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April 26, 2011

Massachusetts House Votes Overwhelmingly to Repeal the Code of Conduct AKA the “Gift” Ban

Maryland General Assembly 
This week the Massachusetts State Assembly voted overwhelmingly 128-22 to repeal the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct(PCOC). 

Enacted in 2009, the Massachusetts “gift ban” has been a controversial piece of legislation that has had significant impacts on the pharmaceutical and medical device industry in Massachusetts.  After going into effect on July 1, 2009, the Massachusetts (PCOC) required the reporting of payments of more than $50 made to any health care practitioners by industry.  Payments were then published on the states website in late November, 2010.  

The legislation also requires manufacturers and drug makers to adopt a set marketing code of conduct to help ensure that health care providers were making choices about prescription drugs for their patients based on therapeutic benefits and cost-effectiveness. This code had a number of provisions governing the types and nature of interactions industry could have with physicians.  The Code of was subsequently adopted by the Massachusetts Department of Public Health (DPH).  

Consequently, one year after the Code was in effect, a study published by the Massachusetts Institute of Technology (MIT), analyzed the impact the legislation had on the medical device industry.  The study found that “physician-industry collaboration related to physician education and technology development was impaired by the Massachusetts regulations, with evidence of a larger negative impact on physician education.”  In addition, “within physician education, new device procedure training, non-CME-accredited education, and promotional events experienced the most significant impact.” 

Accordingly, health care stakeholders began to press the Massachusetts legislature to revise the legislation and in some cases, to repeal the entire Code of Conduct.  One attempt in July 2010 to repeal the bill passed in the House, but the repeal was never included in the Massachusetts Senate’s economic development reorganization bill. 

This past fall, when elections for Massachusetts Governor took place, all three candidates, including incumbent Deval Patrick—who was later elected—promised during their campaign to repeal or revise the gift ban and code of conduct.  Then, earlier this year, Governor Patrick discussed at a meeting two points about the gift ban.  He noted that the ban was never intended to extend to the state's medical device industry, and thus should be narrowed.”  Governor Patrick also noted that the “state pharmaceutical ban itself was ripe for repeal or modification, since the Obama administration's federal health care overhaul included superseding language”—the Sunshine Physician Payment Act. 

In light of all these developments and the various attempts to repeal the law, the Massachusetts House on Tuesday, April 26th, 2011, the house voted to repeal the 2008 ban on gifts from pharmaceutical and medical device companies to Massachusetts physicians, tacking the repeal language onto its fiscal 2012 budget bill. The measure would repeal a ban on gifts to physicians, as well as the requirement that companies publicly report payments of at least $50 to physicians and other health providers.

Additionally, Representative Aaron Michlewitz (D-Boston) has filed an amendment (#408) that would remove the restriction on restaurants.  As the Massachusetts Restaurant Association (MRA) noted, the current law prohibits a pharmaceutical or medical device manufacturer agent from paying for meals that are offered, consumed, or provided outside of the health care practitioner's office or hospital setting. These companies are not allowed to hold educational and informational presentations in the restaurants that are surrounding the hospitals.

As a result, MRA asserted that the "restrictions unfairly eliminate functions inside the restaurant, but do not apply to meals at a hospital or office. Restaurants provide an important setting for all types of meetings to take place and shouldn't be excluded as a venue from hosting educational meetings and presentations. Doctors often are faced with high demands and busy schedules; restaurants allow physicians to interact in a private location, removed from the distractions of the office."

Accordingly, MRA recognized that the "mislabeled 'gift ban' has been devastating to restaurants and thousands of middle-class employees," in Massachusetts.

According to the State House News service, “backers of repealing the ban said it had stifled businesses looking to expand in Massachusetts and cost the state revenue from a pair of medical conventions that opted against coming to Massachusetts. Critics of the ban also argued that it had harmed the restaurant industry by preventing pharmaceutical companies from taking doctors out to lunch.” 

Massachusetts Representative Todd Smola (R-Palmer) asserted that, “We need every opportunity possible in order to generate revenue for our economy.”  

In addition, Representative Garrett Bradley, a Hingham Democrat who sponsored the measure, told the Boston Globe that the gift ban is "stifling business.’’  Bradley told the Globe that doctors "have told him that the law limits their ability to learn about new treatments and that companies feel at a disadvantage in Massachusetts."  Accordingly, he asserted that such relationships be regulated at the federal level, under the Sunshine Physician Payment Act. 

Nevertheless, those few representatives that supported the gift ban disputed the contention that Massachusetts had lost out on revenue, pointing to a thriving biotech sector. They also called the ban an important policy to protect patients and ensure the integrity of prescriptions.  Massachusetts Representative Jason Lewis (D-Winchester) asserted that, “a physician choosing to prescribe for his or her patient has undeniably a conflict of interest if he or she is being paid by the company that markets the drug.”  

Now, the House will again have to convince the Senate to include the repeal in the fiscal 2012 state budget, which is expected to be released sometime in May.  

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