Life Science Compliance Update

January 17, 2018

Nevada Posts FAQ and Reporting Requirements on Transparency Law

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As we posted last week, the Nevada draft regulations are up and starting to become a hot topic. The same day as our last post, Nevada updated the Frequently Asked Questions and the SB 539 Reporting requirements.  

Frequently Asked Questions

The two-page FAQ document provides some helpful answers to common questions, such as whether the reporting for pharmaceutical representatives is the responsibility of the individual or of the manufacturer. Nevada notes that it is the responsibility of both and then lists specific requirements. For example, manufacturers are required to submit a list of names of all pharmaceutical representatives who market prescription drugs in Nevada while each pharmaceutical representative is required to submit a report of all compensation or prescription drug that was provided to a provider of health care that is licensed, certified, or registered in this State, among others.

The FAQ also confirms that the law applies equally to all pharmaceutical representatives and not just those who are engaging in the sales and marketing of the diabetes-related treatments state on the website.

The FAQ also includes links to report formatting and other specifics for prescription drug manufacturers and pharmacy benefit managers.

Reporting Requirements

Drug Manufacturers

As required under the law, prescription manufacturers must submit a report to the Nevada Department of Health and Human Services (DHHS) with the below information, for prescription drugs posted on the DHHS website. This report must be submitted via email annually by April 1st of each year for the previous calendar year. DHHS then compiles a report and posts it in accordance with NRS 439.

Manufacturer requirements

Pharmacy Benefit Managers

PBMs are also required to submit a report to DHHS by April 1st of each year. The required information for that report is as follows.

PBM

Pharmaceutical Sales Representatives

Pharmaceutical sales reps that are on a list submitted to DHHS by drug manufacturers anytime during the previous calendar year must submit their report by March 1st of the year, including the below items.

Pharma Rep

January 15, 2018

Maine Updates Their Gift to Physicians Law Online

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Maine has posted a revised version of their gifts to physicians law which bans cash payments from pharmaceutical manufacturers, wholesalers agents for research, consulting, promotional speaking related payments but exempts educational materials, modest meals, prescription drug samples, honorarium at educational events and education-related funding to institutions.

We have previously written about the Maine Legislature passing a new law to prohibit gifts from industry to health care practitioners.

On November 1, 2017, the law went into effect and can now be found online for reference.

For a refresher, the law amends the Maine Pharmacy Act to prohibit a person engaged in the manufacture of prescription drugs or a person who buys prescription drugs for resale and distribution to persons other than consumers from giving a gift to an individual who is licensed, registered or otherwise authorized in the appropriate jurisdiction to prescribe and administer drugs in the course of that individual's professional practice.

However, some significant changes seem to be made to the version listed on the Maine legislative site. Whereas previously there was a list of seven items specifically excluded from the bill, the final legislation does not include that same list.  Instead, the law prohibits manufacturers or wholesalers from offering or giving cash gifts in any amount of a gift for which reciprocity is expected or implied to a health care practitioner.

Further, the list of exceptions has shrunk to a handful. The exceptions include:

  • Giving noncash items of minimal value that will directly benefit the practitioner’s patients including:
    • Prescription drug samples for distribution to patients,
    • Educational materials
  • Modest meals and refreshments that are provided in connection with a meeting or presentation about the benefits, risks and appropriate uses of prescription drugs or medical devices, as long as the meeting or presentation occurs in a venue and manner conducive to informational communications;
  • Giving funding to an academic institution, residency program, or and fellowship program to support the participation of medical, nursing, physician assistant, veterinarian and pharmacy students, residents and fellows in professional meetings, including educational meetings, as long as the program identifies such funding recipients based on independent institutional criteria and the funds are distributed to recipients without specific attribution to sponsors;
  • Giving reasonable honoraria to a practitioner and making payment of reasonable expenses of a practitioner at a professional or educational conference or meeting.

We also recently reviewed the Maine Office of Professional and Occupational Regulation (OPOR) Regulatory Agenda to get a status update. The agenda notes that the Maine Board of Pharmacy expects to get involved in rule-making activity on the topic in 2017-2018.

