As New Jersey Goes, So Goes the Nation?

The party is over…at least in New Jersey and maybe soon a handful of other states. A new NJ law places a yearly cap of $10,000 on the amount of money that physicians can receive from pharma.

Yes, it’s just NJ for now, but the news should serve as a resounding wake up call for dermatologists. This is the latest intrusion by government (in this case state government) into the relationships that physicians have with the pharmaceutical industry. The Open Payments website (a result of the Physician Payments Sunshine Act) was started by the Federal government several years ago and was intended to offer transparency to the physician/industry relationship. While I’ve yet to have a patient tell me that they’ve looked me up on the website, my colleagues are all very busy looking each other up.

The Sunshine Act was designed to increase transparency around the financial relationships between physicians and industry, but these gift bans—which are popping up in several states—are an abuse of the scope of the intent.

About the Jersey Rule: Regulation or Censorship?

The rule took effect on January 1, 2018, and it doesn’t pull any punches. The so-called “Limitations and Obligations Associated with Acceptance of Compensation from Pharmaceutical Manufacturers by Prescribers” legislation appears to be the first of its kind to be tied to physician licensing and not directed at pharmaceutical companies. This is ironic in a state known as the “Medicine Chest of America” due to its high concentration of pharma companies and all of the ties and taxes levied on the pharmaceutical industry.

Here’s the gist: All contracts and payments entered into by physicians directly with the pharmaceutical industry will be subject to a $10,000 total yearly cap. This includes speaker fees (except for those at continuing education events), participation on advisory boards, and consulting hours, but exempts research and education related payments. In addition, physicians will be subject to a $15 cap for meals related to all activities. NJ prescribers are also now forbidden from accepting any gift that does not “advance care or education.”

Some studies have shown that “gifts” and cash encourage physicians to prescribe pricey name-brand drugs instead of much less expensive generic ones. That said, many generic medications are also made by pharmaceutical companies, several of which are NJ-based.

“We want doctors in New Jersey to make prescribing decisions based only on what’s in the best interest of their patients, not based on meals that may be provided or compensation that might be provided by pharma companies” said NJ Attorney General Christopher Porrino in an interview with WHYY, a public media organization in the Philadelphia Region.

So goes the nation?

Media reports suggest many states are taking aim at any financial influence on doctors from pharma. Most hold the pharmaceutical companies accountable, whereas Jersey places the onus on doctors. For example, Nevada requires sales representatives to file reports on free drug samples and payments to prescribers above $10. In Maine, drug makers can’t offer prescribers any cash gift or any gift “for which reciprocity is expected or implied.” The California Senate passed a bill restricting the ability of pharmaceutical companies to provide gifts and financial incentives to physicians and other healthcare professionals—and now that same bill is up for vote in the House.

This is likely just the beginning of state efforts to reign in such payments and rain on the parade. Let this serve as your wake up call. Join your state society. Find out what restrictions your states have in store. Don’t let the politicians tell you who you can have relationships with, or how you can earn your living, while they’re busy counting their lobbyist dollars.