Policy and Medicine

Massachusetts Posts 2011 Payments to Healthcare Providers: 3% Drop in Payments

 

As we have covered numerous times on this website, in 2009, the State of Massachusetts enacted the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct (PCOC).  

After going into effect on July 1, 2009, the PCOC requires the reporting of payments of more than $50 made to any health care practitioner by industry.  Payments for 2009 were then published on the states website in late November, 2010.  The legislation is very similar to the Physician Payment Sunshine Act.  

For a better understanding of Massachusetts’s law and basic definitions of terms, click here.  

More recently, the Massachusetts Department of Public Health approved final amendments to the PCOC in November of last year.  The amendments, among other things, allow companies to provide “modest meals” for healthcare providers for product education (non-CME) outside of the office or hospital setting.   You can find the current version of the law here.  

Consequently, the Massachusetts Department of Public Health recently posted its transparency data—manufacturer payment data to physicians and hospitals—for 2011.  You can download the full 2011 data here.  Between 2010 and 2011 payments decreased approximately 3%, from about $64.4 million to $62.4 million.  The number of transactions between manufacturers and physicians, hospitals, and entities also decreased almost 10% (from 42,497 to just over 38,500).  There were also a number of other significant changes: 

• Payments for charitable donations decreased 62% (over $1.8 million less)
• Compensation for bona fide services decreased 7% (over $2.4 million less)
• Payments for education and training remained unchanged
• Payments for food decreased 6%
• Payments for marketing studies decreased 42% ; and 

Payments for CME, third-party conferences or meetings increased 16% (over $1.2 million less) .  This category includes payments to covered recipients for accredited CME activities and for sponsoring a covered recipient’s scientific or professional conference/meeting, where the sponsorship is promotional (e.g., booths/exhibits).

Payments for grants/educational gifts also increased, 2%. This category includes fellowships, scholarships grants for local events, and provision of anatomical models or other such practice-related items.  In addition “other” types of payments increased 60%, a little over $1.4 million. 

Payments to specific individuals and entities broke down as follows: 

• 46% of payments were to physicians (over $28.8 million) (28,844 payments)
• 20% were for acute hospitals (over $12.6 million) (889 payments)
• 11% to clinical laboratories (over $6.7 million) (949 payments)
• 9% for stem cell research (over $5.7 million) (153 payments)
• 6% to clinics (over $3.6 million) (134 payments)
• 2% to dentists ($1.5 million) (494 payments)
• 2% to registered nurses (under $1 million) (3,322 payments)
• 2% to pharmacists (under $1 million (1,263 payments)
• 1% clinical nurse specialist (~$312K) (302 payments)
• Less than .05% to nurse practitioners (~$261K) (749 payments)
• ~.3% to physician assistants (~$202K) (639 payments)
• ~.15% to podiatrists (~$96K) (165 payments)
• ~.05% to optometrists (~$34K) (18 payments) 

The payment reports are in a similar format as those posted in previous years (see our story from 2010 payments).  Thus, the posted data includes:

• Top 20 Manufacturers Summary (2011), which includes 509 pages of payments.
• Top 50 Physicians Summary, including 17 pages of payments
• Top 50 Hospitals, Summary, including 29 pages of payments
• Top 100 Covered Recipients, Non Hospital, Detail, including 46 pages of payments  

In general, you can search for payments by category type: 

1. Compensation for Bona Fide Services
2. CMEs, Third-party Conferences, or Meetings
3. Grants/Educational Gifts
4. Food
5. Education/Training
6. Marketing Studies
7. Charitable Donation
8. Other 

Given the immense expense that went into collecting this data, it is hard to imagine that less than $62 million was spent on compliance, which means that it was more expensive to collect the data than the actual dollars spent. 

States considering expanding transparency to NP’s and PA’s, should consider that in Massachusetts they amounted to less than 1.5% of all payments.   With state resources strapped for cash there are significantly better ways to control spending than to force companies to spend more on needless additional transparency.

Massachusetts Manufactures Code of Conduct: Responding to the Change

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.”

Massachusetts Pharmaceutical and Device Manufacture Code of Conduct: Final 2012 Revisions

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 council then 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. The Boston Globe quoted several policy makers, physicians, and consumer groups who are frustrated with the changes. 

While many may still be concerned about the potential for conflicts or bias, these amendments reflect the tremendous outpouring from physicians, industry and related stakeholders who saw first hand the detrimental and stigmatic impact the regulations had on physician-industry collaboration and patient care.  The Massachusetts gift-ban and severe restrictions on physician-industry collaboration was misguided from the beginning, and the Massachusetts Legislature, and the Council correctly amended it to reflect the fact that modest meals do not sway or influence physicians.   

These meals are necessary only because physicians have no other time in their busy schedule of seeing patients and conducting research to receive this innovative education and information to stay up-to-date on the latest clinical data and breakthroughs.  Moreover, numerous studies have shown that such meals have no impact on physicians.  In fact, a recent survey of almost 24,000 US physicians found that 72% said a meal would not influence them. 

Why is it acceptable for politicians, lobbyists, and every other industry to conduct business over meals, but not the most time-constrained and highly regulated industry?  This double standard has, and always will be, unacceptable.  While abuses have occurred in the past, and are still possible, the proper authorities have the resources and skills designed to prosecute those companies and individuals who try to improperly use these events, but the overwhelming majority of educational seminars and events that include modest meals help patients and improve physician competency and clinical skills. 

Public Comment and Staff Response and Recommendations  

Provision of meals:  Chapter 111N originally prohibited the provision of meals to health care practitioners outside of a hospital or the practitioner’s office.  The legislature removed that prohibition, and chapter 111N now permits a pharmaceutical or medical device manufacturer to provide modest meals and refreshments outside of such a healthcare setting in connection with non-CME educational presentations for the purpose of educating and informing health care practitioners about the benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information, provided that such presentations occur in a venue and manner conducive to informational communication.   

The emergency regulation defined “modest meals and refreshments” as “food and/or drinks provided by or paid for by a pharmaceutical or medical device manufacturing company or agent to a health care practitioner that, as judged by local standards, are similar to what a health care practitioner might purchase when dining at his or her own expense.”  The Council explained that “This definition is consistent with the definitions contained in industry codes of conduct and allows the manufacturers to adjust for regional or other variations in costs.”  As a result, the council made no change to this definition.  

The council explained its position by noting that Chapter 111N directs that the Department’s regulation be “no less restrictive than the most recent version of the Code on Interactions with Healthcare Professionals developed by the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Code on Interactions with Healthcare Professionals developed by the Advanced Medical Technology Association (AdvaMed).”  The Council asserted that “The definition as adopted is consistent with these codes, and also with the American Medical Association’s ethical guidelines.”   

In general, the regulated manufacturers, several medical associations and representatives of the Massachusetts hospitality industry supported the definition as fair and consistent with existing codes of conduct.  Consumer advocates and professional groups representing providers and medical students objected to the definition as vague and unenforceable.  Most recommended that the Department specify a particular dollar limit on meals, with many recommending that the Department base the dollar limits on per diem allowances for government employees.   

However, the Council maintained that “Imposing a specific dollar cap is a simplistic approach to a complex regulatory provision.”  The statutory change permits meals outside of physician office or hospital settings, i.e., in restaurants or other facilities with function rooms.  The per-person cost for the meal component of a presentation or group event is often more than the menu price of similar meals because the cost of the room and attendant amenities (audio-visual equipment, for example) may be included, as may be beverages, taxes and gratuities.   

