Why Transparency Is the New Currency of Trust in Life Sciences
Author
May Khan leads the Compliance Services team at Vector Health, a SaaS company focused on life sciences compliance. Her experience includes global transparency reporting, Sunshine Act strategy, and HCP risk monitoring. At Vector, she coordinates cross-functional teams focused on data integrity, customer service, and regulatory alignment.
Vector Health Compliance
Your Leading Partner in Global Sunshine Compliance
One unreported dinner. One undisclosed consulting fee. One missing line in a spreadsheet.
In an industry where a single medicine can take many years and billions of euros to bring to market, it is often the smallest and least visible transactions—a sponsored lunch, a speaker honorarium or a research grant—that shape whether the public trusts the relationships behind the science.
Life sciences companies depend on credibility. Regulators need to trust the evidence supporting a marketing authorisation. Payers need to trust that formulary decisions have not been influenced by inappropriate benefits. Patients need to trust that a medicine was prescribed because it was right for them, not because someone was paid to recommend it.
Transparency reporting exists to make that trust verifiable rather than assumed.
The Trust Equation Behind Every Prescription
Every interaction between a manufacturer and a healthcare professional (HCP) or healthcare organisation (HCO)—whether a consulting agreement, congress sponsorship or research collaboration—may create the potential, real or perceived, to influence professional judgement.
Transparency reporting does not presume improper intent. It removes ambiguity.
When transfers of value are disclosed publicly, patients, regulators, journalists and other stakeholders can examine the same information. For companies operating responsibly, that visibility can provide a documented and defensible record of what was paid, to whom, and for what purpose.
Disclosure alone does not prove that a relationship was appropriate. Companies must still be able to demonstrate that the activity served a legitimate purpose, represented fair value, was properly approved and was classified accurately. Transparency nevertheless creates a record against which those explanations can be assessed.
From Voluntary Codes to a Legal Mandate
Before the adoption of Law No. 62 of 31 May 2022, transparency in Italy’s healthcare sector was primarily governed through industry self-regulation. Trade associations including Farmindustria and Confindustria Dispositivi Medici established disclosure obligations for companies subject to their respective codes.
These frameworks created an important foundation for transparency, but their reach depended substantially on association membership and the scope of the relevant industry code.
Law No. 62/2022, commonly known as the Italian Sunshine Act, introduced a statutory framework. Transparency is therefore no longer solely a requirement arising from voluntary membership in an industry association.
The Act defines a manufacturing company broadly. It can include entities involved, directly or through an intermediary or connected company, in producing or placing on the market medicines, instruments, equipment, goods or services—including certain non-healthcare goods and services—commercialisable within human or veterinary healthcare. The definition expressly includes nutritional products and certain organisers of healthcare-related congresses and events.
The law also contemplates companies established outside Italy, providing that their reporting obligations may be fulfilled by a representative in Italy.
Inside Italy’s Sunshine Act
The Italian Sunshine Act requires the disclosure of specified transfers of value and relationships between manufacturing companies and individuals or organisations operating in the healthcare sector.
For transfers of money, goods, services or other benefits, and for the conventions covered by Article 3(1), disclosure is required when the value is:
- more than €100 per transaction or more than €1,000 in aggregate during the year for an individual operating in the healthcare sector; or
- more than €1,000 per transaction or more than €2,500 in aggregate during the year for a healthcare organisation.
The Act separately covers agreements that provide direct or indirect benefits through participation in congresses, educational events, committees, commissions, advisory bodies or scientific committees, as well as consulting, teaching and research relationships. The statutory text does not expressly make these agreements subject to the monetary thresholds applicable to the transfers and conventions covered by Article 3(1).
The required communication includes information identifying the beneficiary or counterparty, the date or reference period, the nature and purpose of the relationship, its amount or market value, and details of any intermediary who established the terms or managed the relationship on the company’s behalf.
Companies established in corporate form are also subject to separate annual reporting obligations concerning specified shareholdings, bondholdings and income derived from licences for the economic use of industrial or intellectual-property rights.
The Act provides that entering into covered conventions or agreements, accepting covered transfers, or acquiring the relevant interests or income constitutes consent to publication and processing for the purposes of the law. Companies must nevertheless provide an appropriate privacy notice, and the Act expressly preserves specified rights under the GDPR.
Once the Ministry of Health’s Sanità Trasparente register becomes operational, published communications will be publicly searchable and will remain available for five years from the date of publication.
Why Transparency Protects the Industry, Not Only the Public
It is tempting to view transparency reporting entirely as a regulatory burden. In practice, mandatory disclosure can also protect companies that operate responsibly.
A consistent statutory framework creates a more level playing field by applying common disclosure obligations beyond companies that voluntarily belong to an industry association. It can make it harder for businesses to gain an advantage through undisclosed financial incentives and can help distinguish properly documented, legitimate relationships from conduct that cannot withstand scrutiny.
