Doctors must pay attention to drug company gift ban

Now that the state Public Health Council has approved of the most extensive and restrictive ban in the country on pharmaceutical companies giving gifts to doctors, physicians cannot rest easy.

While the regulations govern only the activity of drug and device companies, not doctors themselves, any prescriber who receives an improper benefit from a drug or device company still risks serious reputational damage – and possibly professional discipline or even prosecution under state anti-kickback laws, health law experts say.

“Though [the regulations] won’t create liability for doctors, they can still suffer a collateral adverse impact,” says William M. Mandell, an attorney at Pierce & Mandell in Boston and co-author of the 2008 book, Managing Relationships with Industry: A Physician’s Compliance Manual. “Not to mention that being party to a relationship with a company called into question could cause harm to their reputation, which is the most important thing doctors have.”

Under the regs – which go into effect on July 1 – doctors in Massachusetts will no longer be able to enjoy Red Sox tickets, dinners at Locke-Ober or even notepads provided gratis by pharmaceutical and medical device companies.

Plus, as of July 2010, even legitimate benefits that drug-and-device companies bestow upon doctors, such as bona fide consulting fees, will be catalogued on a publicly searchable database on the DPH website.

The regulations emerged from a sweeping package of legislation enacted last summer intending to contain health care costs while promoting quality and transparency in delivery. Part of the Legislature’s goal in passing the law was to address potential conflicts of interest arising in relationships between the drug industry and health care providers.

Accordingly, the Legislature included a provision directing DPH to regulate such relationships by developing a “Massachusetts Marketing Code of Conduct” for the industry to follow and by creating a public disclosure system.

DPH issued its proposed regulations in December 2008 and the state Public Health Council unanimously approved them on March 11.

Under the new code, drug and device companies are barred from giving practitioners:

• Free meals unless consumed in a hospital or office setting, accompanied by an informational presentation;

• Entertainment or recreational items like concert tickets, sports equipment or vacations or complimentary items like pens and coffee mugs;

• Coverage of travel, lodging and meal expenses at medical conferences, professional meetings or CME events;

• Grants, scholarships, subsidies and consulting contracts in exchange for prescription of drugs or devices; and

• Monetary compensation for anything other than bona fide professional services.

However, the code will still permit prescription drug samples and compensation for legitimate professional or consulting services.

Meanwhile, the disclosure requirement mandates that companies report to DPH the nature, value and recipient of any fee, payment or other benefit worth $50 or more. All such disclosures would be made publicly available and easily searchable on the DPH website, though payment for consulting in connection with genuine research or clinical trials would be exempt from the reporting requirement.

According to Steven C. Schachter, a neurologist at Beth Israel-Deaconess Medical Center in Boston and Mandell’s co-author, the proposed regulations are reasonable.

“I’m reassured to see provisions in place that enable relationships between physicians and industry that pertain to advancing medical research and knowledge,” he says.

Schachter also predicts that physicians on staff at hospitals with strict rules already in place won’t notice anything new.

“But for those in private practice or who belong to institutions without significant rules in place, it will represent a change,” he says.

At the same time, lawyers emphasize that while only industry is accountable under the regulations, doctors should still be aware of what’s permissible and what isn’t.

For one thing, the reporting system creates the potential for reputational fallout for doctors who tend to receive significant benefits from drug companies, even where the benefits are technically permissible, says Carl Rosenfield, a Newton attorney and former DPH deputy general counsel.

“It depends who goes to the trouble of looking through the database, who does the analysis and what’s reported in the paper,” he says. If the benefits a doctor is receiving are “substantial enough, there could be questions.”

Pat Cerundolo of Foley Hoag in Boston, who advises pharmaceutical companies, adds that any investigations or proceedings against drug companies suspected of violating the regulations would most likely embroil physicians.

“To the extent that any physician could be implicated in [improper] transactions, it could raise questions under federal anti-kickback laws,” he said. “It might also raise questions about the doctor’s conduct as a licensed physician in Massachusetts and whether the conduct violates any disciplinary rules.”

That’s because, according to Mandell, a doctor can violate anti-kickback laws by entering a contract with a pharmaceutical company where the fee he’s receiving noticeably exceeds a fair market value for the time and services he’s been asked to provide. Because the new regs require companies to disclose any benefits they confer upon doctors, it could become easier for authorities to detect these kinds of arrangements.

“This code of conduct and disclosure law that only imposes prohibitions on drug companies still creates a basis on which there will be a higher profile for all physician interactions with industry,” he says. “You’re going to be on their radar screen. So if you weren’t careful before and weren’t aware of the rules of the road, you need to get cracking and understand the rules at both the state and federal level.” MMLR

Questions or comments should be directed to the editor at: reni.gertner@mamedicallaw.com