Massachusetts Gift Bans
Posted on 07/15/2010
On March 11, 2009, the Massachusetts Public Health Council adopted stringent regulations governing the sale and marketing practices of pharmaceutical companies.1 The regulations established the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct, which requires pharmaceutical and medical device manufacturing companies to implement a compliance program reflecting the Commonwealth’s regulations on meals, use of non-patient identified prescriber data, gifts and other payments, and the like.
In terms of implementation, beginning on July 1, 2010, the law required companies to disclose any gifts or payments valued over $50 and given to anyone who can prescribe, purchase, or dispense drugs or devices. Essentially, the disclosure requirement is a ban on all gifts to prescribers. As recently as this month, the House passed an economic development bill that repeals the disclosure requirement whereas the Senate version of the bill contains no such repeal. Based on the results of their conference committee, the fate of the disclosure requirement will be determined.
The issue of gift bans is a particularly controversial one. Opponents of the ban argue that is has adversely affected pharmaceutical clinical research and restaurant and convention sales. Ken Johnson, the Senior Vice President of the Pharmaceutical Research & Manufacturers of America argued: “The disclosure requirements…could make Massachusetts an unattractive place for academic scientists to live and work – and for pharmaceutical research companies to do business. Such a policy clearly is not in the best interest of public health – and it flies in the face of ongoing efforts to further cultivate the life sciences industry within Massachusetts.”
Additionally, it has been argued that such disclosures will complicate the defense of litigation against pharmaceutical and medical device defendants. As various empirical tools indicate, far too many prospective jurors agree with the proposition that pharmaceutical and medical device manufacturers place profits over the health and safety of those who use their products. Further, anecdotal evidence suggests that public disclosure of physicians’ financial relationships with drug and device manufacturers is likely to reinforce those negative perceptions, thus making product liability lawsuits that much more difficult to defend.2
On the other hand, supporters of gift bans argue that such bans foster transparency, accountability and ensure that medical research and doctors’ decisions are not unduly influenced by drug and device manufacturers.3 Such transparency is beneficial to patients since they help reduce the cost of health care and provide safer drugs. According to Health Care for All, a Massachusetts based advocacy organization “the gift ban drives down the cost of health care for everyone. The pharmaceutical industry invests over $6 billion a year nationwide in direct-to-physician marketing, and on average an estimated $9,000 in marketing to each physician in the United States.” Further, the gift ban provides a safeguard on drugs as “research shows that giving gifts to prescribers influences which drugs they prescribe for patients. And drugs and device companies promote the most expensive, name-brand, least-proven drugs.4
With regards to the effects of the gift bans on restaurant revenue “[t]he Massachusetts Prescription Reform Coalition has researched the decrease in restaurant profits, and found sales are down across the country – including in states without a gift ban.”5 Similarly, on the issue of Massachusetts becoming an unattractive location for research and business, on March 3, 2010, the Boston Globe reported that Merck is planning to move its US chemicals business headquarters from New Jersey to Billerica, Massachusetts because, as chairman Dr. Karl-Ludwig Kley suggests “Massachusetts is an extremely attractive state to do business for research or innovation companies.”
Although there is no clear solution to the controversy surrounding gift bans, the federal government provides guidance. The federal government’s Patient Protection & Affordable Care Act includes the Physician Payment Sunshine Provision, which requires disclosure of payments made to physicians and teaching hospitals by manufacturers of products covered under Medicaid, Medicare, and SCHIP. As such, perhaps national legislation to create uniform practices by the industry and physicians is necessary so that the likelihood of repeals of related laws, as in Massachusetts, is reduced. Regardless, whatever the conference committee concludes, from a patient perspective, a repeal of the disclosure requirement would likely serve the best interests of the industry rather than the “best interest of public health.”
2 Smith, Scott, Esq., “Unwanted Side Effects – How Manufacturer-Physician Disclosure Laws May Complicate the Defense of Litigation Against Pharmaceutical and Medical Device Defendants.” Andrews Health Law Litigation Reporter, January 27, 2010.
3 See, e.g., “Grassley, Kohl Continue Campaign to Disclose Financial Ties Between Doctors and Drug Companies,” press release dated January 22, 2009.
4 “Brand name drugs are newer to the market and their long-term effectiveness and side effects have often not been fully investigated. Merck, for example, hired doctors to pitch Vioxx, as soon as it was on the market, to other physicians over expensive meals. Once reports surfaced that Vioxx caused heart attacks, the drug was pulled off the market, but only after the number of prescriptions for Vioxx rose fourfold as a result of the company’s direct-to-physician marketing.” Health Care for All, 2010.
5 Health Care for All, 2010.