S T A T E   O F   N E W   Y O R K
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                                  5978

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                              March 3, 2011
                               ___________

Introduced  by  M.  of  A.  BURLING,  FINCH,  McDONOUGH, GIGLIO, JAFFEE,
  CASTELLI -- Multi-Sponsored by -- M. of  A.  CALHOUN,  CROUCH,  MAGEE,
  MONTESANO,  STEVENSON, THIELE -- read once and referred to the Commit-
  tee on Governmental Operations

AN ACT to amend the public health law,  in  relation  to  disclosure  of
  certain  gifts provided by drug manufacturers or wholesalers to health
  care providers

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Article 2 of the public health law is amended by adding a
new title 6 to read as follows:

                                TITLE VI
           NEW YORK STATE PHARMACEUTICAL DRUG MANUFACTURER AND
                        WHOLESALER DISCLOSURE ACT
SECTION 266.   LEGISLATIVE INTENT.
        266-A. DEFINITIONS.
        266-B. DISCLOSURE REQUIREMENTS.
        266-C. ANNUAL CONSUMER GUIDE ON PHARMACEUTICAL DRUG MANUFACTURER
                 AND WHOLESALER GIFTS TO HEALTH CARE PROVIDERS.
        266-D. PENALTIES.
        266-E. RULES AND REGULATIONS.
  S 266. LEGISLATIVE INTENT.   THE LEGISLATURE FINDS THAT  THE  COST  OF
PRESCRIPTION DRUGS IN THE UNITED STATES HAS GROWN DRAMATICALLY.  ACCORD-
ING  TO THE CENTERS FOR DISEASE CONTROL, SPENDING ON RETAIL PRESCRIPTION
DRUGS IN THE UNITED  STATES  MORE  THAN  TRIPLED  FROM  FIFTEEN  BILLION
DOLLARS  IN  NINETEEN  HUNDRED  EIGHTY-TWO  TO  FORTY-EIGHT  BILLION TWO
HUNDRED MILLION DOLLARS IN NINETEEN HUNDRED NINETY-TWO, THEN  MORE  THAN
TRIPLED  AGAIN  TO  ONE  HUNDRED  SIXTY-TWO BILLION FOUR HUNDRED MILLION
DOLLARS IN TWO THOUSAND TWO. IN PER CAPITA  TERMS,  RETAIL  PRESCRIPTION
DRUGS  SPENDING  INCREASED  FROM  SIXTY-FOUR DOLLARS IN NINETEEN HUNDRED

