Massachusetts Public Health Council Approves Regulations Implementing Relaxation of Strict Ban on Gifts from Pharmaceutical and Medical Device Manufacturers
On November 21, 2012, the Massachusetts Public Health Council (PHC) approved the final regulatory amendments implementing the Pharmaceutical and Medical Device Manufacturer Conduct Law, MGL ch. 111N, which was amended by Gov. Deval Patrick in July 2012. (See our Healthcare & Life Sciences alert, "Massachusetts Relaxes Strict Ban on Gifts from Pharmaceutical and Medical Device Manufacturers to Physicians," July 12, 2012.) These amendments mark a fundamental departure from what was deemed one of the strictest bans on gifts from pharmaceutical and medical device manufacturers to healthcare practitioners in the United States. Most significantly, the new regulations allow manufacturers to provide modest meals and refreshments to Massachusetts healthcare practitioners and to reimburse training expenses without a written purchase contract. Further, the PHC clarified that, while some disclosure requirements overlap with the federal Sunshine Act, others unique to Massachusetts remain. Also, manufacturers are still required to pay a $2,000 annual fee. The amendments to the regulations, known as the Marketing Code of Conduct (available at 105 CMR 970.000 et seq.), are scheduled to take effect on December 7, 2012.
A Broad and Flexible Definition of Modest Meals and Refreshments
The most impactful change in the regulations is the reversal of the "meal ban" for Massachusetts physicians. The amended regulations enable manufacturers to provide or pay for "modest meals and refreshments" associated with educating healthcare practitioners during non-CME presentations. Significantly, such presentations are no longer confined to a practitioner's office or a hospital setting and may be held at an outside venue. However, because Massachusetts still prohibits gifts related to entertainment or recreation, outside venues must be conducive to informational communication regarding the benefits, risks and appropriate uses (which expressly excludes off-label uses) of prescription drugs or medical devices.
Further, what constitutes a permissible meal is quite flexible. The amended regulations define "modest meals and refreshments" to include "food and/or drinks provided by or paid for by a pharmaceutical or medical device manufacturing company or agent to a healthcare practitioner that, as judged by local standards, are similar to what a healthcare practitioner might purchase when dining at his or her own expense." This broad definition, consistent with the PhRMA and AdvaMed codes, allows manufacturers flexibility in providing meals. For instance, it permits the provision of or payment for alcoholic drinks. In addition, it does not include a monetary cap on the cost of a meal. (The Massachusetts Department of Public Health (DPH) noted that the cost of modest meals and refreshments vary significantly and may incorporate other expenses, such as room rental fees, audio-visual charges and other regional differences in price.)
Reasonable Expenses for Technical Trainings Are Allowed Without Purchase Agreements
The amended regulations allow manufacturers to pay for reasonable expenses necessary to train healthcare practitioners regarding the use of medical devices. Previously, manufacturers were only permitted to pay for such expenses, including travel and lodging expenses, pursuant to written agreements for the purchase of the device. With this limitation eliminated, manufacturers now may train healthcare practitioners prior to executing written purchase agreements.
Some Disclosure Requirements Preempted by Sunshine Act, Others Are Implemented
The amended regulations also acknowledge that the federal Physician Payment Sunshine Act, enacted and upheld under the Patient Protection and Affordable Care Act, preempts the portions of the Massachusetts law requiring the disclosure of the same information. Accordingly, manufacturers need not disclose information to DPH that they already disclosed to a federal agency pursuant to federal law.
The Massachusetts law, however, requires certain disclosures beyond what federal law requires. As a condition of providing modest meals and refreshments, manufacturers now will be required to file quarterly reports detailing all non-CME educational presentations at which they provided meals or refreshments. Specifically, manufacturers must report:
- the location of the event
- a description of products or devices discussed
- the total expenditure
- an estimate of the expenditure per participant
- any other information DPH deems necessary
Although some of this reporting will be preempted, the regulation is designed to collect certain data not covered by the Physician Payments Sunshine Act (e.g., presentations discussing drugs and devices that are not reimbursable by Medicare, Medicaid, or CHIP, and meals and refreshments provided to healthcare practitioners other than physicians, such as physician assistants and nurse practitioners).
Finally, the amended regulations impose a new requirement that manufacturers must report all incidents of non-compliance with the Marketing Code of Conduct to both DPH and the state attorney general.
Annual Disclosure Fee Is Now a Registration Fee
The PHC also clarified that pharmaceutical and medical device manufacturers must still pay a $2,000 fee to DPH. Instead of paying the prior annual "disclosure fee," manufacturers now will be required to pay a $2,000 annual "registration fee" when registering with DPH.
Although these amendments provide pharmaceutical and medical device manufacturers with greater flexibility in offering meals at educational presentations and in reimbursing training expenses, manufacturers are cautioned to continue monitoring their relationships with Massachusetts healthcare practitioners and ensure they comply with the remaining provisions of the law.