Massachusetts Law Imposes Limitations and Monitoring Requirements on Medical Device and Pharmaceutical Company Interactions with Health Care Practitioners and Facilities

On August 10, 2008, Massachusetts Governor Deval Patrick signed into law the Act to Promote Cost Containment, Transparency and Efficiency in the Delivery of Quality Health Care. Aimed at improving the quality and cost of health care in the Commonwealth, this legislation includes new measures regulating pharmaceutical and medical device manufacturer conduct.

Under the new law's Chapter 111N, entitled Pharmaceutical and Medical Device Manufacturer Conduct, the Commonwealth's Department of Health is required to promulgate regulations limiting gifts and benefits that pharmaceutical and medical device companies can provide to health care practitioners. The statute also establishes compliance and enforcement mechanisms including mandatory staff training for employees selling or marketing pharmaceutical drugs or medical devices and public disclosure of gifts over $50 from pharmaceutical and medical device companies to practitioners or facilities.

The Department of Health must develop a marketing code of conduct that is "no less restrictive than" the most recent iterations of industry codes adopted by both the Pharmaceutical Research and Manufacturers of America and the Advanced Medical Technology Association. The Department's marketing code of conduct must prohibit pharmaceutical and medical device companies from:

• Paying for meals (1) during recreational events for health care practitioners, (2) offered without a pharmaceutical marketing agent being present, (3) offered, consumed or provided outside of the practitioner's office or hospital or (4) provided to a practitioner's guest.
• Provision or payment of recreational items of any value, including, but not limited to tickets to the theater or sporting events or vacation trips to any health care practitioner who is not a salaried employee of the company.
• Financial support for the costs of travel, lodging or other personal expenses of non-faculty healthcare practitioners attending any continuing medical education or other professional or educational events except when approved by the department.
• Payments in cash or cash equivalents to healthcare practitioners directly or indirectly, except as compensation for bona fide services.
• Any grants, scholarships, subsidies, support, consulting contracts, or educational or practice related items to a healthcare practitioner in exchange for prescribing prescription drugs or using medical devices or for a commitment to continue prescribing prescription drugs or using medical devices.

The Department's marketing code of conduct must allow the pharmaceutical and medical device companies to provide peer reviewed academic information, payment for "substantial" consulting services of a health care practitioner for "genuine" research projects, as well as prescription drugs solely for a practitioner's patients. After the Department of Health promulgates regulations consistent with this mandate, the Department must update its marketing code of conduct at least every two years.

In addition to requiring the Department of Health to promulgate a marketing code of conduct, the new legislation imposes its own restrictions on the conduct of pharmaceutical and medical device companies. Pharmaceutical or medical device companies must adopt and comply with the Department's most recent marketing code. The new law mandates that these companies train and monitor any employees responsible for the sale or marketing of drugs or medical devices. Pharmaceutical and medical device companies employing persons who sell or market their products must also conduct audits of these employees, establish policies and procedures for investigating claims of non-compliance and identify a compliance officer to the commonwealth. Further, by July 1 of each year, pharmaceutical and medical device companies that employ persons in the sale or marketing of their products must also report to the Department of Health any fee, payment, subsidy or other economic benefit valued at more than $50 provided to health care practitioners or facilities. The Department of Health must make this information available to the public on its website, and the Department of Health as well as the attorney general and local district attorneys have jurisdiction to enforce these provisions. A person or entity can be fined as much as $5000 for each violation of the statute.

This material is made available for information purposes only, and should not be relied upon to resolve specific legal questions.