Pharmaspective

Minnesota Legislature Proposes to Repeal the Annual Disclosure Requirement for Wholesale Drug Distributors and Manufacturers

By Jenna Gervasio

Minnesota law [Minn. Stat. § 151.47(f)] currently requires wholesale drug distributors and manufacturers to report annually to the Minnesota Board of Pharmacy (Board) all "payments, honoraria, reimbursement or other compensation" permitted under the gift prohibition statute and provided to practitioners during the previous calendar year.  On March 5, 2013, the Minnesota Senate introduced Senate Bill 1081 (SB 1081), which would repeal this section of the law.

 

The introduction of SB 1081 comes almost two months after the Board indicated in a letter that it will not require wholesale drug distributors and manufacturers to submit annual disclosure reports for the 2012 calendar year. The Board’s letter noted that the Sunshine Act provisions of the federal Patient Protection and Affordable Care Act (Sunshine Act) preempts state laws that require manufacturers to report the same information required by the federal law. Since the Board requires wholesale drug distributors and manufacturers to report most of the information required by the Sunshine Act, the Board indicated that it will not require these entities to report data for the 2012 calendar year. In this letter, the Board also noted that it intended to ask the Minnesota Legislature to repeal section 151.47(f) of the law.

 

SB 1081 would not repeal the gift ban [Minn. Stat. § 151.461], which prohibits wholesale drug distributors and manufacturers from offering or giving any gift to a practitioner in excess of $50 per calendar year.

 

On Friday, February 1, 2013, the Centers for Medicare & Medicaid Services (CMS) announced the much anticipated release of the final regulations implementing the Sunshine Act. The Sunshine Act requires applicable manufacturers of covered drugs, devices, biological products, and medical supplies to report annually certain information regarding payments and other transfers of value to physicians and teaching hospitals. An additional provision requires applicable manufacturers and group purchasing organizations (GPOs) to report all ownership and investment interests held by physicians or members of their families. As set forth in the final regulations, applicable manufacturers and GPOs must begin data collection on August 1, 2013, and must file their first reports on March 31, 2014.

 

The Minnesota Board of Pharmacy Will Not Require the Submission of Annual Disclosure Reports for the 2012 Calendar Year

By Danielle Burke

 

Minnesota law [Minn. Stat. § 151.47(f)] requires wholesale drug distributors and manufacturers to report annually to the Minnesota Board of Pharmacy (Board) all "payments, honoraria, reimbursement or other compensation" permitted under the gift prohibition statute and provided to practitioners during the previous calendar year. The annual disclosure report is due by May 1st of each year for expenditures incurred during the preceding calendar year.

 

On January 8, 2013, the Board indicated in a letter that it will not require wholesale drug distributors and manufacturers to submit annual disclosure reports for the 2012 calendar year. The Board’s letter notes that the Sunshine Act provisions of the federal Patient Protection and Affordable Care Act (Sunshine Act) preempts state laws that require manufacturers to report the same information required by the federal law. Since the Board requires wholesale drug distributors and manufacturers to report most of the information required by the Sunshine Act, the Board will not require these entities to report data for the 2012 calendar year.

 

Additionally, the Board indicated that it will ask the Minnesota Legislature to repeal § 151.47 of the law. The Board will not ask the Legislature, however, to repeal the gift ban, which prohibits wholesale drug distributors and manufacturers from offering or giving any gift to a practitioner in excess of $50 per calendar year.

 

The federal Office of Management and Budget (OMB) has received final regulations from the Centers for Medicare and Medicaid Services (CMS), which would implement the Sunshine Act. CMS previously missed the October 1, 2011, deadline to establish regulations implementing the Sunshine Act. The Sunshine Act requires drug, device, biological product, and medical supply manufacturers to report annually certain information regarding payments and other transfers of value to physicians and teaching hospitals. An additional provision requires manufacturers and group purchasing organizations (GPOs) to report all ownership or investment interests held by physicians or members of their family. Although the Sunshine Act requires manufacturers and GPOs to begin collecting data starting January 1, 2012, CMS has previously indicated that it will not require data collection by applicable manufacturers and applicable GPOs before January 1, 2013.

