Enacts the New York state pharmaceutical drug manufacturer and wholesaler disclosure act; requires pharmaceutical drug manufacturers and wholesalers to annually report to the New York department of health, for disclosure to the general public, all of its gifts to health care practitioners that prescribe drugs when such gifts have a value of seventy-five dollars or more; authorizes the commissioner of health to impose penalties and promulgate necessary rules and regulations.

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S212-2011 Actions

• Jan 4, 2012: REFERRED TO HEALTH
• Jan 5, 2011: REFERRED TO HEALTH

S212-2011 Memo

BILL NUMBER:S212

TITLE OF BILL:
An act
to amend the public health
law, in relation to disclosure of certain gifts
provided by drug manufacturers or wholesalers to health care providers

PURPOSE:
To require the state Department of Health to collect information on
pharmaceutical company expenditures incurred in the marketing of
prescription drugs and to create a free guide on pharmaceutical drug
manufacturer and wholesaler gifts to health care providers in order
to inform consumers.

SUMMARY OF PROVISIONS:
This bill would add a new Title VI to the Public Health Law, which
would require the commissioner of the Department of Health (DOH) to
create a consumer guide on 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 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, seminars
and income, This guide must be made available to the public at no
cost no later than September 1st of each year. Exempt from the
reporting requirements are: legitimate expenses associated with
clinical trials; scholarships for medical students, residents, and
fellows to attend genuine educational, scientific, or policy-making
conferences of a medical or professional association as long as the
recipient is chosen by said association; wire stricted grants; gifts
of less than $75 in value; prescription drug rebates and discounts;
and free drug samples.

JUSTIFICATION:
Prescription drug costs represent a growing component in health care
expenditures. According to the Centers for Disease Control, spending
on retail prescription drugs in the US more than tripled from $15
billion in 1982 to $48.2 billion in 1992, then more than tripled
again to $162.4 billion in 2002. That is a per capita increase from
$64 in 1982 to $569 in 2002. From 1985 to 2001, Medicaid spending on
drugs increased 10-fold, and New York had the second highest Medicaid
expenditures on Prescription drugs in the nation. Some observers see
that as a positive trend, arguing that effective drug regimens
prevent inpatient admissions and other costly procedures, and that
marketing to medical professionals
is necessary to inform 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 directly with health care professionals, and point to some
troubling trends with implications for both the quality and cost of
health care:


* The pharmaceutical industry spent more than $22 billion in 2003 on
marketing, the lion's share of it on direct marketing to health care
providers;

* The number of sales representatives employed by
drug companies nearly doubled since 1996, rising from 41,000 to
between 90,000 and 100,000 in 2004. The number of marketers has seen
similar increases, growing from 55,348 in 1995 to 87,810 in 2000;

* The drug industry sponsored more than 314,000 physician "events" in
2001, 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 1996 rise in spending for
pharmaceuticals in 2001, the four top sellers were among the top ten
most heavily marketed drugs. Between 2000 and 2004, the prices of the
top selling pharmaceuticals have increased almost 25%.

* Leading medical schools including Stanford University, Yale
University and the University of Pennsylvania have enacted policies
banning their physicians from accepting of gifts, even those of only
nominal value, from pharmaceutical companies.

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 and unnecessary health care costs. A January 2001 study by the
Journal of the American Medical Association (JAMA) found that
marketing directly influences the drugs that doctors prescribe. A
2006 JAMA study reiterated that position, indicated that drug
companies spend approximately $13,000 per physician annually and went
so far as to call for a ban on such gifts. Furthermore, many groups
fear that advertising promotes newer, less tested drugs aver older,
more trusted drugs and fear an increased emphasis on treatment over
prevention. While both the pharmaceutical industry and providers have
established voluntary guidelines to limit gifting, the practice
continues extensively.

The purpose of this bill is to authorize the commissioner of health to
collect data on the promotional activities of drug companies, and
report these findings to consumers. Furnishing pharmaceutical
consumers with this information may help them make better decisions
about their medical care.

LEGISLATIVE HISTORY:
S.3217/A.6615 of 2009-2010; Referred to Senate Health Committee
S.2971-C/A.7468-A of 2007-2008; Referred to Senate Health Committee
S.696-E/A.5574-E of 2005-2006; Referred to Senate Finance Committee
S.505A of 2003-2004; Referred to Senate Finance Committee
S.4191 of 2001-20D2; Referred to Senate Finance Committee

FISCAL IMPLICATIONS: None.

