Repeal of Massachusetts Code of Conduct “Gift Ban” Falls Short

As we noted earlier in April, the Massachusetts State Assembly voted overwhelmingly 128-22 to repeal the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct (PCOC). 

Enacted in 2009, the Massachusetts “gift ban” has been a controversial piece of legislation that has had significant impacts on the pharmaceutical and medical device industry in Massachusetts.  After going into effect on July 1, 2009, the Massachusetts (PCOC) required the reporting of payments of more than $50 made to any health care practitioners by industry.  Payments were then published on the states website in late November, 2010.  

After months of debate, the Massachusetts legislature passed the state budget last week, but the final bill did not include any provisions to repeal the gift ban.  The budget also failed to overturn a Massachusetts ban on coupons – the only such state ban in the country.

Clearly, the promises that Governor Patrick made during his re-election campaign were not followed up on. 

Senator Anthony Petruccelli, a Democrat from East Boston, sponsored an amendment that would have changed the current ban’s provision, allowing meals to take place, once again, at restaurants.

Massachusetts House Speaker Robert DeLeo told the Boston Herald last month that he looks “at the lifting of the gift ban in Massachusetts as a means to create more business.” Based on conversations he has had with restaurant owners, caterers, and Jim Rooney, executive director of the convention center, DeLeo asserted that Massachusetts is losing business in the state because companies are not willing to come to Massachusetts because of this ban.

However, this argument lost credibility when a review of state tax rolls indicated Massachusetts restaurants actually experienced a 3.2 percent uptick in business during the first four months of the year, according to tax receipts on meals that were reported in the state Blue Book. There were also year-over-year gains in the final months of 2010.

Many patient groups had argued for lifting the ban on coupons because they provide access to people who cannot afford expensive medications.  However, consumer groups successfully countered by claiming that such coupons are disguised marketing to promote brand name drugs.

As for the coupon ban, patient groups argued that such discounting would provide needed relief to people who have difficulty affording their meds. However, consumer groups countered that coupons are marketing ploys that are designed to promote expensive medicines that allow drugmakers to provide lower-cost alternatives (back story).

For now, Massachusetts will continue to enforce the code of conduct and gift ban.  As the federal government moves toward implementing the Sunshine Physician Payment Act this fall, health care stakeholders in Massachusetts will have a number of reporting and disclosure issues to address within the state since many provisions are not preempted by the federal law.