Life Science Compliance Update

April 02, 2014

Physician Payments Sunshine Act: Review of Individual State Reporting Requirements

The Physician Payments Sunshine Act gets most of the attention on Policy & Medicine these days with phase I submitted and other important deadlines looming. However, a number of states have aggregate spend requirements that will not be preempted by the Federal Sunshine Act. We recently reported on Washington DC's annual transparency report, and have paid close attention to Vermont's Prescribed Product Gift Ban and Disclosure Law. At last month's National Disclosure Summit, we covered a well-organized presentation that simplified the distinct state laws entitled "Interaction and Coordination between State and Federal Reporting Requirements: Strategies to Limit Risk." Trudy Seeley of Sanofi-Aventis and Diane Bieri of Arnold and Porter LLP presented.

As an introduction, the Federal Sunshine Act preempts any state laws requiring reporting of the same type of information concerning payments or other transfers of value made by applicable manufacturers to covered recipients. States may require reporting of non-required categories of information for payments or other transfers of value reported to CMS, including any exclusions from the Sunshine Act.

Applicable manufacturers and GPOs subject to state law reporting requirements in Vermont, Massachusetts, Minnesota, the District of Columbia, Louisiana, and California should be aware that certain state requirements to report gifts or payments may be preempted. Seeley noted that most, but not all, companies are going to take advantage of the Federal preemption, and back out that which they are reporting separately. However, the Act does not preempt all aspects of state disclosure requirements covering payments to physicians and other health practitioners.

Most aggregate spend states have a much broader list of covered recipients and a larger set of reportable activities. We have compiled a chart with the states that have different requirements from the Federal Sunshine Act.


Covered Recipients

Reportable Activities

Other Considerations



• Everyone from Federal Sunshine Act

• Residents
• Physician Assistants
• Nurse Practitioners
• Pharmacists
• Employees of Prescribers
• Non-teaching hospitals/clinics
• Health plans
• Pharmacies
• Universities
• Non-Profit Foundations
• Patient Advocacy Associations
• Professional Associations.

Note that a number of these come in to play for sponsorships, charitable donations, displays and exhibits, so there is a lot left after Federal to still report in Vermont.

• Everything from Federal Sunshine Act
• Samples, includes OTC drugs and devices
• Demo units
• Coupons, vouchers, co-pay cards
• Patient starter kits
• Accredited CME
• Patient education and disease management materials

• Clinical spend prior to 8/1/2013: VT has given companies the option to check a box if they are not going to report Federally preempted spend in their state report. For other states, if you choose to take advantage of the preemption, you still have to report the state spend for the first half of the year (before 8/1). In VT, this is not the case.

• Patient education and disease management materials

• Anatomical models and charts- Textbooks and reprints are considered by Federal rules to benefit doctors and are reportable, but models and charts are not. In the states, these are considered “gifts.”

VT still has the only total ban on food for their prescribers if they “regularly practice in Vermont,” which is left a bit up to company interpretation.  It becomes difficult to know whether a doctor who is licensed in Vermont, but actually practices in a surrounding state.


Also, companies will have to pay extra attention to their Federal Reports with respect to Vermont doctors. Doctors are only allowed to partake in a meal if they are paid as a speaker or consultant. Vermont will likely focus in on the doctors in the Federal report from VT if they see meals to doctors without fees or other expenses attached.





• Everyone from Federal Sunshine Act

• Residents
• Physician Assistants
• Nurse Practitioners
• Pharmacists
• Employees of Prescribers
• Non-teaching hospitals/clinics
• Nursing Homes

• Everything from Federal Sunshine Act
• Accredited CME
• Anatomical models and charts

Reporting not required under “de minimus” threshold of $50 per covered recipient event

Note that MA allows “modest” out of office meals for healthcare providers

MA requires a separate report mainly for the additional covered recipients. 