EFFECTIVE  DATE:    This  act  shall  take  effect  January  1st  next
succeeding the date on which it shall have become a law.

S212-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                     212

                         2011-2012 Regular Sessions

                              I N  SENATE

                                 (PREFILED)

                               January 5, 2011
                                 ___________

  Introduced  by  Sen. MAZIARZ -- 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  disclosure  of
    certain  gifts provided by drug manufacturers or wholesalers to health
    care providers

    THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section  1.  Article 2 of the public health law is amended by adding a
  new title 6 to read as follows:


                                  TITLE VI
             NEW YORK STATE PHARMACEUTICAL DRUG MANUFACTURER AND
                          WHOLESALER DISCLOSURE ACT
  SECTION 266.   LEGISLATIVE INTENT.
          266-A. DEFINITIONS.
          266-B. DISCLOSURE REQUIREMENTS.
          266-C. ANNUAL CONSUMER GUIDE ON PHARMACEUTICAL DRUG MANUFACTURER
                   AND WHOLESALER GIFTS TO HEALTH CARE PROVIDERS.
          266-D. PENALTIES.
          266-E. RULES AND REGULATIONS.
    S 266. LEGISLATIVE INTENT.   THE LEGISLATURE FINDS THAT  THE  COST  OF
  PRESCRIPTION DRUGS IN THE UNITED STATES HAS GROWN DRAMATICALLY.  ACCORD-
  ING  TO THE CENTERS FOR DISEASE CONTROL, SPENDING ON RETAIL PRESCRIPTION
  DRUGS IN THE UNITED  STATES  MORE  THAN  TRIPLED  FROM  FIFTEEN  BILLION
  DOLLARS  IN  NINETEEN  HUNDRED  EIGHTY-TWO  TO  FORTY-EIGHT  BILLION TWO
  HUNDRED MILLION DOLLARS IN NINETEEN HUNDRED NINETY-TWO, THEN  MORE  THAN
  TRIPLED  AGAIN  TO  ONE  HUNDRED  SIXTY-TWO BILLION FOUR HUNDRED MILLION
  DOLLARS IN TWO THOUSAND TWO. IN PER CAPITA  TERMS,  RETAIL  PRESCRIPTION
  DRUGS  SPENDING  INCREASED  FROM  SIXTY-FOUR DOLLARS IN NINETEEN HUNDRED
  EIGHTY-TWO TO FIVE HUNDRED SIXTY-NINE DOLLARS IN TWO THOUSAND TWO.    IN

