AN ACT PROHIBITING CERTAIN GIFTS FROM PHARMACEUTICAL AND MEDICAL DEVICE COMPANIES TO HEALTH CARE PROVIDERS.

AN ACT PROHIBITING CERTAIN GIFTS FROM PHARMACEUTICAL AND MEDICAL DEVICE COMPANIES TO HEALTH CARE PROVIDERS.

This bill prohibits pharmaceutical and medical device companies that do business with the state from giving certain health care providers cash, gifts, or other things of value. It makes numerous exceptions to this ban, including permitting payments for students and providers attending meetings; providers performing research, clinical trials, or consulting work; and educational conference organizers.

The bill requires drug and device companies that pay a provider $ 1,000 or more a year to disclose certain information to the Attorney General's Office. It makes a violation of any of its provisions an unfair and deceptive trade practice.

A drug or medical device manufacturer must meet two sets of conditions to be affected by the bill—its business activities and its relationship to the state. The bill applies to any entity, except a licensed hospital or pharmacy, that (1) produces, prepares, propagates, compounds, converts, or processes prescription drugs, “biologics,” or medical devices or (2) packages or repackages, labels or relabels, or distributes them. A biologic, under the bill, is a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, or analogous product applicable to the prevention, treatment, or cure of a human disease or condition.

Such an entity must also directly or indirectly do business with the state relating to purchasing or providing reimbursement for drugs, biologics, or medical devices in any state program including Medicaid, HUSKY A or B, state administered general assistance, Charter Oak, the Corrections Department inmate health services program, and state employee health insurance. The state also purchases veterinary drugs for the UConn Agricultural School, so the bill appears to apply to manufacturers of drugs and medical devices for animals (Since the definition of biologics applies only to human, the bill would not apply to a company producing biologics only for animals. )

The bill applies to licensed health care providers who can prescribe, dispense, or administer drugs. Physicians and physician assistants, dentists, podiatrists, optometrists, veterinarians, and advanced practice registered nurses can perform all these tasks; registered nurses and nurse-midwives can administer prescription drugs. The bill also applies to these providers' employees, officers, or agents when acting in the course of their relationship with the provider or in support of health care provision. But it does not include any employee of a drug or medical device manufacturer.

1. any food or beverage to a covered provider or paying for it;

2. or paying for, directly or indirectly to a provider or indirectly to the event sponsor, the costs of a provider's travel, lodging, time, or personal expenses at a continuing medical education (CME) event, third-party scientific or educational conference, or professional meeting;

3. any advice or guidance to a CME provider about the content or faculty for a program in Connecticut the company funds, even if the provider asks for it;

4. a provider any entertainment or recreational items, including tickets to sporting or performing arts events, sports equipment, or leisure or vacation trips;

5. any cash or cash equivalent payments to a provider, either directly or indirectly, or any tangible items of value other than those the bill permits;

6. a provider any grants, scholarships, subsidies, consulting contracts, or educational or practice-related items in exchange for the provider's prescribing, disbursing, or using prescription drugs, biologics, or devices or agreeing to continue to do so; and

7. a provider, directly or indirectly, remuneration, in cash or in kind, including any rebate or kickback that is prohibited under state or federal laws.

The bill requires a covered drug or device company to (1) separate all its CME grant-making functions in the state from its sales and marketing department and (2) make CME grant decisions regardless of its sales and marketing objectives.

1. pursuant to a written agreement, (a) reasonably compensate providers for professional or consulting services related to a research project or clinical trial or (b) reimburse providers for any out-of-pocket costs they incur in performing research or clinical trials;

2. pursuant to a written agreement, provide reasonable compensation for providers' expenses, including travel and lodging, in obtaining technical training in the use of a medical device;

3. provide, distribute, disseminate, or receive peer-reviewed academic, scientific, or clinical information;

4. purchase advertising in peer-reviewed journals;

5. provide prescription drug or medical device demonstration and evaluation units and educational materials about these products to providers for their or their patients' benefit;

6. provide rebates, discounts, and other price concessions consistent with their general practice or the industry's;

7. provide information about prescription drugs and medical devices including (a) identifying appropriate coverage, coding, and billing for the products, (b) identifying computerized billing applications and information and support about their use and installation, as long as the support is not intended to induce providers to acquire, recommend, or use an application;

8. provide samples of, or pay for, prescription drugs for low-income people through an established patient assistance program that meets federal criteria or is otherwise permitted under federal law; and

9. pursuant to a written agreement, reasonably compensate providers, based on the fair market value, for licensing intellectual property.