In order to take into account variations in costs based on regional differences, number of participants, etc, the Department would have to establish a ceiling that was at such a high level so as to invite criticism that in many lower-cost areas or events, it would exceed any reasonable interpretation of “modest.”  Additionally, among any regulated group, a defined upper limit often as a practical matter becomes the average, and a figure high enough to account for regional variations could have the unintended consequence of encouraging additional spending beyond what would otherwise be considered modest.

The Council explained that Comparison to government employee “per diems” is not apt for a number of reasons.  When government employees travel on business, the travel allowance is intended to cover a personal meal, not a meal that is part of any seminar or conference event.  Also, the per diem amount does not limit the amount of the cost of a meal but rather limits the amount of reimbursement to the employee – the employee is free to spend additional amounts at his or her own cost.   

The Council clarified again that meals that were previously prohibited are now allowed to be provided and that “Past cases of noncompliance were related to impermissible activities, and not to disputes about the dollar value of reported payments.”  The Council said it was “confident that any complaints regarding provision of meals that do not meet the definition will be investigated.” 

Alcohol as part of modest meals.  Consumer advocates and groups representing medical students stated that alcohol should not be permissible as part of modest meals and refreshments because the provision of alcohol is inconsistent with providing meals for educational purposes and in appropriate venues. 

The Council recognized that the new statutory language is silent on the provision of alcoholic beverages, although the legislature chose the term “modest meals and refreshments” rather than simply “modest meals.”  As a practical matter, nearly every venue with function rooms or conference capacity serves alcoholic beverages, and “it would be unrealistic to expect either the host site or the manufacturer to police the contents of participants’ glasses.”  As such, the Council did not propose “any language around the provision of or payment for alcohol.” 

Expenses related to training.  Previously, chapter 111N and the regulation had permitted payment or reimbursement for expenses, including travel and lodging related expenses, necessary for technical training of health care practitioners on the use of a medical device if the commitment to provide such expenses, and the amounts or categories of reasonable expenses to be paid, were described in the written agreement between the health care practitioner and the device vendor for the purchase of the device.   

The 2012 changes to chapter 111N removed the requirement that the reimbursable expenses appear in the written contract.  Accordingly, the proposed amendment to 105 CMR 970.008(2)(b) removed this condition.  The Council recommended that the revised statutory language continue to be part of the amended regulation. 

Federal preemption of reporting requirements.  An additional component of chapter 111N required disclosure to the Department of payments by pharmaceutical and medical device manufacturers to covered recipients.  Federal provisions in the Affordable Care Act known as the Physician Payments Sunshine Act (“the Sunshine Act”) require manufacturers of drugs, biologics, devices and medical supplies covered under Medicare, Medicaid and the Children’s Health Insurance Program to report payments and other transfers of value made to physicians and teaching hospitals to the Centers for Medicare and Medicaid Services (“CMS”) for subsequent public disclosure.  The Sunshine Act also preempts any state law that requires the collection and reporting of the same type of data.   

Thus, current provisions in chapter 111N that require disclosures of certain payments by pharmaceutical and medical device manufacturers to certain covered recipients will be preempted once federal regulations are finalized and federal reporting goes into effect.  The Sunshine Act also provides that the federal Secretary of Health and Human Services will send reports of payments to each state.   

The 2012 changes to chapter 111N acknowledge the federal preemption and that the Department will receive the federal reports, and requires the Department to make all disclosed data in annual reports publicly available and easily searchable on its website not later than 90 days following the receipt from the Secretary. 

The emergency amendments had stated that manufacturers would no longer have to make any required annual disclosures after the federal preemption begins.  Additionally, the regulation stated that the Department would deem any manufacturer to have met any requirements regarding the quarterly disclosure of payments if that manufacturer complies with all federal reporting requirements and the federal Secretary subsequently sends the data to Massachusetts.  Many commenters objected to the Department’s treatment of the federal preemption on two grounds. 

First, the federal reporting requirements apply to payments to physicians and teaching hospitals, while the original Massachusetts requirements under c. 111N apply to all prescribers and health care providers.  Commenters want the Department to continue to collect data on payments to providers other than physicians and teaching hospitals, (primarily nurse practitioners and physician assistants) and payments by manufacturers who do not have to report under the federal law (e.g., for drugs and devices that are not reimbursable by federal insurance programs because they are strictly for cosmetic purposes and not covered by insurance).  However, reported payments to nurse practitioners and physician assistants represented 0.8% of the total reported payments for FY2010 and 0.7% of the reported payments for FY2011. 

Second, commenters wanted the Department to enforce the quarterly reporting inserted in c. 111N as a condition for the provision of modest meals, notwithstanding any federal preemption issues. 

Although the vast majority of reporting will be preempted by federal law, the Council recommended that the regulation be amended to require all annual reporting of information that is not reported pursuant to federal requirements.  The Council also recommended that the regulation require the quarterly reporting set forth in the statute, despite the fact that much of the information is of the type required to be reported under the Sunshine Act and therefore likely to be found to be preempted if challenged. 

Annual fee.  Previously, c. 111N had linked the fee that manufacturers must pay to the Department with the required disclosure.  The statutory change added authority for the fee to the section regarding the provision of modest meals and refreshments; the emergency amendment had separated the fee from the required disclosures, many of which will be preempted by federal law. 

The Council recommended that the current amount of the fee ($2000) be added to the new section where the fee now appears in order to make it more readily apparent that regulated companies must pay an annual fee with their registration with the Department. 

Venue and manner conducive to informational communication.  Consumer advocates urged the Department to define or otherwise regulate the places outside of the office or hospital setting where modest meals may be provided, by specifically prohibiting such meals at recreational sites like resorts, sporting clubs, casinos or other vacation destinations. 

The Council reiterated that “Meals (or any other types of gifts or payments) in connection with entertainment or recreation are already prohibited by both the statute and regulation.”  There are many examples of dual-purpose venues that provide conference services in addition to functioning as sites for recreation or entertainment.  Likewise, non-recreational sites can provide entertainment within their function rooms.  Accordingly, the Council said it was “confident that the current statutory and regulatory language provide limitations that prohibit inappropriate gifts or payments from being provided to practitioners.” 

Amendments

 

970.006:        Provision of Meals

 

(1)  Pharmaceutical or medical device manufacturing companies and agents may provide or provide payment for modest meals to health care practitioners in the health care practitioner’s office or hospital setting in connection with informational or educational meetings or presentations.   

(2)  Pharmaceutical or medical device manufacturing companies and agents may provide or provide payment for modest meals and refreshments to health care practitioners outside of the health care practitioner’s office or hospital setting for the purpose of educating and informing health care practitioners about the benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information, provided that such presentations occur in a venue and manner conducive to informational communication.  For the purposes of 105 CMR 970.006(3), “appropriate uses” may not include the promotion of off-label uses of prescription drugs or medical devices. 

(3)  No pharmaceutical or medical device manufacturing company may provide or provide payment for such meals and refreshments permitted under 105 CMR 970.006

(4) unless such pharmaceutical or medical device manufacturing company files quarterly reports detailing all non-CME educational presentations at which such meals or refreshments are provided.  Reports shall include:  

(a)  the location of the non-CME presentation;

(b)  a description of any pharmaceutical products, medical devices or other products discussed at such presentation; 

(c)  the total amount expended on such presentation; and  

(d)  an estimate of the amount expended per participant, factoring any meals, refreshments or other items of economic value provided at such presentation.

