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Massachusetts FY 2013 Budget Contains Important Sales and Marketing Changes for Pharmaceutical and Medical Device Manufacturers

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| Legal Advisory

Changes to M.G.L. c. 111N, Pharmaceutical and Medical Device Manufacturer Conduct

Effective July 1, 2012, pursuant to provisions in the Massachusetts FY 2013 Appropriations Act (the state budget), pharmaceutical and medical device manufacturers (“Manufacturers”) will now be able to provide or pay for “modest meals and refreshments” for health care practitioners in connection with certain non-CME educational presentations. Such presentations must occur in a venue and manner conducive to informational communication and educate and inform the health care practitioners about the benefits, risks and appropriate uses of prescription drugs or medical devices, disease states or other scientific information. The Massachusetts Department of Public Health (“DPH”) will develop regulations defining “modest meals and refreshments.”

Manufacturers providing or paying for these modest meals and refreshments will be required to file quarterly reports with DPH that include the location of the presentation, description of the products or devices discussed, and the total amount paid for the presentation, meals, and refreshments per participant. DPH may require a fee for filing such reports. However, Manufacturers will not have to report information that it already disclosed to a federal agency under federal law and that DPH can obtain from such federal agency. This new Massachusetts reporting requirement may match up to the annual federal requirements leaving the question of whether or to what extent the federal reporting requirements will preempt this state reporting requirement. As you may recall, the Centers for Medicare and Medicaid Services (“CMS”) has yet to issue final regulations implementing the federal “Sunshine” disclosures required by the Affordable Care Act. DPH will make the annual reports of “Sunshine” disclosures made to the U.S. Department of Health and Human Services available on a searchable database.

In another important change, medical device manufacturers can now cover the expenses for technical training for health care practitioners on the use of medical devices. Previously, health care practitioners could only receive training if the expense was part of the vendor’s purchase contract, leading to much confusion as to how a health care practitioner could make an informed pre-purchase evaluation of a device.

Changes to M.G.L. c. 175H False Health Care Claims

The FY 2013 Appropriations Act adds an exception to the Massachusetts False Health Care Claims Law, to allow pharmaceutical companies to offer “coupons” (including certificates, rebates, vouchers and other discounts) on prescription drugs or biologics to reduce a patient’s out-of-pocket expenses as long as the product covered by the coupon does not have an AB rated generic equivalent. The coupon must be provided to the patient directly or electronically and the manufacturer cannot favor or exclude any particular pharmacy. The coupon exception became effective July 1, 2012 and is scheduled to sunset on July 1, 2015. By December 31, 2014, the Division of Health Care Finance and Public Policy in consultation with DPH must complete an analysis on the impact of use of coupons on healthcare costs. Massachusetts had long been an outlier in prohibiting prescription drug coupons. This change in law will allow Massachusetts patients the same access to prescription discounts that are available to patients in virtually every other state.

This advisory was prepared by the Life Sciences practice group at Nutter McClennen & Fish LLP. For more information, please contact your Nutter attorney at 617.439.2000.

This update is for information purposes only and should not be construed as legal advice on any specific facts or circumstances. Under the rules of the Supreme Judicial Court of Massachusetts, this material may be considered as advertising.

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