The bill also allows covered companies to reasonably compensate a provider, based on fair market value, for consulting services such as (1) research, (2) participating on a health care-related advisory board, (3) collaborating with a nonprofit organization that promotes health and disease prevention, and (4) making presentations at training programs a covered company sponsors, including those required by the Food and Drug Administration. The compensation must be paid pursuant to a written agreement that documents the legitimate need for the consulting services and identifies the connection between the provider's competence and expertise and the services he or she will perform. The number of providers contracted for a project cannot exceed the number reasonably needed to achieve its identified purpose.

The entity contracting with a provider for these consulting services must make appropriate use of the services and keep records about them. The place and circumstances of any meeting held related to the consulting services must be conducive to consultation, and the activities related to consulting must be the primary focus of the meeting.

Payments Related to CME, Scientific or Educational Events, and Professional Meetings

The bill permits covered companies to provide or pay for various activities related to CME events, third party scientific or educational events, and professional meetings, under certain conditions.

It permits companies to provide scholarships or other financial aid to permit medical students, residents, fellows, and other health care students to attend educational conferences if:

1. the conference is a national, regional, or specialty medical association's major educational, scientific, or policy-making meeting;

2. the student's school or training institution selects the fund recipients; and

3. no one attending the meeting receives grants, scholarships, subsidies, support, consulting contracts, or educational or practice-related items in exchange for prescribing, disbursing, or using prescription drugs, biologics, or devices or agreeing to continue to do so.

It permits companies to compensate or reimburse a provider for speaking or providing actual and substantive services as a faculty organizer or academic program consultant at a CME event, third party scientific or educational event, or a professional meeting if the payment:

1. is reasonable,

2. based on fair market value for the services rendered, and

3. complies with the Accreditation Council for Continuing Medical Education's Standards for Commercial support or the relevant continuing education accrediting body's commercial support standards.

The bill permits companies to sponsor or pay for any portion of a third party scientific or educational event, charitable conference or meeting, or professional meeting if:

1. payment is made directly to the event organizer;

2. the organizer is responsible for and controls selection of the event's venue, content, faculty, educational methods, and materials and does so in accordance with its written guidelines;

3. the event venue is appropriate and conducive to conveying medical information and training;

4. the main purpose in bringing people to the event is to further their knowledge of the topics being presented; and

5. the event's primary purpose is to present at least one educational program and its time and effort is dedicated primarily to promoting scientific and educational activities and discourse.

The bill permits companies to financially support any costs of a CME event if (1) their support meets the Accreditation Council for Continuing Medical Education's Standards for Commercial Support or the relevant continuing education accrediting body's commercial support standards and (2) they do not directly pay or sponsor a health care provider.

Any covered company that compensates or reimburses a provider more than $ 1,000 in a calendar year must disclose certain information to the Attorney General's Office, on a form the attorney general prescribes. It must disclose (1) the provider's name, address, and institutional affiliation; (2) the provider's aggregate compensation or reimbursement; and (3) the reason for the payment. The company must file the form electronically beginning by July 1, 2010 and annually thereafter (apparently even if it no longer compensates any provider above the threshold level. ) The form's format must permit searches by provider name or institutional affiliation. The Attorney General's Office must, within available resources, make the information it receives available on its website.

The bill makes any violation of the payment and gift prohibitions or the disclosure requirements an unfair or deceptive trade practice.

The law prohibits businesses from engaging in unfair and deceptive acts or practices. CUTPA allows the Department of Consumer Protection commissioner to issue regulations defining what constitutes an unfair trade practice, investigate complaints, issue cease and desist orders, order restitution in cases involving less than $ 5,000, enter into consent agreements, ask the attorney general to seek injunctive relief, and accept voluntary statements of compliance. It also allows individuals to sue. Courts may issue restraining orders; award actual and punitive damages, costs, and reasonable attorneys fees; and impose civil penalties of up to $ 5,000 for willful violations and $ 25,000 for violation of a restraining order.