Life Science Compliance Update

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February 07, 2018

New Jersey "Gift" Ban Revision?

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During his last few days as Governor of New Jersey, Chris Christie’s administration enacted an aggressive regulation in an stated attempt to combat the opioid epidemic. The regulation was finalized in late December 2017 and required that beginning January 15, 2018, any contracts and payments entered into by prescribers directly with the pharmaceutical industry will be subject to a $10,000 annual cap. This cap includes payments from industry for consulting and speaking and includes a $15 per meal cap, but exempts research and education-related payments.

Current New Jersey Governor Phil Murphy may now be trying to modify that rule, according to a source who spoke with ROI-NJ recently. The source, familiar with the thinking behind a potential modification but not permitted to speak publicly on the discussion, said the Administration is considering increasing the limit or even rolling back the rule altogether.

The source made sure to note that this consideration should not be viewed as Governor Murphy having less concern about any problems surrounding potential opioid use and abuse as much as the concerns for the unintended consequences of the Christie rule which applies to prescribers for payments from all manufacturers.

Evidently, the rule is having a detrimental effect on the hospitality industry – specifically the restaurant industry. Marilou Halvorsen, CEO and president of the New Jersey Restaurant & Hospitality Association (NJRHA), said restaurants are already estimating losses of at least $4.5 million this year. According to Halvorsen a survey of NJRHA members cites respondents as having estimated losses ranging from $5,000 to as much as $300,000 for this year. “Restaurants do garner a lot of business. It’s predictable, it’s a good source of business,” she said. “The servers love it because they get good tips and get banquet pay quite often.” Halvorsen has been sharing her findings with the Murphy administration.

Nicholas Vasilakis, the owner of audiovisual company Event Solutions Corp. in Bayonne, New Jersey, said he already is seeing a dramatic drop in his business. He estimates that his company will lose roughly $100,000 this year from cancelations or non-bookings of the roughly 200 events he works on annually in the state. On Monday, Vasilakis told ROI-NJ that he has one event booked in February, compared with 20 events booked in February 2017. Interestingly, he noted that “After January 16, [the date the legislation went into effect] it all just stopped,” he said, adding that some prebooked events are still on the calendar.

It’s too early to tell what impact the rule is having or will have on the opioid issue, but it’s clear the rule has many perplexed. Lani Dornfeld, an attorney in New Jersey, discussed the confusion the rule creates with respect to manufacturer’s gift giving. In reality, it only regulates New Jersey prescribers acting as receivers. But – Dornfield said – the rule has an effect on all those who practice in New Jersey, even if their offices are in another state because penalties for not following the rule could result in the revocation of a practitioner’s New Jersey medical license, which could lead to that prescriber losing his or her license in other states as well. Such wide-ranging ramifications have made it so prescribers are hesitant to even attend events in New Jersey.

Dornfield also said there is confusion over whether this affects New Jersey-licensed doctors who attend events in other states, but did confirm that the rule applies to events in all states and that doctors from New Jersey traveling outside the state are still held accountable to the payment limits.   

These type of rules have been modified over the years.  In one instance, Massachusetts passed a similar meal restriction only to modify it a few years later to allow for modest meals but left the definition up to the manufacturer, so far that has worked fine for that state.   

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