Possible Repeal of Massachusetts Ban: A Gift to Prescribers, Patients or Industry?

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Next month marks the second anniversary of the enactment of the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct, a law requiring pharmaceutical and medical device manufacturing companies to designate a compliance officer and implement a compliance program reflecting the commonwealth’s regulations on meals, CME sponsorship, use of non-patient identified prescriber data, gifts and other payments, etc.  The law, which went into effect on July 1, 2009, builds upon the Pharmaceutical Research and Manufacturers of America’s revised Code  on Interactions with Healthcare Professionals (”PhRMA Code“) and the Advanced Medical Technology Association’s revised Code of Ethics on Interactions with Healthcare Professionals (”AdvaMed Code“), two voluntary codes intended to eliminate any influence — perceived or otherwise — of the industry over healthcare professionals with respect to gifts, entertainment, recreation, educational programs, professional meetings, scholarships, and the like.

The Massachusetts law is more restrictive, however, than its PhRMA and AdvaMed counterparts.  It prohibits companies from sponsoring continuing medical education programs that do not meet Accreditation Council for Continuing Medical Education guidelines.  The PhRMA and AdvaMed Codes do not.  It prohibits any company employee from providing meals outside of a hospital or office setting.  The PhRMA Code only restricts sales representatives and their immediate supervisors to a hospital or office setting.  The AdvaMed Code does not impose any restrictions on the location of meals.

Furthermore, starting on July 1, 2010, the law requires companies to annually certify their compliance with commonwealth regulations and, among other things, to disclose any gifts or payments valued over $50 and given to anyone who can prescribe, purchase, or dispense drugs or devices.  Effectively, it’s a ban on all gifts to prescribers (and in so doing goes a step further than the PhRMA and AdvaMed Codes which make an exception for educational gifts).  Companies must also submit $2,000, payable to the commonwealth’s Department of Public Health, with each annual disclosure report.  Violations can result in penalties up to $5,000 per occurrence.  The first round of disclosures were due 16 days ago and covered activities for the July 1, 2009 to December 31, 2009 period.  Next year companies will be expected to report on their activities for the January 1, 2010 to December 31, 2010 period.  Or will they?

The Massachusetts House recently passed an economic development bill that repeals the disclosure requirement/gift ban (the bill also establishes a sales tax holiday and consolidates commonwealth economic agencies).  The Senate version of the bill does not include the repeal.  It’s a wait-and-see as to how the two chambers will work out the final bill through their conference committee.

Opponents of the gift ban claim it has adversely affected pharmaceutical clinical research as well as the restaurant and convention industries.  Almost two years ago, PhRMA Senior Vice President Ken Johnson expressed his disappointment over the law, saying:

[it is] very likely damaging for medical partnerships, clinical research and patients in Massachusetts….

Public disclosure of a pharmaceutical company’s arrangements with principal investigators of its clinical trials also could reveal sensitive, proprietary business information to a company’s competitors.  This could erode the independent decision-making of companies trying to bring science from research facilities to patient care setting….

The disclosure requirements subjects all of the physicians, academic institutions and hospitals involved in such trials to publicity in a form that may be difficult to understand and likely will generate unwanted and unnecessary public scrutiny.  This could make Massachusetts an unattractive place for academic scientists to live and work — and for pharmaceutical research companies to do business.  Such a policy clearly is not in the best interest of public health — and it flies in the face of the ongoing efforts to further cultivate the life sciences industry within Massachusetts.

Indeed, the Wall Street Journal and Boston Herald report that some medical groups either have threatened to take their annual meetings elsewhere or have actually done so in protest of the law.

Supporters of the law say otherwise.  Health Care For All, a Massachusetts-based advocacy organization, views banning gifts as a step in the right direction.  According to the organization:

[t]he pharmaceutical industry gives gifts to promote their drugs and make a higher profit.  Under the guise of promoting welfare for all, the industry maximizes their own revenue….

