New Pharma Laws Add Confusion, Costs

Bill Introduced in U.S. Senate Could Require Full Disclosure of All Gifts

Booth camp: Attendees visit exhibits at HCEA’s 2008 annual meeting.A surge of new laws and regulations are in the works that will require pharmaceutical and medical-device companies to disclose all gifts to health-care providers or eliminate commercially supported continuing medical education.

The Massachusetts state senate passed legislation this spring that bans pharmaceutical and medical-device companies from giving payments and gifts, including travel and honoraria, to health-care providers. California, Minnesota and Vermont have passed similar laws, and during 2007 alone at least 27 states proposed legislation requiring marketing disclosures by drug manufacturers, according to the National Conference of State Legislatures.

“It’s such a dynamic area, it’s always changing,” said Kristine Rapp, vice president of global ethics and compliance for Hospira Inc., a pharmaceutical and medication delivery firm based near Chicago. “As states enact different laws, the task facing companies’ compliance functions becomes more complex.”

Further complicating matters is the possibility of a nationwide disclosure law. The Physician Payments Sunshine Act of 2008 was introduced in March in the House of Representatives and if passed would require every manufacturer of a drug, device or medical supply to submit a report on gifts exceeding $25. Manufacturers who don’t comply can be fined up to $100,000 per infraction.

Rapp said industry professionals are concerned with laws that require pharma and medical-device companies to disclose their gifts because of the extra work this creates, not to mention the challenge of developing an accurate tracking system. “These requirements will be burdens on any company,” she said, “and the reporting adds costs.”

Also of concern is a proposal from the American Medical Association’s Coun-cil on Ethical and Judicial Affairs that would ultimately ban health-care providers from receiving any funding for medical education. Although it was tabled by the council in June, it could be on the agenda again next year.

In a seemingly preemptive move, New York City-based pharmaceutical giant Pfizer announced last month that it would stop awarding grants to medical education and communication companies, although it will continue to support CME programs at medical centers, teaching hospitals and via certain other suppliers if they meet the stringent requirements thata have been established by the Accreditation Council for Continuing Medical Education.