DHSC consults on statutory disclosure of industry payments to the healthcare sector


The Department of Health & Social Care (DHSC) has commenced a public consultation on mandatory disclosure of payments by life sciences companies to the healthcare sector. The UK government intends to introduce an ambitiously broad statutory regime for the public disclosure of each transfer of value (TOV) by a company in the life sciences sector to any healthcare practitioner (HCP) or a wide range of healthcare organisations (HCO).

The proposed statutory regime is as yet unnamed, but we will refer to it as the ‘Statutory Disclosure Regime’.

We have been expecting these proposals for some time. The UK government was granted the power to legislate for a regime such as the Statutory Disclosure Regime in the Health and Care Act 2022[1], and there have been rumours for some months that the government planned to use this power.

Some context

It is very common for companies in the life sciences sector to make payments or provide other TOVs to HCPs and other individuals and HCOs. In part, because such companies have positive obligations to gather real world data regarding their products. As such, many TOVs represent healthy collaboration between the healthcare sector and the life sciences industry.

Life sciences companies are not currently obliged by law to publicly disclose such TOVs in the UK. However, life sciences sectors have voluntarily instituted their own disclosure schemes under industry codes of practice, such as the ABPI Code of Practice for the Pharmaceutical Industry (ABPI Code) and the ABHI Code of Ethical Business Practice (ABHI Code). These codes are designed to ensure transparency and mitigate against the risk of bribery.

Public disclosure of TOVs to HCPs and others in the healthcare sector is already required by law in some other jurisdictions, such as in France under the Loi Bertrand. It now appears that the UK intends to follow the same path.

The content of the consultation

While DHSC is only at the preliminary stage of consultation, much can be gleaned about what obligations DHSC plans to impose under the Statutory Disclosure Regime.

In particular, it appears that the Statutory Disclosure Regime will significantly expand disclosure requirements compared to existing voluntary regimes.

Companies in scope

The Statutory Disclosure Regime will apply to:

  1. manufacturers of medicines, medical devices or certain so called ‘borderline products’ (i.e. foods and dermatological products which are listed in the Drug Tariff); and
  2. commercial suppliers of medicines, medical devices or such borderline products; and
  3. parent companies and subsidiaries of the companies referred to in (a) and (b).

By contrast, the ABPI Code and the ABHI Code only apply to those pharmaceutical or medical device companies which are members of the respective industry association or who voluntarily abide by the relevant code.

It should be noted that the consultation suggests that small businesses (fewer than 50 employees) or micro businesses (fewer than 10 employees) could be excluded from the Statutory Disclosure Regime due to its expected administrative burden. While a de minimis threshold will be welcomed, it might be preferable if this related to minimum annual sales.

Relevant recipients of TOVs

DHSC proposes that companies subject to the Statutory Disclosure Regime will be required to disclose TOVs made to a wide range of recipient individuals and organisations. These recipients fall into two categories: (1) persons and organisations which provide healthcare in the UK; and (2) persons and organisations which carry out activities connected with healthcare in the UK.

It is proposed that ‘persons and organisations which provide healthcare’ will include any:

  • registered HCP;
  • hospital;
  • trust;
  • clinic;
  • health board;
  • pharmacy; or
  • surgery,

in each case whether or not in the public or the private sector.

It is proposed that ‘persons and organisations which carry out activities connected with healthcare’ could include:

  • Charity arms of hospitals;
  • Medical or clinical research organisations (including medical research charities);
  • Professional bodies responsible for the core training of healthcare professionals (such as royal colleges);
  • Other medical education or training providers; and
  • Patient advocacy organisations.

These categories of relevant recipient appear to be at least as broad as the categories of relevant recipient identified in the ABPI Code.

TOVs within scope

The consultation envisages that all TOVs that can be expressed as a monetary value will need to be reported, except for those expressly excluded (see below).

