
                individuals at the request of or designated on behalf 
                of a covered recipient) during the preceding year.
                    ``(C) Special rule for certain payments or other 
                transfers of value.--In the case where an applicable 
                manufacturer provides a payment or other transfer of 
                value to an entity or individual at the request of or 
                designated on behalf of a covered recipient, the 
                applicable manufacturer shall disclose that payment or 
                other transfer of value under the name of the covered 
                recipient.
            ``(2) Physician ownership.--In addition to the requirement 
        under paragraph (1)(A), on March 31, 2011, and on the 90th day 
        of each calendar year beginning thereafter, any applicable 
        manufacturer or applicable group purchasing organization shall 
        submit to the Secretary, in such electronic form as the 
        Secretary shall require, the following information regarding 
        any ownership or investment interest (other than an ownership 
        or investment interest in a publicly traded security and mutual 
        fund, as described in section 1877(c)) held by a physician (or 
        an immediate family member of such physician (as defined for 
        purposes of section 1877(a))) in the applicable manufacturer or 
        applicable group purchasing organization during the preceding 
        year:
                    ``(A) The dollar amount invested by each physician 
                holding such an ownership or investment interest.
                    ``(B) The value and terms of each such ownership or 
                investment interest.
                    ``(C) Any payment or other transfer of value 
                provided to a physician holding such an ownership or 
                investment interest (or to an entity or individual at 
                the request of or designated on behalf of a physician 
                holding such an ownership or investment interest), 
                including the information described in clauses (i) 
                through (viii) of paragraph (1)(A), except that in 
                applying such clauses, `physician' shall be substituted 
                for `covered recipient' each place it appears.
                    ``(D) Any other information regarding the ownership 
                or investment interest the Secretary determines 
                appropriate.
    ``(b) Penalties for Noncompliance.--
            ``(1) Failure to report.--
                    ``(A) In general.--Subject to subparagraph (B), 
                except as provided in paragraph (2), any applicable 
                manufacturer or applicable group purchasing 
                organization that fails to submit information required 
                under subsection (a) in a timely manner in accordance 
                with rules or regulations promulgated to carry out such 
                subsection, shall be subject to a civil money penalty 
                of not less than $1,000, but not more than $10,000, for 
                each payment or other transfer of value or ownership or 
                investment interest not reported as required under such 
                subsection. Such penalty shall be imposed and collected 
                in the same manner as civil money penalties under 
                subsection (a) of section 1128A are imposed and 
                collected under that section.
                    ``(B) Limitation.--The total amount of civil money 
                penalties imposed under subparagraph (A) with respect 
                to each annual submission of information under 
                subsection (a) by an applicable manufacturer or 
                applicable group purchasing organization shall not 
                exceed $150,000.
            ``(2) Knowing failure to report.--
                    ``(A) In general.--Subject to subparagraph (B), any 
                applicable manufacturer or applicable group purchasing 
                organization that knowingly fails to submit information 
                required under subsection (a) in a timely manner in 
                accordance with rules or regulations promulgated to 
                carry out such subsection, shall be subject to a civil 
                money penalty of not less than $10,000, but not more 
                than $100,000, for each payment or other transfer of 
                value or ownership or investment interest not reported 
                as required under such subsection. Such penalty shall 
                be imposed and collected in the same manner as civil 
                money penalties under subsection (a) of section 1128A 
                are imposed and collected under that section.
                    ``(B) Limitation.--The total amount of civil money 
                penalties imposed under subparagraph (A) with respect 
                to each annual submission of information under 
                subsection (a) by an applicable manufacturer or 
                applicable group purchasing organization shall not 
                exceed $1,000,000.
            ``(3) Use of funds.--Funds collected by the Secretary as a 
        result of the imposition of a civil money penalty under this 
        subsection shall be used to carry out this section.
    ``(c) Procedures for Submission of Information and Public 
Availability.--
            ``(1) In general.--
                    ``(A) Establishment.--Not later than November 1, 
                2009, the Secretary shall establish procedures--
                            ``(i) for applicable manufacturers and 
                        applicable group purchasing organizations to 
                        submit information to the Secretary under 
                        subsection (a); and
                            ``(ii) for the Secretary to make such 
                        information submitted available to the public.
                    ``(B) Definition of terms.--The procedures 
                established under subparagraph (A) shall provide for 
                the definition of terms (other than those terms defined 
                in subsection (g)), as appropriate, for purposes of 
                this section.