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD01691-01-1

 S. 212                              2

  TWO  THOUSAND  FIVE,  SPENDING  ON  PHARMACEUTICALS  ROSE TO TWO HUNDRED
  FIFTY-ONE BILLION EIGHT HUNDRED MILLION DOLLARS.  WHILE THE AVAILABILITY
  OF USEFUL NEW DRUGS TO TREAT CHRONIC CONDITIONS SUCH AS  HEART  DISEASE,
  HYPERTENSION AND DEPRESSION ACCOUNTS FOR MUCH OF THE INCREASED SPENDING,
  THERE  IS  WIDESPREAD  CONCERN  ABOUT THE IMPACT AGGRESSIVE MARKETING BY
  DRUG MANUFACTURERS AND WHOLESALERS HAS HAD ON DRUG COSTS AND PRESCRIBING
  PATTERNS. IN ADDITION TO  THE  EXPLOSIVE  GROWTH  IN  DIRECT-TO-CONSUMER
  ADVERTISING,  THESE  MARKETING EFFORTS ARE OFTEN DIRECTED AT HEALTH CARE
  PROVIDERS AND INCLUDE GIFTS, PARAPHERNALIA, TRIPS AND TRAVEL,  FOOD  AND
  ENTERTAINMENT.  A  COMPETITIVE  MEDIA  REPORTING  STUDY  FOUND THAT DRUG
  COMPANIES PROVIDED SEVEN BILLION TWO HUNDRED MILLION  DOLLARS  WORTH  OF
  FREE  SAMPLES  TO  PHYSICIANS'  OFFICES IN NINETEEN HUNDRED NINETY-NINE.
  THE DRUG INDUSTRY SPONSORED MORE THAN THREE  HUNDRED  FOURTEEN  THOUSAND
  PHYSICIAN  "EVENTS" IN TWO THOUSAND ONE, RANGING FROM CATERED LUNCHES IN
  HOSPITAL CONFERENCE ROOMS TO WEEKEND GETAWAYS AT RESORTS, NEARLY  DOUBLE
  THE  NUMBER  FOUR  YEARS  EARLIER.  DRUG COMPANIES SPENT SOME TWENTY-TWO
  BILLION DOLLARS IN MARKETING IN TWO THOUSAND THREE.   ACCORDING  TO  THE
  JOURNAL  OF  THE  AMERICAN  MEDICAL  ASSOCIATION, NINETY PERCENT OF DRUG
  COMPANY MARKETING IS DIRECTED AT PHYSICIANS.  ESTEEMED MEDICAL  PUBLICA-
  TIONS  SUCH  AS  THE JOURNAL OF THE AMERICAN MEDICAL ASSOCIATION AND THE
  BRITISH MEDICAL JOURNAL PRODUCED STUDIES THAT  SUGGEST  THESE  MARKETING
  ACTIVITIES DO INFLUENCE HEALTH CARE PROVIDERS' DECISIONS ON PRESCRIPTION
  DRUGS, AND IN WAYS THAT ARE NOT THE BEST FOR PATIENTS OR THE HEALTH CARE
  SYSTEM  ITSELF.  THE  LEGISLATURE RECOGNIZES THAT DRUG MANUFACTURERS AND
  WHOLESALERS ARE FREE TO USE ANY LEGAL SALES AND MARKETING TECHNIQUES  TO
  PROMOTE  THEIR PRODUCTS. BUT THE LEGISLATURE ALSO FINDS THAT THE CONSUM-
  ERS HAVE A RIGHT TO KNOW WHAT GIFTS, IF ANY, THEIR HEALTH CARE PROVIDERS
  ARE RECEIVING FROM MANUFACTURERS AND WHOLESALERS,  IN  ORDER  THAT  THEY
  MIGHT   MAKE   INFORMED   AND   COST-EFFECTIVE   DECISIONS  ABOUT  THEIR
  PRESCRIPTION DRUG EXPENDITURES.
    S 266-A. DEFINITIONS. AS USED IN THIS TITLE, THE FOLLOWING TERMS SHALL
  HAVE THE FOLLOWING MEANINGS:

    1. "APPROVED CLINICAL TRIAL" MEANS A  CLINICAL  TRIAL  THAT  HAS  BEEN
  APPROVED  BY  THE  U.S.  FOOD  AND DRUG ADMINISTRATION (FDA) OR HAS BEEN
  APPROVED BY A DULY CONSTITUTED INSTITUTIONAL REVIEW  BOARD  (IRB)  AFTER
  REVIEWING  AND  EVALUATING  IT  IN  ACCORDANCE  WITH  THE  HUMAN SUBJECT
  PROTECTION STANDARDS SET FORTH AT 21 C.F.R. PART 50, 45 C.F.R. PART  46,
  OR AN EQUIVALENT SET OF STANDARDS OF ANOTHER FEDERAL AGENCY.
    2.  "BONA  FIDE  CLINICAL TRIAL" MEANS AN APPROVED CLINICAL TRIAL THAT
  CONSTITUTES "RESEARCH" AS THAT TERM IS DEFINED IN  45  C.F.R.  S  46.102
  WHEN THE RESULTS OF THE RESEARCH CAN BE PUBLISHED FREELY BY THE INVESTI-
  GATOR  AND  REASONABLY CAN BE CONSIDERED TO BE OF INTEREST TO SCIENTISTS
  OR MEDICAL PRACTITIONERS WORKING IN THE PARTICULAR FIELD OF INQUIRY.
    3. "CLINICAL TRIAL" MEANS ANY STUDY ASSESSING THE SAFETY  OR  EFFICACY
  OF  DRUGS ADMINISTERED ALONE OR IN COMBINATION WITH OTHER DRUGS OR OTHER
  THERAPIES, OR ASSESSING THE RELATIVE SAFETY  OR  EFFICACY  OF  DRUGS  IN
  COMPARISON WITH OTHER DRUGS OR OTHER THERAPIES.
    4.  "DRUGS"  SHALL  HAVE  THE SAME MEANING AS SET FORTH IN SUBDIVISION
  SEVEN OF SECTION SIX THOUSAND EIGHT HUNDRED TWO OF THE EDUCATION LAW.
    5. "HEALTH CARE PROVIDER" MEANS ANY PHYSICIAN OR OTHER PERSON  WHO  IS
  LEGALLY AUTHORIZED TO PRESCRIBE DRUGS.
    6.  "PHARMACEUTICAL  DRUG  MANUFACTURER" MEANS A PERSON WHO COMPOUNDS,
  MIXES, PREPARES, PRODUCES AND BOTTLES OR PACKS DRUGS FOR THE PURPOSE  OF
  DISTRIBUTING  OR  SELLING TO PHARMACIES OR TO OTHER CHANNELS OF DISTRIB-
  UTION.

