Massachusetts passes strict gift disclosure laws for drug companies
While US presidential candidates argued about healthcare, Massachusetts governor Deval Patrick signed into law legislation to help contain spiraling healthcare costs. The Act to Promote Cost Containment, Transparency and Efficiency in the Delivery of Quality Healthcare, like many reforms in state law, could have US-wide impact.
The act requires that gifts or payments over $50 given to doctors, physicians and other healthcare professionals be disclosed to the Department of Health, which then posts the information on its website.
Patient groups and social activists touting the legislation believe increased disclosure and transparency will lower costs as doctors will be more accountable for the drugs they prescribe patients.
Unsurprisingly, drug companies and most healthcare professionals are against it. Industry spokesmen suggest the legislation could force them out of Massachusetts. Announcing the bill’s passage, Patrick stated, ‘This measure will set a marketing code of conduct to help ensure healthcare providers make choices about prescription drugs and medical devices for their patients based on therapeutic benefits and cost effectiveness. I applaud the many important initiatives that this legislation enacts to enhance the quality and cost effectiveness of healthcare in the commonwealth.’
Massachusetts is the sixth state or district to enforce gratuity disclosures. Other states don’t go as far, or include payments from medical device companies. The imposition of transparency rules in states may indicate federal legislation is near. For almost five years Congress has been presented with varying payment disclosure laws. It is currently debating the Physician Payments Sunshine Act, which many experts think will pass. The federal rule would force disclosure of payments over $500.
Arthur Caplan, director of the University of Pennsylvania’s Center for Bioethics, says, ‘The ethical handwriting is on the wall. Disclosure is coming. States are pushing for it. And once a few states do, it’s hard to imagine the federal government won’t line up behind. That’s a good thing because we have a great deal of evidence that gift giving can influence behavior in terms of prescriptions, publishing positive findings but suppressing negative findings and generating enthusiasm for new drugs.’
Surface tension
It may seem like it’s not a big deal and companies will simply limit payments. But the challenge lies in identifying and documenting payments, which, requiring disclosure, are subject to a filing and reporting requirement.
Despite drug companies’ opposition, not everyone is worried. Just before the legislation passed, Eli Lilly voluntarily declared that beginning July 2009, it will disclose payments over $500 to doctors for their roles as advisers and speakers, eventually including other payment types.
The first large US firm to do so, Eli Lilly, leads the industry in transparency. President and CEO John Lechleiter notes that while restoring trust in a damaged industry, disclosures allow people to see what is going on, which, he says, ‘just makes good business sense.’