Experts living within the guidelines of the gift ban find that it is not interfering with their work or professional relationships according to Dr. David Coleman, Boston University School of Medicine.

‘The Massachusetts Gift Ban legislation is an important step in the process of reducing both biases in therapeutic decision-making and healthcare costs.  The Ban has not adversely impacted the important relationships of our physician-faculty with the pharmaceutical and device industries….’

Health Care For All also maintains there is no connection between the decrease in restaurant revenues and the law as:

[t]he Massachusetts Prescription Reform Coalition has researched the decrease in restaurant profits, and found sales are down across the country — including in states without a gift ban.   According to the trade paper, Restaurants & Institutions, sales at the nation’s top 100 independent restaurants were down 10% in 2009….

Massachusetts Senators, who recognize the value of the gift ban legislation, also see that these lost profits mirror similar recession-caused losses in the restaurant industry across the country.

Georgia Maheras, Private Market Policy Manager at the Massachusetts Prescription Reform Coalition, considers the current House bill to be a “significant step backward” in the fight to curb medical costs.

Massachusetts is not alone in attempting to reform pharmaceutical and medical device marketing practices.  Neighboring Vermont has a similar, and in fact more stringent, law which even allows the Attorney General’s office to track free samples given to physicians (though a reporter for the Times Argus, a Vermont newspaper, worries how a repeal in Massachusetts might have a ripple effect).  California, the District of Columbia, Maine, Minnesota, Nevada, and West Virginia also have some form of a marketing code.  The federal government’s Patient Protection & Affordable Care Act includes the Physician Payment Sunshine Provision (”Provision”) requiring disclosure of payments made to physicians and teaching hospitals by manufacturers of products covered under Medicaid, Medicare, and SCHIP (click here to read a summary).

So who has it right?  It would seem as though PhRMA and AdvaMed opened the door for state and federal government to codify modified versions of these industry codes.  From a compliance perspective, it must be quite inefficient — and headache inducing — to wade through state marketing disclosure laws that lack uniformity.  Starting January 1, 2012, the Provision will preempt state disclosure laws except for where the state requires additional information.  Maybe this will help, maybe it will add to the headache, or maybe this particular episode will no longer matter.   For now, though, from a patient perspective, a repeal of the Massachusetts disclosure requirement/gift ban, or that of any other state, would feel more like a gift to the industry and prescribers than a service to the “best interest of public health.”

The Center for Health & Pharmacy Law & Policy here at Seton Hall Law has issued two white papers addressing these issues: Conflicts of Interest in Clinical Trial Recruitment & Enrollment: A Call for Increased Oversight,” in which the Center proposes legal and policy changes to address conflicts of interest in the relationships between industry and doctors that can create unwarranted risks to trial participants and to the scientific integrity of research; and Drug and Device Promotion: Charting a Course for Policy Reform,” in which the Center proposes legal and policy changes to address conflicts of interest in the relationship of medicine and industry– including the recommendation “that industry funding for continuing medical education should be phased out, and replaced by an educational process driven by physicians.”

The Center has also recommended “the adoption of federal legislation to ban the use of gifts, meals, and other perks to promote drugs and devices. The states have taken the lead to date–Massachusetts, California, Minnesota, and the District of Columbia have passed laws to limit or ban gifts and meals that are now routine in marketing practices. Concluding that industry self-regulation is not sufficient, the Center calls for national legislation to create uniform practices by industry and physicians. As urged by Professor Boozang, ‘the benefits of drugs and devices should drive promotion and physicians’ decision to prescribe, not a marketing model that depends on gifts and meals.’”

Obviously, the adoption of additional federal standards in this regard will lessen the ability of industry to pit one state against another and make compliance easier. The Physician Payment Sunshine Provision is a step in that direction, the Massachusetts development bill is a step back.