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01691-01-1
              

A. 5978                             2

EIGHTY-TWO TO FIVE HUNDRED SIXTY-NINE DOLLARS IN TWO THOUSAND TWO.    IN
TWO  THOUSAND  FIVE,  SPENDING  ON  PHARMACEUTICALS  ROSE TO TWO HUNDRED
FIFTY-ONE BILLION EIGHT HUNDRED MILLION DOLLARS.  WHILE THE AVAILABILITY
OF  USEFUL  NEW DRUGS TO TREAT CHRONIC CONDITIONS SUCH AS HEART DISEASE,
HYPERTENSION AND DEPRESSION ACCOUNTS FOR MUCH OF THE INCREASED SPENDING,
THERE IS WIDESPREAD CONCERN ABOUT THE  IMPACT  AGGRESSIVE  MARKETING  BY
DRUG MANUFACTURERS AND WHOLESALERS HAS HAD ON DRUG COSTS AND PRESCRIBING
PATTERNS.  IN  ADDITION  TO  THE  EXPLOSIVE GROWTH IN DIRECT-TO-CONSUMER
ADVERTISING, THESE MARKETING EFFORTS ARE OFTEN DIRECTED AT  HEALTH  CARE
PROVIDERS  AND  INCLUDE GIFTS, PARAPHERNALIA, TRIPS AND TRAVEL, FOOD AND
ENTERTAINMENT. A COMPETITIVE  MEDIA  REPORTING  STUDY  FOUND  THAT  DRUG
COMPANIES  PROVIDED  SEVEN  BILLION TWO HUNDRED MILLION DOLLARS WORTH OF
FREE SAMPLES TO PHYSICIANS' OFFICES  IN  NINETEEN  HUNDRED  NINETY-NINE.
THE  DRUG  INDUSTRY  SPONSORED MORE THAN THREE HUNDRED FOURTEEN THOUSAND
PHYSICIAN "EVENTS" IN TWO THOUSAND ONE, RANGING FROM CATERED LUNCHES  IN
HOSPITAL  CONFERENCE ROOMS TO WEEKEND GETAWAYS AT RESORTS, NEARLY DOUBLE
THE NUMBER FOUR YEARS EARLIER.  DRUG  COMPANIES  SPENT  SOME  TWENTY-TWO
BILLION  DOLLARS  IN  MARKETING IN TWO THOUSAND THREE.  ACCORDING TO THE
JOURNAL OF THE AMERICAN MEDICAL  ASSOCIATION,  NINETY  PERCENT  OF  DRUG
COMPANY  MARKETING IS DIRECTED AT PHYSICIANS.  ESTEEMED MEDICAL PUBLICA-
TIONS SUCH AS THE JOURNAL OF THE AMERICAN MEDICAL  ASSOCIATION  AND  THE
BRITISH  MEDICAL  JOURNAL  PRODUCED STUDIES THAT SUGGEST THESE MARKETING
ACTIVITIES DO INFLUENCE HEALTH CARE PROVIDERS' DECISIONS ON PRESCRIPTION
DRUGS, AND IN WAYS THAT ARE NOT THE BEST FOR PATIENTS OR THE HEALTH CARE
SYSTEM ITSELF. THE LEGISLATURE RECOGNIZES THAT  DRUG  MANUFACTURERS  AND
WHOLESALERS  ARE FREE TO USE ANY LEGAL SALES AND MARKETING TECHNIQUES TO
PROMOTE THEIR PRODUCTS. BUT THE LEGISLATURE ALSO FINDS THAT THE  CONSUM-
ERS HAVE A RIGHT TO KNOW WHAT GIFTS, IF ANY, THEIR HEALTH CARE PROVIDERS
ARE  RECEIVING  FROM  MANUFACTURERS  AND WHOLESALERS, IN ORDER THAT THEY
MIGHT  MAKE  INFORMED   AND   COST-EFFECTIVE   DECISIONS   ABOUT   THEIR
PRESCRIPTION DRUG EXPENDITURES.
  S 266-A. DEFINITIONS. AS USED IN THIS TITLE, THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS:
  1.  "APPROVED  CLINICAL  TRIAL"  MEANS  A CLINICAL TRIAL THAT HAS BEEN
APPROVED BY THE U.S. FOOD AND DRUG  ADMINISTRATION  (FDA)  OR  HAS  BEEN
APPROVED  BY  A  DULY CONSTITUTED INSTITUTIONAL REVIEW BOARD (IRB) AFTER
REVIEWING AND  EVALUATING  IT  IN  ACCORDANCE  WITH  THE  HUMAN  SUBJECT
PROTECTION  STANDARDS SET FORTH AT 21 C.F.R. PART 50, 45 C.F.R. PART 46,
OR AN EQUIVALENT SET OF STANDARDS OF ANOTHER FEDERAL AGENCY.
  2. "BONA FIDE CLINICAL TRIAL" MEANS AN APPROVED  CLINICAL  TRIAL  THAT
CONSTITUTES  "RESEARCH"  AS  THAT  TERM IS DEFINED IN 45 C.F.R. S 46.102
WHEN THE RESULTS OF THE RESEARCH CAN BE PUBLISHED FREELY BY THE INVESTI-
GATOR AND REASONABLY CAN BE CONSIDERED TO BE OF INTEREST  TO  SCIENTISTS
OR MEDICAL PRACTITIONERS WORKING IN THE PARTICULAR FIELD OF INQUIRY.
  3.  "CLINICAL  TRIAL" MEANS ANY STUDY ASSESSING THE SAFETY OR EFFICACY
OF DRUGS ADMINISTERED ALONE OR IN COMBINATION WITH OTHER DRUGS OR  OTHER
THERAPIES,  OR  ASSESSING  THE  RELATIVE  SAFETY OR EFFICACY OF DRUGS IN
COMPARISON WITH OTHER DRUGS OR OTHER THERAPIES.
  4. "DRUGS" SHALL HAVE THE SAME MEANING AS  SET  FORTH  IN  SUBDIVISION
SEVEN OF SECTION SIX THOUSAND EIGHT HUNDRED TWO OF THE EDUCATION LAW.
  5.  "HEALTH  CARE PROVIDER" MEANS ANY PHYSICIAN OR OTHER PERSON WHO IS
LEGALLY AUTHORIZED TO PRESCRIBE DRUGS.
  6. "PHARMACEUTICAL DRUG MANUFACTURER" MEANS A  PERSON  WHO  COMPOUNDS,
MIXES,  PREPARES, PRODUCES AND BOTTLES OR PACKS DRUGS FOR THE PURPOSE OF
DISTRIBUTING OR SELLING TO PHARMACIES OR TO OTHER CHANNELS  OF  DISTRIB-
UTION.