From the Agenda,

Rulemaking activity is currently under consideration for purposes of implementing 2017 Public Law Chapter 249 to establish procedures and standards to Board-certify a pharmacist to prescribe naloxone hydrochloride and procedures and standards on the dispense naloxone hydrochloride (see chapter 40 below). The Board may consider rulemaking for purposes of implementing 2017 Public Law Chapter 267 on appropriateness of certain gifts extended by manufacturers or wholesale distributors to health care practitioners for which is major substantive rulemaking. In addition, the Board is expected to review rules overall streamlining, to ensure compliance with current laws, and to update rules by addressing outdated references, providing clarification of certain rules as necessary, and setting licensing requirements and operating standards for newly identified types of retail pharmacies.

While most of us like to be prepared and work hard to ensure full compliance with all laws, with no guidance or rule adoption of these laws, companies cannot be found in violation of the laws. Therefore, you still have time to comply while preparing your company for the laws once they take effect.

This change of language has no exemption for research or consulting. We encourage you to review the rules in their entirety to determine what changes if any, your company needs to take.

January 11, 2018

Nevada Proposes Drug Transparency Regulations

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We have written many times on the Nevada law passed in Summer 2017 that requires patient advocacy organizations to report all payments they receive from industry, regardless of the nature of the payment.

The legislation was signed into law by Nevada Governor Brian Sandoval in June 2017 and now the Nevada Department of Health is working on regulations to implement the law.

The current draft regulations require manufacturers and pharmacy benefit managers to submit a report by April 1st of each year for the previous calendar year that outlines the costs and rebates related to drugs listed on the List of Essential Diabetes Drugs.

Pharmaceutical sales representatives that are registered with the Department during any point of the previous year are required to submit a report by March 1st.

The reports for manufacturers shall include the following elements:

  • costs of producing the drug;
  • the total administrative expenditures (including marketing and advertising costs);
  • the profit earned and percentage of total profit attributable to the drug;
  • total amount of financial assistance provided through patient assistance;
  • cost associated with coupons;
  • the wholesale acquisition cost;
  • history of any increase over the 5 years including percentage increase, date of increase, and explanation;
  • aggregate amount of all rebates provided to PBM’s;
  • any additional information prescribed by regulation by DHHS.

Further, for any drugs on the list for which there was a price increase, the report must include the following:

  • a list of each factor that contributed to the increase;
  • the percentage of total increase attributable to each factor;
  • an explanation of the role of each factor in the increase;
  • any other information prescribed by DHHS in regulation.

PhRMA and BIO Involvement

The Pharmaceutical Research and Manufacturers of America (PhRMA) and the Biotechnology Innovation Organization (BIO) filed a lawsuit in response to the law being signed by Governor Sandoval, asking that the Court declare provisions of the law to be preempted by federal law and in violation of the United States Constitution. They argue that the transparency acts as a “cap” by requiring manufacturers disclose the above information.

One argument the organizations make is that the law impedes Congress’ sole authority to set patent policy and that requiring manufacturers to detail the reason behind a price increase “in purpose and effect…punishes manufacturers for the price of their ‘essential’ diabetes drugs.” They further argued that the only way manufacturers can “avoid forfeiting trade-secret protection for the ‘factors’ of a price increase is by limiting its list prices.”

Another argument was that the law as signed by Governor Sandoval conflicts with federal trade and state trade secret laws – the Uniform Trade Secrets Act and the Defend Trade Secrets Act. They argued that because the Nevada law exempts trade secret protections for all of the information the manufacturer must provide in the report, manufacturers lose those protections as soon as the annual list of drugs is published, even before the information is turned over, of advertising, cost, marketing, production, and pricing information associated with the drugs.   

Did Nevada Respond?

Interestingly, included in the draft regulations is a provision for if a manufacturer or PBM believes that a data element in the report meets the standard of the Defend Trade Secrets Act (DTSA). In that case, they shall request to have the element declared confidential by writing to the Department of Health and providing a detailed explanation of why the data element qualifies as a trade secret under the DTSA. This explanation will be made available to the public upon request. Therefore, it seems as though Nevada may have believed PhRMA and BIO had a solid argument about the DTSA. However, only time will tell how the exemption works in practice and whether or not trade secrets are truly being protected.

News, updates, meetings, and public hearings will be uploaded to the Nevada Department of Health’s website here.

Take Action!

Of interest to many of our readers may be the Small Business Impact Survey, available here through January 22, 2018, at 5:00 pm PST. The survey analyzes the impact of the proposed regulation on business with less than 150 employees.

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