On Saturday, The Vermont Legislature passed a law (S. 48) a gift ban and disclosure law which includes all marketing activities, for healthcare providers in that state.
The law basically outlaws, Vermont physicians from participation in promotional events, and dinner meetings, including product theaters, consulting and requires reporting of just about everything else. They have also set up a state system for Generic Substitution.
Gifts
The law restricts manufacturers of a prescribed product or any wholesale distributor of medical devices, or any agent, to offer or give any gift to a health care provider.
The definition of a “Gift” is “anything of value provided to a health care provider for free or any payment, food, entertainment, travel, subscription, advance, service, or anything else of value provided to a health care provider, unless:
(i) It is an allowable expenditure or
(ii) The health care provider reimburses the cost at fair market value. The prohibition of these gifts applies to everything except:
– Samples of a prescribed product provided to a health care provider for free distribution to patients.
– The loan of a medical device for a short-term trial period, not to exceed 90 days, to permit evaluation of a medical device by a health care provider or patient.
– The provision of reasonable quantities of medical device demonstration or evaluation units to a health care provider to assess the appropriate use and function of the product and determine whether and when to use or recommend the product in the future.
– The provision, distribution, dissemination, or receipt of peer-reviewed academic, scientific, or clinical articles or journals and other items that serve a genuine educational function provided to a health care provider for the benefit of patients.
– Scholarship or other support for medical students, residents, and fellows to attend a significant educational, scientific, or policy-making conference or seminar of a national, regional, or specialty medical or other professional association if the recipient of the scholarship or other support is selected by the association.
– Rebates and discounts for prescribed products provided in the normal course of business, as well as labels approved by the federal Food and Drug Administration for prescribed products.
Allowable Payments:
– Payment to the sponsor of a significant educational, medical, scientific, or policy-making conference or seminar, (in the definition section they do allow for ACCME or equivalent conferences provided you have more than one speaker) provided:
o (i) the payment is not made directly to a health care provider;
o (ii) funding is used solely for bona fide educational purposes; and
o (iii) all program content is objective, free from industry control, and does not promote specific products.
– Honoraria and payment of the expenses of a health care professional who serves on the faculty at a bona fide significant educational, medical, scientific, or policy-making conference or seminar, provided:
There is an explicit contract with specific deliverables which are restricted to medical issues, not marketing activities;
The content of the presentation, including slides and written materials, is determined by the health care professional.
– A bona fide clinical trial and a research project which constitutes a systematic investigation with:
o Gross compensation for the Vermont location or locations involved;
o Direct salary support per principal investigator and other health care professionals per year;
o Expenses paid on behalf of investigators or other health care professionals paid to review the clinical trial.
– Payment or reimbursement for the reasonable expenses, including travel and lodging-related expenses, necessary for technical training of individual health care professionals on the use of a medical device if the commitment to provide such expenses and the amounts or categories of reasonable expenses to be paid are described in a written agreement between the health care provider and the manufacturer.
– Royalties and licensing fees paid to health care providers in return for contractual rights to use or purchase a patented or otherwise legally recognized discovery for which the health care provider holds an ownership right.
– Other reasonable fees, payments, subsidies, or other economic benefits provided by a manufacturer of prescribed products at fair market value.
Penalties
For any manufacturer that violates this legislation, a civil penalty of no more than $10,000.00 per violation will be brought by the attorney general in the Washington superior court for injunctive relief, costs, and attorney’s fees, and each unlawful gift constitutes a separate violation.
Reporting
Reporting disclosures in the Act now require that every manufacturer of prescribed products must disclose to the office of the attorney general the value, nature, purpose, and recipient information of any allowable expenditure or gift permitted except:
(i) royalties and licensing fees;
(ii) rebates and discounts for prescribed products provided in the normal course of business;
(iii) and payments for clinical trials.
(iv) These restrictions apply similarly to academic institution or to a professional, educational, or patient organization representing or serving health care providers or consumers.
For a clinical trial for which disclosure is delayed (upon FDA approval or two years post payment whichever is shorter), the manufacturer must identify to the attorney general the clinical trial, the start date, and the web link to the clinical trial registration on the national clinical trials registry.
Reporting of Samples
Every manufacturer of prescribed products must disclose to the office of the attorney general the receiving health care provider’s information and the brand name, generic name, quantity, and dosage of samples of a prescribed product provided for free distribution to patients, as well as the individual responsible for the company’s manufacturer’s compliance of this Act.
Start Date
Annually starting on July 1, companies with expenditures in Vermont of more than $0 will have to file with the state and pay a $500 registration fee. All reports will have to be filed by October 1. For Device Manufactures the start date is January 1, 2010 with reports due for the first six months of 2010 on October 1.
There is also a fee of $500 due to the state for any company with expenditures of greater than $0.
All of the disclosure data will be made available by the Attorney General’s Office through a public website.
Generic Substitution Working Group
This legislation also creates a work group to recommend a sample list and a process for substitution for consideration by the general assembly (similar to the Comparative Effectiveness Council created by the Recovery Act).
The bill defines a “therapeutically equivalent generic drug” as a generic drug which is in the same class as a brand-name drug but is not necessarily chemically equivalent. This group composed of physicians and other health care providers will meet to discuss research and activities, as well as offer recommendations related to increasing the use of generic drugs.
Ultimately, $40,000.00 is appropriated to the office of the attorney general for fiscal year 2010 from a special fund assigned to the office for the purposes of collecting and analyzing information on activities related to the marketing of prescribed products.
Summary
This is a scaled down version of their original bill. But it still represents the most restrictive bill to date with no minimum payment value, an outright ban on FDA regulated education.
With the FDA requiring more and more REMS education programs, this law is in direct conflict with current federal guidelines.
We will know more details now that the law is passed and the State of Vermont provides more clarification.
According to previous reports from Vermont, total payments to physicians in the state have been less than $10 million dollars, it is not clear that this bill solves anything other than disincentivizing manufactures from marketing and conducting clinical trials in the state.
Unfortunately in this case the state medical society endorsed the bill early on, with no real understanding of what this means to their members.
Rather than deal with compliance and potential fines for such a small state, companies will simply pull out resources from the state and move clinical trial sites to less restrictive areas of the country. In addition, confernces will ban Vermont physicians from attending any promotional events including special colored name tags on exhibit floors to ensure compliance.
In the end everyone from the not so normal state of Vermont will suffer from reduced quality of care. If my parents were considering retiring there, for just medical treatment considerations alone, I think that there may be better alternatives.
The Governor is expected to sign the law some time in early June which takes effect July 1, 2009 (that is right less than one month later).
You are encouraged to contact Jim Douglas (R) the Governor at his office http://governor.vermont.gov/contact.html and recommend that he veto S. 48 this draconian bill on the implenmentation deadline alone, other parts are bad but meeting this deadline is impossible.
Now it is “Time to Leave the Maple Farm”
State Policy: Vermont Physician Gift Ban – Time to Leave the Maple Farm