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  7. "PHARMACEUTICAL DRUG WHOLESALER" MEANS A PERSON WHOSE PRIMARY BUSI-
NESS  PURPOSE  IS  TO  BOTTLE, PACK OR PURCHASE DRUGS FOR THE PURPOSE OF
SELLING OR RESELLING TO PHARMACIES OR TO OTHER CHANNELS AS  PROVIDED  IN
THIS TITLE.
  8.  "PHARMACY" SHALL HAVE THE SAME MEANING AS SET FORTH IN SUBDIVISION
ONE OF SECTION SIX THOUSAND EIGHT HUNDRED TWO OF THE EDUCATION LAW.
  9. "UNRESTRICTED GRANT" MEANS ANY GIFT,  PAYMENT,  SUBSIDY,  OR  OTHER
ECONOMIC  BENEFIT  TO  AN  EDUCATIONAL INSTITUTION, PROFESSIONAL ASSOCI-
ATION, HEALTH CARE FACILITY,  OR  GOVERNMENTAL  ENTITY  WHICH  DOES  NOT
IMPOSE  ANY  RESTRICTIONS  ON  THE  USE  OF THE GRANT, SUCH AS FAVORABLE
TREATMENT OF A CERTAIN PRODUCT OR AN ABILITY OF THE MARKETER TO  CONTROL
OR INFLUENCE THE PLANNING, CONTENT, OR EXECUTION OF THE EDUCATION ACTIV-
ITY.
  S  266-B. DISCLOSURE REQUIREMENTS. 1. ANY PHARMACEUTICAL DRUG MANUFAC-
TURER OR PHARMACEUTICAL DRUG WHOLESALER, INCLUDING ANY EMPLOYEE OR AGENT
OF SUCH MANUFACTURER OR WHOLESALER, THAT MAKES ANY GIFT WHETHER  IN  THE
FORM  OF MONEY, SERVICE, LOAN, TRAVEL, ENTERTAINMENT, HOSPITALITY, THING
OR PROMISE, OR IN ANY OTHER FORM, TO A HEALTH CARE PROVIDER SHALL REPORT
THE GIFT TO THE COMMISSIONER IN THE MANNER SET FORTH IN SUBDIVISION  TWO
OF THIS SECTION.
  2.  ANY PHARMACEUTICAL DRUG MANUFACTURER OR PHARMACEUTICAL DRUG WHOLE-
SALER WHO MAKES AT LEAST ONE GIFT UNDER SUBDIVISION ONE OF THIS  SECTION
SHALL  FILE  WITH  THE  COMMISSIONER AN ANNUAL REPORT, DUE NO LATER THAN
JUNE FIRST OF EACH YEAR, BEGINNING IN  TWO  THOUSAND  THIRTEEN,  OF  ALL
GIFTS MADE BY THE MANUFACTURER OR WHOLESALER TO HEALTH CARE PROVIDERS.
  3.  SUCH  ANNUAL REPORT SHALL CONTAIN: (A) THE NAME, ADDRESS AND TELE-
PHONE NUMBER OF THE PHARMACEUTICAL DRUG MANUFACTURER OR WHOLESALER;  (B)
AN  ITEMIZED  LIST  CONTAINING  A DESCRIPTION OF EACH GIFT FALLING UNDER
SUBDIVISION ONE OF THIS SECTION AND  THE  NAME,  ADDRESS  AND  TELEPHONE
NUMBER OF THE HEALTH CARE PROVIDER WHO RECEIVED EACH GIFT; (C) THE MONE-
TARY VALUE OF EACH GIFT; AND (D) SUCH OTHER INFORMATION AS DEEMED NECES-
SARY BY THE COMMISSIONER FOR COMPLIANCE WITH THIS ARTICLE.
  4. THE FOLLOWING SHALL BE EXEMPT FROM DISCLOSURE:
  (A)  THE  PAYMENT  OF  REASONABLE  COMPENSATION  AND  REIMBURSEMENT OF
EXPENSES IN CONNECTION WITH BONA FIDE CLINICAL TRIALS;
  (B) ANY GIFT THE VALUE OF WHICH IS LESS THAN SEVENTY-FIVE DOLLARS;
  (C) SCHOLARSHIP OR OTHER SUPPORT FOR MEDICAL STUDENTS,  RESIDENTS  AND
FELLOWS  TO ATTEND A SIGNIFICANT EDUCATIONAL, SCIENTIFIC, OR POLICY-MAK-
ING CONFERENCE OF A NATIONAL, REGIONAL, OR SPECIALTY  MEDICAL  OR  OTHER
PROFESSIONAL  ASSOCIATION  IF  THE RECIPIENT OF THE SCHOLARSHIP OR OTHER
SUPPORT IS SELECTED BY THE ASSOCIATION;
  (D) UNRESTRICTED GRANTS FOR CONTINUING MEDICAL EDUCATION PROGRAMS;
  (E) PRESCRIPTION DRUG REBATES AND DISCOUNTS; AND
  (F) FREE SAMPLES OF DRUGS.
  S 266-C. ANNUAL CONSUMER GUIDE ON PHARMACEUTICAL DRUG MANUFACTURER AND
WHOLESALER GIFTS TO HEALTH CARE PROVIDERS. 1. NO  LATER  THAN  SEPTEMBER
FIRST OF EACH YEAR, BEGINNING IN TWO THOUSAND THIRTEEN, THE COMMISSIONER
SHALL  PUBLISH  AND  MAKE  AVAILABLE,  FREE  OF  CHARGE TO THE PUBLIC, A
CONSUMER GUIDE ON GIFTS PROVIDED BY  PHARMACEUTICAL  DRUG  MANUFACTURERS
AND  WHOLESALERS  TO HEALTH CARE PROVIDERS. SUCH GUIDE SHALL CONTAIN ALL
OF THE INFORMATION PROVIDED IN THE ANNUAL REPORT REQUIRED BY SECTION TWO
HUNDRED SIXTY-SIX-B OF THIS TITLE AND THE INFORMATION SHALL  BE  WRITTEN
IN PLAIN LANGUAGE IN A CLEAR AND UNDERSTANDABLE FORMAT.
  2.  THE  COMMISSIONER  SHALL PROVIDE FOR THE ADEQUATE DISTRIBUTION AND
AVAILABILITY OF THE CONSUMER GUIDE ON PHARMACEUTICAL  DRUG  MANUFACTURER
AND  WHOLESALER  GIFTS  TO HEALTH CARE PROVIDERS.  APPROPRIATE COPIES OF

