On Nov. 10, 2008, a bill was introduced in the Texas Senate that would require drug companies to provide annual disclosures of gifts, payments and other economic benefits to health care providers. If passed, Texas would join the ranks of other jurisdictions (the District of Columbia, Maine, Minnesota, Vermont, West Virginia, and, most recently, Massachusetts), to require such disclosure.

The Texas bill—S.B. 151—specifically applies to “pharmaceutical manufacturing companies,” which is defined to include any entity that “produces, prepares, propagates, compounds, converts, or processes prescription drugs,” or that “packages, repackages, labels, relabels, or distributes prescription drugs.” Wholesale drug distributors and pharmacists are excluded from the reporting requirement.

Under the bill, the annual disclosure would include reporting the value, nature and purpose of any gift, fee, payment, subsidy or other economic benefit provided in connection with detailing, promotional, or marketing activities of the company to (1) physicians, (2) hospitals, (3) nursing homes, (4) pharmacists, (5) pharmacies, (6) health benefit plan administrators or (7) any other persons authorized to prescribe or dispense prescription drugs in Texas. (As drafted, the bill contains no minimum dollar thresholds for reporting as other state requirements do.) The report would also require disclosure of the name and address of each recipient. Similar to other state reporting laws, the Texas law would obligate companies to disclose annually the name and address of the individual responsible for the company’s compliance.

Information disclosed to the state under S.B. 151 as “trade secret information” would be kept confidential. Further, the state would keep confidential information relating to (1) free samples, (2) compensation and reimbursement in connection with clinical trials, (3) economic benefits, gifts, or other payments valued at less than $25, and (4) scholarship or support for a medical student, resident or fellow to attend a significant educational, scientific or policy-making conference. This latter provision differs from other state laws, which provide exemptions from reporting for these types of items. The Texas bill, in contrast, would not exempt these items from reporting; rather, it would simply keep disclosures related to these items confidential.

Penalties under S.B. 151 include a $10,000 fine for failure to file an annual report. If passed, the first annual report in Texas under the bill would be due June 30, 2010.