S909-2011 Actions

• Mar 12, 2012: COMMITTEE DISCHARGED AND COMMITTED TO RULES
• Feb 21, 2012: NOTICE OF COMMITTEE CONSIDERATION - REQUESTED
• Jan 4, 2012: REFERRED TO HEALTH
• Jan 5, 2011: REFERRED TO HEALTH

S909-2011 Memo

BILL NUMBER:S909

TITLE OF BILL:
An act
to amend the public health law, in relation to requiring a cost/benefit
analysis of pharmaceutical advertising and promotional expenses

PURPOSE OR GENERAL IDEA OF BILL:
To require the state Department of
Health to collect information on pharmaceutical company expenditures
incurred in the marketing of prescription drugs and to report to the
governor and the legislature the impact of these expenditures on drug
utilization, health insurance premiums, and other matters.

SUMMARY OF SPECIFIC PROVISIONS:
Section one sets out the legislative
intent of this measure. Section two adds a new paragraph (t) to
subdivision 1 of section 206 of the public Health Law to require the
commissioner of the Department of Health (DOH) to conduct a
cost/benefit analysis of the advertising and promotional activities
associated with the provisions of prescription drugs in New York State.
In performing this function, the commissioner is directed to collect
information from pharmaceutical companies (and pharmaceutical
companies are directed to provide such information), related to
advertising, marketing and so-called "drug detailing" activities,
including: 1) funds spent on health care professionals, hospitals,
clinics, pharmacy benefits management employees and managed care
employees on education materials, food and entertainment, gifts,
trips and travel, free samples, seminars and income; and 2)
advertising in NYS, including radio, television, the internet and
daily and weekly periodicals, billboards, signs, and direct
correspondence. After collecting this data, the commissioner is
required to analyze it and make recommendations to the Governor and
the legislature on the costs associated with advertising and
promotional activities, on prescription drug utilization, inpatient
admissions, ambulatory care, invasive procedures, health care visits,
premium rates, and quality.

JUSTIFICATION:
Prescription drug costs represent a growing component
in health care. According to the federal Health Care Financing
Administration (HCFA), personal spending on prescription drugs rose
228% from 1988 to 1998. Some observers see that as a positive trend,
arguing that effective drug regimens prevent inpatient admissions and
other costly procedures, and that marketing is necessary to inform
consumers and health care practitioners about products.

Critics of the practices, however, believe that the rise in
prescription drug spending correlates with the amounts pharmaceutical
companies are spending on marketing, advertising and "detailing" drugs
in the media and directly with health care professionals, and point to
some troubling trends with implications for both the quality and cost
of health care:

* The number of sales representatives employed by drug companies
nearly doubled since 1996, rising from 41,000 to 83,000;


* The drug industry sponsored more than 314,000 physician "events"
last year, ranging from catered lunches in hospital conference rooms
to weekend getaways at resorts, nearly double the number four years
earlier; and

* Of the drugs responsible for the nearly 19% rise in spending for
pharmaceuticals last year, the four top sellers were among the top
ten most heavily marketed drugs.

Some observers contend that the massive amounts spent on these
promotional activities has led to inappropriate use of some drugs
with serious consequences for health care quality, underutilization
of less costly generic drugs, conflicts of interest for providers and
added unnecessary health care costs. A January study by the ,Journal
of the American Medical Association (JAMA) found that marketing
directly influences the drugs that doctors prescribe. And an April
1995 JAMA article concluded that over 10% of the statements marketing
representatives made about drugs contradicted information readily
available to them.

The purpose of this bill is to authorize the commissioner of health to
collect data on the marketing and promotional activities of drug
companies, determine impact on utilization of drugs, avoided costs,
prescription trends and other matters, and report back to the
governor and the legislature on their findings. Furnishing
policymakers with up-to-date information on the impact of drug
company marketing practices and their effects will help guide
decisions on these critical issues.