• Everyone from Federal Sunshine Act

• Residents
• Physician Assistants
• Nurse Practitioners

• NOT Pharmacists

• Everything from Federal Sunshine Act

There is a $50 limit on meals and physician education per prescriber, per year


Risks: Payments apparently in excess of annual limit would be listed on Federal reports. For example, pure device companies do not fall within MN law, so in the Federal reports, you will see physicians who have over $50 meals with no fees or expenses attached. While MN has not been litigious, the worry is that reporters could state that companies have disregarded the state limit.


 Washington, DC

• All Licensed Healthcare Providers:

(Nurses, CDEs, Reg. Dieticians, Licensed Nutritionists, Radiology techs, etc.)


• Non-Teaching hospitals/Clinics

• Universities

• Patient Advocacy Associations

• Professional Associations

•All Licensed Healthcare Facilities (Hospice, LTC, Dialysis, etc.)


Pretty much anyone remotely involved with healthcare


• All activities for additional CRs

• Employee costs (salaries/overhead)

• All print and media advertising, but only within DC- if you advertise in MD and VA, you are safe

Reporting not required under “de minimus” threshold of $25 per covered recipient per day.


For in-office meals, this $25 limit is very helpful- most meals for lab techs and other licensed healthcare providers are under $25 and will help lower reporting responsibilities.





 West Virginia

• Everyone from Federal Sunshine Act

• Residents
• Physician Assistants
• Nurse Practitioners

• NOT Pharmacists

• All activities for additional CRs

• All national and print media advertising divided by the population of WV


• Reporting is aggregated by buckets of spend

• De minimus threshold of $100 per covered recipient







CA requires companies to adopt a compliance program in accordance with HHS’ Compliance Program Guidance for Pharmaceutical Manufacturers. A company's program must have policies for compliance w/ the PhRMA Code on Interactions with Health Care Professionals


• Each company sets annual (fiscal year) limit on meals and educational items to any CA physician per year


Risks: Payments apparently in excess of annual limit would be listed on Federal report





Connecticut requires companies to adopt policies consistent with the PhRMA Code or AdvaMed's "Code of Ethics on Interactions with Health Care Professionals"





• $50 limit on meals and educational items to any state employee, per year (most hospitals are state-owned)

• Risks: Payments apparently in excess of annual limit would be listed on Federal report




Drug companies must adopt general compliance programs in accordance with the Code on Interactions with Healthcare Professionals, and follow through with training and auditing procedure. Companies must submit an annual report be submitted, including a certification that annual audit has been conducted and that the certifying entity is in compliance with its code of conduct.

Risks: inconsistencies between state and federal reports

Only Vermont and Massachusetts have explicitly stated that their laws apply to medical device companies. Vermont has been the only state to take explicit enforcement action, though the public scrutiny could become very real once Federal reports become public.

The presenters noted that determining what information is not reportable in certain states may cause added work. Furthermore, companies' mistakes or judgment calls in complying with state restrictions on certain types of activities will be more visible once Federal reporting begins.

From a policy standpoint, companies may want to consider identifying the challenges and the tracking resources devoted to compliance with state transparency obligations after Federal Sunshine is implemented in case there is an opportunity to modify state requirements. Seeley believes that states like Minnesota, which are almost completely covered by Federal reporting requirements, might be the most likely to defer to the Federal system.


October 08, 2013

Massachusetts Hearing on Restricting Interactions with Physician and Industry: Modest Meals Should be Defined as those Served at Hospital Cafeterias

On Tuesday, October 1st, 2013, the Joint Committee on Public Health of the Massachusetts Legislature held a public hearing on a number of new bills relating to interactions between the medical products industry and physicians. We reviewed these bills in a recent article.

As a quick review, Tuesday's docket contained the following bills directly relevant to interactions between the medical products industry and physicians:

MA House Bill 2061, which proposed a complete ban on pharmaceutical advertisements in the Commonwealth of Massachusetts.

