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Revisions in the Physician Payments Sunshine Act (S.2029) will now make it a Class D federal felony for physicians to accept more than $25 annually in gifts or other rewards from pharmaceutical companies or biological product and medical device manufacturers.

The revised bill, introduced last fall by Senators Chuck Grassley, Republican of Iowa, and Herb Kohl, Democrat of Wisconsin, requires full disclosure of gifts, through a Department of Health and Human Services online system, by both companies and individual physicians, and it revokes caps on non-disclosure penalties for companies.

The legislation targets offending individual physicians, hospitals, schools, and other medical institutions that deal directly with patients. It also makes it a federal offense for medical industries to circumvent customary gift-giving practices through third parties, such as lawyers and insurance companies, or via “educational” events.

It reverses earlier legislation that would have preempted more stringent physician sunshine laws passed by the states. The previous version of the law limited penalties to $10,000 for non-disclosure, and $100,000 for companies that “knowingly” fail to disclose gifts to physicians. The new bill establishes a lower limit for fines, but not an upper limit, and requires that that penalties take into account histories of gift-giving, product specifics and histories, overall corporate revenue, and other variables, before appropriate fines can be assessed.

Patients’ rights and medical ethics groups, like the New England Medical Ethics Commission in Boston, are exultant. “It’s not like the A.M.A. or [pharmaceutical trade association] PhRMA were ever going to comply with their own stated standards,” says Patty Williams, Director of Communications for the commission. Williams is referring to the American Medical Association’s 1991 guidelines on gifts to physicians from industry, which stemmed a tide of blatant gift-giving in the 1980s, but have been criticized for allowing new byways for abuse: free lunches and dinners, travel and honoraria, and the hemorrhaging of complimentary pens, coffee mugs, and other product-related paraphernalia into doctors’ offices.

“What we really need is a sea change in the medical profession wherein physicians realize that it isn’t O.K. to get gifts or fill our offices with advertisements for products. It demeans patient care,” says Mount Sinai School of Medicine professor Dr. Joseph Ross. While programs like the Prescription Project, which scrutinize pharmaceutical company information and sales practices, have been in place for several years in states like Massachusetts and Pennsylvania, their effect is limited by the willingness of doctors to abide by ethical standards.

“This will definitely make it a lot harder for us to get our products to customers,” says Sampson Browning, spokesperson for Eli Lilly, which anticipates large losses of revenue due to the new legislation.

“I haven’t paid for lunch since last February, and I think I ate at home that day,” says Dr. Bruce Arbogast, Director of Pine Grove Medical Center in Chicago. “Do the math. Do you think I can afford to say no when the drug reps knock on my door?” From now on, doctors will have to, or risk up to ten years imprisonment.