 

 

Update: Massachusetts Bureau of Health Care Safety and Quality Requests Approval of Final Regulations to Implement Changes to the Pharmaceutical and Medical Device Manufacturer Conduct Law

On September 19, 2012, the Massachusetts Department of Public Health (Department) posted emergency regulations to immediately implement recent changes to Massachusetts’ Pharmaceutical and Medical Device Manufacturer Conduct Law [Mass. Gen. Laws Ch. 111N] (Law). The Law requires the Department to “adopt a standard marketing code of conduct for all pharmaceutical or medical device manufacturing companies that employ a person to sell or market prescription drugs or medical devices in the commonwealth.” Recent changes to the law permits pharmaceutical and medical device manufacturers to provide “modest meals and refreshments in connection with non-CME educational presentations for the purpose of educating and informing health care practitioners about the benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information.” The presentation must occur “in a venue and manner conducive to informational communication.” Additionally, pharmaceutical and medical device manufacturing companies who provide these meals must file quarterly reports detailing all non-CME educational presentations in which they provide such meals or refreshments. The emergency regulations are set to expire on December 19, 2012.

 

On November 21, 2012, the Massachusetts Bureau of Health Care Safety and Quality submitted a request to the Public Health Council to approve final regulations to implement recent changes to the Law. The final regulations permit pharmaceutical or medical device manufacturing companies to provide or pay for modest meals in the health care practitioner’s office or hospital setting in connection with informational or educational meetings or presentations. Companies may also provide or pay for modest meals outside of the health care practitioner’s office or hospital setting, provided that the meal is “for the purpose of educating and informing health care practitioners about the benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information.” Please note that the regulations state that “appropriate uses” may not include the promotion of off-label uses of prescription drugs or medical devices.

 

The final regulations define “modest meals and refreshments” as “food and/or drinks provided by or paid for by a pharmaceutical or medical device manufacturing company or agent to a health care practitioner that, as judged by local standards, are similar to what a health care practitioner might purchase when dining at his or her own expense.”

 

In addition, echoing the amended law, the final regulations also require that the quarterly reports include:

 

• The location of the non-CME presentation;
• A description of any pharmaceutical products, medical devices, or other products discussed;
• The total amount spent on the presentation;
• The estimated cost per participant, including meals, refreshments, and other items of economic value provided; and
• Any other information as determined necessary by the Commissioner.

 

Further, the final regulations clarify that companies will need to register annually and submit a $2,000 annual registration fee .

 

Although the final regulations require companies to continue submitting annual disclosure reports to the Department, companies are not required to disclose information that has been disclosed to a federal agency pursuant to federal law. 

Massachusetts Department of Public Health Issues Emergency Regulations to Implement Recent Changes to the Pharmaceutical and Medical Device Manufacturer Conduct Law

On July 1, 2012, portions of Massachusetts House Bill 4200 (HB 4200) became effective. HB 4200 amended Massachusetts’ Pharmaceutical and Medical Device Manufacturer Conduct Law (Law), which requires the Department of Public Health to “adopt a standard marketing code of conduct for all pharmaceutical or medical device manufacturing companies that employ a person to sell or market prescription drugs or medical devices in the commonwealth.”

HB 4200 amended the Law to allow pharmaceutical and medical device manufacturers to provide “modest meals and refreshments in connection with non-CME educational presentations for the purpose of educating and informing health care practitioners about the benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information.” The presentation must occur “in a venue and manner conducive to informational communication.” Additionally, pharmaceutical and medical device manufacturing companies who provide these meals must file quarterly reports detailing all non-CME educational presentations in which they provide such meals or refreshments.

On September 19, 2012, the Massachusetts Department of Public Health (Department) posted emergency regulations to implement the changes in HB 4200. The regulations state that a pharmaceutical or medical device manufacturing company may provide or pay for modest meals that are in the health care practitioner’s office or hospital setting in connection with informational or educational meetings or presentations. Companies may also provide or pay for modest meals outside of the health care practitioner’s office or hospital setting, provided that the meal is “for the purpose of educating and informing health care practitioners about the benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information.” Please note that the regulations state that “appropriate uses” may not include the promotion of off-label uses of prescription drugs or medical devices.

