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Massachusetts Governor Deval Patrick Signs A Health Bill with Strong Gifts-to-Doctors Rules

Aug 12, 2008 | Parker Waichman LLP

According to a recent Associated Press report, Massachusetts Governor Deval Patrick just signed a bill created, in part, to help reduce that state’s increasing health care costs.  The bill will require “hospitals and doctors to adopt a statewide electronic records-keeping system by 2015” and “mandates hospitals report all hospital-acquired infections and bans them from charging for so-called ‘never events’ like wrong-side surgeries.”

Of particular importance, though, is another aspect of the bill that requires pharmaceutical companies and medical device manufacturers to report all gifts to doctors that exceed $50.  Trinkets, samples, food and drinks, trips, and other gifts have long been an accepted part of the medical profession.   Earlier this year, Christopher A. Viehbacher, president for North American pharmaceuticals at GlaxoSmithKline, wrote to Governor Patrick and Speaker Salvatore F. DiMasi of the state’s House, suggesting his company might not invest as much in Massachusetts if political developments” worked to “devalue” its assets.  Viehbacher was writing in response to a proposed gift ban that would make Massachusetts “the most hostile state in the nation when it comes to biopharmaceutical sales.”  Now, in response to the bill, some companies claim that the bill’s gift language is so “all-encompassing” it will be impossible for them to conduct research in the state.  Also according to the AP, “the national Biotechnology Industr
y Organization slammed the measure.”

Meanwhile, gift-giving practices are changing and last month, gifts that pharmaceutical companies have been giving doctors were banned from drug maker’s marketing campaigns under a new voluntary guideline.  The industry’s Code on Interactions with Health Care Professionals—written by the Pharmaceutical Research and Manufacturers of America, the industry’s trade association—will ask chief executives of large drug makers to certify in writing that “they have policies and procedures in place to foster compliance with the code.”  

Extravagant gifts given to doctors by industry, such as golf vacations and expensive dinners, have been sharply criticized as influencing doctors' prescribing habits.  Industry says such gestures are part physician education; however, critics say these practices sully independent decision-making.  "Transparency brings about accountability and benefits everyone, consumers most of all," said Senator Chuck Grassley, an Iowa Republican.

The drug industry last updated its marketing code in 2002, when it banned “dine and dash” events in which drug makers provided free take-out dinners, Christmas trees, and gas to doctors who agreed to listen to brief sales pitches.  That code also banned golf outings and free tickets to sporting events.  None of those rules apply to biotechnology or medical device makers, many of which continue to give expensive gifts and resort vacations to high-profile physicians.  And, last year, five medical device makers settled a U.S. Justice Department investigation over gifts and payment practices. Four of them—Zimmer Holdings Inc., Johnson & Johnson's DuPuy Orthopedics, Smith & Nephew, and Biomet Inc.—agreed to pay a combined $311 million as part of the settlement.  The fifth company, Stryker Corporation agreed to change its practices and was not fined.

According to the AP, Senate President Therese Murray, one of the bills champions, said the new law is critical to the success of the state’s landmark health care law.


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