Colorado, Connecticut and Vermont recently enacted legislation creating new
compliance and disclosure requirements for pharmaceutical and medical device
manufacturers and healthcare professionals. Many state legislatures have
recently enacted or proposed legislation that is intended to bring transparency
to healthcare providers’ relationships with industry. Such state legislative
efforts supplement the “sunshine” provisions of the Patient Protection and
Affordable Care Act of 2010 (PPACA), one of two statutes that encompass the
health reform legislation.
Specifically, PPACA included a modified version of the previously proposed,
but never enacted, Physician Payments Sunshine Act. The recently enacted laws in
Colorado, Connecticut and Vermont signal that for the purposes of establishing
and enforcing transparency and disclosure laws, states are not exclusively
deferring to the federal government.
The governor of Colorado signed two bills into law on June 10, 2010. Senate
Bill S.10-126 requires the Colorado Department of Regulatory Agencies to post on
its website copies of the disclosure reports that pharmaceutical and medical
device manufacturers are required to submit to the U.S. Department of Health and
Human Services pursuant to the transparency and disclosure provisions enacted as
part of PPACA.
The second bill, Senate Bill S.10-124, also known as the Michael Skolnick
Medical Transparency Act of 2010 (the Transparency Act), amends the Michael
Skolnick Medical Transparency Act (the Original Act) of 2008.
The Original Act required physicians to disclose to the Director of the Colorado
Division of Registrations (the Director) certain healthcare-related independent
contractor or employment contracts that exceed an annual aggregate of $5,000.
The Transparency Act expands existing disclosure requirements to a broad range
of healthcare practitioners including dentists, physician assistants, nurses,
physical therapists and counselors.
Required disclosures must be made whenever physicians or other covered
providers are renewing or applying for certification, registration, or a new
active license to practice. Contracts requiring disclosure include independent
contractor and consulting relationships between healthcare professionals and
pharmaceutical and medical device manufacturers. These contracts are disclosed
on a public website, such as the website of the Director or that of the state
board overseeing the applicant’s practice.
In contrast to PPACA, Colorado does not provide a “trade secret” exception
whereby disclosures can be delayed or remain confidential when such disclosures
could reveal competitive information or trade secrets related to the
manufacturer’s product development.
On June 8, 2010, the governor of Connecticut signed into law Public Act No.
10-117 (S.428) (the Connecticut Act). The
Connecticut Act requires pharmaceutical and medical device manufacturers to
implement, at a minimum, the PhRMA or AdvaMed compliance codes. In addition, all
such manufacturers must adopt a comprehensive compliance program that comports
with the recommendations set forth in the Compliance Program Guidance for
Pharmaceutical Manufacturers issued by the Office of the Inspector General of
the U.S. Department of Health and Human Services. The Connecticut Commissioner
of Consumer Protection may impose civil penalties of up to $5,000 for failure to
implement a compliant code, or failure to conduct training or regular compliance
audits related to the code.
On May 27, 2010, the Vermont Legislature, one of the most active in the area
of transparency and disclosure laws, enacted new legislation (S.88) (the Vermont
Act). This legislation amends existing Vermont legislation
related to a healthcare provider’s relationships with medical device and
Vermont previously enacted certain transparency and disclosure laws,
including a prohibition on the provision of gifts by pharmaceutical and medical
device manufacturers to healthcare professionals. In addition to the existing
requirements under Vermont law, the Vermont Act requires each manufacturer to
disclose all free product samples it provides to a healthcare provider (18 V.S.A.
This new requirement does not apply to prescription drug samples that
manufacturers are required to report pursuant to the requirements set forth in
PPACA. Under PPACA, beginning April 1, 2012, drug manufacturers and authorized
distributors must report to the Secretary of the U.S. Department of Health and
Human Services the identity and quantity of drug samples requested by, and
distributed to, healthcare practitioners to the extent payment for such a drug
is available under a government healthcare plan (or a waiver of such plan).
Finally, the legislation modified and expanded the exceptions to the Vermont
gift ban (18 V.S.A. § 4631a). Specifically, the Vermont Act expands the
categories of permissible free samples; allows restricted support for fellowship
salaries; and allows manufacturers to provide coffee or other snacks and
refreshments at a conference booth. The Vermont Act also exempts the provision
of pharmaceuticals, medical devices and donations to free clinics or patient
assistance programs from the gift ban. Finally, the Vermont Act amends the prior
legislation to allow manufacturers that sponsor continuing medical educational
programs to use part of the sponsorship funding to provide meals and other food
for all conference participants.