S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   3999
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             February 1, 2017
                                ___________
 
 Introduced  by  Sens.  KRUEGER, BAILEY, PARKER, PERKINS, 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.
              

                                                            LBD05538-01-7

 S. 3999                             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
 equally 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.
   §  2. Subdivision 1 of section 206 of the public health law is amended
 by adding a new paragraph (w) to read as follows:
   (W) 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. 3999                             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 THAT 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.
   § 3. This act shall take effect immediately.