It appears this would not expand the scope of disclosure compared to the ABPI Code. However, for the medical devices industry, this would represent a significant expansion of the scope of TOVs that must be disclosed, even for those companies that comply with the ABHI Code. Currently the ABHI Code only requires that companies disclose ‘educational grants’. This is in part due to the medical devices industry having had a slightly different emphasis in anti-corruption efforts compared to the pharmaceutical industry. For example, devices industry codes prohibit direct sponsorship of individual HCP attendance of conferences rather than requiring broad disclosure of TOVs.

DHSC proposes that certain information will not need to be disclosed under the Statutory Disclosure Regime:

  • Minimal payments: it is proposed that payments worth less than £50 will not need to be disclosed at all, where the total annual value of payments to that recipient does not exceed £500.
  • Commercially sensitive information: DHSC indicates that a company will be able to withhold ‘commercially sensitive information’ from its TOV disclosures, while still being obliged to disclose that a payment has been made. The proposed definition of ‘commercially sensitive information’ adopts a common concept, namely ‘information whose disclosure the business thinks will significantly harm the legitimate business interests of the undertaking to which it relates.’

For instance, DHSC suggests that a company moving into a new therapeutic area could withhold from disclosure the identities of key experts whom it has hired as consultants. DHSC suggests that those identities could constitute ‘commercially sensitive information’ that a competitor could use to try to disrupt the company’s efforts to move into the new therapeutic area.

The consultation emphasises that companies will be expected to publish a rationale for withholding commercially sensitive information.

  • Fair market value payments for products or services: this exception would not apply to payments for services provided by individual HCPs, as disclosure of consultancy fees paid to HCPs is considered desirable.
  • Discounts and rebates agreed with healthcare providers.
  • Services provided by a company as part of a contractual arrangement (e.g. a testing service provided as part of a contract to supply a medicine): in this regard, it appears the Statutory Disclosure Regime may require less disclosure than the ABPI Code as services provided as a ‘package deal’ under the ABPI Code must be disclosed as a TOV.
Data protection implications

DHSC proposes that a company will need to publish the following data points in relation to each TOV payment which it discloses:

  • name of recipient;
  • whether the recipient is an individual or an organisation;
  • professional registration number (if applicable);
  • work address (unless recipient is an individual, for privacy reasons);
  • aggregated annual sum value of payments or benefits (in GBP); and
  • reasons for payment or benefit.

DHSC further proposes that such information will need to remain publicly available for 3 years from disclosure.

At this stage, the proposal does not include an ‘opt-out’, such as applies in some countries. This would allow an individual HCP to avoid being named personally but rather to be described generically (e.g. an orthopaedic surgeon).

Companies will need to think carefully about their data protection obligations alongside their obligations under the Statutory Disclosure Regime, including by publishing a suitable Privacy Notice and conducting any necessary impact assessments.

Even companies which already grapple with the data protection implications of TOV payments under the ABPI Code or the ABHI Code will need to consider whether their data protection arrangements are appropriate for disclosure under the Statutory Disclosure Regime. At present, the ABPI recommends that companies rely on legitimate interests as their lawful basis for processing personal data for the purposes of ABPI Code compliance. Companies may instead move to using compliance with a legal obligation as their legal basis, which will likely require some documentation changes.

Next steps

Stakeholders have until 16 October 2023 to respond to the consultation.

The Health and Care Act 2022 gives the government power to designate third party-operated schemes (for example, Disclosure UK operated by the ABPI) as ‘relevant schemes’, compliance with which would constitute compliance with the Statutory Disclosure Regime. The DHSC indicates in the consultation document that it may be willing to exercise this power. If DHSC uses this power to designate the ABPI Code, there may be little practical change in terms of the scope of disclosure by pharmaceutical companies that already disclose through Disclosure UK.

Given the narrower scope of the current disclosure requirements in the ABHI Code, medical devices companies would need to disclose a much wider range of payments than they do currently. Accordingly, the industry may consider broadening disclosure under industry codes and operating a system more similar to the ABPI’s Disclosure UK.


[1] s 92 Health and Social Care Act 2022