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CBI’s Aggregate Spending Conference: Overview of Panel on State Laws
August 23, 2010
The new sampling disclosure requirements for the state of Vermont and the far reaching implications as more reporting requirements at state and federal levels loom for pharmaceutical, biotechnology and medical device companies was the subject of a panel discussion at last week’s CBI’s 4th Annual Conference on Tracking State Laws & Aggregate Spend. John Oroho, a principal of Porzio, Bromberg & Newman and Executive Vice President of Porzio Pharmaceutical Services, moderated the state panel discussion entitled, “Update on Recent and Proposed State Transparency and Disclosure Laws.”
Not only are other states looking to require disclosure of samples but a growing number of states are also looking at and enacting gift bans in connection with interactions with healthcare practitioners, according to Mr. Oroho. “The current state of flux in sample accountability and related activities mandates an enormous amount of work for the life sciences industry and a sea change for how companies track samples.”
Under the PDMA (Prescription Drug Marketing Act), he explains, life sciences companies are required to report losses of samples that exceed a level set by the company. The present sample accountability systems for most companies are sales representative-centric with sample reconciliations conducted at the sales rep level. The Social Security Act amendments of 2010, as part of the healthcare overhaul legislation, further complicate what lies ahead as life sciences companies become subject to sample reporting at the drug and dosage level in the aggregate for healthcare practitioners (HCP). The upshot is that companies, in addition to developing aggregate spending systems to satisfy aggregate spend requirements, will also have to revisit sample accountability systems and build in capabilities to reconcile drug samples at the HCP level.
Mr. Oroho explains that there is still another level of complexity in the Physician Payments Sunshine Act which adds transparency to the relationship between drug, biologic and medical device manufacturers and physicians or medical practices regarding gifts and payments. Currently several states have laws that require disclosure of fees paid to HCPs, including speaking fees, meals and other compensation. Vermont law bans most gifts to health care professionals and other states are predicted to follow.
Companies have less than two years to get up to speed so that they can be compliant with the aggregate spend requirements as companies are required to start tracking expenses in 2012 and begin reporting the prior year in 2013.
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