A. 5978                             4

THE GUIDE SHALL BE TRANSMITTED TO THE OFFICE FOR THE AGING FOR  DISTRIB-
UTION AT EVERY OFFICE FOR THE AGING IN THE STATE, TO EVERY COUNTY OFFICE
FOR  THE  AGING  IN  THE  STATE AND TO THE COMMISSIONER OF EDUCATION FOR
DISTRIBUTION  TO  EVERY  PUBLIC LIBRARY IN THE STATE WHERE COPIES OF THE
GUIDE SHALL BE MADE AVAILABLE FREE OF CHARGE TO THE PUBLIC. THE  COMMIS-
SIONER SHALL ALSO POST THE GUIDE ON THE DEPARTMENT'S INTERNET WEBSITE.
  S  266-D.  PENALTIES.   1. THE COMMISSIONER MAY IMPOSE A CIVIL PENALTY
FOR FAILURE TO FILE A TIMELY REPORT AS REQUIRED BY SECTION  TWO  HUNDRED
SIXTY-SIX-B  OF  THIS TITLE IN AN AMOUNT UP TO FIFTY DOLLARS A DAY UNTIL
SUCH REPORT IS FILED OR THREE THOUSAND DOLLARS, WHICHEVER IS LESS.
  2. ANY PERSON WHO VIOLATES ANY OTHER PROVISION OF THIS TITLE SHALL  BE
SUBJECT  TO  A  CIVIL  PENALTY IN AN AMOUNT NOT TO EXCEED THREE THOUSAND
DOLLARS FOR EACH VIOLATION. THE COMMISSIONER IS AUTHORIZED TO ASSESS THE
CIVIL PENALTY UNDER THIS SECTION PURSUANT  TO  SECTION  TWELVE  OF  THIS
CHAPTER.
  S  266-E.  RULES  AND  REGULATIONS.  THE COMMISSIONER IS AUTHORIZED TO
PROMULGATE RULES AND REGULATIONS AS DEEMED NECESSARY TO  CARRY  OUT  AND
ENFORCE THE PROVISIONS OF THIS TITLE.
  S  2. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.