The Department of Public Health has released the final version of the regulations constituting “The Pharmaceutical and Medical Device Manufacturer Code of Conduct,” also known as the “Marketing Code of Conduct” (105 CMR 970.000). These new regulations directly address how pharmaceutical and medical device companies may market their prescription drugs, biologics or medical devices in Massachusetts. Most notably, the regulations prohibit various payments and gifts to individuals who dispense or prescribe prescription drugs or medical devices (e.g., healthcare practitioners, hospitals, nursing homes, pharmacists and health benefit plan administrators — collectively referred to as healthcare practitioners).
Of equal importance, however, is that the regulations require that covered companies disclose certain payments to healthcare practitioners. Although not required by the regulations to take action directly, it is important for healthcare practitioners to understand that most payments they receive from covered companies are likely to be publicly disclosed. The regulations are effective as of July 1, 2009, so all payments made after this date are subject to the disclosure rules.
Activities Prohibited Under The Regulations
Covered companies are strictly prohibited under the regulations from making payments of any kind (cash, cash equivalents, equity, “in kind” or tangible items) to Massachusetts healthcare practitioners, subject to some exceptions described below. The regulations make it clear that the following may not be provided:
- “Complimentary” gifts, such as pens, coffee mugs or gifts cards;
- Entertainment items, such as tickets to sporting events;
- Meals (with a few narrow exceptions); and
- Travel, lodging or other personal expenses of non-faculty healthcare practitioners in connection with conferences or professional meetings, including Continuing Medical Education.
Exceptions To The Prohibitions
The regulations do contain explicit exceptions to these prohibitions, including:
- compensation to healthcare practitioners for “bona fide services”;
- providing prescription drugs (i.e., samples) to healthcare practitioners for patient use;
- making certain donations to charities;
- providing reasonable quantities of medical device demonstration and evaluation units to healthcare practitioners to assess the appropriate use and functionality of the product and determine whether or not and when to use or recommend the product in the future; and
- making payments or free outpatient prescription drugs for the benefit of low income individuals through established “patient assistance programs.”
Beginning July 1, 2010, covered companies will be required to file an annual report with DPH on or before July 1st of each year, disclosing any payment or other economic benefit of $50 or more (on an individual transactional basis and not in the aggregate) provided by a covered company to a healthcare practitioner, except for the following purposes:
- For clinical trials and genuine research;
- The provision of prescription drugs to a healthcare practitioner solely and exclusively for use by patients;
- The provision of demonstration or evaluation units;
- The provision of in-kind items used for the provision of charity care; or
- The provision of price concessions in the normal course of business.
Disclosures must include the value, nature, purpose and particular recipient of the payment. Because even permitted payments will come under public scrutiny (if they are valued at $50 or more), healthcare practitioners must seriously consider whether they are willing to accept such payments after July 1, 2009.
Healthcare practitioners may find themselves in a position to report violations of these prohibitions to the DPH. In order to protect individuals who might wish to report such violations, covered companies are prohibited from discharging, refusing to hire, refusing to serve, or in any manner retaliating against persons who have taken action in furtherance of the enforcement of the regulations. A person who knowingly and willfully violates the regulations, including a covered company that takes retaliatory action against a healthcare practitioner as described above, will be punished by a fine of up to $5,000 per transaction, occurrence or event.