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

                                  2623

                       2015-2016 Regular Sessions

                            I N  S E N A T E

                            January 27, 2015
                               ___________

Introduced  by  Sens. KRUEGER, HASSELL-THOMPSON, 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.
(5) Pharmaceutical companies claim that  advertising  dollars  are  well

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03353-01-5
              

S. 2623                             2

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 (v) to read as follows:
  (V) 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. 2623                             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.