The regulations define “modest meals and refreshments” as “food and/or drinks provided by or paid for by a pharmaceutical or medical device manufacturing company or agent to a health care practitioner that, as judged by local standards, are similar to what a health care practitioner might purchase when dining at his or her own expense.”

In addition, echoing the amended law, the emergency regulations also state that the quarterly reports must include:

•    The location of the non-CME presentation;
•    A description of any pharmaceutical products, medical devices, or other products discussed;
•    The total amount spent on the presentation; and
•    The estimated cost per participant, including meals, refreshments, and other items of economic value provided.

Further, the regulations explain that companies will no longer be required to submit annual disclosure reports after the 2013 submission for sales and marketing activities occurring in 2012. In addition, the annual disclosure report fee of $2,000 will not be required after July 1, 2012.

The emergency regulations are effective September 19, 2012. There will be a public hearing held on October 19, 2012, to discuss the regulations.

Amnesty! Courtesy of the Vermont Attorney General's Office!

Pursuant to Vermont's Prescribed Products Gift Ban and Disclosure Law (Law), manufacturers of prescription drugs, biological products and medical devices are required to disclose annually to the Attorney General’s Office (AG's Office) the value, nature, purpose, and recipient of any allowable expenditure or permitted gift. On September 6, 2012, the AG’s Office sent a memorandum to manufacturers of medical devices and biologics offering limited amnesty to those “whose obligation to comply with the [Law] began on or after July 1, 2009 but who failed to report their activities in any of the following reporting periods: FY10 (7/1/09-6/30/10), FY11 (7/1/10-6/30/11), or 2011 (7/1/11-12/31/11).” Notably, this offer is limited to amnesty from the “financial penalties the [AG’s Office] is authorized to seek under the Law for failure to report, and does not apply to back-payment of registration fees or penalties for other violations of the law, such as gift ban violations.”

In order to take advantage of this offer of limited amnesty, manufacturers of  medical devices or biologics must email prescribedproducts@atg.state.vt.us on or before October 1, 2012, with the following information:

•    The manufacturer’s name;
•    The reporting period(s) for which the manufacturer failed to report; and
•    The name, physical address, email address and phone number of the person with whom the AG’s Office should communicate with about the unreported activity.

The AG’s Office has indicated that it “does not anticipate seeking full disclosure for unreported activity[.]” The AG’s Office does, however, “anticipate requiring disclosure – at a later date –  of some aggregate information related to the activity.” Also note that the AG’s Office may seek to execute an Assurance of Discontinues “to secure a manufacturer’s future compliance with the law notwithstanding that manufacturer’s acceptance of the offer of limited amnesty.”

Proposed Legislation in Massachusetts Allowing Pharmaceutical and Medical Device Manufacturers to Provide Modest Meals to Practitioners Has Been Sent to the Governor (Updated)

Last week, the Massachusetts Senate and House of Representatives both passed House Bill 4200. Currently, Massachusetts’s Pharmaceutical and Medical Device Manufacturer Conduct Law, requires the Department of Public Health to “adopt a standard marketing code of conduct for all pharmaceutical or medical device manufacturing companies that employ a person to sell or market prescription drugs or medical devices in the commonwealth.”  This section of the law also specifies certain activities that the adopted marketing code of conduct shall not allow, including the provision of certain meals to health care practitioners and direct payment for meals at a CME event, scientific or educational conference, or professional meeting.  

 

HB 4200 would amend this section of the Law, and allow the adopted marketing code of conduct to permit pharmaceutical and medical device manufacturers to provide “modest meals and refreshments in connection with non-CME educational presentations for the purpose of educating and informing health care practitioners about the benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information.”  The presentation must occur “in a venue and manner conducive to informational communication.”  Additionally, pharmaceutical and medical device manufacturers who provide these meals must file quarterly reports detailing all non-CME educational presentations in which they provide such meals or refreshments.