LEGISLATIVE HISTORY:
2009-2010:  S.3592

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Immediate.

S909-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 
                                          909
 2011-2012 Regular Sessions
 I N  SENATE
 (PREFILED)
 January 5, 2011
 
 Introduced  by Sens. KRUEGER, HASSELL-THOMPSON, HUNTLEY, PARKER, SERRANO
 -- read twice and ordered printed, and when printed to be committed to
 the Committee on Health
 

AN ACT to amend the public  health  law,  in  relation  to  requiring  a
 cost/benefit  analysis  of  pharmaceutical advertising and promotional
 expenses
 THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section  1.  Legislative intent. The legislature finds and declares as
 follows: (1) More than almost all other consumer purchases, the purchase
 of medications has a direct, discernible impact on the health, life  and
 pocketbooks  of  New  York state citizens. (2) A substantial and growing
 portion of the price of prescription drug products  and  their  cost  to
 consumers  and  the  state  is  represented by advertising, particularly
 direct-to-consumer advertising through mass media,  company  advertising
 and  promotional  activities  through  the education of the personnel of
 managed care plans, pharmaceutical benefits management companies, hospi
 tals and clinics and health care professionals by means of salespersons'
 detailing,  seminars  and  conferences,  and  indirect  advertising  and
 promotion  to health care professionals and their staffs and the person
 nel of managed care plans, and pharmaceutical benefits management compa
 nies, hospitals and clinics through entertainment, meals, travel, trips,
 promotional items, free samples and free supplies,  all  of  which  also
 include  the salaries of the growing legions of drug representatives and
 salespersons. (3) There has been marked increase in spending by  pharma
 ceutical  companies  for direct-to-consumer advertising since the liber
 alization of federal regulations governing these practices in 1997.  (4)
 Researchers have indicated that assumptions of the amount of advertising
 are  based  on  extrapolation  from data in the public domain since they
 were unable to obtain data directly from the  pharmaceutical  companies.
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD04078-02-1
 
       S. 909                              2
 (5)  Pharmaceutical  companies  claim  that advertising dollars are well
 spent in that they facilitate  dialogue  between  patients  and  doctors
 about  diseases  and  conditions  that  are widely undertreated, thereby
 leading  to  diagnoses and prescriptions that save lives or even greater
 costs resulting from delays in treatment, while consumer groups point to
 evidence that advertising may be leading consumers to make inappropriate
 demands for newer, costlier medicines, when less expensive drugs may  be
 as  or  more  appropriate.  (6)  Health  insurance  companies claim that
 direct-to-consumer advertising motivates consumers to seek  more  expen
 sive  drugs  than  necessary  or  unnecessary  drugs  which, in turn, is
 responsible in part for large increases in  health  insurance  premiums.
 (7) There are no accurate reported figures on what pharmaceutical compa
 nies  spend  on  advertising,  educational and promotional activities to
 influence provider practices, consumer demand or market share.  (8)  New
 York  state  and  local  governments will spend over one billion dollars
 this year on prescription drugs as costs continue to increase.  (9)  The
 legislature  needs  data  that  is reliable and valid regarding industry
 direct-to-consumer advertising and drug detailing practices.   (10)  The
 legislature hereby determines that it must require pharmaceutical compa
 nies  to  provide  data through the disclosure of their expenditures for
 mass media direct-to-consumer advertising, correspondence  to  consumers
 and direct and indirect advertising through education, entertainment and
 promotional  samples  and  giveaways to health care professionals, their
 offices and staffs, and for the personnel  of  managed  care  plans  and
 pharmaceutical  benefits  management companies and hospitals and clinics
 to determine its impact on provider practices and consumers demand.
 

