The Act will have a significant effect on the daily business of medical device companies.

Al Reicheg

April 11, 2012

6 Min Read
Transforming Business: The Silver Lining of the Sunshine Act

The Physician Payment Sunshine Provision is scheduled to go into effect sometime this year, 90 days after CMS finalizes the regulations. The intention of the legislation is to allow for greater transparency of the relationships between industry and the medical community. Sometime next year, the first disclosure reports mandated by the provision will be due, requiring most U.S. manufacturers of drugs, devices, biologics, and medical supplies to annually disclose payments exceeding $10 per program or $100 per year provided to physicians and teaching hospitals. This legislation will add significant visibility to physician-level spending.



Figure 1. Case Study: A client leverages physician networking technologies to identify the optimal 25,000 primary care physicians from a universe of 107,000. Click image for larger view.

Although this federal transparency provision has support from diverse stakeholders, including industry, consumer, patient groups, professional medical associations, and provider organizations, its transformational effect will be uniquely felt by medical device manufacturers in the areas of cost, day-to-day operations, and physician interactions.
However, as a major catalyst for change, the Sunshine Act represents an opportunity to reevaluate all areas of efficiency and traditional physician collaboration. Device makers should ask themselves: Can we accelerate adoption of important technology advances and enable our sales and marketing teams to engage more efficiently and effectively by understanding the effect that physician influence networks have on the practice activity of a community?  The answer is yes.

Historically, medical device and pharmaceutical companies have allocated significant resources to support a range of physician relationships and, as in most industries, positively affect customer behavior. Key opinion leaders have been relied upon as program chairs and keynote speakers for their expertise, national recognition, and ability to influence others. To conduct successful programs, resources have been allocated based on research and valuation results, as well as a need to provide speaker honoraria, and lunch and dinner programs that often involved travel.
Public scrutiny has increased in recent years, and the Sunshine Act is likely to intensify the external glare of media. But, while this legislation brings with it the tasks of compliance, tracking, and reporting, it also provides an opportunity to more closely examine the strategies behind resource allocation. With the bright light of the Sunshine Act on our spending strategies, will they hold up to internal scrutiny?

Will the implementation of this provision affect speaker bureaus?  Will we lose some national or regional thought leaders?  No one can be sure yet.  But what is certain is that there is a window of opportunity to optimize spending prior to 2013 and ensure that we identify customer engagements that are more strategic and valuable to our organizations.

Make Plans to be “Sunshine-Smart”

As the Sunshine Act dawns, there are steps that manufacturers should take to reassess resource allocation strategies. First, there are a few key questions to ask: Are there better ways to identify optimal customers; Are we overlooking key relationships that may be highly advantageous?  


Compared to five years ago, the effect of social networking on our lives has made understanding the networks of connectivity between people increasingly vital. Studies now show that physicians are far more likely to find out about products from friends and colleagues than they are from a company’s marketing efforts.  


Now, it is much harder to control how people first come to experience our messages. Therefore, it is important to identify the communication architecture, the network interactions, that drive the practice behavior of a community.

All of us belong to different networks made up of different kinds of relationships. Networks are not new. People have always clustered themselves into groups based on different types of relationships between individuals. Social networks are simply the online manifestation of our natural social behavior.


Due to the specific demands of practicing medicine, physicians have very defined professional relationship networks that facilitate sharing opinions and experience with peers who are considered experts. The purpose is to cut through the noise and receive an honest evaluation, to validate, vet, and convey information. Professional opinions are shared in networks and physicians’ participation and role in each is unique. Some members are merely influencers, while others in the network are highly influential triggers for decision-making.


Advanced analytics and networking technologies identify valuable new insights in data, making sense of millions of practice interactions between physician pairs. Results enable us to understand who affects the practice decisions of whom and the practice behaviors of networks of professionals.

Making Sense of Interactions Between Physicians

Treatment and/or referral decisions are made every day in every community, and are often the result of shared experiences between peers. Medicine is not practiced in a silo. Behavior changes and decisions are the result of any number of network interactions. For example, segmenting physicians by a certain attribute, such as identifying all gastroenterologists, is valuable, but identifying the gastroenterologist with practice activity that affects the behavior of a primary care physician (PCP) reveals additional value. Networking technologies are enabling medical device companies to identify the inner dynamics of physician peer networks to activate more valuable physician engagements.

These technologies now identify the following:

  • The physician influence and communication network architecture of every community by disease state/condition.

  • Key networks that drive the practice activity of their communities.

  • Interspecialist network relationship insights and the emergence of new practice patterns and activity.

Case Study: Leveraging Relationships

In this case study, the client had excellent relationships with a targeted universe of customers—specialists in the therapeutic class. The team saw an opportunity with PCPs, but resources were very limited. It was important to identify a very manageable number of optimal PCPs from a pool of more than 100,000 who were diagnosing, and sometimes treating and referring, patients in this therapeutic area.

The client saw opportunity and value in leveraging the relationships with their current specialist customers, by identifying PCPs who were in the influence network of current key customers.  Identifying influence networks across the country, where customer specialists had direct connectivity or influence on PCPs, enabled the client to efficiently narrow the universe by 75%—from approximately 100,000 to a more manageable 25,000 PCPs—each representing a new opportunity to leverage current key customer relationships (see Figure 1).

New, data-centric technologies reveal physician peer network interactions in each community, providing better ways to understand the value of current relationships, and leverage physician network relationships to identify new market opportunities.


With some of the most significant changes to the healthcare industry in the last half century set to go into effect in the very near future, there is understandably a great deal of uncertainty felt by device and drug manufacturers across the United States. By leveraging the synergistic approaches offered by new physician networking technologies, we can ensure that customer engagements are more strategic and valuable to our organizations. The Sunshine Act may seem like a dark cloud on the horizon, but the silver lining here is the opportunity to rethink and significantly improve the way we engage and connect with our customers and their networks.



Alan G. Reicheg is chief commercial officer at Qforma (Princeton, NJ). He has held leadership positions in marketing and managed care for MedPointe Pharmaceuticals and was senior director of marketing at Savient Pharmaceuticals. He received his BA from Rutgers University and is a member of the Coalition for Healthcare Communication. Reach him at [email protected].


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