MA House Bill 2018 and its companion MA Senate Bill 1051, which add additional disclosure requirements on interactions between healthcare providers and the pharmaceutical industry, above and beyond the disclosure requirements already in place under both existing State statutes and the Physician Payment Sunshine Act. This bill also ties the definition of a modest meal to federal standards for the same and prohibits the provision of alcohol at informational exchanges.

MA Senate Bill 1052, which call for addition needless information for MA's existing disclosure requirements for physician-industry interactions in a manner which is largely duplicative of the Physician Payment Sunshine Act.

MA House Bill 2020 and its companion MA Senate Bill 1050, which propose State funding for an academic detailing program.

A collaborator of Policy and Medicine, David Barton from the Center for Medical Innovation at Brigham and Women's Hospital, attended the committee meeting. He observed that little spoken testimony was offered either for or against most of the aforementioned bills. In fact, only two individuals appeared to testify on these bills.

Semi-retired Harvard Medical School Pathologist David Korn, MD, testified in support of H2018 and S1051. As mentioned above, these bills focus on defining the value of a modest meal, with an incidental provision prohibiting the inclusion of alcohol at informational exchanges, and a broadening of the disclosure provisions in the existing MA gift ban statute related to meals. These disclosure provisions largely exceed those required under the Sunshine Act, and thus represent an added burden on interactions between physicians and industry. In contrast, the prohibition of alcohol and definition of a modest meal merely duplicate the federal standard in force under the Sunshine Act. Thus, the disclosure provision may have naturally have been the focus of Dr. Korn's testimony. Instead, he delivered a lecture on the evils of pharmaceutical marketing, the need to break the medical academe's "addicti[on] to medical product company gifting," and the genesis of various ethics codes. He lamented the repeal of the prohibition of meals from industry to doctors under the Massachusetts gift ban law and then suggested that a modest meal should be defined according to the contents of hospital cafeterias.

Following Dr. Korn's testimony, the committee heard testimony on the licensing of naturopathy and insurance reforms before returning to the topic of industry interactions with testimony from PhRMA's assistant general council John Murphy. Mr. Murphy ran through the arguments against each of the proposed bills relating to industry interactions rather quickly. Among his arguments were that the ban on pharmaceutical advertisement suggested in H2061 represents an unconstitutional suppression of commercial free speech and that many of the various disclosure rules suggested were duplicative of provisions within the physician payment sunshine act. At the end of his testimony, he mentioned that PhRMA had provided substantially more information through written testimony. This reference suggests that much of the material that the committee will use in deciding whether or not to pass these bills on to the house and senate has not been made publicly available at this time.


As we stated before it is unlikely that these bills are going anywhere this session of the legislature. It should be noted that the legislature is much more open to private meals at nice restaurants for their own benefit. There is no reason they should be more restrictive on private citizens such as physicians. So if they are smart they will not try to restrict physician meals to the cafeteria or perhaps they should try it out for week first.  Given how wonderful the food is at the hospital cafeteria it is no wonder out side meals have good attendance.


September 16, 2013

Massachusetts Legislature: Bi-Annual Hearing on Restricting Physician Interactions with Industry and Promoting Academic Detailing

At the beginning of each legislative session in Massachusetts a flurry of anti-pharma, bio and device bills are filed by various legislators. Bills can range from forcing doctors to eat only when the speaker is talking to banning marketing and advertising of medical products all together. There can be a legislative competition for whose bill will be the most restrictive. Also, each session in the fall of the first year of the two year legislative session, a hearing is held to listen to all these bills simultaneously.

According to Massachusetts insiders the portion of the hearing devoted to restrictions on pharmaceutical and device companies starts out with speaker after speaker describing the "evils" of manufacture sales and marketing and extolling the virtues of government academic detailing. Then they are brought back to reality that one of Massachusetts main employers are these same manufactures that they are pummeling. These hearings allow the legislators to voice their aggressions out on manufactures in one session.

