Life Science Compliance Update

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March 11, 2009

Massachusetts Pharmaceutical and Medical Device Manufacture's Code of Conduct: Final Version

After receiving input from over one hundred organizations, the Massachusetts Department of Public Health (the Department), Public Health Council (the Council), adopted (10-0) the final Pharmaceutical and Device Manufacturer’s Code of Conduct (the Code or, the Code of Conduct).

The Code of Conduct will have to be maintained and certified by each company.  The Code will begin on July 1, 2009, and require reporting for the last six months of 2009 and submitted to the Department by July 1, 2010.  It will require reporting of all payments or economic benefit over $50.00 and not aggregated.  Penalties will include $5,000 fines for knowing or willful violations.

The Code prohibits:

  • Payment for entertainment or recreation is prohibited, such as tickets to a sporting event, passes to a museum, etc;

·        Payments in cash or cash equivalents to health care providers, either directly or indirectly, are prohibited, except as compensation for bona fide services;

·        Financial support by manufacturers to health care practitioners in training;

·        Complimentary items such as pens, mugs, and calendars are banned;

·        Meals are restricted and in some instances prohibited. For example, any meals given to health care providers must be modest, and only provided at a training or educational event. They generally cannot be provided or paid for when they occur outside of a health care provider’s office or the hospital setting. Meals to spouses or other guests are prohibited. The rules would allow for industry to sponsor conferences and professional meetings at hotels and convention centers;

Manufacturers Code

Pharmaceutical and medical device manufacturers must:

  • Adopt a marketing code of conduct
  • Adopt and submit to the Department of Public Health a description of a training program to provide regular training to appropriate employees including, without limitation, all sales and marketing staff
  • Certify to the Department that it is in compliance with the regulations
  • Adopt and submit to the Department policies and procedures for investigating non-compliance with the regulations
  • Submit to the Department the name, title, address, telephone number and electronic mail address of the compliance officer responsible for ensuring compliance with the regulations

Prescription Data

The Code also includes a provision for governance on manufactures using no-patient identified prescriber data to facilitate communications with healthcare practitioners including:

  • Maintaining Confidentiality
  • Companies have in place policies for data use and employee education around those policies
  • Comply with the request of any health care practitioner not to make his or her prescriber data available to company sales reps.
  • Before utilizing prescriber data the manufactures are required to give health care practitioners the opportunity to request that their data is withheld from company sales representatives and not used for marketing purposes.

In a presentation by Melissa Lopes, Deputy General Counsel, outlines the differences between the proposed Code and what was reached upon by the Council.

The Department takes great pride in announcing that the final regulations remain the strongest in the Nation:

·         Only state to require adoption of, and compliance with, state-authored Code of Conduct requirements;

·         Only state to prohibit certain payments to healthcare practitioners by both pharmaceutical and medical device manufacturers;

·         Only state to require disclosures by medical device manufacturers; and

·         One of only two states to make disclosure data part of the public record.

Restriction on payments

·         Making explicit the statutory requirement that the $50 threshold will be applied per individual transaction.

Payments to be disclosed include:

·         Advertising, promotion, or other activity used to:

·         Influence sales/market share of a prescription drug, biologic or medical device;

    Influence the prescribing behavior of an individual health care practitioner to promote a drug, biologic, or medical device;

    Evaluate the effectiveness of a professional pharmaceutical or medical device detailing sales force;

·         Product education and training;

·         Charitable donations to hospitals, universities, and federally tax-exempt 501(c)(3) organizations;

·         Sponsorship of Continuing Medical Education (CME), third-party conferences, scientific, or professional meetings;

·         Consulting payments in conjunction with marketing-based research; and

·         Any other economic benefit with a value of $50 or more, directed at and benefiting a covered recipient.

The Council made substantive changes with three goals in mind:

·         To limit industry interactions with healthcare practitioners that may influence prescribing patterns and/or adversely affect the care patients receive;

·         To increase transparency surrounding industry payments to covered recipients;

·         To not unduly restrict beneficial industry interactions with healthcare practitioners/other covered recipients that increase access to advances in the diagnosis, treatment, and prevention of disease.