 

970.007:        CME, Third-Party Scientific or Educational Conferences, or Professional

 

Meetings

 

(1)  No pharmaceutical or medical device manufacturing company that employs or contracts with a pharmaceutical or medical device manufacturer agent may provide: 

(a)  financial support for the costs of travel, lodging, or other personal expenses of non-faculty health care practitioners attending any CME event, third-party scientific or educational conference, or professional meetings, either directly to the individuals participating in the event or indirectly to the event’s sponsor. 

(b)  funding to compensate for the time spent by health care practitioners participating in any CME event, third-party scientific or educational conferences, or professional meetings;

(c)  payment for meals directly to a health care practitioner at any CME event, third-party scientific or educational conferences, or professional meetings, although a CME provider or conference or meeting organizer may, at its own discretion, apply any financial support provided by a pharmaceutical or medical device manufacturing company for the event to provide meals for all participants.

(d)  sponsorship or payment for CME, also known as independent medical education, that does not meet the Standards For Commercial Support as established by the Accreditation Council for Continuing Medical Education (ACCME) or equivalent commercial support standards of the relevant continuing education accrediting body, or that provides payment directly to a health care practitioner.   

(2)  A pharmaceutical manufacturing company shall separate its CME grant-making functions from its sales and marketing departments. 

(3)  A pharmaceutical manufacturing company shall not provide any advice or guidance to the CME provider regarding the content or faculty for a particular CME program funded by the company. 

(4)  Nothing in 105 CMR 970.000 shall prohibit:

(a)  compensation or reimbursement made to a health care practitioner serving as a speaker or providing actual and substantive services as a faculty organizer or academic program consultant for a CME event, third-party scientific or educational conference, or professional meeting, provided that the payment:

1.  is reasonable;

2.  is based on fair market value; and

3.  complies with the standards for commercial support as established by the relevant accreditation entity.

(b)  sponsorship or payment for any portion of a third-party scientific or educational conference, charitable conference or meeting, or professional meeting, where the payment is made directly to the conference or meeting organizers;   

(c)  the use of hotel facilities, convention center facilities or other special event venues for CME or other third-party scientific, educational or professional meetings or conferences.

Massachusetts Pharmaceutical and Device Manufacture Code of Conduct: Hearing for Emergency Regulations Calls for Standard Definition of Modest Meals

In late September, the Massachusetts Public Health Council passed the first round for emergency regulations to allow companies to provide “modest meals” for healthcare providers for product education (non-CME) outside of the office or hospital setting.  The amendments proposed the following definition:

“Modest Meals and Refreshments, food and/or drinks provided by or paid for by a pharmaceutical or medical device manufacturing company or agent to a health care practitioner that, as judged by local standards, are similar to what a health care practitioner might purchase when dining at his or her own expense.”

Consequently, the council held a public hearing on October 19, 2012, to hear testimony on the emergency regulations.  The hearing follows July revisions to the 2008 Pharmaceutical and Device Manufacturer Code of Conduct (PCOC) as part of the 2013 state budget.  

Several groups provided testimony, including the Coalition for Healthcare Communication, the Massachusetts Biotechnology Council (MassBio) and the Pharmaceutical Research and Manufacturers of America (PhRMA).  These groups collectively testified that the state’s emergency amendments making an exception to a 2008 gift ban to allow “modest meals” to be offered to healthcare professionals is both supported by their organizations and in line with industry and federal standards.

There were also groups of activist’s medical students lead by a social advocacy organization Healthcare for All.  Collectively they protested the proposed rules by delivering a letter to the governor on the grounds that the proposed rule  “allows wine, fancy drinks, three-course fancy lobster dinners.” They utilize the standard argument, absent of benefit of why doctors would want to meet over dinner “We need to have confidence as a patient that your doctor is making the best decision about your drugs based on the medical evidence and not based simply on who took them out for dinner last night.” stated a representative from Healthcare for All.

“The Massachusetts Department of Health correctly recognized that the most important need here is to facilitate education for drug prescribers,” said Coalition Executive Director John Kamp after the hearing.  “The common sense provision of a modest meal at a dinner meeting is merely a way to facilitate the safe and effective use of medicine.”  Kamp asserted that “These education sessions provide prescribers with current and accurate information about these products,” and noted how “FDA explicitly recognizes the value of these sessions by frequently requiring them for drugs with safety markers under the congressionally authorized Risk Evaluation and Mitigation Strategy (REMS) program.”

Although the Coalition “takes that as a given, it found it necessary to respond to critics of the change who made irresponsible allegations that company-sponsored education was unregulated and often led to improper prescribing,” he said.  Consequently, the singular goal of the Coalition’s comments was to “dispel the myth promulgated by some that company-supported education is pure selling and is unfettered by regulation or full company responsibility for the truth, veracity or “fair balance” of the content of the presentations.”

The Coalition recognized that “Nothing could be further from the truth.”  Company-sponsored educational events are fully regulated by the federal Food and Drug Administration (FDA), state consumer protection statutes, codes (including this one from the State of Massachusetts), federal “false claims” and other statutes, the discipline of possible plaintiff “failure to warn” law suits, and the self-regulatory guidelines of PhRMA, BIO and AdvaMed, the three leading trade associations of the medicines industry.

The Coalition’s comments also recognized that companies “need to maintain their professional relationships and reputations with the clinicians and other prescribers of their prescription products.  A reputation for being truthful, straightforward and fully forthcoming is among the most important assets of every medicine company.”

PhRMA “believes that the emergency amendments will facilitate the ability of pharmaceutical manufacturers to offer company-sponsored speaker programs that educate and inform health care practitioners about the benefits, risks, and appropriate uses of their products and to engage in other informational discussions with physicians,” said Marjorie Powell, senior assistant general counsel, PhRMA.

Further, PhRMA “appreciates” the emergency amendments’ flexible standard for determining whether a meal is modest, and that the definition of modest meals is consistent with the PhRMA Code, which states that “speaker programs may include modest meals offered to attendees and may occur in locations outside of the office or hospital setting, as long as they occur in a venue and manner conducive to informational communication.”

MassBio President and CEO Robert K. Coughlin also praised the amendments as “very narrowly tailored but important revisions to the law that now provide our members with further critical opportunities to educate health care professionals on important aspects of medical science, treatments and therapeutics.”  Coughlin agreed with Massachusetts Governor Deal Patrick that the new law “will afford health care providers some flexibility to be educated on new clinically relevant products and allow them to stay informed on advancements and medical devices that benefit patients and lower our health care costs.” 

Kamp stated on behalf of the Coalition that the “singular goal” of his comments “is to dispel the myth promulgated by some that company-supported education is pure selling and is unfettered by regulation or full company responsibility for the truth, veracity or ‘fair balance’ of the content of the presentations. Nothing could be farther from the truth.”

When addressing the specific language in the modest meal definition, PhRMA recommended that Massachusetts revise its definition to refer to what a “typical” healthcare practitioner might purchase when dining at his or her own expense.  “This additional language would ensure that companies are able to conduct a single evaluation of whether a particular meal is modest,” according to Powell.

