Just before the July 4th holiday, on July 3, Massachusetts Governor Deval Patrick signed the FY 2013 budget bill which included provisions amending the state’s 2008 “gift ban” law that prohibited drug and medical device companies from providing meals to health care professionals outside of the practitioner’s office or hospital setting. The result of this law was the exclusion by drug and device companies nationwide of participation by Massachusetts health care professionals in company-sponsored educational speaker programs, among other company-sponsored educational events, where meals were offered. Since the law took effect on July 1, 2009, it has been unlawful for Massachusetts health care professionals to attend company-sponsored speaker programs and educational events where the latest clinical data and product advancements were shared if meals were provided and the programs occurred outside of the office or hospital setting. Moreover, the 2008 law prohibited the payment of reasonable expenses necessary for technical training on the use of a medical device, except where those expenses were included in a vendor’s purchase contract for the device. For Massachusetts device sales, device companies have had the added burden of preparing and securing purchase contracts for their devices to ensure that they could lawfully cover reasonable expenses necessary for appropriate training of professionals on the use of their products.
The amended law now expressly permits:
· The provision of or payment for modest meals and refreshments in connection with non-continuing medical education (CME) educational presentations for the purpose of educating and informing health care professionals about the benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information, provided that these presentations occur in a venue and manner conducive to informational communication and quarterly reports (discussed below) are filed; and
· The payment of reasonable expenses necessary for technical training on the use of a medical device (without needing to itemize these expenses in advance in a purchase contract).
The law directs the Massachusetts Department of Public Health to define “modest meals and refreshments” through regulation without any deadline for doing so, leaving drug and device companies to guess in the interim as to how the Department may define “modest.” As required under the 2008 law, meals costing $50 or more must be reported by July 1 of each year to the Department of Public Health. In addition, under the amended law, any drug or device company providing modest meals in connection with non-CME educational presentations must file quarterly reports with the Department that include: (1) the location of the non-CME presentation; (2) a description of any pharmaceutical products, medical devices or other products discussed during the presentation; and (3) the total amount expended on the presentation and an estimate of the amount expended per participant, factoring any meals, refreshments or other items of economic value provided at the presentation. The amended law also gives the Department the authority to collect fees from companies to cover the administrative expense of overseeing these quarterly reports. Note that the provision of any refreshment or food item at non-CME presentations will trigger the quarterly reporting requirement, even if it does not rise to the $50 threshold for disclosure on a company’s July 1st annual report, as these are separate requirements under the amended law.
However, acknowledging the federal “Sunshine Act” (42 U.S.C. 1320a-7h), the amended Massachusetts law provides that the Department must not require a drug or device manufacturing company to disclose information which has been disclosed to a federal agency pursuant to federal law. While the reach of “transfers of value” that are reportable under the Sunshine Act remains unsettled until the Centers for Medicare & Medicaid Services (CMS) issues final regulations later this year, the federal law generally exempts transfers of value under $10, unless the aggregate amount given to a physician during the calendar year exceeds $100. As a result of the quarterly reporting requirement now included in the Massachusetts law, it appears that meals and refreshments under $10 per recipient that would not trigger disclosure under the Sunshine Act may escape preemption and remain subject to reporting in quarterly Massachusetts drug and device company reports for meals and refreshments provided at non-CME educational programs.
Drug and device companies may wish to reassess any current restrictions they have in place for attendance by Massachusetts health care professionals at company-sponsored non-CME educational programs where meals or refreshments are offered. These companies would be well-advised to proceed with caution in terms of meals or refreshments provided at these programs until the Department issues regulations defining the parameters for what constitutes a “modest” meal or refreshment. If including Massachusetts professionals in such a program, a conservative meal or refreshment offering is recommended until the Department provides guidance or issues a regulation defining “modest.” For now, modest meals and refreshments currently offered at such programs in accordance with the PhRMA Code or AdvaMed Code can serve as a benchmark for drug and device companies wishing to proceed in this area.
Sections 109-114 of the Massachusetts FY 2013 budget law amending the state's gift ban authority can be found at http://www.mass.gov/bb/gaa/fy2013/os_13/hdefault.htm.
Julie Tibbets is a partner in the Food, Drug, & Device/FDA Practice of Alston & Bird LLP and can be contacted at julie.tibbets@alston.com or (202) 239-3444.