Transparency may also reduce the risk of reputational contagion. Under a voluntary system, the conduct of one company can cast doubt over an entire sector. Under a mandatory and consistently applied framework, individual conduct becomes easier to identify and assess separately.
Accurate reporting also provides companies with a contemporaneous record of their financial relationships with healthcare stakeholders. That record may help a company demonstrate what was paid, why it was paid, who approved it and how it was reported.
However, accurate disclosure is not a defence for an otherwise improper payment. A company must be able to stand behind both the payment and the data describing it.
Lessons from the United States
The United States’ transparency reporting experience is instructive.
In 2020, Medtronic USA agreed to pay more than $9.2 million to resolve allegations relating to payments involving a South Dakota neurosurgeon. The total consisted of two separate components: $8.1 million to resolve allegations that the company had violated the False Claims Act by paying kickbacks, and an additional $1.11 million to resolve allegations that it had failed to report certain payments accurately under the Open Payments Program.
According to the U.S. Department of Justice, Medtronic allegedly paid for more than 100 events over nine years at a restaurant owned by the surgeon. The company was also alleged to have underreported those payments to the Centers for Medicare & Medicaid Services.
The case demonstrates that transparency-reporting failures can create enforcement exposure alongside the underlying conduct. It should not be interpreted as evidence that accurate disclosure would have legitimised the alleged payments. Rather, it shows that incomplete or inaccurate reporting can add a separate layer of regulatory risk to an already problematic relationship.
The Manufacturing Stakes
Italy is not a peripheral participant in this discussion. Its pharmaceutical sector is among the leading pharmaceutical markets in the European Union, supported by a significant manufacturing base and an internationally connected supply chain.
That scale means Italian companies—and multinational organisations operating or manufacturing in Italy—may be judged by international partners, regulators and investors on the credibility of their compliance infrastructure, not only on the quality of their products.
For businesses operating across borders, a weakness in Italian transparency reporting is unlikely to remain a purely local issue. Incomplete recipient data, inconsistent classifications or poorly documented payments can create questions for regional compliance teams, global headquarters, auditors and business partners.
Transparency is therefore more than a reporting obligation. It is evidence that a company understands its financial relationships, can explain the purpose of its payments and is prepared to stand behind the information it publishes.
Trust is no longer built solely through statements of values or commitments to ethical conduct. It is increasingly built through data that is complete, traceable and capable of withstanding scrutiny.
As the next article in this series will explore, the United States and France have operated statutory healthcare-transparency systems for more than a decade. Their experiences provide useful insight into how disclosure requirements can reshape corporate processes, enforcement risk and stakeholder expectations once the information becomes publicly visible.
One unreported dinner. One undisclosed consulting fee. One missing line in a spreadsheet.
In an industry where a single medicine can take many years and billions of euros to bring to market, it is often the smallest and least visible transactions—a sponsored lunch, a speaker honorarium or a research grant—that shape whether the public trusts the relationships behind the science.
Life sciences companies depend on credibility. Regulators need to trust the evidence supporting a marketing authorisation. Payers need to trust that formulary decisions have not been influenced by inappropriate benefits. Patients need to trust that a medicine was prescribed because it was right for them, not because someone was paid to recommend it.
Transparency reporting exists to make that trust verifiable rather than assumed.
The Trust Equation Behind Every Prescription
Every interaction between a manufacturer and a healthcare professional (HCP) or healthcare organisation (HCO)—whether a consulting agreement, congress sponsorship or research collaboration—may create the potential, real or perceived, to influence professional judgement.
Transparency reporting does not presume improper intent. It removes ambiguity.
When transfers of value are disclosed publicly, patients, regulators, journalists and other stakeholders can examine the same information. For companies operating responsibly, that visibility can provide a documented and defensible record of what was paid, to whom, and for what purpose.
Disclosure alone does not prove that a relationship was appropriate. Companies must still be able to demonstrate that the activity served a legitimate purpose, represented fair value, was properly approved and was classified accurately. Transparency nevertheless creates a record against which those explanations can be assessed.
From Voluntary Codes to a Legal Mandate
Before the adoption of Law No. 62 of 31 May 2022, transparency in Italy’s healthcare sector was primarily governed through industry self-regulation. Trade associations including Farmindustria and Confindustria Dispositivi Medici established disclosure obligations for companies subject to their respective codes.
These frameworks created an important foundation for transparency, but their reach depended substantially on association membership and the scope of the relevant industry code.
Law No. 62/2022, commonly known as the Italian Sunshine Act, introduced a statutory framework. Transparency is therefore no longer solely a requirement arising from voluntary membership in an industry association.
The Act defines a manufacturing company broadly. It can include entities involved, directly or through an intermediary or connected company, in producing or placing on the market medicines, instruments, equipment, goods or services—including certain non-healthcare goods and services—commercialisable within human or veterinary healthcare. The definition expressly includes nutritional products and certain organisers of healthcare-related congresses and events.
The law also contemplates companies established outside Italy, providing that their reporting obligations may be fulfilled by a representative in Italy.