She also raised some issues regarding how the amendments would dovetail with Sunshine Act requirements (which preempt state law) and how Massachusetts disclosure reports should be drafted to coordinate with federally mandated Sunshine Act disclosure reports. While noting that company-sponsored speaker programs “are critical to the safe and effective use of prescription drugs,” Powell also stated that companies might have opportunities to interact with healthcare practitioners in other contexts as well, which Massachusetts should consider when crafting the final rule.

Overall, Coughlin stated that the definition of modest meals “strikes a thoughtful and effective balance: it holds the industry accountable through transparency while also providing further opportunities to life sciences companies – some of whom are small and not yet profitable – to engage with the medical community in a controlled manner that is critical for the further development of the life sciences and the achievement of novel therapies that advance not only our economic health, but also the health of our citizens.”

Kamp pointed out that company-sponsored educational events are fully regulated by the federal Food and Drug Administration, state consumer protection statutes, state codes (including the Massachusetts code), federal “false claims” and other statutes, the threat of possible plaintiff “failure to warn” law suits, and the self-regulatory guidelines of PhRMA, BIO and AdvaMed, the three leading industry trade associations. In other words, according to Kamp’s testimony, “the laws of the federal and state governments … and the internal policies of companies are stringent and work to ensure that these programs are both educational and in accordance with good care.”

“As we said in Boston, these sessions are strictly regulated and provide information that is essential to the safe and effective use of drugs,” Kamp said.

The Massachusetts Department of Public Health will now consider the hearing testimony and written comments on the proposal.  The regulation will be voted on by the Council at its Nov. 14 meeting and will be filed with the Secretary of the Commonwealth. The final regulation will be effective as published on Dec. 7.

Massachusetts Physician Expelled from Research Lunch

Over the past few years, we have covered issues and stories regarding the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct, which was enacted in 2008.  When the Code went into effect on July 1, 2009, it required reporting of all payments or economic benefit over $50.00 and not aggregated, made from manufacturers to doctors, similar to the Physician Payment Sunshine Act.  The Massachusetts Department of Public Health collects the payment data and publishes it on its website. 

The Code also prohibited certain payments, such as those for entertainment, complimentary items (e.g., pens, mugs, etc.), and even restricted meals.  Additionally, the Code required all manufacturers to adopt a marketing code of conduct and to provide training to their employees about such code.    

Numerous stakeholders in Massachusetts raised concern over the Code of Conduct.  In fact, one study conducted by the Massachusetts Institute of Technology 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.”  The study also found that a “majority of physicians claimed that physician education has been impaired as a direct result of the Massachusetts regulations, and a majority of company representatives stated that their ability to keep physicians updated had been impaired as a result of the law.” 

In response to these concerns, and several attempts to repeal the legislation, the Massachusetts legislature finally amended the Code this past summer.  The changes include allowing for payment of expenses for medical device training, meals for non-CME presentations at locations beyond hospitals, medical offices and training sites, elimination of state reporting for physicians that duplicates federal Sunshine Act reporting, and the addition of quarterly reports for the non-CME events by manufactures.  

Then, just last week, the Massachusetts Public Health Council passed the first round for emergency regulations to allow companies to provide modest meals for healthcare providers for product education.   

In response to our story, a Massachusetts physician contacted us about a recent experience involving the Massachusetts code.  The physician was at a work/research meeting to discuss the design of a multi-center a clinical trial of a new small molecule.  The company needed input on which subgroups of patients had the greatest need for the specific type of compound.   

Lunch was served during the meeting, and although the physician received his lunch, his plate was soon taken away because the supporter’s lawyers had determined that no physicians from Massachusetts could eat at scientific advisory boards.  All the other physicians received food.  The physicians insisted to no avail that this was an incorrect interpretation of the rules, given the recently passed repeal and emergency regulations regarding modest meals for non-CME presentations. 

Nevertheless, the physician had to leave the meeting to get food himself, which he then submitted as an expense to get reimbursed.  The sad part, the physician explained, was that this was not the first time this had happened.   

While transparency is a laudable goal, shaming physicians for no wrongdoing and embarrassing them in front of their colleagues, is one of the significant consequences and costs that come with it.  Placing a physician in an embarrassing situation like this, for a simple meal, so that he and his colleagues could continue planning a clinical trial that will eventually lead to a cure or treatment is shameful.  Continued actions such as this will discourage researchers and physicians from participating in such activities, which will only throw sand in the gears of innovation, slow medical progress, and hurt patients.   

Physicians and researchers give up their free time, their weekends, and their time with their families, so that important breakthrough research can be conducted and science can move forward.  While transparency in any research relationship may be considered by some important, stigmatizing a physician for being hungry is nonsensical and truly shows the potential harm the Physician Payment Sunshine Act may really have on physician-industry collaboration.   

Is this really what we want to be spending a quarter of $1 billion on?  Do patients really find value in knowing everything their physician has ate during lunch while trying to improve their knowledge and competency about a certain disease, or trying to conduct research?  How will knowing what this doctor ate, or prohibiting from eating lunch with his colleagues when they would be discussing research improve a patient’s healthcare?   

We have asserted for years that the unintended consequences of transparency are chilling innovation, and while this doctor gave no indication of his desire to stop doing research with industry, his message to us clearly shows his dissatisfaction and disgust.  

This situation truly underscores the significant need to educate patients and consumers about such payments when they are made public and the tremendous amount of context that will be necessary to ensure that doctors such as this one do not have to walk with their heads down to McDonalds for trying to improve the lives of millions of Americans. 

Massachusetts Pharmaceutical and Medical Device Manufactures Code of Conduct: Proposed Emergency Regulations to Allow for Meals at Corporate Educational Events

The Massachusetts Public Health Council passed the first round for emergency regulations to allow companies to provide modest meals for healthcare providers for product education. 

As we noted back in July, Massachusetts finally passed a partial repeal of their 2008 Pharmaceutical and Medical Device Manufacturer Code of Conduct as part of their 2013 $32.5 Billion Dollar State Budget.  In signing the legislation, Massachusetts Governor Deval Patrick noted that the change will “afford health care providers some flexibility to be educated on new clinically relevant products and allow them to stay informed on advancements and medical devices that benefit patients and lower our health care costs,” Patrick wrote in a letter to life sciences industry organizations.” 

The changes include allowing for payment of expenses for medical device training, “modest meals” for non-CMEpresentations at locations beyond hospitals, medical offices and training sites.  “The new exception applies only to presentations occurring in a ‘venue and manner conducive to informational communication.’”  The revisions also eliminated state reporting for physicians that duplicates federal Sunshine Act reporting, and added quarterly reports for the non-CME events by manufactures.  

Consequently, yesterday, the Boston Globe reported that the Massachusetts Public Health Council approved emergency regulations pertaining to the definition of “modest meals” under the code.  A presentationto the Public Health Council by the Massachusetts Bureau of Healthcare Safety & Quality sets forth the proposed definition of “modest meals:” 

Modest Meals and Refreshments, food and/or drinks provided by or paid for by a pharmaceutical or medical device manufacturing company or agent to a health care practitioner that, as judged by local standards, are similar to what a health care practitioner might purchase when dining at his or her own expense. 

