State Physician Payment Disclosure TrendsIs Your Company In Compliance or Is It Exposed to Potential Related Government

Investigations?

Susan Antonelli Morris, Esq.Manager, Compliance Program

CSL Behring, LLC

Pat Meehan, Esq.Patricia Hamill, Esq.Judson Aaron, Esq.Bob Rauker, Esq.Conrad O’Brien PC

© Copyright 2010Conrad O’Brien PC

04/10/23 1

States with some form of potential Physician Payment Disclosure Laws

Massachusetts• 105 CMR §970.000 Vermont• Act 59, Vt. Stat. tit. 18,

Chapter 91 (§4601-4634)California• CAL. HSC. CODE §119400-

119402 Maine• Maine Rev. Stat. Title 22

Chapter 603 §2698-A

Minnesota• Minn. Stat. §151.461Nevada• NRS 639.570W. Virginia• W. Va. Code §5A-3C-13District of Columbia• D.C. Code § 48-833• Chapter 83, Title 17 D.C. Mun.

Reg.New Jersey

• (outgoing AG recommendation)04/10/23 2

State ComparisonState State

Code of Conduct

ComplianceProgram

Requirement

DisclosureRequirement

DisclosurePublic?

Payments Restricted?

Medical DeviceIncl?

PhysicianDisclosure

W. Virginia X

California X PhRMA and self limits

Maine XNevada X X

D.C. X X

Vermont X

Minnesota X X X

Massachusetts X X X X X X

New Jersey(rec)

X X X X

04/10/233

State Comparison Comments

West Virginia: • Pharma only required to disclose aggregate expenses associated with direct

promotion and advertising of prescriptions to residents of W. VA. • Information is confidential.• No code of conduct, no medical device obligations, no physician disclosure• Enforcement – no license to sell or distribute

California:• Requires a comprehensive compliance program which includes PhRMA “Code on

interactions with Health Care Professional” (no medical device)• Must have limits on gifts or incentives provided to medical or health professionals

including annual dollar limit on gifts, promotional materials and other items.• Exceptions include free samples intended for free distribution, financial support

for CME, health educational scholarships and consulting fees at FMV for legitimate services

• Enforcement – no license to sell or distribute, misdemeanor possibly

04/10/23 4

State Comparison Comments

Maine: • Pharma only required to disclose aggregate expenses associated with direct

promotion and advertising of prescriptions to residents of Maine. • All expenses associated with educational or informational programs• All expenses associated with food, entertainment, gifts valued greater than

$25, and anything provided to health care professional for less than market value

• All expenses associated with trips and travel• All expenses associated with product samples, except those distributed by H C

workers free of charge• No code of conduct, no medical device obligations, no physician disclosure• Exclusions include reasonable compensation for clinical trial and expenses

associated with scholarship, educational , scientific and policy-making conference.• $1,000 plus costs and attorney’s fees. Civil violation• 22 M.R.S.A. §47 has criminal provisions (up to 6 months and $10K fine)04/10/23 5

State Comparison Comments

Nevada:• Requires a device and drug company to adopt a marketing code of

conduct that incorporates the principles of the “Code on Interactions with Health Care Professional” set forth by PhRMA or AdvaMed.

• Must adopt training program to provide regular training• Conduct annual audits and have investigation policies and procedures• Identify a compliance officer• Enforcement – No license to sell or distribute

04/10/23 6

State Comparison Comments

District of Columbia: • Pharma only required to disclose aggregate expenses associated with direct promotion and

advertising of prescriptions to residents of DC. • All expenses associated with educational or informational programs• All expenses associated with food, entertainment, gifts valued greater than $25, and anything

provided to health care professional for less than market value• All expenses associated with trips and travel• All expenses associated with product samples, except those distributed by H C workers free of

charge• DC Safe Rx law requiring training, code of conduct and education background• Not included:

• reasonable compensation for clinical trial and expenses associated with scholarship, educational, scientific and policy-making conference.

• No medical device obligations, no physician disclosure• Confidential• $1,000 plus costs and attorney’s fees. Civil violation.

04/10/23 7

State Comparison Comments

Vermont:No gifts except:

Samples that are distributed for free to patients. The loan of a medical device for a short-term trial period, not to exceed 90 days, to

permit evaluation of a medical device by a health care provider or patient. The provision of reasonable quantities of medical device demonstration or evaluation

units to a health care provider to assess the appropriate use and function of the product and determine whether and when to use or recommend the product in the future.

The provision, distribution, dissemination, or receipt of peer-reviewed academic, scientific, or clinical articles or journals and other items that serve a genuine educational function provided to a health care provider for the benefit of patients.

Scholarship or other support for medical students, residents, and fellows to attend a significant educational, scientific, or policy-making conference or seminar of a national, regional, or specialty medical or other professional association if the recipient of the scholarship or other support is selected by the association.

Rebates and discounts for prescribed products provided in the normal course of business. Labels approved by the federal Food and Drug Administration for prescribed products.

04/10/23 8

State Comparison Comments

Vermont (Continued)

Disclosure of allowable gifts, except Royalties, licensing fees, rebates, discounts, payments for clinical trial

Public – but strong trade secret law that might prevent disclosureEnforcement: • The Attorney General of Vermont may bring an action for injunctive relief, costs,

and attorney's fees and may impose on a manufacturer that violates this section a civil penalty of no more than $10,000 per violation. Each unlawful gift shall constitute a separate violation.

