Healthy Skepticism Library item: 15764

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: Journal Article

Steinbrook R.
A Higher Bar — Vermont's New Law on Marketing Prescribed Products
The New England Journal of Medicine 2009 Jun 10;
http://content.nejm.org/cgi/content/full/NEJMp0904719

Full text:

As Congress continues to discuss the reform of physician–industry relations, individual states are enacting new laws. In July 2009, regulations on the conduct of pharmaceutical and medical-device manufacturers take effect in Massachusetts,1 as does a Vermont law on the marketing of prescribed products.2

The Vermont law, signed on June 8, 2009, by Governor Jim Douglas, a Republican, is broader and stricter than the 2008 Massachusetts law, which had previously been considered the most comprehensive in the country. Vermont’s law bans gifts to physicians from manufacturers of prescription drugs, medical devices, and biologic products, with few exceptions. For the gifts and other expenditures that are allowed, the law requires disclosure of the product or products being marketed, if any, the name of the recipient, the recipient’s address and institutional affiliation, and the dollar amount (with no minimum). The law covers payments not only to doctors but also to other individuals and institutions, including pharmacists, health benefit plan administrators, nursing homes, hospitals, the state’s medical school, and professionals’ and patients’ organizations. After the state’s attorney general summarizes the disclosures in an annual report covering the previous fiscal year, the data will be “publicly available and searchable through an Internet website.“2 The initial information should become available in 2011.

Although Vermont has had a pharmaceutical marketing disclosure law since 2002, its value has been limited because it prohibited the disclosure of details about information that a company claimed was a “trade secret.” In fiscal year 2008, of the 78 pharmaceutical manufacturers that disclosed payments, 37 requested that some or all of their data be listed as trade secrets; these companies reported $2.4 million in spending, or 83% of the $2.9 million that was reported.3 Of the $2.9 million, $1.8 million was for the top 100 individual recipients, and $861,912 was for food; $479,306 went to psychiatrists, and $445,304 was spent on marketing of drugs used to treat diabetes.

Under the new law, Vermont classifies gifts and payments from manufacturers into three categories – those that are banned, those that are allowed and disclosed, and those that are allowed and not disclosed.

Most gifts to physicians are banned, including “any payment, food, entertainment, travel” or “anything else of value provided to a health care provider” that does not qualify as an “allowable expenditure.” The exceptions include the provision of drug samples for free distribution to patients, the short-term loan of medical devices to permit their evaluation, and the distribution of journal articles and other items “that serve a genuine educational function.”

Most payments that are allowed must be disclosed, such as those for speaking, consulting, or research; such payments, however, must be based on the “fair market value” of the services. The exceptions to disclosure are royalties and licensing fees, rebates and discounts, and samples of prescription drugs, which are exempt. Disclosure of payments related to clinical trials, such as to the investigators and for expenses, may be delayed for up to 2 years, pending Food and Drug Administration approval or clearance of a product, although the manufacturer must tell the attorney general the name of the trial and its start date and must provide a Web link to the registration on the national clinical trials registry. Gifts to academic institutions and educational, professional, or patients’ organizations are allowed but must be disclosed. Payments to sponsors of accredited continuing medical education conferences are allowed, as are honoraria and expense payments for faculty members if “there is an explicit contract with specific deliverables which are restricted to medical issues, not marketing activities” and if “the content of the presentation, including slides and written materials, is determined by the health care professional.” Violations are subject to civil penalties of up to $10,000 per violation.

The Physician Payments Sunshine Act, which is pending in Congress, would mandate the disclosure of many industry gifts and payments to physicians on a searchable federal government Web site.4 Although subject to further revisions, it would probably preempt state disclosure laws as they apply to industry payments to physicians.5 The Sunshine Act would not, however, ban gifts and some payments, or cover recipients other than doctors, as Vermont’s law does. By enacting the strictest gift ban and disclosure law in the country, Vermont has raised the bar for voluntary and legislative reform efforts.