Massachusetts loosens the strings on sales reps
Edition: September 2012 - Vol 20 Number 09
It wasn’t a hue and cry from physicians, patients or medical device vendors that led to the softening of Massachusetts’ strict gift ban. Rather, it appears that complaints from the state’s hotel and restaurant industry are what tipped the scale.
At any rate, medical device and pharmaceutical vendors can once again provide modest meals and refreshments in connection with non-CME educational presentations even if those events don’t occur in the hospital or physician’s office, and even if the vendor and provider don’t have a signed purchase agreement in hand. Massachusetts Governor Deval Patrick signed the changes into law in early July.
Though the original code of conduct targeted manufacturers, “as a practical matter, it changed the way customers behaved, which ended up changing the landscape for all vendors,” notes Ted Almon, president and CEO, Claflin Co., Warwick, R.I. “I see the new amendments as intended to correct the over-reaches [of the original gift ban], narrowing the focus of the law, which is appropriate.”
The strict code hadn’t caused sales reps for specialty distributor Bay State Anesthesia to change their approach to customers and prospective customers, notes Shawn Walker, partner for the North Andover, Mass-based company, Nevertheless, the lifting of the strictest provisions of the code of conduct was a relief.
“Sometimes the only way to get everybody to the table is at lunch,” and often, that food is prepared by the hospital cafeteria, she says. “And we wouldn’t provide a meal to educate people in the event they might buy [a device], but rather, to provide a venue to teach them how to use it.
“Still, its good to know you don’t have the specter of a fine hanging over you.”
The 2009 code
Signed into law in 2009, the “Massachusetts Marketing Code of Conduct” was intended to limit sales and marketing activities between vendors and healthcare providers that could influence prescribing patterns or adversely affect patient care; and increase transparency with regard to interactions between vendors and healthcare providers.
The 2009 code prohibited providing or paying for meals for healthcare practitioners that:
• Are part of an entertainment or recreational event.
• Are offered without an informational presentation made by the vendor.
• Are offered, consumed, or provided outside of the healthcare practitioner’s office or hospital setting.
• Are provided to a healthcare practitioner’s spouse or other guest.
The code also prohibited:
• Provision or payment of entertainment and recreational items.
• Sponsorship or payment for continuing medical education that fails to meet the Accreditation Council for Continuing Medical Education Standards.
• Financial support for the costs of travel, lodging or other personal expenses of non-faculty healthcare practitioners attending any CME event, third-party scientific or educational conference, or professional meetings.
• Funding to compensate for the time spent by healthcare practitioners participating in any CME event, third-party scientific or educational conferences, or professional meetings.
• The provision of or payment for meals directly at any CME event, third-party scientific or educational conferences, or professional meetings.
• Payments in cash or cash equivalents to healthcare practitioners either 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 2009 marketing code of conduct specifically allowed payment for reasonable expenses necessary for technical training on the use of a medical device if that expense is part of the vendor’s purchase contract for the device.
The changes signed into law by Governor Patrick were significant in two respects.
First, the amended code allows payment for reasonable expenses necessary for technical training on the use of a medical device even if the vendor does not have a signed purchase agreement with the healthcare provider.
Second, it removes the requirement that modest meals and refreshments in connection with non-CME education presentations must take place in the hospital or physician’s office. Instead, the amended law provides that meetings off campus, such as restaurants, are allowable so long as “such presentations occur in a venue and manner conducive to informational communication.”
Why the change?
In a letter to the American Medical Student Association PharmFree Campaign, which had lobbied against loosening of the strict code of conduct, Patrick wrote, “After many substantive and thoughtful discussions, I have decided, consistent with the widely accepted national Pharma [Pharmaceutical Research and Manufacturers of America] code, to support ‘modest meals and refreshments’ in connection with education presentations for health care practitioners. Companies must make quarterly reports to the Department of Public Health, detailing all presentations at which such meals and refreshments were provided and the total amount expended. This narrow change will afford health care providers some flexibility to be educated on new clinically relevant products and allow them to stay informed on advancements in pharmaceuticals and medical devices that benefit patients and lower our healthcare costs.”
The strict code of conduct had been under attack for some time. Massachusetts House Speaker Robert DeLeo had reportedly said that some restaurants were losing 20 percent of their sales due to the law. And the Restaurant and Business Alliance had made repeal of the law one of its top agenda items.
The art of gift-giving
“Frankly, as someone who started working in 1970, I suppose I am somewhat old school in my approach to sales,” says Almon. “I was taught and still believe it is all about relationships. Entertainment and modest gift-giving is/was an art to me, and I was good at it. So my initial reaction [in 2009] was that the state was taking away an important business tool I had always used to my advantage. We could no longer give away our Patriots or Red Sox tickets, or even invite customers to the games unless they paid for them. Golf was dicey too, but charity events were OK for the most part, and there were lots of them.
“Now I have had time to really consider what the intent of the law was, and what was happening within the system that lawmakers intended to prevent. It had nothing to do, really, with what I was doing; it was really aimed at big drug and device companies that were paying off docs and others for their business. It was a corrupt practice, even if the specific quid pro quo wasn’t clearly defined, and I agree it should be prohibited. They probably also proscribed some perfectly harmless things like lunches and other meals at meetings, but there are always unintended consequences.
“So, like most things the gift law and the practices it intends to control are rather subjective,” adds Almon. “There is a very fine line between legitimate relationship-building using reasonable entertainment and even modest gifts (promotional items, golf balls, sports tickets) and the outright bribery that can corrupt honest commerce. I always felt that honest business people knew where that line was and honored it. It is a matter of intent – the spirit with which the gift is given. There should never be an expectation attached to the gesture; it should be one of gratitude. Not different, really, from many other things in life.”
Meanwhile, the Massachusetts Medical Society will continue to work with the state Department of Public Health in the implementation of the new code, says Society spokesman Rick Gulla.
At its annual meeting in May, the Society had elected to advocate modifying the gift ban so long as the proposed changes would 1) advance patient interests, 2) conform to the guidelines of the American Medical Association and the Accreditation Council on Continuing Medical Education regarding industry gifts to physicians, and 3) “not adversely affect public trust, or the benefit to the patient from modification of the law outweighs the ethical impact of any potential adverse effect on public trust.”
Meanwhile, the Massachusetts Life Sciences Center, a quasi-public state agency established in 2006 to promote the life sciences in Massachusetts, gave a thumbs-up to the recent changes to the law. “We think the changes strike the right balance,” says spokesman Angus McQuilken.