In addition to this definition, the new emergency regulations specify the following: 

• Pharmaceutical or medical device manufacturing companies and agents may provide or provide payment for modest meals to health care practitioners in the health care practitioner’s office or hospital setting in connection with informational or educational meetings or presentations.     
• Pharmaceutical or medical device manufacturing companies and agents may provide or provide payment for modest meals and refreshments to health care practitioners outside of the health care practitioner’s office or hospital setting for the purpose of educating and informing health care practitioners about the benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information, provided that such presentations occur in a venue and manner conducive to informational communication.  For the purposes of 105 CMR 970.006(3), “appropriate uses” may not include the promotion of off-label uses of prescription drugs or medical devices

No pharmaceutical or medical device manufacturing company may provide or provide payment for such meals and refreshments permitted under 105 CMR 970.006(3) unless such pharmaceutical or medical device manufacturing company files quarterly reports detailing all non-CME educational presentations at which such meals or refreshments are provided.  Reports shall include: 

• the location of the non-CME presentation;
• a description of any pharmaceutical products, medical devices or other products discussed at such presentation; 
• the total amount expended on such presentation; and
• an estimate of the amount expended per participant, factoring any meals, refreshments or other items of economic value provided at such presentation. 

The emergency regulations included several other modifications: 

• Each pharmaceutical and medical device manufacturing company must report all incidents of non-compliance with the Code to the Office of the Attorney General in a format specified by the Department.
• Each pharmaceutical and medical device manufacturing company must register with the Department annually and must pay the annual registration fee established by the Department. 

According to the presentation, the Public Health Council, the revised regulations “are consistent with nationally-recognized standards included in industry codes of conduct (e.g., PhRMA, AdvaMed, and the American Medical Association).”  They also said that such regulations: 

• promote educational and training opportunities
• implement the legislative intent to balance consumer protection, the legitimate interests of pharmaceutical and medical device manufacturers, and promoting the education of health professionals.
• include a definition of modest meals and refreshments that does not include a specific dollar limit, but rather is “similar to what a HCP might have purchased when dining at his or her own expense,” as judged by local standards.
• We also propose that this regulation be filed on an emergency basis. 

The Council gave an anticipated timeline for implementation as follows: 

• The regulation was presented for a vote to adopt the proposed emergency regulation on September 19, 2012.  The regulation will be filed as an emergency regulation with the Secretary of the Commonwealth and the regulation becomes effective upon filing.
•  A public hearing will be held on October 19, 2012 at 10am, in the Public Health Council Room. DPH will also be accepting written comment. All of the feedback will be considered to determine if additional changes to the regulations will be proposed. 
• Regulation will be voted on by PHC at its November 14 meeting and filed with Secretary of the Commonwealth. The final regulation will be effective upon publication on December 7, 2012. 

The public health council should be applauded for taking a reasonable approach in defining modest meals. 

It is important that physicians and others who work with industry to produce live saving medications and products participate in the public hearing and provide written testimony to the Department of Public Health for the October 19^th public hearing.  

Davio's the resturant picture featured at the top of the story and other local restaurant owners were instrumental in passing this law earlier this year, and in this and future articles we will give honor to those small businessmen who stood up for their rights as Americans, so that our healthcare providers stay up to date.

 

Massachusetts Passes Partial Repeal of The Pharmaceutical and Device Manufactures Code of Conduct – AKA “The Gift Ban”

After four years of wrangling between the legislatures, the Commonwealth of Massachusetts house and senate overwhelmingly passed revisions to their 2008 Pharmaceutical and Device Manufacturer Code of Conduct (PCOC) as part of their 2013 $32.5 Billion Dollar State Budget.  Over the weekend Governor Deval Patrick signed the budget which  includes the partial repeal of the "gift ban". “This narrow change will afford health care providers some flexibility to be educated on new clinically relevant products and allow them to stay informed on advancements and medical devices that benefit patients and lower our health care costs,” Patrick wrote in a letter to life sciences industry organizations. 

The changes include allowing for payment of expenses for medical device training, meals for non-CME presentations at locations beyond hospitals, medical offices and training sites, elimination of state reporting for physicians that duplicates federal Sunshine Act reporting, and the addition of quarterly reports for the non-CME events by manufactures. 

We have followed closely over the past few years, efforts to overturn the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct (PCOC), which was enacted in 2009.  The PCOC requires that manufacturers and distributors  of prescription drugs and medical devices adopt a Code of Conduct, establish a compliance program and  track and report payments or any items with a value of more than $50 related to sales and marketing activities made to any Massachusetts health care practitioner who is authorized to prescribe.

Reportable payments for  were  first published on the Massachusetts Department of Public Health’s  website in late November, 2010.  The Massachusetts reporting system is very similar to the Physician Payment Sunshine Act, enacted as part of the Accountable Care Act (“ACA”),  and thus is subject to pre-emption  under the Sunshine Act provisions now that the United States Supreme Court upheld the constitutionality of the ACA.  

Over the past three years, numerous efforts have been launched by the Massachusetts House and Senate to repeal the PCOC or strip it of various provisions that have hurt physician education and innovation. All prior repeal or amendment efforts were unsuccessful. 

At the end of June, however, the Massachusetts legislature finally enacted legislation that will modify some of the restrictions the law uniquely created and applied to Massachusetts physicians and other prescribers, which have had an adverse reaction on patients, healthcare professionals, and various industries in Massachusetts, such as food and hospitality.  The hotel and restaurant lobbies fought hard for achange of the absolute prohibition on the provision of meals to Massachusetts physicians at restaurants, hotels and convention centers by companies, arguing the Massachusetts law went beyond the tougher ethical standards under the most recent PhARMA and AdvaMed Codes and was hurting business.  Massachusetts House Speaker Robert A. DeLeo said some restaurants reported losing 20 percent of their sales after the ban passed three years ago.  “It is costing our state tens of millions of dollars in sales taxes, income taxes, meals taxes, and convention revenue,” says Dave Andelman of the Restaurant and Business Alliance.

The final legislation, which was signed Sunday July 8th by Massachusetts Govern Deval Patrick, will make several changes to the current statute, Massachusetts General Law Chapter 111N. 

• First, the legislation allows the “payment for reasonable expenses necessary for technical training on the use of a medical device.”  This removes the requirement that the device must be “part of the vendor’s purchase contract for the device.”  As a result, physicians will have greater access to medical device education, which suffered significantly in the years that the PCOC was in place, as reported by an MIT study.   
• Second, the legislation allows the provision of or payment for modest meals and refreshments in connection with non-CME (continuing medical education) educational presentations, without the same location limitations in the original law,  for the purpose of educating and informing health care practitioners about the benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information.   

To meet this new requirement, the non-CME presentations must “occur in a venue and manner conducive to informational communication” and must be in compliance with all other requirements.  The Massachusetts Department of Public Health (DPH) is charged with issuing rules to define what constitutes “modest meals and refreshments” under the amended law.  As the Massachusetts DPH once again goes through a rulemaking process under Chapter 111N this will be a good opportunity for CME providers, industry, and affected stakeholders in Massachusetts to submit comments and suggestions to the agency on what should qualify as “modest” and other elements of a permissible non-CME company run educational event with food and refreshments provided to attendees.    

In addition to these requirements, manufacturers must also meet several conditions before providing modest meals and refreshments at non-CME events.  First, companies must file quarterly reports detailing all non-CME educational presentations at which such meals or refreshments are provided.  Reports must include: 

1. The location of the non-CME presentation;
2. A description of any pharmaceutical products, medical devices or other products discussed at such presentation; and
3. The total amount expended on such presentation and an estimate of the amount expended per participant, factoring any meals, refreshments or other items of economic value provided at such presentation.  

