To implement Section 35(b) of the Universal Healthcare Act (“UHC Act“), the Department of Health (DOH) has issued Administrative Order No. 2021-0036 entitled ‘Guidelines on Compliance with Section 35(b) of [the UHC Act]: All Drug, Medical Device, Biological and Medical Supplies Manufacturers to Submit Reports on Disclosure of Financial Relationships with Health Care Providers and Health Care Professionals’ (“Disclosure Guidelines” ). The Disclosure Guidelines require covered drug and medical device companies to submit Disclosure Reports on their financial relationships with healthcare providers and healthcare professionals (collectively, HCP ) to the Food and Drug Administration (FDA).1
The Disclosure Guidelines took effect on 24 July 2021, 15 days from the date of publication in a newspaper of general circulation. Under FDA Advisory No. 2021-2035 dated 16 August 2021, the first Disclosure Report under the Disclosure Guidelines shall be due on 15 September 2021.
Implications for covered companies
The Disclosure Guidelines apply to FDA-licensed manufacturers, traders, re-packers, distributor-importers, and distributor-wholesalers of drugs, medical devices, and biological products, including vaccines, and medical supplies registered with the FDA (“Covered Persons“). These Covered Persons will now be subject to additional compliance obligations and greater transparency in their dealings with HCPs, by requiring Covered Persons to file regular Disclosure Reports to the FDA.
What the regulation says
The Disclosure Guidelines require all Covered Persons to document, maintain records, submit to the DOH and FDA, and make publicly available data and information on all financial relationships, directly or indirectly, with HCPs, both in the private and public sectors.
Financial relationships with HCPs cover the following:
- All sponsorship of events, research and educational grants, payment of services, space rentals or facility fees, donations for patients, and other service arrangements
- All donations, educational grants, research funding, sponsorship related to events, travel, and accommodation, registration fees, honoraria, support for continuing professional development, royalties, current or prospective ownership or investment interest, consultancy/speakership fees, among other arrangements
- For drugstores, payments for disease awareness partnership programs, training of drugstore pharmacists conducted by companies or training of drugstore pharmacists conducted by third parties on behalf of companies, or financial relationships of a similar nature
Under the implementing rules and regulations of the UHC Act (“UHC Act IRR“), ‘financial relationship’ includes ‘transfers of value,’ which cover direct or indirect transfer of benefits or gains, whether in cash, in kind, or otherwise, made, whether for promotional purposes or otherwise, in connection with the development or sale of drugs, medical devices, and biological and medical supplies.
The Disclosure Report shall not include regular commercial or trade transactions2 between the Covered Persons and the HCPs. However, the DOH Public Health Ethics Committee (PHEC) may request for information on such transactions in case of an investigation.
The Disclosure Reports must be submitted online through the FDA Online Disclosure Report System (ODRS) that can be accessed via https://odrs.fda.gov.ph.
Covered Persons shall be responsible to record, track, and check all financial relationships with HCPs3 by establishing an electronic database, procedures, and system for financial relationships, which may be subject to inspection by the PHEC.
The president, CEO, chairperson, owner or top management of all Covered Persons is responsible for the completeness and accuracy of the Disclosure Reports. The FDA shall provide such person with the account and access to the ODRS, which may be shared or delegated to their authorized officer or personnel for full compliance purposes.
The Disclosure Report must be submitted on a semi-annual basis as provided below:
|Covered period||Deadline for updating in the ODRS|
|First half of the current year*||15 July of the current year|
|Second half of the current year||15 January of the succeeding year|
*As provided in FDA Advisory No. 2021-2035, the first Disclosure Report covering January 2021 to June 2021 is due for filing with the FDA on 15 September 2021.
The PHEC may request for updates at any time of the year for the purpose of determining potential or actual conflicts of interest, especially when assessing, evaluating, or monitoring government or DOH projects or programs.
Failure of a Covered Person to submit and update the Disclosure Reports will constitute a violation of the FDA Act and its implementing rules and regulations and may be a basis or ground for the PHEC to investigate, process, and recommend to the FDA to conduct an inspection of the Covered Persons, check on the financial relationship with HCPs and report the findings.
Actions to consider
Covered Persons should implement and have a system in place to record, monitor, and maintain records relating to all their financial relationships with HCPs to allow them to comply with the obligations under the Disclosure Guidelines.
To ensure compliance with the regulations, affected establishments should also understand the financial relationships that are covered by the disclosure requirements and those that are exempt from disclosure.
Quisumbing Torres’ Healthcare Industry Group can assist affected establishments to ensure compliance with the Disclosure Guidelines.
1 The DOH has also issued DOH Administrative Order No. 2021-0011, entitled ‘Implementing Guidelines of Section 35 of the [UHC Act] on Standards on Receipt, Assessment, and Management of Conflict of Interest.’
2 Regular Commercial or Trade Transactions refer to the sales agreement between two parties or more to exchange items of value, usually money or some other remuneration for goods or services.
3 Health Care Provider (HCP) refers to any of the following: 1) A Health Facility, which may be public or private, devoted primarily to the provision of services for health promotion, prevention, diagnosis, treatment, rehabilitation and palliation of individuals suffering from illness, disease, injury, disability, or deformity, or in need of obstetrical or other medical and nursing care; 2) Community-based Health Care Organization, which refers to an association of members of the community organized for the purpose of improving the health status of that community; 3) Pharmacy or drug outlet, which refers to establishments licensed under the FDA Act and sell or offer to sell any health product directly to the general public or entities licensed by appropriate government agencies, and which are involved in compounding and/or dispensing and selling of pharmaceutical products directly to patients or end users as defined under the Philippine Pharmacy Act; 4) Laboratory and Diagnostic Clinic, which refers to licensed facilities where tests are done on the human body or on specimens thereof to obtain information about the health status of a patient for the prevention, diagnosis and treatment of diseases. 5) Health Care Professional, which refers to the doctor of medicine, nurse, midwife, dentist, or other allied health professional or practitioner duly licensed to practice in the Philippines.
*Authored by Quisumbing Torres, a member firm of Baker & McKenzie International, a Swiss Verein. Please contact [email protected] for inquiries.