Sunlight is a Weak Disinfectant

Palace Guard with Two Leopards, Jean-Joseph Benjamin Constant (1845-19020

One of the most robust “memes” in contemporary law is the power of disclosure. In health law, disclosure comes up again and again: patients need to give “informed” consent, insurers are supposed to explain their policies clearly, and conflicts of interest, when not proscribed, should at the very least be exposed. But there are growing challenges to the disclosure meme, both within health law and without.

George Lowenstein and Peter Ubel note some problems with disclosure approaches in this article on the weaknesses of behavioral economics generally:

It seems that every week a new book or major newspaper article appears showing that irrational decision-making helped cause the housing bubble or the rise in health care costs. Such insights draw on behavioral economics, an increasingly popular field that incorporates elements from psychology to explain why people make seemingly irrational decisions, at least according to traditional economic theory and its emphasis on rational choice. . . . But the field has its limits. As policymakers use it to devise programs, it’s becoming clear that behavioral economics is being asked to solve problems it wasn’t meant to address.

[T]ake conflicts of interest in medicine. Despite volumes of research showing that pharmaceutical industry gifts distort decisions by doctors, the medical establishment has not mustered the will to bar such thinly disguised bribes, and the health care reform act fails to outlaw them. Instead, much like food labeling, the act includes “sunshine” provisions that will simply make information about these gifts available to the public. We have shifted the burden from industry, which has the power to change the way it does business, to the relatively uninformed and powerless consumer.

The same pattern can be seen in health care reform itself. The act promises to achieve the admirable goal of insuring most Americans, yet it fails to address the more fundamental problem of health care costs. . . . [T]he act tries to lower costs by promoting incentive programs that reward healthy behaviors. . . . [But s]tudies show that preventive medicine, even when it works, rarely saves money.

At its worst, disclosure can become merely pro forma; as Kafka (via Trudo Lemmens) puts it, “Leopards break into the temple and drink to the dregs what is in the sacrificial pitchers; this is repeated over and over again; finally it can be calculated in advance, and it becomes part of the ceremony.” Omri Ben-Shahar has argued that disclosure is one of many aspects of consumer protection law with little real impact on individual welfare. As Amelia Flood reports,

Ben-Shahar, who spent last summer studying all the mandated disclosure statutes in Illinois, Michigan and California, argues that consumer protection advocates have gotten it wrong when it comes to mandating information access for consumers. He says consumers get lost in a sea of technical language, unread disclaimers and long-shot lawsuits. . . . According to Ben-Shahar, disclosures are of more use to consumer ratings groups like Zagat and Consumer’s Digest than they are to most consumers.

So perhaps there is some hope here: third-party aggregators and raters might use disclosures as part of an overall effort to rate various hospitals or doctors. The question then becomes–who shall pay (and rate) the raters? One irony here is that doctor rating sites have themselves been accused of being insufficiently transparent about the ways in which they evaluate physicians. New York Attorney General Cuomo even pursued the matter. His office eventually settled with insurers who ran rating sites. They pledged to “fully disclose to consumers and physicians all aspects of their ranking system.”

What’s the lesson here? First, that consumers are, by and large, too busy to process piecemeal disclosures by professionals like physicians and other health care providers. Second, third party raters can fill some of this information gap by aggregating information. Third, this process of aggregation and rating itself will likely need to be closely supervised by a good-faith regulator, lest it fail to take into account the full range of interests (and quality of information) proper for the task.

Under the Radar: Health Care Reform & Drug Advertising & Marketing

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At the Food and Drug Law Institute’s 21^st Annual Advertising & Promotion Conference John Kamp of the pro-industry Coalition for Healthcare Communication discussed four proposals addressing drug advertising and marketing issues that may be incorporated into the final health care reform bill but have not been widely debated.  Mr. Kamp’s presentation is available here.  

Off the Table (For Now)

Of most concern to industry is an oft-floated proposal to eliminate the tax deduction for drug advertising.  (See, for example, bills sponsored by Representative Jerrold Nadler (D-NY) and Representative Daniel Lipinski (D-IL) here and here.)  Most recently, on September 11, 2009 Senator Bill Nelson (D-FL), a member of the Senate Finance Committee, announced his plan to put forth an amendment to the Baucus Bill that would eliminate the “tax break drugmakers get for TV advertising.”