 S. 212                              3

    7. "PHARMACEUTICAL DRUG WHOLESALER" MEANS A PERSON WHOSE PRIMARY BUSI-
  NESS PURPOSE IS TO BOTTLE, PACK OR PURCHASE DRUGS  FOR  THE  PURPOSE  OF
  SELLING  OR  RESELLING TO PHARMACIES OR TO OTHER CHANNELS AS PROVIDED IN
  THIS TITLE.
    8.  "PHARMACY" SHALL HAVE THE SAME MEANING AS SET FORTH IN SUBDIVISION
  ONE OF SECTION SIX THOUSAND EIGHT HUNDRED TWO OF THE EDUCATION LAW.
    9. "UNRESTRICTED GRANT" MEANS ANY GIFT,  PAYMENT,  SUBSIDY,  OR  OTHER
  ECONOMIC  BENEFIT  TO  AN  EDUCATIONAL INSTITUTION, PROFESSIONAL ASSOCI-
  ATION, HEALTH CARE FACILITY,  OR  GOVERNMENTAL  ENTITY  WHICH  DOES  NOT
  IMPOSE  ANY  RESTRICTIONS  ON  THE  USE  OF THE GRANT, SUCH AS FAVORABLE
  TREATMENT OF A CERTAIN PRODUCT OR AN ABILITY OF THE MARKETER TO  CONTROL
  OR INFLUENCE THE PLANNING, CONTENT, OR EXECUTION OF THE EDUCATION ACTIV-
  ITY.
    S  266-B. DISCLOSURE REQUIREMENTS. 1. ANY PHARMACEUTICAL DRUG MANUFAC-
  TURER OR PHARMACEUTICAL DRUG WHOLESALER, INCLUDING ANY EMPLOYEE OR AGENT
  OF SUCH MANUFACTURER OR WHOLESALER, THAT MAKES ANY GIFT WHETHER  IN  THE
  FORM  OF MONEY, SERVICE, LOAN, TRAVEL, ENTERTAINMENT, HOSPITALITY, THING
  OR PROMISE, OR IN ANY OTHER FORM, TO A HEALTH CARE PROVIDER SHALL REPORT
  THE GIFT TO THE COMMISSIONER IN THE MANNER SET FORTH IN SUBDIVISION  TWO
  OF THIS SECTION.
    2.  ANY PHARMACEUTICAL DRUG MANUFACTURER OR PHARMACEUTICAL DRUG WHOLE-
  SALER WHO MAKES AT LEAST ONE GIFT UNDER SUBDIVISION ONE OF THIS  SECTION
  SHALL  FILE  WITH  THE  COMMISSIONER AN ANNUAL REPORT, DUE NO LATER THAN
  JUNE FIRST OF EACH YEAR, BEGINNING IN  TWO  THOUSAND  THIRTEEN,  OF  ALL
  GIFTS MADE BY THE MANUFACTURER OR WHOLESALER TO HEALTH CARE PROVIDERS.
    3.  SUCH  ANNUAL REPORT SHALL CONTAIN: (A) THE NAME, ADDRESS AND TELE-
  PHONE NUMBER OF THE PHARMACEUTICAL DRUG MANUFACTURER OR WHOLESALER;  (B)
  AN  ITEMIZED  LIST  CONTAINING  A DESCRIPTION OF EACH GIFT FALLING UNDER
  SUBDIVISION ONE OF THIS SECTION AND  THE  NAME,  ADDRESS  AND  TELEPHONE
  NUMBER OF THE HEALTH CARE PROVIDER WHO RECEIVED EACH GIFT; (C) THE MONE-
  TARY VALUE OF EACH GIFT; AND (D) SUCH OTHER INFORMATION AS DEEMED NECES-
  SARY BY THE COMMISSIONER FOR COMPLIANCE WITH THIS ARTICLE.
    4. THE FOLLOWING SHALL BE EXEMPT FROM DISCLOSURE:

