What you need to know:

Recent amendments to the Massachusetts Gift Ban Law lift prohibitions on meals and technical training expenses, and also provide relief from double reporting under the Sunshine Act.

What you need to do:

Pharmaceutical and medical device companies should examine how these changes affect their organizations, and they should watch for further guidance from Massachusetts about the types of disclosures it will continue to require under the Gift Ban Law once reporting under the Sunshine Act begins.

On July 8, Massachusetts Governor Deval Patrick approved the FY 2013 state budget, which included substantial changes to the Massachusetts Gift Ban Law. The Gift Ban Law, which governs pharmaceutical and medical device manufacturer conduct, was renowned and often criticized for being notoriously strict. The recent amendments eliminate and modify two key elements of the Gift Ban Law: one related to providing meals or refreshments and one relating to subsidizing travel and expenses associated with medical device demonstrations or training. Importantly, the law also gives some relief to companies that are required to make similar disclosures under the federal Physician Payment Sunshine Act. Pharmaceutical and medical device companies who work with Massachusetts healthcare providers will surely welcome these changes.

Modest Meals and Refreshments Are Permitted, But Must Be Reported

The most significant change to the law allows pharmaceutical and medical device companies to provide “modest” meals and refreshments to healthcare providers outside of the hospital setting in connection with non-CME presentations. The Gift Ban Law’s original provisions forbade almost all meals outside the hospital or physician office setting. The prohibition on meals was one of the most criticized aspects of the law – with restaurants complaining about loss of business and physicians protesting that they had lost a useful means of obtaining valuable information about drugs and devices. Now, pharmaceutical and medical device companies are permitted to provide “modest” meals and refreshments, so long as the meals are provided along with non-CME presentations intended to educate and inform healthcare practitioners about “benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information...” The Department of Public Health is now charged with defining what is “modest,” and may, but is not required to, provide additional information about those settings which are considered “conducive to informational communication.”

Companies wishing to take advantage of this change should be aware that additional reporting obligations accompany the decision to offer meals and refreshments. Specifically, companies that provide meals outside the hospital and physician office setting must file quarterly reports listing all of the non-CME educational presentations where meals were provided, including the drug/device discussed, the location, the total cost of the event and an estimate of the per-participant cost.

Medical Device Training Expenses May Now Be Covered Absent a Purchase Agreement

The second major change relates to payments made to healthcare providers in connection with medical device training and demonstrations. The Gift Ban Law previously permitted payment of a healthcare provider’s “reasonable expenses” deemed to be necessary for technical training on the use of a medical device—but only if there was a “purchase contract for the device” in place. The requirement that the expenses be memorialized in the purchase contract—or that there even be a purchase agreement in place at the time the training is provided—has now been eliminated.

Double Reporting for Physicians Will Be Eliminated Once the Sunshine Act Becomes Effective

Finally, the amendments to the Gift Ban Law provide relief from the specter of doublereporting under both the federal Physician Payment Sunshine Act and the Gift Ban Law. Pharmaceutical and medical device manufacturing companies will not be required to disclose information to the state if the same information has been disclosed to the US Department of Health and Human Services under the Physician Payment Sunshine Act. Keep in mind, however, that Massachusetts requires reporting for any healthcare provider with prescribing authority, not just physicians.

Pharmaceutical and medical device companies should continue to watch for additional guidance about their reporting obligations as the federal government continues to refine the scope and type of disclosures it will require under the Physician Payment Sunshine Act, set to take effect in January 2013. We expect to see additional guidance from Massachusetts about the types of disclosures it will continue to require under the Gift Ban Law once reporting under the Sunshine Act begins.