Why Support the Pharmaceutical Drug and Medical Device Provisions in S.2863

Late Thursday night the Legislature enacted S. 2863, a comprehensive strategy to contain the growth in health care costs and improve access to quality care. The legislation now awaits the Governor’s signature. Since Senate President Murray introduced the bill in March, the most debated component of the bill has been the section related to pharmaceutical and medical device company gifts to health care providers. The final language enacted is a good compromise and a great first step for the Commonwealth. It requires the Department of Public Health to implement (and enforce jointly with the Attorney General) a statewide code of conduct on gifts based on industry trade group internal codes of conduct (the PhRMA Code and AdvaMed Code). While it allows companies to continue to provide gifts and payments that do not violate the standards to be adopted by DPH (such as compensation for research), it requires companies to disclose those payments to DPH and the public.

Since its passage, we have heard a number of misstatements and untruths about the provision on pharmaceutical gifts to providers. Below we attempt to clarify:

First, the new law does impose restrictions on industry gifts to health care providers but does not create new rules to follow. It requires the Dept. of Public Health to establish regulations that take, as their foundation, the industry’s own codes of conduct. We have relied on companies to voluntarily adopt and enforce these codes for years and, during that time, gift giving has only increased. However, companies should have no problem following rules they have set themselves.

Second, pharmaceutical industry threats that companies will leave the state if this bill is signed into law don’t hold water. These rules apply to all companies that sell their products in Massachusetts and no company is going to stop selling its products here (nearly $4.5 billion was spent on prescription drugs in 2006 alone). In fact, GlaxoSmithKline, which wrote letters threatening to leave the state months ago, has since rescinded that threat.

Third, the new law does not prevent or inhibit research. Drug and device companies will continue to be allowed to compensate doctors for research, as long as that compensation is reasonable and disclosed to the state (as several other states require). Massachusetts has one of the largest, most dynamic research clusters in the world. It is underpinned by some $2.2 billion in annual NIH funding. That isn’t going away, and Massachusetts will remain a research nucleus.

Fourth, the new requirements that companies disclose their financial relationships with health care providers do not limit anyone’s ability to do business. We have a transparency law because the public has a right to know if the doctors who treat them are getting money from the companies whose drugs they prescribe. That’s why half a dozen states have now passed one kind of disclosure law or another. The industry itself supports federal disclosure legislation. Because companies already track this information and disclose it in other states, such a provision imposes few new costs.

The wealth of research shows that gifts inherently influence prescribing decisions, threatening affordability and patient safety. Consumers deserve the peace of mind of knowing that we’re being prescribed a drug because it’s the right drug for us, not because a doctor has a relationship with the pharmaceutical company. And, the Commonwealth has a right to expect these companies (which, by the way, the state has just invested $1 billion of taxpayer money in) adhere to ethical standards in conducting business and cease practices that threaten patient care and to bankrupt our health care system.

The MPRC applauds the tireless efforts of Senate President Murray and Speaker DiMasi in realizing that costs must be controlled. We encourage Governor Patrick to do the same.