DPH may require payment of a fee, to be determined by the agency in the forthcoming regulations, to pay the costs of administering these new requirements.  

Importantly for manufacturers and distributors subject to the Massachusetts reporting system, the Massachusetts legislature through this amendment to the law has instructed DPH to no longer require reporting by manufacturers and distributors of information that has already been disclosed under the federal Sunshine Act.  This follows the federal pre-emption provisions under the Sunshine Act and will please many manufacturers who are concerned about dual reporting requirements for states that have transparency laws.  DPH will be able to obtain such information from the federal Sunshine database, nevertheless, so companies must still plan to expand and modify their tracking and reporting systems for the much broader scope of reporting that will be due under the Sunshine Act, once final regulations are issued by the Centers for Medicare and Medicaid Services (“CMS”). CMS postponed the tracking requirements  until January 1, 2013.  

Finally, the amended legislation requires DPH to make data filed by companies in annual reports publicly available more quickly and in an easily searchable format on its website no later than 90 days. 

The state budget also includes modification to the Massachusetts anti-kickback statute that had previously prohibited the provision of coupons and vouchers for prescription medications to be used by Massachusetts residence. The prohibition has been lifted as long as the coupon or voucher is not for a medication that is available in a generic equivalent form and does not favor any particular retail pharmacies. 

There was opposition to this change a group of “consumer advocates” including Healthcare for All, the National Physicians Alliance, Community Catylist, and AARP sent letters to the legislature and governor asking for him to veto this section,  but a stronger group of small businesses and restaurants, life science companies and patient groups including the Association of Clinical Researchers and Educators advocated for the partial repeal and finally succeeded. 

Discussion 

Massachusetts should be applauded for taking a step in the right direction to encourage more physician-industry collaboration and remove unnecessary and duplicative burdens that will hinder medical progress and only hurt patients. Bill Mandell, a health law attorney at Pierce & Mandell, P.C. in Boston, notes “the modifications to Chapter 111N [the Gift Ban Law] just passed keeps intake the mandate on companies to adopt and follow a Code of Conduct but aligns Massachusetts with general industry ethical standards in effect nationally on non-CME events with food; the new law will thus end the outlier treatment of Massachusetts physicians, restaurants, hotels, convention centers without totally gutting the basic requirements established under the original 2006 law intended to protect Massachusetts consumers from increasing health care costs.”       

While critics believe the PCOC should remain intact, these concerns are misguided, particularly for educating healthcare providers, as numerous studies have shown that commercial support does not create bias.  Moreover, critics who claim that meals influence doctors to prescribe brand name drugs forget that over 75% of medicines prescribed are generics, and that educational programs exist to educate healthcare professionals about new breakthroughs, data, clinical trials, and treatments.  

In addition, parts of the Massachusetts gift ban still remains intact, which should provide critics with security, particularly since the Sunshine Act contains no such provision.  Ultimately, as DeLeo recognized, the gift ban as originally enacted was “an overreaction.”  Now, “it’s time to correct the situation.”  Times have changed.  Transparency is now the norm and companies have embraced this and are geared toward Sunshine.  With healthcare reform moving forward, physicians need truthful and accurate scientific education and manufacturers are in the best position to provide this information. 

Massachusetts House Votes for Third Year in a Row to Repeal the “Gift Ban”

The Massachusetts State House, for the third year in a row, voted to repeal the controversial Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct(PCOC).  As reported by Pharmalot, the latest effort goes beyond the previous two tries: “the House also agreed to repeal a disclosure rule that requires all financial arrangements between drug and device makers with prescribers is posted on a website maintained by the state Department of Public Health.”   

Dr. Charles Birbara, a Worcester rheumatologist, is in favor of lifting the ban, because it is better for his patients and gives them more options." Dr. Birbara told GoLocalWorcester, "The insurance company often times controls what we prescribe by virtue of what's on their formula. There are many people that don’t take prescribed medicine, because they can’t afford it. These co-pays can get very pricey. The coupons really help out the patient."  

According to MA Rep. Jason Lewis, who is working to stop the amendment from passing, those on the other side of the issue have their reasons.  “We want to make sure they have the best interest of patients. There are opponents who say that that argument is well and good, but it’s hurting the pharmaceutical industry in Massachusetts,” he said. 

Speaker of the Massachusetts State House, Robert A. DeLeo is also opposed to the ban. 

Background 

In 2010, Massachusetts Governor Deval Patrick made a point during his reelection campaign that the PCOC “was never intended to extend to the state's medical device industry,” and “goes beyond” the code that the pharmaceutical industry uses to police itself,” “and thus should be narrowed.”  

“I think that was not its intent,” he said during an October 2010 forum in front of an audience of biotech advocates. “Aligning it with Pharma is a priority of mine.”  

Patrick added that the PCOC was “ripe for repeal or modification, since the Obama administration's federal health care overhaul included superseding language.”  As a result, a spokesman from the Department of Public Health, which oversees these regulations, said the agency was currently reviewing the ways in which Massachusetts regulations are impacted by federal law in order to determine whether there are any additional steps that need to be take. 

Additionally, the Massachusetts State Assembly voted overwhelmingly 128-22 to repeal the PCOC in late April, 2011 during its annual budget debate, but the proposal was dropped during negotiations with the Senate. 

Despite strong signals that Gov. Deval Patrick, the House and the Senate would support peeling back parts of a three-year-old ban on gifts from pharmaceutical companies to doctors – a policy that critics say is strangling the restaurant business and killing jobs – 2011 came to a close without action.

However, the article noted that “efforts to dismantle components of the ban are poised to reemerge in 2012 and received the fresh backing of a panel of lawmakers” at the end of December, potentially teeing up the issue for consideration during debate on a major health care system overhaul eyed for next year. 

Specifically, a move by the Committee on Public Health to give a favorable recommendation to the proposal came at a time when most lawmakers had cleared out of the capitol for an extended holiday recess. The pre-Christmas activity angered consumer advocates who argue that any attempt to weaken the so-called gift ban would encourage doctors to prescribe costlier medications, drive up health care costs, and infringe upon safeguards intended to ensure that patient interests prevail over business relationships. 

Most recently, House leaders have been calling for a repeal of the gift ban according to a recent article from the Boston Herald, mostly because lawmakers believe that the federal law—Physician Payment Sunshine Act—will preempt majority of Massachusetts law.  Until CMS proposes the final regulations and the Supreme Court decides whether the entire Affordable Care Act stays or goes, it is unlikely that Massachusetts will repeal the gift ban.  The proposed House bill would keep the state reporting requirements, some of which exceed those required under the Sunshine Act.

Enacted in 2009, the PCOC or “gift ban” has been a controversial piece of legislation that has had significant impacts on the pharmaceutical and medical device industry in Massachusetts.  The ban prohibits pharmaceutical companies and medical device manufacturers from providing “entertainment or recreational items of any value,” such as sports tickets; cash payments; “complimentary items” such as pens, mugs or gift cards; grants and scholarships in exchange for a promise to prescribe certain drugs or use certain devices; or any other prohibited “kickback.”

