Impact of the Physician Payment Sunshine Act on State Regulations: Adoption of General Compliance Programs, Data Mining, DOJ Compliance

Posted in Physician Payment Sunshine Act on May 27, 2013

In addition to the gift ban laws discussed in our last series post, certain states require drug companies to adopt general compliance programs. Both Connecticut and California require drug companies to adopt such programs in accordance with the Office of Inspector General’s “Compliance Program Guidance for Pharmaceutical Manufacturers.” There are several elements in the guidance for manufacturers to consider when developing a compliance program, including:

• Written policies;
• Training program;
• Designation of a compliance officer and other appropriate bodies;
• Line of communication between all employees and compliance officer;
• Risk evaluation to monitor compliance;
• Policies for investigating noncompliance; and
• Development of policies to deal with employees and entities excluded from participation in federal healthcare programs.

This legal requirement is generally not burdensome for manufacturers thanks to the autonomous nature of the laws and the broad language of the guidance.

Data Mining

Certain states have also established laws against data mining. Vermont, New Hampshire, Massachusetts, and Maine passed laws limiting the practice of collecting and selling physician-level prescription statistics. Pharmaceutical companies use this data to guide marketing efforts. These states implanted laws prohibiting such practices in order to minimize abuse in drug marketing to physicians and to protect physicians’ privacy.

Quasi-Voluntary Disclosure and Compliance by Pharmaceutical Companies

Not all laws regulating pharmaceutical companies before the PPSA were implemented on a state level. Several pharmaceutical manufacturers have agreed to publish their payments to physicians in settlements with the Department of Justice (DOJ). The first company to announce that it will be reporting payments was Eli Lilly in 2008.

Visit our blog soon for the final entry of our Physician Payment Sunshine Act Blog Series.