Massachusetts Pharmaceutical and Medical Device Manufactures Code of Conduct: Delays in Release of Data and Changes to the Regulations

As we have covered numerous times on this blog, in 2009, the State of Massachusetts enacted the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct (PCOC). 

After going into effect on July 1, 2009, the PCOC requires the reporting of payments of more than $50 made to any health care practitioner by industry.  Payments for 2009 were then published on the states website in late November, 2010. 

However, Massachusetts has not published its data for 2010, and is now several weeks behind from last year.  If just one state like Massachusetts—who has been a leader and pioneer in transparency of payments—cannot publish payments on time, one can only speculate how much difficulty and delay the Centers for Medicare and Medicaid Services (CMS) will have publishing payments for 50 states under the Physician Payment Sunshine Act, especially considering CMS is already over 2 months late for proposed regulations. 

Massachusetts Code of Conduct 

Companies must disclose “the value, nature, purpose and particular recipient of any fee, payment, subsidy or other economic benefit with a value of at least $50 to any covered recipient in connection with the company’s sales and marketing activities” (105 CMR 970.009(1)). This includes: 

• Reimbursement of expenses in conjunction with a product training program or event,
• Compensation for serving as faculty at a Continuing Medical Education (CME) event or participation on a Speaker’s Bureau, and
• Compensation for bona fide services.
• This does not include consumers who purchase prescription drugs or medical devices.   

The website explains that any of these transactions may be referred to as “payments.” The $50 total is for each occurrence, not in total for the year. For example, a $55 dinner provided to a covered recipient would have to be reported, but two $30 dinners would not, even though added together, they total more than $50. The EOHHS explains more about PCOC on their website. 

The code applies to pharmaceutical and medical device manufacturers that employ or contract with any person to sell or market prescription drugs or medical devices in Massachusetts.  The PCOC also prohibits by law certain gifts and payments. 

The legislation also requires manufacturers and drug makers to adopt a set marketing code of conduct to help ensure that health care providers were making choices about prescription drugs for their patients based on therapeutic benefits and cost-effectiveness. This code had a number of provisions governing the types and nature of interactions industry could have with physicians.  The Code of was subsequently adopted by the Massachusetts Department of Public Health (DPH).   

The 2010 report gave a breakdown of the top 50 paid physicians, and detailed report of what services the physicians provided and which companies made such payments. On the spreadsheet, the number of payments made is listed, the number of events, as well as the total amount of compensation a physician received. The detailed reports go into what category the payment was for, the specific amount of payment, and which specific company. 

The website includes detailed instructions on how to create custom reports and how to run searches for doctors, manufacturers, and by payment category, which includes eight categories of payments to covered recipients. 

The “gift ban” has been a controversial piece of legislation that has had significant impacts on the pharmaceutical and medical device industry in Massachusetts.  In fact, one year after the Code was in effect, a study published by the Massachusetts Institute of Technology (MIT), analyzed the impact the legislation had on the medical device industry.  The study found that “physician-industry collaboration related to physician education and technology development was impaired by the Massachusetts regulations, with evidence of a larger negative impact on physician education.”  In addition, “within physician education, new device procedure training, non-CME-accredited education, and promotional events experienced the most significant impact.” 

Massachusetts Updates FAQ on Code of Conduct 

Consequently, in late August this year, the Massachusetts Executive Office of Health and Human Services, Department of Public Health, Office of the General Counsel, published an updated Frequently Asked Questions (FAQ).  New changes include: 

Registration and Disclosure Report Submission Process 

Manufacturers subject to the regulation are required to register annually with the Department as part of the regulation.  Annual registration includes paying a fee of $2000. While manufacturers subject to the regulation are required to submit both a disclosure report annually and register annually, the two requirements are separate processes, and the time frames for the two are different. 

A company must designate a compliance officer and may submit one overall disclosure report or several reports at the divisional level. If a company decides to do separate reports for each division, the company is required to register each division separately with the Department, and each division will be required to register annually and pay the annual registration fee of $2000. 

All manufacturers subject to the Massachusetts law must register and pay the annual registration fee, even if there are no data items on their disclosure report. The annual registration renewal fee is due annually during July and August and may be paid electronically through the on-line system established for manufacturer’s annual registration and compliance certification. If a manufacturer does not have any data to disclose for a given period, it should send an e-mail stating that fact to: pharmameddata@massmail.state.ma.us. The Department will deem such emails as meeting the requirement for filing an annual disclosure report. The subject line of emails should contain only the manufacturer’s Department-assigned ID number (the number beginning with CC) and company name. 

A company that anticipates being subject to the Department’s regulations during a disclosure period should submit an initial registration form and the annual fee to the Department as soon as their product launches. 

Which Transactions Need To Be Disclosed? 

Employees of a PMDMC who are also covered recipients are exempt from having payments made to them by their employer reported, but not exempt from reporting by other PMDMCs. 

All marketing activities subject to 105 CMR 970.000 must be reported. Manufacturers are responsible for reporting payments to Massachusetts covered recipients, even if those payments are made by the manufacturer’s agent.