Physician Payment Sunshine: 2014 Draft Guide to Vermont’s Disclosure Law

Recently, the Vermont Attorney General’s office discussed the recently released draft “Guide to Vermont’s Prescribed Products Gift Ban and Disclosure Law for 2014 Disclosures.” Revisions to the 2013 Guidelines document are in bold and underlined.

As Policy and Medicine has reported, Vermont law bans most gifts and requires manufacturers of prescribed products – including pharmaceuticals, biological products, and medical devices – to register with the Attorney General’s Office and to disclose permitted gifts and allowable expenditures. Vermont law also requires manufacturers to disclose the distribution of samples of prescribed products to Vermont health care professionals. The Attorney General publishes a Guide to assist health care professionals in complying with the law.

The Draft 2014 Guide contains only a few modifications made to the 2013 Guide. The Vermont Office of the Attorney General hosted a call to discuss the changes.

CME and Promotional Speaking (changes to 2013 Guide in Bold and Underlined):

The Attorney General’s Office modified the reporting requirements for sponsorship of educational conferences, stating that payment is only allowed if the conference meets “statutory requirements, including that the event be a certified CME.”

They also modified the reporting requirements for promotional speaking to include payments made to charity or other third parties, whether or not the donation is attributed to the health care provider by name. The report should list the health care provider.

Consistency with Federal Sunshine Act:

Manufacturers in charge of submitting data expressed both their interests and concerns with having the Vermont forms be consistent with the Federal forms. While many agreed that consistency would be ideal, others felt that because the Federal regulations from the Centers for Medicare and Medicaid Services (CMS) were still essentially “moving targets,” it may be unwise to tailor Vermont’s disclosure laws to CMS’s constantly updated laws and FAQs.

Prescription Pads:

The 2014 Draft allows prescription pads “if the predominant purpose and function…is educational and does not favor one manufacturer over another.” This revision is construed very narrowly, according to the Attorney General’s interpretation. It should be noted that the PhRMA Code disagrees with the Vermont draft in this regard, prohibiting pads as non-educational.

The “Prescription Pad” addition received many questions and comments. Several callers wondered if a prescription pad would ever be educational and not promotional. Providers cannot have logos on their pads, nor can providers favor one company or another on their pads. Furthermore, providers must include information about more than one company so as not to seem biased. One caller commented that, based on the extremely narrow interpretation, if a company is the only one that offers a particular product, a prescription pad would automatically be promotional and disallowed.

When asked to name a circumstance in which a prescription pad would be predominately educational, the Attorney General’s Office responded “if it clears up confusion about appropriate dosage.”

The office hinted that they would be working on this area as they revise the draft.

Sample Disclosure Form:

The 2014 disclosure forms will be identical to the 2013 forms currently posted, but note that the Sample Disclosure Form reflects an amendment which allows manufacturers to choose “medical food,” “infant formula” and “medical equipment/supplies” as the Prescribed Product Type when reporting the distribution of coupons and vouchers.

Value of Expenditure, Change to National multiplier for Vermont:

The 2014 Draft uses a different multiplier to allow manufacturers to aggregate small educational materials given in large number to physicians.

As a background, for gifts that are not banned but are of a fair market value below $25, such as a small number of educational brochures, manufacturers may elect to report the expenditures for all Vermont health care providers in the aggregate. For items that are not customarily sold, such as educational brochures for patient use, the value is the manufacturer’s cost of production. With respect to educational brochures, for example, “cost of production” means cost of materials and printing. For items that are produced for national use, the manufacturer may report a value of the portion of the manufacturer’s total national cost attributable to Vermont, which shall be calculated as the percentage of Vermont physicians as compared to all physicians nationally. For purposes of 2014 reporting, Vermont’s allocation of national expenditures is 0.46% (multiply the national total by 0.0046).

For 2013 reporting, Vermont’s allocation of national expenditures was 0.25%.

Disclosing Product Types without Divulging Trade Secrets:

Vermont’s disclosure law requires manufacturers to fill in their product name on the disclosure form. However, if more than five products are associated with the reported payment or gift, the manufacturer only must list the five products most relevant to the expenditure. If all of a manufacturer’s products are associated with the reported payment or gift, and the manufacturer manufactures more than five products, the manufacturer must list its top five products as measured by gross revenue.

The 2014 draft updates this requirement: “Should a manufacturer be unable to list the top five products without divulging a trade secret, the manufacturer should indicate ‘brand promotion‘ in the product name field.”

The Office apparently wrote the initial five product limit as a concession to manufacturers. The revision was part of another concession to manufacturers who stated that listing one of their five top products would constitute divulging a trade secret. Some callers were concerned that manufacturers would overly use this option. The Office clarified that if a product is already public knowledge, it is not a trade secret.

Cap on Low Dollar End:

The Attorney General’s Office stated that they would consider a cap on the low dollar end for reporting requirements at a later time.

Links to Documents:

Draft Guide to Vermont’s Disclosure Law for 2014 Disclosures

Disclosure Form for Manufacturers of Prescribed Products (unchanged for 2014)

Samples Disclosure Form for Manufacturers of Prescribed Products (unchanged for 2014)

Guide to Vermont’s Disclosure Law for 2013 Disclosures