This year is no exception, a total of 10 bills of which two were duplicates (house and senate versions) were filed in early January. Many of the bills filed were similar or identical bills to ones introduced in 2012. A joint committee hearing for the Massachusetts Committee on Health is scheduled for Tuesday October 1, 2013 at 10:00 AM in A-1 in the Massachusetts State Capitol Building to discuss these bills.

Below is a summary of the bills:

Bill S.1051 "An Act to prevent undue influence on prescriber behavior"

Sponsors: Mark C. Montigny

Hearing Scheduled for 10/1/2013 at 10:00 AM in A-1

Bill H.2018 "An Act to define modest meals and refreshments in prescriber educational settings"

Sponsors: Jason M. Lewis

These bills adds the following text before the definition of "Person" in Section 1o f chapter 111N of the General Laws: "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, the cost of which does not exceed the allowance defined by the U.S. General Services Administration for the Massachusetts per diem localities. The allowable amounts for modest meals and refreshments shall be updated on an annual basis in accordance with the U.S. General Services Administration meal allowance rates.

In addition, presentations "that occur in a manner conducive to informational communication" shall prohibit the provision of and pharmaceutical or medical device manufacturing company payment for any form of alcoholic beverage.

Meals and refreshments shall be provided within the context of the informational presentation, and shall not occur prior to or following the educational presentation. The presentations shall not occur in locations that are otherwise recreational in nature, including, but not limited to, resorts, sporting clubs, casinos or other vacation destinations.

The Bill also amends Section 2A of chapter 111N by inserting, after clause

(3), adding the following requirements relating to the tracking of expenditures:

(4) total amount spent on meals

(5) for such presentation; total amount spent on the venue for such presentation; (6) a description of the content of such presentation;

(7) total number of prescriber attendees at such presentation;

(8) names of attendees present at such presentation;

(9) names and credentials of presenters at such presentation;

(10) and total amount spent on other items of economic value provided at such presentation.

The department of public health shall collect receipts for all required reporting expenditures.

Analysis: This bill proposes to ban all venues for physicians with the word resort or casino in it. I recently attended a medical meeting in Las Vegas, the room costs were less than $100/night, the total cost of the venue was significantly cheaper than non-casino hotels, the same holds true for "resorts" in off season" many ski "resorts" make for great meeting venues at a reduced price.

The Massachusetts legislators may have to be reminded that many of them and their colleagues participate in meetings and retreats in "resorts," "casinos," "sporting clubs", or "other vacation destinations"

Also, they may want to remind themselves there is a significant "resort" business in Massachusetts on Cape Cod.

The bill also proposes a draconian tracking system for FDA mandated education, including who presented, a description of the content, the total amount spent on presentations. The legislators should consider being more transparent in their motives and just simply push for a ban of such presentations which is their ultimate goal, rather than just making these events so difficult that they discontinue.

Bill S.1052 "An Act to restore integrity in the marketing of pharmaceutical products and medical devices"

Sponsors: Mark C. Montigny

Hearing Scheduled for 10/1/2013 at 10:00 AM in A-1

This Bill establishes that a pharmaceutical or medical device manufacturer agent shall not knowingly and willfully offer or give to a health care practitioner, a member of a health care practitioner's immediate family, a health care practitioner's employee or agent, a health care facility or employee or agent of a health care facility, a gift of any value. However, it does not prohibit the provision, distribution, dissemination, or receipt of peer reviewed academic, scientific or clinical information. It also does not prohibit the purchase of advertising in peer reviewed academic, scientific or clinical journals.

By July first of each year, every pharmaceutical or medical device manufacturing company shall disclose to the department of public health the value, nature, purpose, and recipient of any fee, payment, subsidy, or other economic benefit not prohibited by this Bill, which is provided by the company, directly or through its agents, to any physician, hospital, nursing home, pharmacist, health benefit plan administrator, health care practitioner or any other person in this state authorized to prescribe, dispense, or purchase prescription drugs or medical devices in this state. A person who violates any requirements in this Bill will be punished by a fine of not more than $5,000 for each transaction, occurrence or event is in violation.