S 2. Subdivision 1 of section 206 of the public health law is  amended
 by adding a new paragraph (s) to read as follows:

 (S)  CONDUCT  A  COST/BENEFIT  ANALYSIS OF ADVERTISING AND PROMOTIONAL
 ACTIVITIES ASSOCIATED WITH THE PROVISION OF PRESCRIPTION DRUGS  TO  THIS
 STATE'S  CITIZENS  BY  PHARMACEUTICAL  COMPANIES. THE COMMISSIONER SHALL
 UTILIZE A METHODOLOGY TO DETERMINE THE IMPACT  UPON  THE  NECESSITY  FOR
 INPATIENT HOSPITAL CARE, MAJOR AMBULATORY SERVICES, INVASIVE PROCEDURES,
 NUMBERS  OF  VISITS  TO  HEALTH  CARE PROFESSIONALS AND HEALTH INSURANCE
 PREMIUM RATES RELATIVE TO THE  COSTS  ASSOCIATED  WITH  ADVERTISING  AND
 PROMOTIONAL  ACTIVITIES DIRECTED TOWARD THIS STATE'S CITIZENS BY PHARMA
 CEUTICAL COMPANIES.  AT  REASONABLE  INTERVALS,  AS  DETERMINED  BY  THE
 COMMISSIONER,  BUT  IN NO EVENT LESS FREQUENT THAN QUARTERLY, PHARMACEU
 TICAL COMPANIES WHICH PROVIDE PRESCRIPTION DRUGS  IN  THIS  STATE  SHALL
 PROVIDE  THE  COMMISSIONER  WITH  INFORMATION NECESSARY TO CARRY OUT ITS
 DUTIES UNDER THIS SECTION.  PHARMACEUTICAL COMPANIES OR THEIR  REPRESEN
 TATIVES  WHO  PROVIDE PRESCRIPTION DRUGS IN THIS STATE SHALL DISCLOSE IN
 THE AGGREGATE ALL ADVERTISING AND PROMOTIONAL COSTS TO THE  COMMISSIONER
 AS FOLLOWS:

 (1)  FOR  EVERY  HEALTH  CARE PROFESSIONAL WHO PRESCRIBES PRESCRIPTION
 DRUGS AND FOR EVERY MANAGED CARE PLAN, PHARMACEUTICAL  BENEFITS  MANAGE
 MENT COMPANY, HOSPITAL AND CLINIC WHICH PROVIDES PRESCRIPTION DRUGS, THE
 DOLLAR  AMOUNTS SPENT ON THE PROFESSIONAL, THAT PROFESSIONAL'S STAFF AND
 THE PERSONNEL OF THE MANAGED CARE PLAN AND THE  PHARMACEUTICAL  BENEFITS
 MANAGEMENT  COMPANY,  HOSPITAL  AND CLINIC, AND THE DOLLAR AMOUNT OF THE
 PORTION  OF  THE  PHARMACEUTICAL  COMPANIES'  DETAIL  PERSONS'  SALARIES
 ATTRIBUTABLE TO ACTIVITIES LISTED BELOW:

 (I)   EDUCATION  AND  EDUCATIONAL  MATERIALS,  REGARDLESS  OF  WHETHER
 PROVIDED IN THE PLACE OF BUSINESS OF THE HEALTH CARE  PROFESSIONAL,  THE
 MANAGED  CARE  PLAN, THE PHARMACEUTICAL BENEFITS MANAGEMENT COMPANY, THE
 HOSPITAL OR CLINIC OR, IN ANOTHER SETTING, AND REGARDLESS OF WHETHER THE
 
