Massachusetts has now joined California and Nevada in imposing marketing compliance obligations on drug and device companies marketing products in the state. On Sunday, August 10th, Massachusetts Governor Deval Patrick signed into law Senate Bill 2863, which requires the Massachusetts Department of Public Health (DPH or Department) to establish a pharmaceutical and medical device marketing code of conduct, and imposes compliance and reporting requirements on pharmaceutical and medical device companies that employ a person to sell or market prescription drugs or medical devices in Massachusetts. The law will become effective on January 1, 2009. It does not apply to wholesale drug distributors or retail pharmacies.
The law requires the DPH to establish a marketing code of conduct that is no less restrictive than the most recent versions of the Codes on Interactions with Healthcare Professionals issued by the Pharmaceutical Research and Manufacturers of America (the PhRMA Code) and the Advanced Medical Technology Association (the AdvaMed Code). As we reported in June, the PhRMA Code was recently revised to add more stringent restrictions on meals, gifts, and other drug marketing activities.
Under the statute, the DPH marketing code must contain specific prohibitions, some of which are more restrictive than the revised PhRMA Code. For instance, the DPH marketing code may not allow a pharmaceutical or device manufacturing company to provide meals that are part of a recreational event, offered without an informational presentation, consumed outside of the office, or for a practitioner’s spouse or other guest. The PhRMA Code, in contrast, permits a drug company to provide meals outside the professional’s office if they are not provided by field representatives or their immediate managers. The DPH code must also prohibit the sponsorship of independent medical education programs that do not meet the Accreditation Council for Continuing Medical Education (ACCME) Standards for Commercial Support, whereas the PhRMA Code permits support for non-ACCME accredited third-party programs. The DPH code must, like the PhRMA Code, prohibit the provision of entertainment or recreation. In addition, the Code must prohibit all payments to healthcare practitioners, except as compensation for bona fide services. This latter provision is drafted broadly enough to prohibit rebates and other price reductions offered after a purchase. Hopefully, the DPH will clarify that price reductions are not affected by the code.
The law also spells out certain activities that must be permitted under the marketing code. The code must allow companies to distribute peer reviewed scientific information; purchase advertising in peer reviewed scientific journals; provide pharmaceuticals exclusively for use by the practitioner’s patients; compensate a practitioner for consulting services in connection wth genuine research or a clinical trial; and pay reasonable expenses in connection with medical device training if those expenses are part of the purchase contract.
The law does not impose a deadline for the development of the marketing code, but once it is established, the DPH must update it at least every two years.
Under the new law, drug and device companies that employ a person to sell or market a prescription drug or medical device in Massachusetts must adopt and comply with the DPH’s most recent marketing code of conduct; adopt a training program for compliance with the code; conduct annual audits to monitor compliance with the code; and adopt policies and procedures for investigating noncompliance with the code. In addition, these companies must take corrective action in response to noncompliance with the code, and report any noncompliance to state authorities.
The law also requires covered drug and device companies to provide two annual reports to the Department. The first report will include a description of the company’s training program, a description of the investigation policies, information on the compliance officer, and a certification that the company has conducted its annual audit and is in compliance with the DPH marketing code. The annual deadline for this report is not specified.
Second, by July 1 every year, a covered drug or device company must also report the “value, nature, purpose and particular recipient” of any payment, fee, or economic benefit of at least $50 it provided to a physician, hospital, nursing home, pharmacist, or other specified healthcare practitioner. The Department will then make such information available on its website. Notably, unlike the reporting laws of other states, there are no exceptions to this reporting obligation for bona fide service fees, investigator payments, or any other payments.
The law, which will be enforced by the Attorney General, provides for a fine of up to $5,000 for each transaction, occurrence, or event that violates this law.