Requires pharmaceutical drug manufacturers and wholesalers to annually disclose all gifts to certain health care practitioners

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.