Furthermore, the department of public health shall make all disclosed data publicly available and easily searchable on its website. Also, the department of public health will consult the board of registration of pharmacy and board of registration of medicine to promulgate regulations requiring the licensing of all pharmaceutical and medical device manufacturer agents.

Analysis: Through the Massachusetts Pharmaceutical and Medical Device Manufacturer Code of Conduct the commonwealth already collect information related to payments to healthcare providers, in addition with the implementation of the physician payment sunshine act this information is already collected.

As far as banning gifts, Massachusetts passed in 2009 a ban on "gifts" and the PhRMA and AdvaMed Codes prohibiting gifts have been in place for over 4 1/2 years. The Senator should ask a physician is he or she has seen any "gifts" from pharmaceutical companies in the last five years. 

Bill H.2020 "An Act to reduce healthcare costs by promoting non-biased prescriber education"

Sponsors: Jason M. Lewis

Bill S.1050 "An Act to reduce health care costs by promoting evidence-based prescriber education"

Sponsors: Mark C. Montigny

Hearing Scheduled for 10/1/2013 at 10:00 AM in A-1

This Bill calls for the development, implementation and promotion of an evidence-based outreach and education program about the therapeutic and cost-effective utilization of prescription drugs for physicians, pharmacists and other health care professionals authorized to prescribe and dispense prescription drugs. In developing the program, the department shall consult with physicians, pharmacists, private insurers, hospitals, pharmacy benefit managers, and the MassHealth drug utilization review board.

Analysis: This is an academic detailing bill, where the government has "sales representatives" to discuss the virtues of inexpensive, less effective, generic drugs and cheaper devices.

Bill H.2061 "An Act prohibiting advertising by pharmaceutical companies"

Sponsors: Kathi-Anne Reinstein

Hearing Scheduled for 10/1/2013 at 10:00 AM in A-1

This Bill states that no pharmaceutical company shall advertise on any media in the commonwealth or by any other means.

Analysis: This is by far the most efficient form of restrictions – just ban anyone from knowing anything. This legislator deserves an award for honesty.

Bill S.1032 "An Act relative to the in-office sales of medical devices and products"

Sponsors: John F. Keenan

Hearing Scheduled for 10/1/2013 at 10:00 AM in A-1

The Bill is designed to regulate certain aspects of the practice of in-office sales of medical devices or products. Any health care practitioner engaging in the in-office sale of medical devices or products must observe the following conditions. In-office sales not in compliance with all of the conditions listed in this section shall be prohibited, and subject to the penalties. The conditions:

(1) The health care practitioner must disclose to the patient any profit gained or financial interest held by the health care practitioner, or any immediate family member, in the sale of the medical device or product, or any professional or other relationship between the health care practitioner and the manufacturer or marketer of the medical device or product;

(2) The health care practitioner must advise the patient as the availability of the medical device or product, or any reasonable equivalents, for purchase at a retail pharmacy or other commercial retail source, and as to the market price of said devices or products or equivalents if purchased at another source;

(3) The medical device or product sold must provide a reasonable potential for therapeutic and medical gain specific to the patient's medical condition or complaint; 

(4) The health care practitioner must have available, and upon request must provide to the patient, easily understandable literature or an explanation of the device's or product's medical or therapeutic benefits, and any risks associated with the device or product, and the scientific evidence upon which any claims of said benefits or risks are based;

(5) The office in which in-office sales occur must have notice prominently posted, or must otherwise reasonably communicate to the patient, that the patient is under no obligation to purchase the medical device or product in the office; provided further that such notice or communication shall also include an explanation to the patient of how to contact the board if the patient feels the in-office sale or discussion promoting said sale creates undue pressure on the patient to purchase a medical device or product, or otherwise violates the standards for professional conduct applicable to the health care practitioner.