                    ``(C) Public availability.--The procedures 
                established under subparagraph (A)(ii) shall ensure 
                that, not later than September 30, 2011, and on June 30 
                of each calendar year beginning thereafter, the 
                information submitted under subsection (a) with respect 
                to the preceding calendar year is made available 
                through an Internet website that--
                            ``(i) is searchable and is in a format that 
                        is clear and understandable;
                            ``(ii) contains information that is 
                        presented by the name of the applicable 
                        manufacturer or applicable group purchasing 
                        organization, the name of the covered 
                        recipient, the business address of the covered 
                        recipient, the specialty of the covered 
                        recipient, the value of the payment or other 
                        transfer of value, the date on which the 
                        payment or other transfer of value was provided 
                        to the covered recipient, the form of the 
                        payment or other transfer of value, indicated 
                        (as appropriate) under subsection (a)(1)(A)(v), 
                        the nature of the payment or other transfer of 
                        value, indicated (as appropriate) under 
                        subsection (a)(1)(A)(vi), and the name of the 
                        covered drug, device, biological, or medical 
                        supply, as applicable;
                            ``(iii) contains information that is able 
                        to be easily aggregated and downloaded;
                            ``(iv) contains a description of any 
                        enforcement actions taken to carry out this 
                        section, including any penalties imposed under 
                        subsection (b), during the preceding year;
                            ``(v) contains background information on 
                        industry-physician relationships;
                            ``(vi) in the case of information submitted 
                        with respect to a payment or other transfer of 
                        value described in subsection (e), lists such 
                        information separately from the other 
                        information submitted under subsection (a) and 
                        designates such separately listed information 
                        as funding for clinical research;
                            ``(vii) contains any other information the 
                        Secretary determines would be helpful to the 
                        average consumer; and
                            ``(viii) provides the covered recipient an 
                        opportunity to submit corrections to the 
                        information made available to the public with 
                        respect to the covered recipient.
            ``(2) Consultation.--In establishing the procedures under 
        paragraph (1), the Secretary shall consult with the Inspector 
        General of the Department of Health and Human Services, 
        affected industry, consumers, consumer advocates, and other 
        interested parties in order to ensure that the information made 
        available to the public under such paragraph is presented in 
        the appropriate overall context.
    ``(d) Annual Reports and Relation to State Laws.--
            ``(1) Annual report to congress.--Not later than April 1 of 
        each year beginning with 2011, the Secretary shall submit to 
        Congress a report that includes the following:
                    ``(A) The information submitted under subsection 
                (a) during the preceding year, aggregated for each 
                applicable manufacturer and applicable group purchasing 
                organization that submitted such information during 
                such year.
                    ``(B) A description of any enforcement actions 
                taken to carry out this section, including any 
                penalties imposed under subsection (b), during the 
                preceding year.
            ``(2) Annual reports to states.--Not later than April 1 of 
        each year beginning with 2011, the Secretary shall submit to 
        States a report that includes a summary of the information 
        submitted under subsection (a) during the preceding year with 
        respect to covered recipients in the State.
            ``(3) Relation to state laws.--
                    ``(A) In general.--Effective on January 1, 2010, 
                subject to subparagraph (B), the provisions of this 
                section shall preempt any law or regulation of a State 
                or of a political subdivision of a State that requires 
                an applicable manufacturer (as defined in subsection 
                (g)) to disclose or report information (as described in 
                subsection (a)) regarding a payment or other transfer 
                of value provided by the applicable manufacturer to a 
                covered recipient (as so described).
                    ``(B) No preemption of additional requirements.--
                Subparagraph (A) shall not preempt any law or 
                regulation of a State or of a political subdivision of 
                a State that requires the disclosure or reporting of 
                information not required to be disclosed or reported 
                under this section.
    ``(e) Delayed Reporting for Payments Made Pursuant to Product 
Development Agreements and Clinical Investigations.--In the case of a 
payment or other transfer of value made to a covered recipient by an 
applicable manufacturer pursuant to a product development agreement for 
services furnished in connection with the development of a new drug, 
device, biological, or medical supply, or by an applicable manufacturer 
in connection with a clinical investigation, the applicable 
manufacturer may report the value of such payment or other transfer of 
value in the first reporting period under subsection (a) after the 
earlier of the following:
            ``(1) The date of the approval or clearance of the covered 
        drug, device, biological, or medical supply by the Food and 
        Drug Administration.
