Regulatory Update: State Reporting
Requirements at a Glance
 By Dan Fitzgerald, Chief Financial Officer
Working with information provided by industry groups such as CASRO, PMRG, PBIRG and MRA, and through careful monitoring within our own physician community, GfK Healthcare continuously tracks state laws and statutes that govern the compensation of physicians and reporting requirements by pharmaceutical companies or their marketing research agencies in an effort to prevent violation of any state laws.
Recently, a statute in Minnesota was updated to allow payments to physicians who participate in bona fide pharma survey research in that state and eliminated reporting requirements for market research payments. In light of this significant development, this article provides a summary of information presented at last month’s Pharmaceutical Business Intelligence Research Group Annual General Meeting on the status of other state legislation with which companies may have to comply when conducting research.
Please note that the information presented below is not legal advice, but GfK Healthcare’s interpretation of state legislation. We urge caution in using the information presented here and recommend consulting with your compliance professionals to determine any legal duties and obligations prior to taking any action.
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Maine
- Manufacturer/labeler required to report “marketing” costs for prescription drugs within Maine.
- The annual disclosure must include the value, nature, purpose and recipient of compensation or payments in connection with activities such as advertising, marketing and direct promotion of prescription drugs.
Guidance:
- Market research does not appear to be covered by the Maine act – services do not fall within the act’s definition of “marketing.”
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Vermont
- Disclosure required of the “value, nature and purpose of any gift, fee, payment, subsidy or other economic benefit provided in connection with detailing, promotional or other marketing activities” of a pharmaceutical manufacturing company, either directly or through pharmaceutical marketers.”
Guidance:
- Based on our interpretation, market research payments should not be prohibited under the Vermont law as they fall into one of the following categories of allowable expenditures: (1) “other reasonable fees, payments, subsidies, or other economic benefits provided by a manufacturer of prescribed products at fair market value;” or (2) “for a research project that constitutes a systematic investigation, is designed to develop or contribute to general knowledge, and reasonably can be considered to be of significant interest or value to scientists or health care professionals working in the particular field of inquiry.”
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California
- Requires every pharmaceutical company to adopt a comprehensive compliance program in accordance with the U.S. Department of Health and Human Services’ “Compliance Program Guidance for Pharmaceutical Manufacturers,” a comprehensive compliance program and limits on gifts given to medical or health care professionals, with some exceptions.
Guidance:
- This applies only to pharmaceutical companies. Market research companies should not have any additional requirements under the California act.
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West Virginia
- In an effort to manage the increasing cost of prescription drugs for its citizens, the West Virginia act requires that advertising costs for prescription drugs, based on aggregate national data, be reported by all manufacturers and labelers of prescription drugs in West Virginia that employ, direct or utilize marketing representatives.
Guidance:
- The West Virginia act and rule should not impact research companies because they do not fall within the definition of a reporting entity and are not required to provide information on market research payments.
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Washington, D.C.
- Requires a manufacturer or labeler of prescription drugs that employs, directs, or utilizes marketing representatives in the District of Columbia to annually report marketing costs for prescription drugs dispensed in the district.
Guidance:
- Market research companies should not have additional requirements/restrictions under the act – services do not fall within the act’s definition of “marketing.”
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Massachusetts
- A marketing code of conduct is in effect for all pharmaceutical/medical device manufacturing companies that employ a person to sell or market drugs/devices in the commonwealth.
- Manufacturing companies are prohibited from providing payments of any kind including, without limitation, cash and cash equivalents, to health care practitioners either directly or indirectly, except as compensation for bona fide services.
Guidance:
- We interpret the Massachusetts regulations, as (i) permitting, subject to compliance with certain requirements, market research payments; and (ii) requiring manufacturing companies to disclose the value, nature, purpose and recipient of market research payments unless the payments were made in connection with double-blind market research.
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Nevada
- Imposes certain requirements on wholesalers and manufacturers that employ a person to sell or market a drug, medicine, chemical, device or appliance in Nevada.
Guidance:
- Similar to the California act, the Nevada act only imposes requirements and obligations on pharmaceutical companies. Accordingly, research companies do not have any responsibilities, obligations or requirements as a result of the Nevada act.
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Colorado
- As reported by the Marketing Research Association (MRA) on June 14, 2010: The Colorado Pharmaceutical Transparency Act, signed into law by Governor Bill Ritter, includes an amendment proposed by the Marketing Research Association (MRA) excluding incentive payments for healthcare practitioners who participate in marketing research projects.
- The Act requires manufacturers of a drug, medical device, biological product or medical supply to publicly report payments or other transfers of value of over $100 aggregate annually made by the manufacturers to a healthcare practitioner.
- Senator Morgan Carroll, the law’s sponsor, agreed to amend S.B. 126 with language similar to that which MRA worked to have added to the federal Physician Payments Sunshine Act, excluding payments made indirectly “through a third party …where the applicable manufacturer is unaware of the identity of the healthcare practitioner.”
Guidance:
- Market research does not appear to be covered by the Colorado act.
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