 

HB 4200 has been sent to the Governor of Massachusetts for consideration.

Update: On July 8, 2012, the Governor of Massachusetts signed HB 4200. According to HB 4200, the amendments to the portion of the law discussed in this post became efffective on July 1, 2012.

 

Vouchers and Discounts and Rebates…Oh My!

Massachusetts has finally done it! On July 8, 2012, the Governor of Massachusetts signed House Bill 4200, which amends Section 3 of Chapter 175H of the Commonwealth's General Laws. This section of the law generally prohibits any person from soliciting, receiving, or offering any remuneration when a payment is or may be made in whole or in part by a health care insurer. This general prohibition prevented the distribution discounts, rebates, and vouchers in Massachusetts.

HB 4200 amends this section of the law and exempts from the general prohibition “any discount, rebate, product voucher or other reduction in an individual’s out-of-pocket expenses, including co-payments and deductibles, on: (i) any biological product… or (ii) any prescription drug provided by a pharmaceutical manufacturing company…that is made available to an individual if the discount, rebate, product voucher or other reduction is provided directly or electronically to the individual or through a point of sale or mail-in rebate, or through similar means.” Pharmaceutical manufacturing companies may not, however, exclude or favor any pharmacy in the redemption of discounts, rebates, vouchers, or other expense reduction offers to consumers.

HB 4200 prohibits a pharmaceutical manufacturing company from providing "any discount, rebate, product voucher or other reduction in an individual's out-of-pocket expenses, including copayments and deductibles, for any prescription drug that has an AB rated generic drug equivalent as determined by the United States Food and Drug Administration.”

The amendments to section 3 of Chapter 175H are effective as of July 1, 2012.

Vermont Attorney General’s Office Releases the “Prescribed Product Disclosures: Report of Vermont Attorney General William H. Sorrell for Fiscal Year 2011”

Vermont’s Prescribed Product Disclosure Law requires manufacturers of prescribed products to annually disclose to the Vermont Attorney General’s Office the value, nature, purpose, and recipient of any allowable expenditure or permitted gift by October 1, 2011. This law also requires Vermont’s Attorney General to annually report on the disclosures. In accordance with this requirement, Vermont’s  AG’s Office recently released the “Prescribed Product Disclosures: Report of Vermont Attorney General William H. Sorrell for Fiscal Year 2011.” The Report includes payments or expenditures made to health care providers during Fiscal Year 2011 (July 1, 2010 - June 30, 2011) that relate to prescription drugs, biological products and medical devices. According to the Report, 154 pharmaceutical, biologic, and medical device manufacturers reported spending approximately $5.6 million in Vermont in allowable expenditures or permitted gifts in Fiscal Year 2011.

To view a full copy of the Report, CLICK HERE.

 

Stealth Drugs; The Necessity of Drug Distribution Permits for Devices.

 
It is generally known that a prescription drug manufacturer must obtain state licenses in order to legally distribute product.  The number of licenses required varies depending upon the method of distribution - a facility that physically ships product requires licenses in more jurisdictions than a manufacturer that uses a third-party logistics provider (“3PL”) to ship its products.  But what about devices?  What device companies are beginning to realize is that they too have licensing requirements in numerous states.  The state statutes and regulations do not, however, always make this clear and several jurisdictions have stealth requirements for device manufacturers that can elude even a well trained eye. 

Kentucky is one such stealth device jurisdiction.  A cursory reading of the Kentucky statute would give device manufacturers reason for celebration – “A wholesale distributor shall be licensed by the board under this section prior to engaging in the wholesale distribution of prescription drugs in the Commonwealth.”  Clearly the device company can skip over Kentucky and move on to the next state.  Or can it?  Let’s turn next to the definition of “wholesale distributor.”  Surely this will provide some additional assurances.  Kentucky defines a wholesale distributor as “an entity engaged in the wholesale distribution of prescription drugs.”  “Even better” you might think.  Surely the term “prescription drug” is clear and unambiguous.  Everyone knows that a device is not a drug.