The Department strengthened the restrictions in response to consumer concerns by:

·         Making explicit the broad mandate implicit in Chapter lllN;

·         Clarifying that all pharmaceutical and medical device manufacturers and distributors must comply with the Department's regulations;

·         Adding an opt-out provision for healthcare providers from data mining of marketing prescription data;

·         Limiting the influence of marketing in healthcare consulting agreements and clarifying that a healthcare practitioner may be hired as a consultant as long as the consultancy does not amount to purely serving as a sales representative for the company;

·         Eliminating the provision allowing manufacturers to provide financial assistance to healthcare professionals in training;

·         Expanding the already broad definition of "sales and marketing activities;"

·         Requiring manufacturers to disclose research that:

·         Is designed or sponsored by a manufacturer's marketing department; and

·         Has marketing, product promotion, or advertising as its purpose.

The Department clarified some parts of the restrictions:

Manufacturers

·         Manufacturers need not restrict or disclose payments provided to full-time employees and board members;

·         Medical device manufacturers may provide demonstrations and evaluation units to healthcare practitioners for their own use; and

·         Clarifying definitions so as to not restrict research and clinical trials on medical devices.

CME

·         Clarifying that CME, conferences, meetings, and meals in conjunction with CME, conferences, and meetings, could be conducted at hotels or convention centers.

·         Requires that CME is accredited by ACCME or like body and follows the rules and separate from marketing.

Research

·         Retained the exemption from disclosure for genuine research and clinical trials.

Samples and Rebates

·         New exemption from disclosure for prescription drugs provided at no cost to covered recipients, solely and exclusively, for use by patients, and demonstrations and evaluation units provided for the benefit of patients; and

·         Providing an exemption for the provision of rebates and discounts.

Charities

·         Allowing for the provision of charitable donations and the donation of drugs or devices in the event of a public health crisis, natural disaster, or other charitable need; and

·         Providing an exemption for the provision of in-kind items for charity care to charitable organizations.

Implementation

  • July 1, 2009
    • Compliance with Code of Conduct;
    • Submission of information in Section 970.005 (name of compliance officer, investigation policies, etc.); and
    • Initial payment of fee (proposed $2,000).
  • July 1, 2010
    • Submission of reportable activities for the period between July 1, 2009 to December 31, 2009.

Fines and Enforcement

  • A person who knowingly or willfully violates this provision, shall be punished by a fine of up to $5,000.00 for non-compliance per transaction, occurrence, or event;
  • Fines shall be issued and enforced by the Department in conjunction with the Office of the Attorney General; and
  • Non-retaliation provision:  No manufacturer or other person shall retaliate or take any adverse action against any applicant, healthcare practitioner, or covered recipient who takes action in furtherance of the enforcement of this law.

Summary

This is, by far, the most restrictive law in the country, and it will help launch an entire industry to comply with all the disclosure requirements.

The inclusion of prescription data mining restrictions was not in the legislative mandate and will be challenged in court for:

  • Lack of legislative intent (it is nowhere in the law)
  • No public hearings or notice which is a violation of standard rule making procedures.  

We can expect more states to adopt similar measures in the coming years on the promise that these types of laws will save tax payers funds. 

The Department previously stated that it will re-evaluate this law in two years.  Perhaps at that time, we will know if there were any savings gained from the prohibition and collection of all this information.

Public Health Council

Press Release

Pharmaceutical and Medical Device Manufactures Code of Conduct March 11-09

            Power Point Presentation on Final Code of Conduct (Acrobat)

            Power Point Presentation on Final Code of Conduct

            Frequently Asked Questions

            Public Health Council Memo on Code

Pharmaceutical and Device Manufactures Code of Contact – Additional Information

Organizational Responses to the Public Health Council on Proposed Code of Conduct

Policy and Medicine

Massachusetts Pharma and Device Code of Conduct: Proposed Rules

            Massachusetts Physician Registry: MWE Unraveling the Web of Confusion

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