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January 16, 2013

Massachusetts Manufactures Code of Conduct: Responding to the Change

Diner open
As we noted back in late September, the Massachusetts Public Health Council passed the first round for emergency regulations to amend the 2008 Pharmaceutical and Device Manufacturer Code of Conduct (PCOC), which came through legislation as part of the 2013 state budget.  The amendments allow companies to provide “modest meals” for healthcare providers for product education (non-CME) outside of the office or hospital setting.   

The Code of Conduct and associated gift ban, among the most restrictive in the country, took effect in 2008 and prohibited pharmaceutical companies and medical-device makers from buying physicians meals outside their workplaces.  The goal was to prevent manufacturers from unduly influencing doctors’ decisions about what drug brands they prescribe.

The Council held a public hearing on October 19, 2012, to hear testimony on the emergency regulations.  Approximately 100 people attended the hearing and 19 offered oral testimony.  There were seventy-seven (77) written submissions from organizations, individuals or groups of individuals.   

Consequently, on November 21, 2012, the Council approved the final amendments, which reflect changes following public comment on emergency regulations approved by the Council on September 19, 2012.  In a memo discussing the amendments, the Public Health Council summarized comments and responses based on several topics

A recent article from the Boston Globe examined how affected stakeholders Massachusetts are responding to the new changes.  “Bill Brady said he lost 20 percent of his restaurant sales four years ago after Massachusetts put in place stringent new rules preventing drug companies from taking doctors out for meals.” 

“It definitely had a major impact on our business,” said Brady, who owns Sonoma Restaurant in Princeton. “And the servers — it took a substantial amount of money out of their pockets.”  Now that the laws have changed, “Brady, along with other restaurateurs, are counting on a return of the lucrative drug company business.” 

At Aquitaine Group, which owns seven restaurants in and around Boston, including Aquitaine and Cinquecento, the impact of the regulations was not immediately apparent, partner Jeffrey Gates said.  A drop in business caused by the financial crisis initially masked the effect of the meal ban, he said.  “But when the regular diners started coming back, the medical meals did not.” 

Aquitaine’s Union Bar and Grille in Boston’s South End had previously hosted an average of two pharmaceutical company meals a week, each with seven or eight people, Gates said.  “In an 80-seat restaurant, on a Tuesday night, that is 10 percent of your business,” he said.  “On a busy Thursday, it’s a 5 percent loss.” 

Listening to the state’s restaurant industry concerns, as well as the concerns of doctors and the pharma and medical device industry, Governor Deval Patrick signed a budget that included an amendment to allow drug and medical-device makers to pay for “modest” meals at what are defined as informational sessions.  

“In the weeks since the change, business has started to improve, but it may never rebound to levels before the ban, Brady said.”  Where he used to book parties of 15 to 18 doctors and medical company representatives, he now gets groups of six or eight. 

“It’s not near what I’d like to see, but it shows promise,” he said.  The story is similar throughout the industry.  Pharmaceutical companies, he said, are taking the first steps toward returning to their old approach, assessing marketing budgets and reaching out to restaurants.  “One factor holding drug makers back may be a need to figure out what exactly is expected of them under the new rules,” the Globe wrote. 

The reporting requirements are of particular concern in the industry, said Marjorie Powell, senior assistant general counsel for PhRMA.  “The rules call for drug companies and device makers to report the amount they spend on meals for informational sessions, the location of the event, the product under discussion, and “other information as determined necessary.” 

That last item is especially worrisome to some companies, Powell said.  “No one knows when the commissioner might decide to ask for something,” she said.  “It means that your system for collecting and recording info faces some uncertainty.” 

Some groups are concerned that by loosening the meal ban, the state is putting corporate interests ahead of patients’ well-being.  “We think it is imperative that patients not be used as pawns for restaurant revenues,” said Amy Whitcomb Slemmer, executive director of Health Care for All, a health care consumer advocacy group based in Boston.  The expense of dining out is likely to be passed on to patients through increased prescription drug prices, she said. And, she said, the term “modest meal” leaves too much room for interpretation. 

Of course, this anecdotal argument could not be farther from the truth.  First, drug prices would not be increased because over 75% of drugs prescribed are already generics, and most states require generics unless the doctor explicitly asks otherwise.  Second, there is no other time for physicians to learn about this valuable information, and physicians who do not receive up dates on clinical information may end up harming patients by not having all the available data and research to make evidence based decisions—such as updates to drug labels or other new warning and risk information that FDA may have required.   

Moreover, there is no ambiguity in modest meals: the regulations define it as “similar to what a health care practitioner might purchase when dining at his or her own expense.”

In a memo accompanying the rules, the Department of Public Health argues that a spending cap, which Health Care for All and others supported, would have been “ a simplistic approach to a complex regulatory provision.”

Gates, of Aquitaine Group, said the medical industry events his restaurants have hosted have never been flashy or extravagant.  “It is a dozen doctors in a room with a rep and a PowerPoint projector, talking about clinical trials, new health issues,” he said. 

“If you picture the most boring wedding you ever went to, these kinds of events are at that level of excitement.”  Brady said he is confident drug and device companies will avoid displays of dining-out excess, having just been released from the state’s restrictive 2008 rules.  “What I do see is the pharmaceutical companies policing themselves a lot more,” he said.  “I think the message was well received by them.”

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