Let’s check and see where that leads us.  The definition of drug includes “Articles, other than food, intended to affect the structure or function of the body of man or other animals.”  Looking further, we do not see the familiar language that it excludes devices.  The breadth of this definition might raise some concern for a device company.  But wait, the wholesaler licensing requirements specifically pertain to prescription drugs.  Under Kentucky law a “prescription drug” is any “drug” required by federal law to be labeled “Caution, federal law prohibits dispensing without a prescription.”  It also includes any “drug” required to be labeled “Rx Only” or “Rx” or which is “to be dispensed only pursuant to a prescription drug order or is restricted to use by practitioners.”

Looking back at a prescription device, it is an “article intended to affect the structure or function of the body of man” and it is labeled either Rx Only or is restricted to dispensing pursuant to prescription to use by a practitioner, right?  The Kentucky Board of Pharmacy has, in fact, interpreted the above provisions in determining that a device manufacturer or distributor does require a license notwithstanding the fact that the word “device” is not used in any of the applicable statutes or regulations that support that determination. 

Other states have similar requirements.  A device manufacturer  or distributor that ships its own product requires just under 20 state licenses whereas a device manufacturer that utilizes a 3PL requires just under 15 state licenses.  As prosecutors and regulators turn their attention to the device industry, state licensing is just one of many areas that device companies may need to address.

Kansas Prescription Monitoring Program: What do Wholesalers Have to do With It?

By:  Elizabeth H. Kim and Frank Fazio

Wholesale distributors shipping drugs into Kansas may have recently received a letter from the Kansas Board of Pharmacy ("Board") requesting monthly shipment lists of prescription drugs sold or distributed into the state. Why?  Well, the letter notes that the request is part of the newly launched Kansas Prescription Monitoring Program ("PMP").

 The PMP is a state-wide initiative that tracks prescriptions for controlled substances and “drugs of concern” in the state as a means of combating drug diversion and abuse.  The implementing regulations, which appear at Kan. Admin. Regs. 68-21-1 to -7 (2011), define “drugs of concern” as products containing a combination of butalbital, acetaminophen, and caffeine; as well as carisoprodol; and tramadol.  Controlled substances include schedules II, III, or IV substances as delineated in the Federal Controlled Substances Act. This information, to be provided by dispensing practitioners and pharmacies, will be synthesized and uploaded into the Kansas Tracking and Reporting of Controlled Substances ("K-TRACS") centralized electronic database.

 Kansas joins about 35 other states, such as California and Pennsylvania, that currently have PMPs. Thirteen states and the District of Columbia have enacted legislation to establish a PMP, but the programs are not fully operational.

 The purpose of the PMP, as proudly displayed on the Board’s website, is to “provide useful feedback to prescribers on their own prescribing trends as well as their patients’ controlled substance histories. PMPs also provide useful information to prescribers when they suspect that a patient may be non-compliant in their controlled substance use.” 

 While the purpose and reasoning behind the PMP appear beneficial, if not admirable, the question remains:  What do wholesalers have to do with it?

 According to the Kansas statutes and regulations, nothing. According to the Board, however, a lot.

 A little investigative work into this issue has revealed that the monthly shipment information from wholesale distributors is intended to help the Board identify those practitioners in the state who are dispensing to patients. In other words, rather than notifying all the licensed practitioners in Kansas of this new requirement, and therefore placing the onus on the practitioner to self-identify as a dispenser, the Board has taken the liberty of requesting this information from wholesale distributors. Although the board is requesting this information from wholesalers, the Kansas Legislature expressly exempted licensed wholesalers from PMP reporting obligations.

 Does this strategy make sense?  Only time will tell. 

 As of now, it appears that the Board is committed to amassing this information from wholesalers.  And as a representative from the Board compellingly expressed, while the enforcement policies have yet to be ironed out, the Board expects full compliance from wholesalers (particularly in light of the fact that it is the entity that issues wholesalers’ licenses).

 So, while wholesalers have nothing to do, officially, with Kansas’ PMP, unofficially, they are expected to provide information that will serve as the foundation of the PMP. Go figure.