            ``(2) Two calendar years after the date such payment or 
        other transfer of value was made.
    ``(f) Implementation.--
            ``(1) Consultation.--The Secretary shall consult with the 
        Inspector General of the Department of Health and Human 
        Services on the implementation of this section.
            ``(2) Limitation on review.--There shall be no judicial 
        review of the implementation of this section.
    ``(g) Definitions.--In this section:
            ``(1) Applicable group purchasing organization.--The term 
        `applicable group purchasing organization' means a group 
        purchasing organization (as defined by the Secretary) that 
        purchases, arranges for, or negotiates the purchase of a 
        covered drug, device, biological, or medical supply.
            ``(2) Applicable manufacturer.--The term `applicable 
        manufacturer' means a manufacturer of a covered drug, device, 
        biological, or medical supply.
            ``(3) Clinical investigation.--The term `clinical 
        investigation' means any experiment involving 1 or more human 
        subjects in which a drug or device is administered, dispensed, 
        or used.
            ``(4) Covered device.--The term `covered device' means any 
        device for which payment is available under title XVIII or a 
        State plan under title XIX or XXI (or a waiver of such a plan).
            ``(5) Covered drug, device, biological, or medical 
        supply.--The term `covered drug, device, biological, or medical 
        supply' means any drug, biological product, device, or medical 
        supply for which payment is available under title XVIII or a 
        State plan under title XIX or XXI (or a waiver of such a plan).
            ``(6) Covered recipient.--The term `covered recipient' 
        means the following:
                    ``(A) A physician.
                    ``(B) A physician medical practice.
                    ``(C) A physician group practice.
            ``(7) Employee.--The term `employee' has the meaning given 
        such term in section 1877(h)(2).
            ``(8) Knowingly.--The term `knowingly' has the meaning 
        given such term in section 3729(b) of title 31, United States 
        Code.
            ``(9) Manufacturer of a covered drug, device, biological, 
        or medical supply.--The term `manufacturer of a covered drug, 
        device, biological, or medical supply' means any entity which 
        is engaged in the production, preparation, propagation, 
        compounding, conversion, processing, marketing, or distribution 
        of a covered drug, device, biological, or medical supply (or 
        any subsidiary of or entity affiliated with such entity).
            ``(10) Payment or other transfer of value.--
                    ``(A) In general.--The term `payment or other 
                transfer of value' means a transfer of anything of 
                value and includes, subject to subparagraph (B), 
                without limitation, any compensation, gift, honorarium, 
                speaking fee, consulting fee, travel, services, 
                dividend, profit distribution, stock or stock option 
                grant, or ownership or investment interest.
                    ``(B) Exclusions.--An applicable manufacturer shall 
                not be required to submit information under subsection 
                (a) with respect to the following:
                            ``(i) Any payment or other transfer of 
                        value provided by an applicable manufacturer to 
                        a covered recipient where the aggregate amount 
                        transferred to, requested by, or designated on 
                        behalf of the covered recipient does not exceed 
                        $100 during the calendar year. Such aggregate 
                        amount shall be determined without taking into 
                        account any payment or other transfer of value 
                        described in clauses (ii) through (ix).
                            ``(ii) Product samples that are not 
                        intended to be sold and are intended for 
                        patient use.
                            ``(iii) Educational materials that directly 
                        benefit patients or are intended for patient 
                        use.
                            ``(iv) The loan of a covered device for a 
                        short-term trial period, not to exceed 90 days, 
                        to permit evaluation of the covered device by 
                        the covered recipient.
                            ``(v) Items or services provided under a 
                        contractual warranty, including the replacement 
                        of a covered device, where the terms of the 
                        warranty are set forth in the purchase or lease 
                        agreement for the covered device.
                            ``(vi) A transfer of anything of value to a 
                        covered recipient when the covered recipient is 
                        a patient and not acting in the professional 
                        capacity of a covered recipient.
                            ``(vii) Discounts (including rebates).
                            ``(viii) In-kind items used for the 
                        provision of charity care.
                            ``(ix) A dividend or other profit 
                        distribution from, or ownership or investment 
                        interest in, a publicly traded security and 
                        mutual fund (as described in section 1877(c)).
            ``(11) Physician.--The term `physician' has the meaning 
        given that term in section 1861(r). For purposes of this 
        section, such term does not include a physician who is an 
        employee of the applicable manufacturer that is required to 
        submit information under subsection (a).''.
                                 <all>
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