       S. 909                              3
 PHARMACEUTICAL COMPANY DIRECTLY OR INDIRECTLY PROVIDES THE EDUCATION AND
 EDUCATIONAL MATERIALS;
 (II) FOOD AND ENTERTAINMENT;
 (III)  GIFTS,  OR  ANYTHING WHICH IS RECEIVED WITHOUT CONSIDERATION OF
 EQUAL OR GREATER VALUE;
 (IV) TRIPS;
 (V) TRAVEL;
 (VI) FREE SAMPLES;
 (VII) SEMINARS;
 (VIII) REDUCED PRICES ON PRESCRIPTION DRUGS; AND
 (IX) INCOME.
 (2) PHARMACEUTICAL COMPANIES WHICH ADVERTISE IN MEDIA TO REACH  A  NEW
 YORK  AUDIENCE  AND  PHARMACEUTICAL  COMPANIES WHICH CORRESPOND DIRECTLY
 WITH CONSUMERS IN THIS STATE SHALL DISCLOSE THE AGGREGATE  COST  OF  THE
 ADVERTISING  OF PRESCRIPTION DRUGS IN THE MEDIA AND IN CORRESPONDENCE TO
 THE CONSUMER. FOR PURPOSES OF THIS SUBPARAGRAPH,  MEDIA  SHALL  INCLUDE,
 BUT  NOT  BE  LIMITED  TO, RADIO, TELEVISION, THE INTERNET AND DAILY AND
 WEEKLY MAGAZINES AND NEWSPAPERS, BILLBOARDS AND SIGNS. FOR  PURPOSES  OF
 THIS  SUBPARAGRAPH,  CORRESPONDENCE  SHALL  MEAN  DIRECT MAIL, TELEPHONE
 COMMUNICATIONS AND ELECTRONIC MAIL DIRECTED TO SPECIFIC  INDIVIDUALS  OR
 HOUSEHOLDS. PHARMACEUTICAL COMPANIES SHALL DISCLOSE THE AGGREGATE OF THE
 PORTION  OF SALARIES OF THEIR DRUG REPRESENTATIVES AND SALESPERSONS THAT
 HAVE ALL OR PART OF THEIR EMPLOYMENT IN ACTIVITIES ENUMERATED IN SUBPAR
 AGRAPH ONE OF THIS PARAGRAPH.
 (3) THE COMMISSIONER SHALL COLLECT AND COMPILE  DATA  FROM  PHARMACEU
 TICAL  COMPANIES  REQUIRED  TO PROVIDE INFORMATION UNDER THIS PARAGRAPH.
 THE COMMISSIONER SHALL USE APPROPRIATE MEASURES TO ANALYZE  AND  COMPARE
 DATA  WITH  DATA ON INPATIENT HOSPITAL STAYS, AMBULATORY SERVICES, INVA
 SIVE PROCEDURES AND VISITS TO HEALTH CARE PROFESSIONALS TO  CONDUCT  THE
 COST/BENEFIT ANALYSIS REQUIRED UNDER THIS PARAGRAPH.
 (4)  THE  COMMISSIONER  SHALL DISSEMINATE DATA IN ACCORDANCE WITH THIS
 PARAGRAPH AND SHALL, NO LATER THAN TWO YEARS FROM THE EFFECTIVE DATE  OF
 THIS PARAGRAPH, DISCLOSE HIS OR HER FINDINGS AND MAKE RECOMMENDATIONS TO
 THE  GOVERNOR,  THE TEMPORARY PRESIDENT OF THE SENATE AND SPEAKER OF THE
 ASSEMBLY ON THE COSTS ASSOCIATED WITH ADVERTISING AND PROMOTIONAL ACTIV
 ITIES BY PHARMACEUTICAL COMPANIES, ON  THE  IMPACT  OF  ADVERTISING  AND
 PROMOTIONAL  ACTIVITIES  UPON THE UTILIZATION OF PRESCRIPTION DRUGS, THE
 NECESSITY OF INPATIENT HOSPITAL STAYS, AMBULATORY CARE, INVASIVE  PROCE
 DURES,  VISITS TO HEALTH CARE PROFESSIONALS AND HEALTH INSURANCE PREMIUM
 RATES.
 

S 3. This act shall take effect immediately.

*By contributing or voting you agree to the Terms of Participation and Privacy Policy and verify you are over 13.

Discuss!