Healthy Skepticism Library item: 107

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Landrigan K .
State may limit gifts from drug companies
Nashua Telegraph 2004 Feb 4

Full text:

CONCORD – Health and Human Services Commissioner John Stephen wants New Hampshire to become the third state in the nation to require pharmaceutical companies to disclose gifts made to doctors, pharmacies and insurance plans that buy or dispense drugs.

Stephen asked House Commerce Chairman John Hunt, R-Rindge, Tuesday to amend a 2004 bill and pass a law similar to ones in Vermont and Maine that compels reporting for this form of marketing that can range from free pens to all-expenses-paid resort trips for health administrators.“I’ve seen enough to know this is a serious issue across the country and I think it’s in the public interest to have this information,” Stephen said.

The Legislature should decide what is the appropriate gift amount to report, but Stephen said it should be no more than $100.

Vermont’s law sets a $25 limit and Democratic presidential candidate Howard Dean signed it into law as that state’s former governor in June 2002.

Maine adopted the same limit in passing its law last year.

Both laws also exempt companies from having to report free drug samples given to physicians.

“The precise limit for reporting is a policy matter best left to the Legislature,” Stephen said.

Hunt said he’s waiting for Stephen’s office to offer specific language, but he supports the concept.

“I don’t have a particular problem with companies having to report this activity. It certainly makes sense, they should come clean about it,” Hunt said.

“My only concern would be that we not end up with a reporting system that only winds up increasing drug prices. I worry that at the end of the day all we end up doing is embarrassing these companies that are getting these profits.”

The Pharmaceutical Research and Manufactures of America and the American Medical Association have adopted ethical standards that drug company gifts given to medical providers should not exceed $100.

Revised PhRMA guidelines in April 2002 also stress that, “items for the personal benefit of the health-care professional should not be offered or distributed.”

But Stephen said many drug makers routinely ignore these standards first put in place in 1990.

“The industry recognizes this is a problem but a reporting requirement is really the best way to shed light on this practice and hopefully eliminate the abuses,” Stephen said.

Bruce Berke, PhRMA’s New Hampshire lobbyist, declined comment on the proposal last night.

“Until we’ve seen what the commissioner is proposing, we can’t respond,” Berke said.

PhRMA fought the Vermont and Maine laws and has weighed in against this idea before Congress and before lawmakers in other states claiming these reporting laws are unnecessary, expensive and difficult to administer.

Vermont’s law required the first reporting on gifts in 2003 be made by Jan. 1, but state officials there report the information will not be complete until March 1.

A 2002 survey by the Kaiser Family Foundation found that 61 percent of doctors accepted meals, entertainment tickets or free travel from manufacturers, and 13 percent accepted “financial or other in-kind benefits,” not including drug trials.

Last month, New Hampshire received $636,000 as part of a $247 million settlement Bayer AG of Germany made with the federal government and 49 states for overcharging drugs bought under the Medicaid program.

The government accused Bayer of selling Cipro, an antibiotic, and Adalat CC, a blood pressure medication, to health maintenance organizations at deeply discounted prices and hiding it by relabeling or repackaging the drugs under HMO private labels.

This allegedly allowed Bayer to avoid paying required rebates to the Medicaid program between 1995-2000.

In the same probe, GlaxoSmithKline, a U.S. pharmaceutical maker, agreed to pay a civil fine of nearly $88 million for overcharging Medicaid for the antidepressant Paxil and the nasal allergy spray Flonase.

Bayer paid a $5.6 million criminal penalty while Glaxo was never charged with a crime.

Stephen said federal prosecutors in Washington and attorneys general in other states have active “criminal and civil investigations” against other drug companies for improper marketing practices.

“I am not aware of any New Hampshire-specific investigation,” said Stephen, a former county and state prosecutor.

Since becoming commissioner last fall, Stephen has been aggressive in trying to drive down prescription drug prices.

He became the first commissioner to invoke authority to immediately lower what the state has to pay private pharmacists for drugs after learning some violated state law by charging large insurers less than they did state government.