    (A)  THE  PAYMENT  OF  REASONABLE  COMPENSATION  AND  REIMBURSEMENT OF
  EXPENSES IN CONNECTION WITH BONA FIDE CLINICAL TRIALS;
    (B) ANY GIFT THE VALUE OF WHICH IS LESS THAN SEVENTY-FIVE DOLLARS;
    (C) SCHOLARSHIP OR OTHER SUPPORT FOR MEDICAL STUDENTS,  RESIDENTS  AND
  FELLOWS  TO ATTEND A SIGNIFICANT EDUCATIONAL, SCIENTIFIC, OR POLICY-MAK-
  ING CONFERENCE 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;
    (D) UNRESTRICTED GRANTS FOR CONTINUING MEDICAL EDUCATION PROGRAMS;
    (E) PRESCRIPTION DRUG REBATES AND DISCOUNTS; AND
    (F) FREE SAMPLES OF DRUGS.
    S 266-C. ANNUAL CONSUMER GUIDE ON PHARMACEUTICAL DRUG MANUFACTURER AND
  WHOLESALER GIFTS TO HEALTH CARE PROVIDERS. 1. NO  LATER  THAN  SEPTEMBER
  FIRST OF EACH YEAR, BEGINNING IN TWO THOUSAND THIRTEEN, THE COMMISSIONER
  SHALL  PUBLISH  AND  MAKE  AVAILABLE,  FREE  OF  CHARGE TO THE PUBLIC, A
  CONSUMER GUIDE ON GIFTS PROVIDED BY  PHARMACEUTICAL  DRUG  MANUFACTURERS
  AND  WHOLESALERS  TO HEALTH CARE PROVIDERS. SUCH GUIDE SHALL CONTAIN ALL
  OF THE INFORMATION PROVIDED IN THE ANNUAL REPORT REQUIRED BY SECTION TWO
  HUNDRED SIXTY-SIX-B OF THIS TITLE AND THE INFORMATION SHALL  BE  WRITTEN
  IN PLAIN LANGUAGE IN A CLEAR AND UNDERSTANDABLE FORMAT.
    2.  THE  COMMISSIONER  SHALL PROVIDE FOR THE ADEQUATE DISTRIBUTION AND
  AVAILABILITY OF THE CONSUMER GUIDE ON PHARMACEUTICAL  DRUG  MANUFACTURER
  AND  WHOLESALER  GIFTS  TO HEALTH CARE PROVIDERS.  APPROPRIATE COPIES OF

 S. 212                              4

  THE GUIDE SHALL BE TRANSMITTED TO THE OFFICE FOR THE AGING FOR  DISTRIB-
  UTION AT EVERY OFFICE FOR THE AGING IN THE STATE, TO EVERY COUNTY OFFICE
  FOR  THE  AGING  IN  THE  STATE AND TO THE COMMISSIONER OF EDUCATION FOR
  DISTRIBUTION  TO  EVERY  PUBLIC LIBRARY IN THE STATE WHERE COPIES OF THE
  GUIDE SHALL BE MADE AVAILABLE FREE OF CHARGE TO THE PUBLIC. THE  COMMIS-
  SIONER SHALL ALSO POST THE GUIDE ON THE DEPARTMENT'S INTERNET WEBSITE.
    S  266-D.  PENALTIES.   1. THE COMMISSIONER MAY IMPOSE A CIVIL PENALTY
  FOR FAILURE TO FILE A TIMELY REPORT AS REQUIRED BY SECTION  TWO  HUNDRED
  SIXTY-SIX-B  OF  THIS TITLE IN AN AMOUNT UP TO FIFTY DOLLARS A DAY UNTIL
  SUCH REPORT IS FILED OR THREE THOUSAND DOLLARS, WHICHEVER IS LESS.
    2. ANY PERSON WHO VIOLATES ANY OTHER PROVISION OF THIS TITLE SHALL  BE
  SUBJECT  TO  A  CIVIL  PENALTY IN AN AMOUNT NOT TO EXCEED THREE THOUSAND
  DOLLARS FOR EACH VIOLATION. THE COMMISSIONER IS AUTHORIZED TO ASSESS THE
  CIVIL PENALTY UNDER THIS SECTION PURSUANT  TO  SECTION  TWELVE  OF  THIS
  CHAPTER.
    S  266-E.  RULES  AND  REGULATIONS.  THE COMMISSIONER IS AUTHORIZED TO
  PROMULGATE RULES AND REGULATIONS AS DEEMED NECESSARY TO  CARRY  OUT  AND
  ENFORCE THE PROVISIONS OF THIS TITLE.
    S  2. This act shall take effect on the first of January next succeed-
  ing the date on which it shall have become a law.