Department of Health and Social Care Consultation on the disclosure of industry payments to the healthcare sector

The Department of Health and Social Care (DHSC) has opened a consultation to seek views on the introduction of secondary legislation regulating the disclosure of life sciences industry payments to healthcare professionals and organisations. 

Aiming to address the second part of Recommendation 8 of the Independent Medicines and Medical Devices Safety (IMMDS) First Do No Harm report, around real and perceived conflicts of interest in the health system,  the government has proposed secondary legislation placing a duty on life sciences manufacturers and commercial supplier to disclose payments and other benefits to the healthcare sector.

The proposed duty aims to achieve two key objectives brought forward by the IMMDS report:

1. Improving patient trust in healthcare professionals and organisations.
2. Ensuring healthcare professionals continue to make impartial, evidenced-based decisions about patient care.

Through the consultation, open until the 16^th October, the government is seeking views from businesses that would be impacted by the proposed regulations. The questions address the scope and operation of the reporting requirements and the effectiveness of mandatory reporting in achieving the objectives set out in the IMMDS report.

Scope

The proposed duty would require disclosure of details for each transfer of value, whether a direct payment, direct benefit, or indirect payment by a manufacturer or commercial supplier of healthcare medicines, medical devices, or borderline substances to a healthcare professional or organisation. Businesses within scope will be by reference to the products placed on the UK market, using legal definitions where possible for clarity.

Mandatory disclosure of payments would also apply to any connected persons including subsidiaries, parent businesses, businesses within the same group as the manufacturer or commercial supplier of relevant products, and third parties acting on behalf of relevant businesses.

The regulations will clarify the recipients in scope, but will include the following public and private services:

• Registered healthcare professionals
• Hospitals
• Trusts
• Clinics
• Health boards
• Pharmacies
• Surgeries
• Persons carrying out activates connected with healthcare such as medical research and training organisations (e.g. royal colleges)
• Entities linked to healthcare provider organisations (e.g. charity arms of hospitals)

Operation of duty

Annual publication of a register of payments received during the previous calendar year (in line with most other obligatory business reporting) would be mandatory, coupled with publication of data to company websites, accessible through a prominent link embedded on the homepage. Minimum thresholds for reporting payments, potential exemptions, and implications for businesses in scope for only part of a year are currently under consideration.

If legislation proceeds, those businesses already disclosing payment or other benefits to healthcare organisations through voluntary schemes (such as Disclosure UK) to comply with industry codes of practice will feel less of an impact, however changes in storage and processing personal data must be considered. The DHSC is considering designating third party schemes, like Disclosure UK, that meet required standards as alternative routes for compliance. Expansion of existing voluntary schemes and continued work with trade associations to improve current codes of conduct are under consideration as an alternative or supplement to legislation.

Data Protection

Where regulation would require disclosure of personal data, usually where healthcare professionals are the recipients of payments, businesses should be aware of the requirement to inform the data subjects of their obligation to publish the personal data when granting payments or benefits.

The DHSC propose data would remain in the public domain for 3 years, similar to current UK and international data protection laws, in line with processing purpose and end use. Should there be adoption of the legislation, existing voluntary third party schemes that currently store and process data on legitimate interest grounds would need to consider potential data impacts of changing the legal basis for storage and processing. 

Enforcement

If legislation progresses, the official response to the consultation will lay out the enforcement plan and will include serving notice of intent for proposed financial penalties due to continued non-compliance, assessing culpability, allowing representations, serving final notice of imposed penalty, and available appeal routes.

How we can help

Our team of regulatory and commercial experts regularly advise clients on healthcare product classification and the legal and commercial impacts of new legislation. Should you need advice on responding to the consultation questions or wish to discuss potential impacts, Bevan Brittan would be happy to help. Please contact Vincent Buscemi, Commercial Health Partner and Head of Independent Health and Care, or Louise Brennan, Solicitor in our Commercial Health team.