Inside Italy’s Sunshine Act
The Italian Sunshine Act requires the disclosure of specified transfers of value and relationships between manufacturing companies and individuals or organisations operating in the healthcare sector.
For transfers of money, goods, services or other benefits, and for the conventions covered by Article 3(1), disclosure is required when the value is:
- more than €100 per transaction or more than €1,000 in aggregate during the year for an individual operating in the healthcare sector; or
- more than €1,000 per transaction or more than €2,500 in aggregate during the year for a healthcare organisation.
The Act separately covers agreements that provide direct or indirect benefits through participation in congresses, educational events, committees, commissions, advisory bodies or scientific committees, as well as consulting, teaching and research relationships. The statutory text does not expressly make these agreements subject to the monetary thresholds applicable to the transfers and conventions covered by Article 3(1).
The required communication includes information identifying the beneficiary or counterparty, the date or reference period, the nature and purpose of the relationship, its amount or market value, and details of any intermediary who established the terms or managed the relationship on the company’s behalf.
Companies established in corporate form are also subject to separate annual reporting obligations concerning specified shareholdings, bondholdings and income derived from licences for the economic use of industrial or intellectual-property rights.
The Act provides that entering into covered conventions or agreements, accepting covered transfers, or acquiring the relevant interests or income constitutes consent to publication and processing for the purposes of the law. Companies must nevertheless provide an appropriate privacy notice, and the Act expressly preserves specified rights under the GDPR.
Once the Ministry of Health’s Sanità Trasparente register becomes operational, published communications will be publicly searchable and will remain available for five years from the date of publication.
Why Transparency Protects the Industry, Not Only the Public
It is tempting to view transparency reporting entirely as a regulatory burden. In practice, mandatory disclosure can also protect companies that operate responsibly.
A consistent statutory framework creates a more level playing field by applying common disclosure obligations beyond companies that voluntarily belong to an industry association. It can make it harder for businesses to gain an advantage through undisclosed financial incentives and can help distinguish properly documented, legitimate relationships from conduct that cannot withstand scrutiny.
Transparency may also reduce the risk of reputational contagion. Under a voluntary system, the conduct of one company can cast doubt over an entire sector. Under a mandatory and consistently applied framework, individual conduct becomes easier to identify and assess separately.
Accurate reporting also provides companies with a contemporaneous record of their financial relationships with healthcare stakeholders. That record may help a company demonstrate what was paid, why it was paid, who approved it and how it was reported.
However, accurate disclosure is not a defence for an otherwise improper payment. A company must be able to stand behind both the payment and the data describing it.
Lessons from the United States
The United States’ transparency reporting experience is instructive.
In 2020, Medtronic USA agreed to pay more than $9.2 million to resolve allegations relating to payments involving a South Dakota neurosurgeon. The total consisted of two separate components: $8.1 million to resolve allegations that the company had violated the False Claims Act by paying kickbacks, and an additional $1.11 million to resolve allegations that it had failed to report certain payments accurately under the Open Payments Program.
According to the U.S. Department of Justice, Medtronic allegedly paid for more than 100 events over nine years at a restaurant owned by the surgeon. The company was also alleged to have underreported those payments to the Centers for Medicare & Medicaid Services.
The case demonstrates that transparency-reporting failures can create enforcement exposure alongside the underlying conduct. It should not be interpreted as evidence that accurate disclosure would have legitimised the alleged payments. Rather, it shows that incomplete or inaccurate reporting can add a separate layer of regulatory risk to an already problematic relationship.
The Manufacturing Stakes
Italy is not a peripheral participant in this discussion. Its pharmaceutical sector is among the leading pharmaceutical markets in the European Union, supported by a significant manufacturing base and an internationally connected supply chain.
That scale means Italian companies—and multinational organisations operating or manufacturing in Italy—may be judged by international partners, regulators and investors on the credibility of their compliance infrastructure, not only on the quality of their products.
For businesses operating across borders, a weakness in Italian transparency reporting is unlikely to remain a purely local issue. Incomplete recipient data, inconsistent classifications or poorly documented payments can create questions for regional compliance teams, global headquarters, auditors and business partners.
Transparency is therefore more than a reporting obligation. It is evidence that a company understands its financial relationships, can explain the purpose of its payments and is prepared to stand behind the information it publishes.
Trust is no longer built solely through statements of values or commitments to ethical conduct. It is increasingly built through data that is complete, traceable and capable of withstanding scrutiny.
As the next article in this series will explore, the United States and France have operated statutory healthcare-transparency systems for more than a decade. Their experiences provide useful insight into how disclosure requirements can reshape corporate processes, enforcement risk and stakeholder expectations once the information becomes publicly visible.
Author
May Khan leads the Compliance Services team at Vector Health, a SaaS company focused on life sciences compliance. Her experience includes global transparency reporting, Sunshine Act strategy, and HCP risk monitoring. At Vector, she coordinates cross-functional teams focused on data integrity, customer service, and regulatory alignment.
Vector Health Compliance
Your Leading Partner in Global Sunshine Compliance