In addition, drug and device companies may only provide meals to doctors inside the hospitals or offices where they work, a fact that proponents say prevents lavish spending on expensive dinners and alcohol as a means to peddle influence. The policy also requires drug and medical device companies to annually disclose “any fee, payment, subsidy or other economic benefit with a value of at least $50” provided to doctors, hospitals, nursing home workers, insurers or other “health care practitioners.”

Payments for 2009 were then published on the states website in late November, 2010.   The payments for 2010 were published just this week.

The legislation also requires manufacturers 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).  

Discussion

Those who support repealing the PCOC maintain that the regulation has severely affected medical innovation and collaboration, and thus decreased the quality of training and education health professionals receive, also decreasing the quality of patient care.  In fact, a study done by MIT showed that the Code of Conduct is having significantly negative effects on patient care and medical innovation.  And one article noted how the gift ban is having a negative effect on primary care physicians in Massachusetts because it is cutting off opportunities for clinicians to gather new scientific information and exchange real-world clinical information. Additionally, the gift ban has resulted in companies withdrawing funding for fellowships, professorships, and other faculty positions and departments in Massachusetts.

Moreover, medical device companies noted the significant burden the legislation placed on them considering the fact that many physicians needed to work directly with industry to learn how to use certain medical devices.

As noted by the Boston Herald, The bill backed by the Public Health Committee (H 1507) would eliminate the disclosure requirement. The proposal also repeals a prohibition on pharmaceutical companies providing meals to doctors outside of a “hospital setting,” so long as the meals are part of an event that is “primarily educational in nature.” 

Backers of eliminating restrictions on meals say they have harmed the restaurant and convention industries, particularly in Boston, which has a high concentration of hospitals and pharmaceutical companies that surround the North End, a popular restaurant district. For example, pharmaceutical and device companies have been “curtailing sales, marketing and training activities in Massachusetts” in order to comply with the new rules, and “some outside companies are avoiding Massachusetts altogether.” 

State Rep. John Mahoney told GoLocalWorcester the restaurant ban is hurting business in the Bay State. "We are the only state that doesn’t allow doctors to have dinner with pharma companies. I don’t think doctors are being swayed by a free meal. People who own restaurants are getting hurt by this. Companies are going to other states to work around this law. They are holding events and dinners in neighboring states." 

In fact, an article in the Boston Globe noted how the new laws have resulted in “fewer jobs related to training, medical device sales and clinical trials.”  They also argue that doctors would not be improperly influenced by a meal and could gain valuable insight into advancements in medical devices or cutting-edge drugs. 

“I think we should be looking at ways of modifying this. It’s, in my opinion, way too restrictive. I think it’s negatively impacting our convention industry,” said Rep. Vincent Pedone (D-Worcester), lead sponsor of the legislation. “This is what some of the proponents of modest change wanted to see. I’m trying to find a compromise between repealing the whole gift ban and making it more workable.” 

Pedone said he’s supportive of the pharmaceutical industry’s own code of conduct. “The pharmaceutical industry has come a long way in a short time with this. If we can adopt just what their code is, which I think is the standard across the country for states, we would be in much better shape,” he said. 

Efforts to relax the gift ban have gained popularity in the House, which has passed complete repeals for two straight sessions. But they’ve stalled in the Senate, where Senate President Therese Murray led the drive to implement the gift ban in 2008 legislation. Last year, however, senators nearly deadlocked on a plan to permit pharmaceutical and medical device companies to buy dinners for doctors, voting 19-18 to preserve the ban. 

The Boston Herald noted that, “it is unclear how eight freshmen in the Senate will affect the outcome, although four of five new senators who served in the House voted to repeal the gift ban law as state representatives.” 

Sen. Susan Fargo (D-Lincoln), co-chair of the committee, said she is opposed to efforts to weaken the gift ban, describing even an incremental change as “the nose of the camel getting under the tent.” Fargo said she hopes the proposal is “fully debated” on the floors of the House and Senate.  “At the time that the gift ban was passed – and the Senate strongly endorsed it – pharmaceutical companies were spending far more on marketing and advertising than they were on research and development,” she said. 

Asked about the House’s repeated votes to repeal the gift ban altogether, Fargo said, “Sometimes the House and the Senate simply have philosophical differences about legislation.” She added that she has no reason to believe the Senate has changed its attitude about the ban. Fargo also said she hoped efforts to whittle down the ban are debated apart from omnibus health care reform legislation planned for next year.

“The core issue of payment reform is big enough and important enough that it should stand alone,” she said. 

Deirdre Cummings, legislative director of the consumer group MassPIRG, said she hopes the House waits until its members return from a seven-week recess before considering efforts to weaken the gift ban.  “The concern from the consumer end is that the pharmaceutical industry are setting up these meetings and they’re really only marketing the most expensive, brand name prescription drugs,” said Cummings. “The impact of that marketing is also significant. It leads to higher prescribing. That’s the concern from the consumer end.” 

Restaurant industry officials, however, say amending the gift ban to permit educational meals at local restaurants would provide an immediate economic jolt to the hospitality industry and lure drug conventions to Massachusetts. Dave Andelman, CEO of Phantom Gourmet, said the ban failed to prevent deep-pocketed drug companies from flooding consumers with advertisements but has created an impediment for smaller companies hoping to break into the market. 

“Pfizer can wrap the whole T in advertising but these generic companies can’t take a doctor to dinner. It’s silly. It should be changed, and it should be changed now,” he said. “I have every reason to believe that it can change. We’ve been approaching every senator and making our case, and without naming names, even some senators that I thought really wouldn’t give us the time of day had to admit that all the arguments I’m making to you now make a lot of sense.” 

Conclusion 

As one recent article from the Boston Business Journal noted, it is “insulting to our physicians, some of the best minds in the country, to think they can be bought for a mug or a yogurt.”  The author correctly recognized that “Much of the money flowing to our health care institutions [from industry] goes toward things like fellowships in the orthopedics department at Massachusetts General Hospital or a diabetes clinical trial at Beth Israel Deaconess Medical Center.  It also goes towards training for heart surgeons on the newest stent procedures and to safety studies on rare disease drugs developed by Genzyme Corp. 

Ultimately, with more and more companies picking up and leaving Massachusetts, and new businesses and other industries deciding to set up their offices in other states, it is becoming clearer to some that the Code of Conduct must go. With 8 new Senators in the Massachussetts Senators, this may provide the needed difference to repeal the PCOC, especially given that the Sunshine Act regulations are now out, making the reporting requirements under the code unnecessary and duplicative. Accordingly, Governor Patrick would be doing a service to the patients, health care practitioners, and entrepreneurs of Massachusetts by urging his legislature to repeal the Code of Conduct. 

It is unlikely that Massachusetts will repeal this law until the U.S. Supreme Court decides whether the Affordable Care Act is constitutional, and whether the Sunshine Act will stand or be stricken.  But the effort to repeal the current law in Massachusetts is sincere and it is important for states to note, that despite the “claims” of cost savings there is no evidence of that for the bay state, thus the repeal effort.

Physician Payment Sunshine: Massachusetts Physician Payments Takes Two Months for Anyone to Notice

As we have covered numerous times on this blog, in 2009, the State of Massachusetts enacted the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct (PCOC). 

After going into effect on July 1, 2009, the PCOC requires the reporting of payments of more than $50 made to any health care practitioner by industry.  Payments for 2009 were then published on the states website in late November, 2010.  The legislation is very similar to the Physician Payment Sunshine Act. 