Direct-to-consumer advertising is a prime target because, as the New York Times put it, for many “the ads are a daily reminder of a health care system run amok,” which “prompt people to diagnose themselves with chronic quality-of-life problems like insomnia or restless leg syndrome; lead people to pressure their doctors for prescriptions for expensive brand-name drugs to treat these conditions; and steer people away from cheaper generic pills.”   There is also concern that DTC ads do not present an accurate picture of drug risks and benefits and that they drive uptake of new drugs before their safety is fully known.

Another obvious driver is the need to pay for health care reform.  Senator Nelson echoed a claim made earlier this year by Congressman Charles Rangel (D-NY) that eliminating the tax break for TV ads would free up $37 billion over the next ten years.  Industry representatives contest the $37 billion figure, arguing that drug companies spend far too little on direct-to-consumer advertising to achieve that level of additional tax revenue.  They contend that Congress would have to eliminate the tax deduction for physician advertising and other marketing expenditures to garner $37 billion.

Less than a week after he announced it, Senator Nelson backed off his plan, perhaps under pressure from other members of Congress who come from districts with a strong media presence and have spoken out against eliminating the deduction.  According to Mr. Kamp, however: “Somebody else will raise this again before it’s over, you bet … Baucus says the reforms will cost $850 billion, the Congressional budget office $750 billion. Three-quarters of a trillion dollars is a lot of real money in Washington. The $37 billion will continue to be in the buffet of options as they try and figure out healthcare.”  

Still on the Table

Three proposals related to drug and device promotion are still on the table, with varying chances for inclusion in the final health care reform bill.

First, health care reform bills in both the House and the Senate contain transparency provisions akin to those in the Physicians Payments Sunshine Act of 2009 introduced in January by Senator Chuck Grassley (R-IA).  Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy recommended that disclosure of drug and device company payments to doctors be federally mandated in its January 2009 white paper.  As the Sunshine Act has widespread support, including from industry, transparency provisions are likely to be included in the final bill.

Second, Section 138 of the health care reform bill reported out of the House Education and Labor Committee   bans the commercial use of “prescription information containing patient identifiable and prescriber identifiable data,” essentially adopting as federal law New Hampshire’s ban on prescription data mining which survived a First Amendment challenge in the First Circuit.  If passed, Section 138 would end drug reps’ current practice of tailoring their sales messages to each doctor’s prescribing history, which many believe creates undue pressure on doctors to prescribe newer more expensive medications.

Third, a bill sponsored by Senator Jack Reed (D-RI) would authorize the FDA to evaluate whether use of a “drug facts box” format for presenting a drug’s benefits and risks would improve healthcare decision making and, if so, to promulgate regulations requiring that drug facts boxes be added to drug labels.  Senator Reed’s bill also empowers the FDA to set standards for comparative clinical effectiveness information included in drug labeling and advertising.

It is difficult to predict whether the data mining ban or Senator Reed’s bill will be included in the final health care reform bill.  Mr. Kamp calls Senator Reed’s bill’s chances a “toss up;” regarding the data mining ban, he has “no idea.”

Seton Hall Law School’s Center for Health & Pharmaceutical Law & Policy Releases White Paper Recommending Reform of Drug and Device Promotion

Seton Hall University School of Law’s Center for Health & Pharmaceutical Law & Policy has called for broad reforms in the marketing of drugs and devices. In a whitepaper, entitled, “Drug and Device Promotion: Charting a Course for Policy Reform,” the Center proposes legal and policy changes to address conflicts of interest in the relationship of medicine and industry. “The time is right for reform in the marketing of drugs and devices to doctors,” said Center Executive Director Tracy Miller. “Conflicts of interest have become pervasive in medical practice. Reform is needed to ensure that patients’ interests are at the heart of medical education, practice, and research,” she said.

