The California Senate has passed a bill restricting the ability of pharmaceutical companies to provide gifts and financial incentives to physicians and other healthcare professionals. Having passed the Senate by a vote of 23-13, the bill is now with the state Assembly.
State Senator Mike McGuire, who sponsored the measure, was quoted in a KRCR-TV news report as saying that California physicians received the highest numbers of gifts and payments from pharmaceutical companies compared with doctors in other states, although he didn’t specify whether that was on a per capita basis.
“SB 790 [the bill restricting gifts to doctors] will curb financial payments, gifts and incentives to medical professionals and help drive down the skyrocketing costs of prescription drugs for millions in California,” McGuire told the station.
His legislation would prevent a drug company from providing payments, food, entertainment, travel, subscriptions, or anything else of value to doctors, unless it is a specified allowable expenditure or the healthcare provider reimburses the cost at fair market value.
The California bill — which, if passed, would be similar to laws that have been passed in Vermont and Minnesota ― stipulates a long list of exceptions that define the limits on drug companies’ permissible gifts to doctors.
For example, pharmaceutical firms can pay for meals for doctors as long as the costs are below $250 per year per doctor. The companies are also allowed to give doctors promotional samples and to donate medications to free clinics.
Drug manufacturers are allowed to sponsor educational, medical, scientific, or policy making conferences or seminars, with the following provisos:
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The payment is not made directly to a healthcare professional or a pharmacist.
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Funding is used solely for educational purposes, except for food.
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All program content is objective and does not promote specific products.
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Honoraria and expense payments are made for services related to medical issues, not marketing activities.
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The content of the presentation is determined by the healthcare professional.
Drug company payments to clinical trial investigators and other researchers must be restricted to direct salaries and expenses. But pharmaceutical firms can pay healthcare providers for the right to use discoveries on which the latter hold patents.
The federal Physician Payments Sunshine Act requires manufacturers of specified drugs, devices, biological substances, or medical supplies to disclose to the Centers for Medicare & Medicaid Services payments or other transfers of value made to physicians or teaching hospitals. That list would evidently provide the basis on which the state would determine whether the new law was being violated. The penalty for violations would range up to $10,000 per incident and would be levied on manufacturers, not physicians.
A Chilling Effect?
It is unclear whether the California bill would have much effect on relationships between healthcare providers and the pharmaceutical industry, or whether it might have a chilling effect, said Lisa Rosenbaum, MD, a cardiologist at Brigham and Women’s Hospital in Boston and a national correspondent for the New England Journal of Medicine (NEJM), in an interview with Medscape Medical News.
Dr Rosenbaum, who recently wrote a series of articles about those relationships for the NEJM but was speaking only for herself, said there is no doubt that drug company largesse does have an effect on physician prescribing behavior. “Pharmaceutical companies wouldn’t do the marketing if it didn’t work,” she noted.
On the other hand, she said, there is no evidence that the actions the bill requires would curb the rapid growth in drug costs. It’s also unclear, she observed, that all pharmaceutical marketing has negative implications for patient care; in some cases, she said, “you can argue that it’s good for doctors to know about good drugs, and it’s beneficial to patients.”
Would the California bill’s restrictions on drug company sponsorship of CME lead to better education and prevent educational materials from being used to promote sponsors’ products? Again, she said, there’s no way to predict that. Moreover, she added, it is difficult to see how the state could ensure that pharmaceutical sponsors were not influencing educational presentations in favor of their drugs.
In Dr Rosenbaum’s NEJM series, she pointed out that grants to principal investigators may not create a conflict of interest if they go to the researchers’ institutions to help cover their overhead. But this aspect of clinical trial sponsorship was not mentioned in the legislation.
Overall, she said, it is hard to figure out whether the bill is a “gesture” to show that lawmakers are trying to rein in medication costs or whether it will undermine industry-academic cooperation in drug development. If the latter turns out to be true, she said, that would be “tragic,” considering the amount of biotechnology research that is being done in California.
Dr Rosenbaum has disclosed no relevant financial interests.
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