We noted almost three months ago, back in December, that Massachusetts had not published its data for 2010, and was several weeks behind from 2010.  Interestingly, we noted that if just one State is having difficulty posting payments on a public website and collecting payment data, what difficulties might the Centers for Medicare and Medicaid Services (CMS) have publishing payments for 50 states Sunshine Act. 

Massachusetts published their data on December 27, 2011 and we waited to see when it would be reported Now, at the end of February, almost two months after the payments were finally posted, the Boston Globe actually decided to research the payments.  For a policy that was supposed to promote transparency and give the public information, two month delay makes the payment data seem pretty unimportant, especially since the Globe is the only publication we found in Massachusetts to have even covered the payments (and they were two months late). 

The payments, which were published in mid-December, includes a list of the: 

-       Top 20 Manufacturers Summary (2010), which includes 620 pages of payments.

-       Top 50 Physicians Summary 

-       Top 50 Hospitals, Summary 

-       Top 100 Covered Recipients, Non Hospital, Detail 

The Globe noted that the data includes $64 million in payments from hundreds of companies in 2010 for speaking, consulting, food, educational programs, marketing studies, and charitable donations.  The largest portion of payments—$30 million—went to physicians.  The Globe noted that comparisons with 2009 are difficult because payments for the previous year were only the second half of 2009.  Nevertheless, they noted that “payments appear to have fallen,” given that they totaled $35 million for six months in 2009. 

Part of the explanation for a drop in revenue is that “a number of hospitals, including Partners HealthCare, which oversees Massachusetts General and Brigham and Women’s, have placed strict limits on the work doctors can do for pharmaceutical and device companies. Partners prohibited its physicians from participating in promotional drug company speakers bureaus as of January 2010, out of concern that physicians could lose their objectivity.” 

In 2010, Sanofi-Aventis US gave the most money, paying 427 recipients $4.7 million—around $11,000 on average.  Most of that total went to the Joslin Clinic to develop books, brochures, and videos about managing diabetes for primary care doctors across the country and their patients, said Joslin Spokesman Jeffrey Bright. Clinic staff produced the materials for Sanofi-Aventis and then delivered it to the company to distribute, he said.  Bright said the materials produced do not promote the company’s drugs. “We are very vigilant about that here,’’ he said. 

These kind of educational patient materials clearly seem like the appropriate source of funding for a company to provide to a clinic. 

Conclusion 

Given the apparent complete lack of interest that Boston and the state of Massachusetts haven given these payments this year, three issues come to mind.  First, the state has considered several times reversing the code of conduct, and this may be more fuel to that fire since the public and media clearly are not interested.  Second, with the eventual roll out of the Sunshine Act, the Massachusetts law will likely be seen as duplicative, burdensome and unnecessary, and it is only a matter of time until the State scraps their reporting system.  Third, all this data collection was done at tremendous costs to the companies providing the information.  In the end will all the time and effort which could have been spent on the pursuit of finding cures be worth it?

Accordingly, with one of the first states to publicly post such payments taking a back seat, it will be interesting to see how many states do the same once the Sunshine database is up and running, which will likely not be until late 2013. 

Massachusetts Pharmaceutical and Medical Device Manufactures Code of Conduct: Delays in Release of Data and Changes to the Regulations

As we have covered numerous times on this blog, in 2009, the State of Massachusetts enacted the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct (PCOC). 

After going into effect on July 1, 2009, the PCOC requires the reporting of payments of more than $50 made to any health care practitioner by industry.  Payments for 2009 were then published on the states website in late November, 2010. 

However, Massachusetts has not published its data for 2010, and is now several weeks behind from last year.  If just one state like Massachusetts—who has been a leader and pioneer in transparency of payments—cannot publish payments on time, one can only speculate how much difficulty and delay the Centers for Medicare and Medicaid Services (CMS) will have publishing payments for 50 states under the Physician Payment Sunshine Act, especially considering CMS is already over 2 months late for proposed regulations. 

Massachusetts Code of Conduct 

Companies must disclose “the value, nature, purpose and particular recipient of any fee, payment, subsidy or other economic benefit with a value of at least $50 to any covered recipient in connection with the company’s sales and marketing activities” (105 CMR 970.009(1)). This includes: 

• Reimbursement of expenses in conjunction with a product training program or event,
• Compensation for serving as faculty at a Continuing Medical Education (CME) event or participation on a Speaker’s Bureau, and
• Compensation for bona fide services.
• This does not include consumers who purchase prescription drugs or medical devices.   

The website explains that any of these transactions may be referred to as “payments.” The $50 total is for each occurrence, not in total for the year. For example, a $55 dinner provided to a covered recipient would have to be reported, but two $30 dinners would not, even though added together, they total more than $50. The EOHHS explains more about PCOC on their website. 

The code applies to pharmaceutical and medical device manufacturers that employ or contract with any person to sell or market prescription drugs or medical devices in Massachusetts.  The PCOC also prohibits by law certain gifts and payments. 

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).   

The 2010 report gave a breakdown of the top 50 paid physicians, and detailed report of what services the physicians provided and which companies made such payments. On the spreadsheet, the number of payments made is listed, the number of events, as well as the total amount of compensation a physician received. The detailed reports go into what category the payment was for, the specific amount of payment, and which specific company. 

The website includes detailed instructions on how to create custom reports and how to run searches for doctors, manufacturers, and by payment category, which includes eight categories of payments to covered recipients. 

The “gift ban” has been a controversial piece of legislation that has had significant impacts on the pharmaceutical and medical device industry in Massachusetts.  In fact, 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.” 

Massachusetts Updates FAQ on Code of Conduct 

Consequently, in late August this year, the Massachusetts Executive Office of Health and Human Services, Department of Public Health, Office of the General Counsel, published an updated Frequently Asked Questions (FAQ).  New changes include: 

Registration and Disclosure Report Submission Process 

Manufacturers subject to the regulation are required to register annually with the Department as part of the regulation.  Annual registration includes paying a fee of $2000. While manufacturers subject to the regulation are required to submit both a disclosure report annually and register annually, the two requirements are separate processes, and the time frames for the two are different. 

A company must designate a compliance officer and may submit one overall disclosure report or several reports at the divisional level. If a company decides to do separate reports for each division, the company is required to register each division separately with the Department, and each division will be required to register annually and pay the annual registration fee of $2000. 

All manufacturers subject to the Massachusetts law must register and pay the annual registration fee, even if there are no data items on their disclosure report. The annual registration renewal fee is due annually during July and August and may be paid electronically through the on-line system established for manufacturer’s annual registration and compliance certification. If a manufacturer does not have any data to disclose for a given period, it should send an e-mail stating that fact to: pharmameddata@massmail.state.ma.us. The Department will deem such emails as meeting the requirement for filing an annual disclosure report. The subject line of emails should contain only the manufacturer’s Department-assigned ID number (the number beginning with CC) and company name. 

A company that anticipates being subject to the Department’s regulations during a disclosure period should submit an initial registration form and the annual fee to the Department as soon as their product launches. 

Which Transactions Need To Be Disclosed? 

Employees of a PMDMC who are also covered recipients are exempt from having payments made to them by their employer reported, but not exempt from reporting by other PMDMCs. 

All marketing activities subject to 105 CMR 970.000 must be reported. Manufacturers are responsible for reporting payments to Massachusetts covered recipients, even if those payments are made by the manufacturer’s agent.