The Center recommends: (1) making payments by drug and device companies to doctors transparent, with public disclosure by industry and physicians of their financial relationships; (2) adopting federal legislation to ban gifts, meals and other benefits provided to doctors as part of the current marketing model; (3) setting new policies to give FDA the authority to require studies of safety and efficacy of drugs and devices used off-label; and (4) undertaking a fundamental change in funding for continuing medical education to end industry support.

Moving to Transparency. The Center recommends that payments by drug and device companies to doctors should be publicly disclosed. “Transparency is critical to shore up public trust in physicians and the collaboration of industry and medicine,” said Tracy Miller. Transparency would also foster better practices by doctors and industry, advance government oversight, and provide information to the press and public. Pending federal legislation, the Physician Payments Sunshine Act, would require industry to disclose payments to doctors.

The Center supports this approach. It also recommends that states undertake disclosure by doctors, and decide how information about physician financial relationships with industry could best be shared with patients. Law Professor Kathleen Boozang adds that, “If doctors had to disclose payments from industry it would prompt them to examine their practices through the eyes of their patients and peers.”

Banning Gifts, Meals, Perks. The Center proposes adoption of federal legislation to ban the use of gifts, meals, and other perks to promote drugs and devices. The states have taken the lead to date–Massachusetts, California, Minnesota, and the District of Columbia have passed laws to limit or ban gifts and meals that are now routine in marketing practices. Concluding that industry self-regulation is not sufficient, the Center calls for national legislation to create uniform practices by industry and physicians. As urged by Professor Boozang, “the benefits of drugs and devices should drive promotion and physicians’ decision to prescribe, not a marketing model that depends on gifts and meals.”

Promoting Scientific Study of Off-Label Uses. The Center proposes that national policy should be redesigned to assure that physicians, patients and government have reliable information to make informed choices about off-label medications. Estimates suggest that as many as 40% of all prescriptions are for off-label uses. The FDA has recently issued guidelines to promote integrity and accuracy in medical articles that drug and device companies give to doctors. The Center urges that this policy guidance, while useful, does not go far enough to provide crucial information about the safety and efficacy of drugs and devices prescribed by doctors for uses other than those approved by the FDA.

The Center proposes giving FDA the authority to mandate scientific studies for off-label medications and devices that have high sales volumes or large profits but lack needed evidence of efficacy or safety. This would protect the interests of patients and advance sound choices about the risks, benefits, and economic value of off-label uses.

Reforming Funding for Continuing Medical Education (CME). Most states require physicians to undertake continuing medical education to maintain their medical license. The drug and device industry currently funds over half of the accredited CME courses available to physicians. The Center recommends that industry funding for continuing medical education should be phased out, and replaced by an educational process driven by physicians. As stated by Tracy Miller, “Physicians need to retake control of their professional education. CME should focus on doctors as professionals caring for the whole patient, not just as prescribers of drugs and devices.” While the transition to new funding occurs, the Center recommends that speakers at CME events should disclose more information about their financial interests, and physicians who are paid to promote drugs and devices should not speak at CME events about those products.

Factual Background for the Recommendations

• Ninety-four percent of physicians have some kind of financial relationship with industry, as reported in a major recent national study.

• Five states–Maine, Massachusetts, Minnesota, Vermont and West Virginia– have required industry to disclose financial relationships with physicians.

• As shown by a recent Congressional investigation of payments by industry to prominent psychiatrists, even at universities with strong disclosure policies, practices have not kept pace, leaving the public in the dark about financial ties between physicians and industry.

• Medications are widely used off-label, especially in certain fields such as psychiatry, pediatrics, and oncology. A recent study found that 73% of off-label uses lack evidence of efficacy.

• Commercial support for accredited CME, nearly all of it from drug and device manufacturers, grew from $302 million in 1998 to $1.2 billion in 2006.

Read Whitepaper here.