(6) Any other conditions deemed appropriate and as may be established in regulation by the board under which the health care practitioner primarily involved in the execution of the in-office sale is registered or licensed.

Analysis: One cannot imagine physicians in the commonwealth of Massachusetts having the time to devote to all the types of disclosure discussed in this bill. If you think about it, a doctor only has so many hours in the day to see patients, and occasionally he or she would like to see their family or significant other. Also, having recently bought a device at a medical office, it seemed significantly more efficient than trying to track down that device somewhere else.

Bill H.1962 "An Act relative to the substitution of generic drugs"

Sponsors: William C. Galvin

Hearing Scheduled for 10/1/2013 at 10:00 AM in A-1

This Bill regulates prescriptions dispensed in a hospital licensed under section 51 of chapter 111 and prescriptions dispensed by a hospitalist or doctor. It provides that no hospital, hospitalist or doctor shall change a drug prescribed by the primary care physician of the patient without consent of the patient and his or her primary care physician; and provided further that all outpatient prescriptions dispensed in a hospital shall be on prescription forms as required by this section and that no retail pharmacy, however organized, shall be exempted from the provisions of this section.

Discussion: Though the goal of this bill not to switch medications at the hospital has good intentions, hospitals and their staff need to have the flexibility to treat the patient with the medication on hand at the facility. Also, as a patient moves through the system they may need different medications.

Additional bills

The following two bills are not subject to the hearing, but introduced in the legislature.

Bill S.543 "An Act to ensure the privacy of patient prescription records"

Sponsors: Richard T. Moore

This Bill requires pharmacists licensed in the Commonwealth, and pharmacies operating in the Commonwealth, and all other persons who control, own, license, use or share pharmacy records shall protect the privacy and confidentiality of provider-identifiable prescription information as if such information constituted "protected health information" within the meaning of the federal Health Insurance Portability and Accountability Act (HIPAA) Privacy Rule (45 CFR Parts 160 & 164). Each violation of this provision shall carry a fine of $1,000 per affected record. Suit to enforce this provision may be brought by the Attorney General or by any affected patient or provider. This provision is a state expansion of medical privacy rights, as permitted by Section 264(c)(2) of HIPAA (Public Law 104-191).

Bill H.1978 "Resolve relative to responsible prescription prescribing"

Sponsors: Thomas A. Golden, Jr.

This Bill establishes a special commission to investigate responsible prescription practices in Massachusetts.

The commission shall consist of 3 members of the house of representatives, 1 of whom shall be appointed by the minority leader of the house of representatives;

3 members of the senate, 1 of whom shall be appointed by the minority leader of the Senate;

1 representative from the executive office for administration and finance; the commissioner of public health drug control program or the commissioner's designee; the director of the prescription monitoring program or the director's designee; and

3 members appointed by the governor that represent the medical and pharmaceutical community with specialty experience in drug regulation, prescription, treatment and abuse.

The commission's investigation, shall include, but not be limited to best practices for responsible prescription. The commission shall submit a report of its findings, including legislative recommendations, if any, to the joint committee on public health and the house and senate committees on ways and means by April 15, 2014.


Additional bills discussed at the hearing include bills for prostate cancer medication, prohibiting clinical laboratory self-referral, generic substitution, state and wide discounts for pharmaceuticals.

We will be follow these bills if they get past the initial hearing phase. Given the current jobs environment in Massachusetts the chances of these bills going anywhere seems highly unlikely.


Preview | Powered by FeedBlitz


April 2018
Sun Mon Tue Wed Thu Fri Sat
1 2 3 4 5 6 7
8 9 10 11 12 13 14
15 16 17 18 19 20 21
22 23 24 25 26 27 28
29 30