The state capitol in Sacramento, Calif. (photo credit: Rafa Konieczny)
A mini wave of state-level rule-making has thrust the issue of restrictions on pharma payments to medical professionals back into the spotlight.
“The issue just kind of reappeared this year and caught us completely off guard,” said Howard Fienberg, a lobbyist for the market research industry.
So far, lobbyists have been fighting, where possible, to keep payments for continuing medical education (CME) and marketing research off the table. But restrictions could curtail compensation for things like speaker training, and that most ubiquitous of pharma marketing tactics, the dinner meeting.
“I think you’ll see more states picking up this kind of legislation,” said Tom Sullivan, president of med-ed firm Rockpointe. “For accredited CME providers, there’s a reasonable exemption for certified CME in all of these proposed and passed rules. But things like promotional dinner meetings could go by the wayside.”
The newer restrictions, in some cases, are motivated by states wanting to take action to curb the opioid epidemic, high drug prices, or both. While more than 30 states have introduced laws this year that address drug prices, according to the National Academy for State Health Policy, so far just two state legislatures in 2017 have proposed limits on promotional payments, New Jersey and California, and one state, Maine, passed a flat ban.
The NJ attorney general, Christopher Porrino, said in a public hearing to debate that state’s proposed cap on payments that the limit is not about “vilifying the medical profession or the pharmaceutical industry,” according to a recap on the Policy & Medicine blog, but that it’s appropriate to scrutinize pharmaceutical marketing practices, some of which can unduly influence physicians.
See also: Pharma spending on CME rose in 2016
Porrino cited what he called an “extreme example,” the state’s lawsuit against opioid maker Insys Therapeutics. New Jersey last month filed a four-count lawsuit against Insys, charging that the company submitted false claims to health insurers to increase the market share for its opioid-fentanyl drug, Subsys.
The complaint accuses Insys of directing its sales force to push physicians to prescribe Subsys to all patients suffering any type of chronic pain, even though the drug is only approved for use in those with break-through cancer pain.
Insys is also the subject of a federal investigation. Six former executives were indicted last December for conspiring to bribe practitioners in various states in order to get them to prescribe the powerful fentanyl spray. Just last month, Insys’ founder and majority owner, John Kapoor, resigned shortly after being arrested on racketeering charges.
New Jersey rule N.J.A.C. 13:45J, which the state’s Division of Consumer Affairs is holding open for public comment until December 1, establishes a $10,000 cap on the dollar amount that a prescriber can accept from a pharma manufacturer in a calendar year for “bona fide services,” which include speaking at promotional activities, participating on advisory bodies and consulting arrangements.
Payments related to speaking at continuing-education events are excluded from the cap, although the rule calls for “modest meals” of no more than $15 per person at educational events. That may spell trouble for the med-ed community, as most large medical meetings and conferences are held at hotels.
“We looked at hotels in NJ and couldn’t find a meal for under $20,” said Sullivan. He thinks the meal cap may change. In 2012, following strong opposition from the restaurant industry, Massachusetts replaced a four-year-old ban on pharma and med-ed company meals with an amendment for them to provide only “modest meals,” but with no spending limit.
Fienberg, who spoke at the NJ hearing in his role as director of government affairs for the Insights Association (created by the 2017 merger of the smaller marketing research trade groups CASRO and MRA), said several people testifying at the NJ hearing made the point that, rather than helping combat the opioid epidemic, limits on payments to prescribers could actually aggravate it by lessening the ability to educate them about the drugs and about addiction treatment.
In California, Senate Bill 790, which passed in that chamber last May, had sought to restrict pharma companies from providing travel, speaking fees, consulting fees, entertainment and other economic gifts to HCPs. Meals were capped at $250 per person per year.
California’s bill was “our prelude to getting back involved in this issue,” said Fienberg. “It looked really, really bad.”
Yet thanks to some last-minute lobbying by physician groups and pharma, the bill has been carried over to 2018 with industry friendly amendments, like an exclusion for “bona fide marketing research conducted by a third party” and a similar exemption for payments to faculty for educational seminars. “Having gotten an exemption in California, we can hopefully do well in NJ,” Fienberg said.
Up in Maine, however, bipartisan support and the ongoing opioid crisis in the state helped the legislature pass a blanket ban on gifts from pharma last June. The provision, LD 911, curtails all cash gifts and allows only those of “minimal” value. The bill became law without the governor’s signature.
Interestingly, Maine was one of several states that had backed off a gift ban in 2012 when the Physician Payment Sunshine Act kicked in. A federal transparency law, the Sunshine act requires drug and device companies to disclose payments and other so-called transfers of value they make to physicians and certain other healthcare providers.
Now, instead of yielding to the transparency regime, Maine joins other states with flat gift bans on their books, like Vermont and Minnesota, neither of whose gift laws are preempted by the Sunshine law. Until Maine’s board of pharmacy clarifies what’s included in the ban, industry is taking a cautious stance, “treating it as a ban on all kinds of payments,” said Fienberg.
In the end, Maine isn’t such a big market, and any ban on market research or promotional dinner meetings wouldn’t cause as much economic damage as it would in a larger state. Yet, given the recent wave of legislation and the fact that the contentious issues motivating it aren’t going anywhere soon, lobbyists and industry advocates don’t see the pressure letting up in 2018.
Correction: An earlier version of this article had implied that Maine’s ban on payments included CME; however the final bill included an exception for educational programs.