On March 24th, West Virginia’s Governor, Earl Ray Tomblin, approved SB 267, which repeals the state’s Prescription Drug Advertising Expense Reporting requirement. West Virginia law required pharmaceutical manufacturers doing business in the state to disclose all expenditures for advertising and direct promotion of prescription drugs to consumers, prescribers, pharmacies, and patient support or advocacy groups within West Virginia.
By approving SB 267, the Governor repealed all of the West Virginia Code provisions relating to the Governor's Office of Health Enhancement and Lifestyle Planning (GOHELP). These provisions are laid out in §16-29H. According to the Code, §16-29H was drafted by the legislature to address concerns over rising healthcare costs, and the GOHELP was created "to coordinate all state health care system reform initiatives among executive branch agencies, departments, bureaus and offices." Indeed, §16-29H-6 lays out an ambitious five-year strategic plan for the Director of the GOHELP.
The advertising reporting provisions are set forth in §16-29H-8, entitled "Continuing efforts to reduce prescription drug prices."
This section states:
Advertising costs for prescription drugs, based on aggregate national data, shall be reported to the Governor's Office of Health Enhancement and Lifestyle Planning by all manufacturers and labelers of prescription drugs dispensed in this state that employs, directs or utilizes marketing representatives. The reporting shall assist this state in its role as a purchaser of prescription drugs and an administrator of prescription drug programs, enabling this state to determine the scope of prescription drug advertising costs and their effect on the cost, utilization and delivery of health care services and furthering the role of this state as guardian of the public interest.
In 2011, the Governor instructed GOHELP to disband and repeal the reporting requirements for the state, but West Virginia still requires companies to report their spending on advertising within West Virginia. This repeal ends the reporting requirements for companies starting January 1, 2015.
Notably, GOHELP had not published any manufacturer advertising information on their website in almost five years. The 2010 Prescription Drug Advertising Expense Report was the last one that West Virginia made available. In that report, GOHELP wrote:
One hundred thirty-eight (138) manufacturers and labelers filed reports under the legislative rule in 2010. This is three more manufacturers/labelers than 2009 and an increase from 2007 and 2008 when 111 and 126 companies, respectively, reported to the PCMC.
Companies reported a total amount spent for advertising and direct promotion of prescription drugs to consumers, prescribers, pharmacies and advocacy groups for the 2010 reporting period of $35,298,700, an increase of $6,636,743 from the 2009 reporting year. The 2010 total for direct-to-consumer advertising was $18,315,037, while $16,983,663 was spent on direct promotion to customers, prescribers, pharmacies and patient support or advocacy groups.
It will be interesting to see whether West Virginia’s decision to repeal its disclosure law starts a trend. Pharmaceutical and device manufacturers already must comply with federal reporting requirements under the Physician Payments Sunshine Act. This federal law preempts all individual state laws, meaning that companies must only report the information required under the Sunshine Act to the federal government. But there is an important caveat: because the Sunshine Act does not preempt state disclosure laws that are broader than the federal requirements, many state laws continue to apply even now after federal reporting requirements started in August 2013.
Aside from being a reporting hassle for companies doing business in these states, however, the utility of this extra reporting information seems to be limited. For example, Massachusetts requires manufacturers to report on a broad class of “covered recipients” that extends beyond the Sunshine Act requirements to include non-teaching hospitals, pharmacists, and nurse practitioners, among others. Massachusetts has issued its physician payment reports to very little publicity, with the last full report coming out in 2012. The state recently published 2013 data, but this only showed payments from the federal Open Payments website, and included no information about covered recipients not already covered by the Sunshine Act.
Other states, such as Minnesota and Connecticut, however, have expanded their “covered recipient” category to include other potential prescribers, including advanced practice registered nurses. We will wait to see what these state reports contain.
Thanks to Christina Sanchez, JD Regulatory Compliance Advisor at G&M Health, LLC for the update on West Virginia’s reporting rule, and thank you to Nico Fiorentino of G&M for his insight into the state reporting requirements.