Life Science Compliance Update

June 26, 2015

Massachusetts Governor Orders Review of All State Regulations; Opportunity For Healthcare Industry Comment

Mass government

Earlier this year, the Governor of Massachusetts, Charles Baker, signed an executive order initiating a “comprehensive review’ for all regulations enforced by the Executive Department. Only those regulations which are mandated by law or essential to the health, safety, environment, or welfare of the Commonwealth’s residents will be retained or modified, the order states. The measure is aimed at reducing “burdensome regulations to increase efficiency and competitiveness.”

To meet the standard set forth in the order, agencies must show:

  1. There is a clearly identified need for governmental intervention that is best addressed by the Agency and not another Agency or governmental body;
  2. The costs of the regulation do not exceed the benefits that would result from the regulation;
  3. The regulation does not exceed federal requirements or duplicate local requirements;
  4. Less restrictive and intrusive alternatives have been considered and found less desirable based on a sound evaluation of the alternatives;
  5. The regulation does not unduly and adversely affect Massachusetts citizens and customers of the Commonwealth, or the competitive environment in Massachusetts;
  6. The Agency has established a process and a schedule for measuring the effectiveness of the regulation; and
  7. The regulation is time-limited or provides for regular review.

Perhaps most notably is the prong that the regulation not “exceed federal requirements."  This is an important announcement for life sciences companies—Massachusetts has long been one of the more complicated and challenging states to do business in based on several regulatory requirements that require time and resources above and beyond an already complex legal landscape. For example, Massachusetts instituted a physician payment disclosure law before the Federal Physician Payments Sunshine Act requirements set in during 2013.  While the Federal law preempts much of the Massachusetts measure, the state’s law includes more expansive definitions as to who constitutes a “covered recipient,” requiring additional resources and fees to comply.  

Furthermore, the state’s Pharmaceutical and Medical Device Manufacturer Code of Conduct is largely parallel to the PhRMA and AdvaMed codes that the respective industries follow.

“[C]onfusing, unnecessary, inconsistent and redundant government regulations inconvenience individuals, encumber cities and towns, stress resources of non-profit organizations, including our health care and educational institutions, inhibit business growth and the creation of jobs, and place Massachusetts for profit enterprises at a competitive disadvantage relative to their out-of-state and foreign competitors,” states the Order. In its assessment of the announcement the National Review noted:

For the citizens and businesses of Massachusetts, where state agencies have a long history of expansive regulatory programs, aggressive rule development, expansive regulatory programs, and sweeping administrative authority, this is an extraordinary measure, and it will undoubtedly reshape state government programs for many years to come.

This will be an important measure to follow and stakeholders should take advantage of the opportunity to participate in this regulatory review process. 

June 06, 2014

Massachusetts Pharmaceutical and Device Code of Conduct: Companies Won’t Have to Report Payments Covered by Federal Sunshine Act; Gift Ban Still In Place

In 2009, the State of Massachusetts enacted the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct (PCOC), which requires companies to report payments of more than $50 made to any healthcare practitioner. The law has provided a foreshadowing of the Federal Physician Payments Sunshine Act, which came into effect August of 2013. We have covered the release of Massachusetts' data from 2010, 2011, and, most recently, in 2012.

Massachusetts just released a Notice of Federal Preemption, which states that their "Department of Public Health may not require a pharmaceutical or medical device manufacturing company to disclose information that has been disclosed to a federal agency pursuant to federal law and that may be obtained by the department from such federal agency." Therefore, any payments disclosed to the Centers for Medicaid and Medicare Services (CMS) pursuant to the Sunshine need not be disclosed to the Department. The District of Columbia released a similar notice of Federal preemption a couple of weeks ago.

However, payments to practitioners that fall outside the federal mandate must continue to be disclosed. In Massachusetts, companies must track and report payments to nurse practitioners for example. Click here for our list of state transparency laws and their specific requirements.

Furthermore, Massachusetts' "Gift Ban" still remains in effect. The Federal Sunshine law merely requires disclosure of certain transfers of value.

While the original law strictly prohibited pharmaceutical and medical device companies from providing any meals of any value to health care practitioners outside a hospital or the practitioner's office, this section was amended in 2012. Such companies may now provide meals outside the office or hospital in a non-CME setting, as long as they are of "modest value," while in a setting conducive to informational communication. Massachusetts still prohibits meals in most settings:

  • Meals and refreshments provided as part of entertainment or a recreational event
  • Meals and refreshments provided without an informational presentation
  • Meals and refreshments provided to a health care practitioner's spouse or guest

Massachusetts' Code of Conduct also prohibits:

  • Entertainment or recreational items of any value, such as tickets to a sporting event or concert, or vacation trips
  • Payments of any kind, except as compensation for bona fide services
  • Grants, scholarships, subsidies or other items, in exchange for prescribing or disbursing prescription drugs, biologics or medical devices

Massachusetts notes: "Consistent with the regulation, the Department expects companies to continue to report all instances of non-compliance or be subject to a penalty (970.010) or enforcement action (970.011)."

They also state that a "guidance document regarding the new quarterly meal reports is being worked on, and will be released in the near future. Until that time, manufacturers should not take any action regarding the quarterly meal reports. Once guidance is released, it will be available in this location."

Thanks to Porzio Life Sciences for alerting us to this notice.


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