March 19, 2009

Massachusetts Finalizes Strict Regulations Limiting Relationships Between Pharmaceutical and Medical Device Manufacturers and Health Providers

Holland & Knight Alert
Michael R. Manthei

On March 11, 2009, the Massachusetts Department of Public Health (DPH) released, and the Public Health Council unanimously approved, the final amended version of Massachusetts Regulation 105 CMR 970.000: Pharmaceutical and Medical Device Manufacturer Conduct (the Regulation). The broad and sweeping rules control relationships between health care practitioners and pharmaceutical and medical device manufacturers by requiring manufacturers to: (1) adhere to a state-authored marketing code of conduct; (2) implement adequate compliance programs; and (3) disclose certain payments to covered health care practitioners. The Regulation implements Chapter 305 of the Acts of 2008: An Act to Promote Cost Containment, Transparency, and Efficiency in the Delivery of Quality Healthcare (the Law). The Law and Regulation largely mirror the PhRMA and AdvaMed Codes that strongly influenced their drafting.

The Regulation appears to be the strictest rule of its sort in the nation. Not only does it require mandatory reporting of fees, payments and other compensation paid to physicians, but it is one of only two regulations nationwide that will make this disclosure a part of the public record. In addition, Massachusetts is the only state to require both pharmaceutical and medical device companies to make such a disclosures, and it is the only state to require companies to adopt a state-authored Code of Conduct. Nonetheless, DPH stated that it does not intend to “compromis[e] Massachusetts health care consumers’ access to clinical trials and new discoveries and treatments arising from legitimate and beneficial industry interactions with health care practitioners.”

105 CMR 970.000: Pharmaceutical and Medical Device Manufacturer Conduct

In its broadest sense, the Regulation controls pharmaceutical and medical device manufacturer conduct in three ways: (1) by requiring adoption of, and compliance with, the state-authored manufacturer code of conduct; (2) by strictly limiting interactions with health care practitioners falling under the Regulation; and (3) by requiring manufacturers to disclosure of payments to certain covered health care practitioners.

Adoption of Marketing Code of Conduct and Compliance Programs
Specifically, the regulation mandates that, by July 1, 2009, pharmaceutical and medical device manufacturers:

  • adopt a sufficient marketing code of conduct
  • adopt and submit a training program on the Marketing Code of Conduct, as specified in the Regulation, for sales and marketing staff
  • certify compliance with the Regulation
  • adopt and submit policies and procedures for investigating instances of non-compliance, taking corrective action, and reporting such instances
  • submit to the Department the contact information of the compliance officer responsible for overseeing the marketing code of conduct

Moreover, manufacturers must take additional steps to control the use of non-patient identified prescriber data (if used), disclose potential conflicts of interest involving health care speakers and consultants, and conduct annual audits ensuring compliance with the Regulation.

Limits on Specific Interactions With Health Care Practitioners

The Regulation prohibits or significantly limits many heretofore common interactions between healthcare practitioners and manufacturers. The types of interactions it regulates include meals, continuing medical education, educational conferences, professional meetings and manufacturer payments to professionals in a variety of contexts. Within each category, the Regulation lays out both prohibited and excepted types of compensation. For example, the Regulation prohibits furnishing meals to health care practitioners unless such meals are modest and occasional, given in conjunction with an informational session, not part of an entertainment/recreation event, not provided outside of the office or demonstration setting, and not provided to spouses or guests. Holland & Knight will be glad to provide information regarding the full set of requirements for each type of interaction.

Disclosure of Payments to Health Care Practitioners

Lastly, the Regulation mandates that, beginning July 1, 2010, pharmaceutical and medical device manufacturers disclose to the DPH any fee, payment, subsidy or other economic benefit with a value of at least $50 that the company pays to physicians or other identified individuals in connection with sales and marketing activities. Sales and marketing activity includes any activity intended to influence sales, prescribing behavior, marketing or evaluation of effectiveness of a prescription drug, biologic or medical device. Certain activities, such as bona fide research and clinical trials, demonstrations, charity care and price concessions are exempt from disclosure. This disclosure must be made annually and must include a $2,000 fee.

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