More states considering gift-disclosure legislation

Many of the proposals would put the names of physicians accepting a drugmaker's gift worth $25 or more on a state list open to the public.

By Kevin B. O’Reilly — Posted March 20, 2006

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Eager to attack high prescription drug prices and concerned about physicians' conflicts of interest, politicians in nine states have proposed legislation to require that drugmakers publicly disclose gifts of substantial value made to doctors, pharmacists, hospitals and other prescribers. A bill in Massachusetts would ban all gifts to physicians.

"There's a very clear relationship when you have practices that tend to influence prescribers and shift prescribing patterns to newer drugs which can be many, many times more expensive," said Sharon Treat, executive director of the National Legislative Assn. on Prescription Drug Prices, a state legislator-run nonprofit group that focuses on ways to lower drug prices at the state level.

In total, 15 gift-disclosure bills have been filed in Hawaii, Illinois, Iowa, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island and Washington. Many of the bills were carried over from the 2005 legislative calendar and are still in committee. A bill passed by the New Hampshire Senate has been referred for further study by its House of Representatives.

Most of the proposals are patterned after a model crafted by the Center for Policy Alternatives, a liberal advocacy group that advises state legislators, and would force drugmakers to report all gifts valued at $25 or more to the state's health department, which would issue an annual public report listing individual physicians and the dollar value of the gifts they received that year.

"It's a shame approach, like publishing the names of johns," said Bob Goodman, MD, assistant professor of clinical medicine at Columbia University College of Physicians and Surgeons in New York and a supporter of the laws.

"Preferably, you'd like to get at people on the ethical, professional side," said Dr. Goodman, who founded the advocacy group No Free Lunch and urges physicians and other health professionals to turn down all gifts from drugmakers.

The scope of the problem is hotly debated. A Kaiser Family Foundation report last year estimated that drugmakers spent nearly $7 billion on drug detailing in 2003, nearly $8,000 per doctor. About 85% of that went to pay for office-based sales visits. The amount spent on gifts to physicians was not broken out. Also unclear is how much drugmakers' modest gifts to physicians are influencing prescribing habits compared with other factors such as patient demand for newer drugs spurred by direct-to-consumer advertising, on which drugmakers devoted $3.3 billion in 2003.

Fear of disclosure may be fading

Maine, Minnesota, Vermont, West Virginia and the District of Columbia already have gift-disclosure statutes on the books. These laws, like those being considered around the country, generally exempt from disclosure any free drug samples, payment for work on clinical trials or scholarships for medical education sponsored by a professional association.

Drugmakers gave Vermont physicians, hospitals and other prescribers $3.11 million in gifts in 2004, up 26% from 2003, according to a May 2005 state attorney general's report. More than half of the $3.11 million, 51%, went to physicians, and the top 5% of recipients accounted for 62% of total reportable gifts.

State medical societies traditionally have been cool to gift-disclosure proposals, because they fear that listing physicians by name will put an unfairly harsh spotlight on them.

"We were concerned, simply, about having physicians highlighted in the press for bad behavior," said Andy Maclean, deputy executive vice president and general counsel of the Maine Medical Assn. MMA was neutral on the 2003 gift-disclosure law that was enacted but in 2005 supported a successful effort that now only allows state authorities to see the gift data.

Maclean said the concern about doctors behaving badly seems to have faded as drugmakers tone down their gifts and physicians have become more aware of ethical guidelines.

The Massachusetts Medical Society's position in support of House bill 2659, which is similar to gift-disclosure legislation other states are considering, might reflect that changing attitude. The bill is separate from one proposing an outright ban.

"MMS is very concerned about conflict of interest in the choice of prescription medications," said the group in testimony to the Bay State Legislature. "The interest of our patients must always prevail over the economic interest of insurers, prescribers or the pharmaceutical industry."

The MMS said it opposes a bill pending in the state Senate that "requires a complex statement to be filed by all physicians and many other licensed individuals as well," adding up to "tens of thousands of forms annually."

Drugmakers question need for laws

Industry groups such as the Pharmaceutical Research Manufacturers of America say that recently implemented industry guidelines make gift-disclosure laws unnecessary.

"Given the AMA standards and the PhRMA code of conduct, they're creating a sort of redundant system," said Marjorie Powell, PhRMA senior assistant general counsel. "If you're dealing with physicians who are highly trained and licensed by the state, it's not clear that regulating on this level of detail their activity is the most important thing the state should be doing with its time and money."

The AMA gift policy adopted in 1990 and updated in 2001 says that drugmakers' gifts should be of insubstantial value, defined as the equivalent of $100 or less, and should primarily benefit patients. PhRMA's code, which was adopted in 2002, more or less hews the AMA line: stethoscopes are OK, golf bags are not.

To PhRMA's Powell, many of the bills have imprecise language that could discourage doctors from accepting gifts and could wind up hurting patients. The Maine disclosure law, for one, is still stuck in the rule-making process as regulators and drugmakers debate how to interpret the statute's language, down to the letter.

"If a pharmaceutical company sales representative were to provide a family physician a videotape to help explain to patients just diagnosed with diabetes how to manage their blood-sugar levels, is that a gift to the physician?" Powell said. "Someone could say it is, depending on that state's definition."

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To disclose or not to disclose

Nine states -- Hawaii, Illinois, Iowa, Massachusetts, New Hampshire, New York, Pennsylvania, Rhode Island and Washington -- are considering legislation that would require drugmakers to publicly disclose gifts to physicians, pharmacists, hospitals and other prescribers or face up to $10,000 in fines. Similar to laws already on the books in other states, many of the pending bills would require drugmakers to report to the state's health department any gift valued at $25 or more, except:

  • Free samples of prescription drugs distributed to patients.
  • Reasonable compensation and reimbursement of expenses in connection with bona fide clinical trials.
  • Scholarships or other support for medical students, residents and fellows to attend a bona fide educational, scientific or policy-making conference of an established professional association. The association must be the one to select the scholarship recipient.

Source: Center for Policy Alternatives, National Conference on State Legislatures

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