State: U.S. bill would undermine drug maker gift rules
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By DANIEL BARLOW Vermont Press Bureau - Published: May 27, 2008
MONTPELIER — A U.S. Senate bill requiring the pharmaceutical industry to report gifts and donations to the medical field would undermine a stronger Vermont law if passed, according to state officials and advocacy groups.
The bill under consideration in the U.S. Senate would for the first time set up a system requiring drug-makers to disclose the gifts, payments, travel reimbursements and other financial donations to doctors and others in the field.
But the reporting threshold under the proposed federal law is $500 — much higher than the $25 threshold that a similar Vermont law, which was passed about five years ago. If passed, the federal bill would preempt the state law.
"Vermont was the first state to enact a law requiring that these payments be made public," said Assistant Attorney General Julie Brille. "We've been doing this for four years now and we are very concerned with how this new Senate bill would affect that."
Sen. Chuck Grassley, R-Iowa, and Sen. Herb Kohl, D-Wis., are the sponsors of the federal bill. Grassley's staff did not return a call for comment this week and Kohl's staff directed questions to the Senate Special Committee on Aging.
Ashley Glacel, the press secretary for that committee, said Wednesday that she understands the concerns over the preempt clause contained in the latest draft of the federal bill, but added that it is more expansive because it also extends to the field of medical device manufacturers.
Vermont's law also has a "trade secrets" provision that allows drug-makers to not report "large portions of their payments" to doctors and others in the medical field,' Glacel added.
"Our bill would increase reporting across the country," she said. "All this information would be gathered at the federal level, but states could still easily access it."
The federal bill requires companies that manufacture and sell drugs and medical equipment to disclose all contributions to doctors and others of more than $500 — although it contains exemptions for product samples, training and educational opportunities.
These requirements would begin in 2011 if the bill passes and companies could face fines ranging from $1,000 to $250,000 for violating it.
The problem is this: The pharmaceutical industry successfully lobbied for changes to the proposed law that would allow it, if passed and signed by President Bush, to override any similar state laws, even if those state laws are stronger than the federal law.
Ken Libertoff, the executive director of the Vermont Association for Mental Health, a Montpelier advocacy group that announced last year it would stop accepting pharmaceutical funds, said it was unfortunate that Washington, D.C. senators could try to undercut Vermont's law as part of a political compromise.
Libertoff's organization is now calling on others in Vermont's medical community to join them in refusing corporate drug dollars.
"From our point of view, this would be a tremendous setback for Vermont and frankly would undermine our own campaign to create an environment of transparency and disclosure," Libertoff said.
Vermont Sens. Patrick Leahy, a Democrat, and Bernard Sanders, an independent, both have concerns with the proposed federal law.
Leahy spokesperson David Carle said the senator believes that states should have the right to maintain strong consumer protection laws. Carle compared this situation to one last summer when a federal mental health parity law threatened to preempt Vermont's stronger parity law.
Carle said "there is a concern that the sponsors are tempted to sell out states like Vermont with stronger laws, in order to get Eli Lilly on board," referring to one of the country's largest drug-makers, now facing thousands of lawsuits over allegations that it hid negative side effects of the anti-psychotic drug Zyprexa.
Will Wiquist, a spokesperson for Sanders, said the senator "does not support that provision" that would preempt state law. He hopes that the language is changed before the bill comes to a full Senate floor vote.
"Vermont has been a leader in transparency in this area and doesn't need any help from the federal government," Wiquist said.
Vermont is one of only a handful of states that require the pharmaceutical industry to report gifts and donations to doctors. The 2005 law was aimed at bringing transparency and accountability to a system that some believe results in these companies buying preferential treatment for their products from doctors.
The pharmaceutical industry spent $2.2 million in fiscal year 2006 (July 2005-July 2006) in gifts and donations to Vermont doctors, medical institutions and advocacy groups, according to a report by the Vermont Attorney General's Office, which compiles the data and releases it annually.
That amount has been on the rise in recent years. Last year's total donations were 2.3 percent more than the previous year's allocation of $2.17 million. Compared with earlier years, the pharmaceutical industry spent nearly 16 percent more last year marketing to doctors than it did in fiscal year 2004.
New numbers detailing the money spent by drug-makers in Vermont for marketing are expected to be released next month.
Libertoff agrees that there are some serious loopholes in Vermont's law, including the clause exempting "trade secrets," free product samples, advertising, discounts and rebates for medical institutions and unrestricted grants for educational purposes.
He said he expects the money the pharmaceutical industry spends for marketing in Vermont to be much higher than the amounts released by the state if these areas where factored in.
"This money not only buys influence and trust, but it also buys silence," Libertoff said. "We hope to lift that veil of silence by calling on all professional to stop accepting these funds by the end of 2008."
Contact Daniel Barlow at daniel.barlow@rutlandherald.com.
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