West Virginia Governor Withdrew Rule for Prescription Drug Advertising Expense Reporting

According to the West Virginia State Register, Governor Earl Ray Tomblin of West Virginia withdrew the rule for Prescription Drug Advertising Expense Reporting late last month, as reported by the Charleston Gazzette.

Tomblin spokeswoman Kimberly Osborne said the rule, which went into effect in 2010, was withdrawn over concerns it had changed the filing requirements for drug manufacturers from the original 2006 rule.  “It would have changed filing requirements that prescription drug companies would have had to abide by,” Osborne said Monday.

In March 2004, West Virginia enacted the West Virginia Pharmaceutical Availability and Affordability Act (the “Act”), W. Va. Code § 5A-3C-1 et seq., with the purpose of addressing the rising cost of prescription drugs.  The, Prescription Drug Advertising Expense Reporting, requires that:

Every drug manufacturer, pharmaceutical manufacturer, and labeler of prescription drugs dispensed in this state, or to a consumer in this state via mail, who employs, directs or utilizes marketing representatives in this state must complete and file with the Governors Office of Health Enhancement and Lifestyle Planning (GOHELP), the form contained in Appendix A of this rule, disclosing the reporting entity’s expenditures for advertising prescription drugs to consumers in this state for the previous calendar year in full. Beginning on or before April 1, 2010, and by the first of April thereafter, the reporting entity shall annually complete and file with GOHELP the form contained in Appendix A of this rule, disclosing advertising expenses for the previous calendar year in full.

Recently however, “Rules for enforcing a 2004 state law requiring pharmaceutical companies to disclose spending on advertising and marketing of brand-name drugs in the state have been withdrawn by Gov.-elect Earl Ray Tomblin’s administration — raising concerns among advocates of the sunshine law.”

Background

Under the Prescription Drug Advertising Expense Reporting law, the reporting entity must disclose all expenditures for advertising and direct promotion of prescription drugs dispensed in this state, including:

 

• The total amount the reporting entity spent for advertising and direct promotion of prescription drugs to consumers, prescribers, pharmacies and patient support or advocacy groups within the State of West Virginia;
• The total number of West Virginia prescribers to whom the reporting entity provided, directly or indirectly, gifts, grants or payments of any kind in excess of one hundred dollars ($100.00) for the purpose of advertising prescription drugs. Annual payments which cumulatively total more than the amount shown on the reporting form shall be reported in increments of two thousand five hundred dollars ($2,500.00) until all payments of any kind to prescribers have been reported; and
• Direct-to-consumer advertising which is directed at, received by or intended to be received by consumers in this state, the form of the advertising and the total amount expended for such advertising.

 

The reporting entity may, but is not required to, disclose:

 

• Free samples of prescription drugs distributed to patients;
• Payments of reasonable compensation and reimbursement of expenses in connection with a bona-fide clinical trial; and
• Scholarships or other support for medical students, , residents and fellows selected by a national, regional or specialty medical or other professional association to attend significant educational, scientific or policy-making conferences sponsored by such association.

As explained by the Charleston Gazzette, “Under state law, agencies adopt rules spelling how they will carry out legislative mandates. Under the rule-making review process, those rules have to be formally approved by the Legislature before they go into effect.”

The 2010 rule made two changes to the 2006 rule, allowing for electronic filing of reports and clarifying that the reports are to be filed with GOHELP, rather than with the now-defunct office of the state Pharmaceutical Advocate.

Sen. Dan Foster, D-Kanawha, a physician and a key legislative advocate for the pharmaceutical spending disclosures, said Monday he was concerned that the rule had been withdrawn, particularly since there had been little or no advance notice to legislators.  “There seems to be a lack of transparency about how this was done,” he said.

“I don’t think that they talked to anybody in the House about this,” said Foster. “[House Health and Human Resources Chairman] Don Perdue and I were very much involved in the initial legislation in 2004.”

Osborne said the rule also was withdrawn to allow the next director of GOHELP to have input in any rule changes.  “We withdrew it because we want to have input from whoever becomes director,” she said.  Martha Walker retired as GOHELP director July 31, and a successor has yet to be appointed.

There have been three financial disclosure reports published since the rule went into effect.  The first, by the Pharmaceutical Advocate and covering the last six months of 2007, disclosed that pharmaceutical companies had spent more than $16 million in direct-to-consumer advertising and for nearly 15,000 “gifts, grants or payments” to state physicians, ranging in amounts from $50 to $52,000.

The next report for calendar year 2008, showed more than $33.2 million in expenditures, including nearly 16,000 gifts, grants or payments. Four physicians received payments in excess of $100,000, according to the report.

The most recent report, for calendar year 2009, cited total spending of $28.6 million, of which $7.7 million was on direct-to-consumer advertising.  That report, the first prepared by GOHELP, was two pages long and did not provide a breakdown of payments to providers by payment categories.