• Criminal penalties possible under 18 V.S.A. § 131. Criminal penalty

04/10/23 9

State Comparison Comments

Minnesota: • Drug distributors (not medical device)cannot offer any gift of value to a practitioner• Exceptions:

• Samples that will be distributed to patients for free• Items with a total combined retail value (calendar year) of not more than $50• Payment for medical conference, professional meeting or educational program – not

made directly to practitioner • Reasonable honoraria and payment of expenses for serving as faculty member at a

medical conference or professional meeting .• Compensation for consulting services for genuine research project• Publications and educational materials & Salaries or other benefits to employees

• Annual report itemizing the nature and value of any payments exceeding $100 in value• Public Disclosure• Civil penalty not exceeding $10,000 for each separate violation. Minn. Rev. Stat. §151.06

04/10/23 10

State Comparison Comments

Massachusetts• Marketing code of conduct by July 1, 2009– PhRMA and AdvaMed (floor)• Prohibited Activities:

• Grants, scholarships, subsidies, consulting contracts, or educational items in exchange for prescribing or disbursing prescription drugs or medical devices.

• Entertainment or recreational items of any value;• Payments in cash or cash equivalents either directly or indirectly except as compensation for bona fide

services;• The provision of complimentary items such as pens, coffee mugs, gift cards, flowers, etc.• Meals that are part of an entertainment or recreational event.• Meals that are offered without an informational presentation made by a pharmaceutical or medical device

marketing agent or without such agent being present.• Meals outside of a HCP’s office, hospital, academic medical center or specialized training facility;• Meals provided to a HCP’s spouse or other guest• Support for the cost of travel, lodging, attendance or other personal expenses of non-faculty HCPs• Direct payment of meals • Sponsorship of CME that is not compliant with the appropriate standards

set by ACCME or other equivalent accrediting body.

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State Comparison Comments

Massachusetts (continued)• Permissible Activities (examples):

• reasonable consulting fees for bona fide services, training, advisory boards, licensing and royalties

• Starting July 1, 2010 disclosure of fee or other item of value exceeding $50.00

• Public Disclosure• Enforcement: $5,000 for each transaction, occurrence or event

04/10/23 12

State Comparison Comments

New Jersey (recommendation by outgoing AG):• Includes drug and device companies• Ban essentially all gifts except items that provide a direct benefit to patients such

as free samples or reimbursement for service at a CME• No meals except modest ones at CME seminars, third-party conferences and

professional meetings• Physician disclosure of more than $200 over preceding 2 years.• Public disclosure of the physician disclosures• Public database of manufacturer (medical device and drug) disclosures (low

threshold such as $25-100) • Restrictions on CME funding and ability to influence• Restrictions on opting-out of prescriber identified data• No code of conduct mentioned

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PhRMA, AdvaMed and MDMACodes of Conduct

Pharmaceutical Research and Manufacturers of America (PhRMA) Code of Conduct

Advanced Medical Technology Association (AdvaMed)

The Medical Device Manufacturers Association (MDMA)

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Proposed Federal Sunshine Act

House Bill (D-Hill)• H.R. 3188 and America’s Affordable Health

Choice Act of 2009Senate Bill (R-Grassley, D-Kohl)• S. 301 and Chairman’s Mark

• Submitted as part of Health Care Reform

04/10/23 15

Comments/Comparison Proposed Federal Sunshine Act*

Provision House Senate

Pre-emption Same as Senate Latest version states it will preempt except any law or regulation of a State or of a political subdivision of a State that requires the disclosure or reporting of information not required to be disclosed or reported

Start Date for reporting

January 1, 2010 January 1, 2012

First Report March 31, 2011 March 31, 2013

Excluded Items(examples)

Any payments under $5; The loan of a device for evaluation purposes for less than 90 days ; samples given away to patients for free

A transfer of value of less than $10, unless the aggregate amount during the calendar year exceeds $100.

Consulting Must be disclosed Same as House

Penalties Same as Senate except knowingly aggregate penalty is the greater of $1,000,000 or 0.1 times revenues.

A civil penalty of not less than $1,000, but not more than $10,000,for each payment not reported with a cap of $150,000. Knowingly failing to submit payment can result in a penalty of not less than $10,000, but not more than $100,000, for each payment. Penalty will not exceed $1m

Public Yes Yes

04/10/23 16

Comments/Comparison Proposed Federal Sunshine Act (continued)*

Provision House Senate

Payments to: •Physician/Physician practice group•Any other prescriber•Pharmacy/pharmacist•Health insurance issuer, group health plan, other entity offering a health benefits plan•PBM, Hospital, Medical school, GPO•CME sponsor•Patient advocacy/disease specific group•Organization of health care professionals•Biomedical researcher

•Physician•Physician medical practice•Physician practice group•Hospital with an approved medical residency training program

Physician Ownership

Ownership or investment interest in manufacturer (other than publicly traded security and mutual fund) held by a physician or immediate family member

* Not a complete comparison Just specific examples 17

Disclosure Trends

• Greater transparency = Greater Reporting

• Larger fines = More Investigations• More Information = More Gov’t Entities• More Paperwork = More Mistakes• Broader scope = Device and Diagnostic** Minnesota Legislator proposes broadening gift ban to device companies

04/10/23 18

Things to Consider

• Educate sales and marketing force now• Do not forget to include others generating consulting and

development agreement• Develop valuation plan for non-cash payments• Implement most stringent policies now?• Plan for mistakes in reporting now• Expect reporting issues between state requirements and IRS• Combined Device and Drug companies

04/10/23 19

Questions

THANK YOU

04/10/23 20