Tied up over disclosure
Life sciences firms anxious about rules on gifts to doctors
Despite howls of protest about a new law designed to crack down on gifts to doctors, several Massachusetts life sciences companies say they remain hopeful the regulations can be implemented in a way that doesn't hurt their ability to work with physicians.
"It's still in the early stages," said Joe Metzger, a spokesman for Smith & Nephew Inc., a medical device maker with 750 employees in Andover and Mansfield.
The law, signed by Governor Deval L. Patrick on Sunday, requires pharmaceutical companies and medical device makers to publicly disclose gifts and payments of more than $50 to healthcare professionals and places a ban on certain gifts, such as tickets to sporting events. It also directs the Department of Public Health to draft extensive regulations restricting companies' marketing practices, using the national pharmaceutical industry's own voluntary "code of conduct" as a starting point. Violations would carry a penalty of $5,000.
But in a letter addressed to lawmakers, Patrick said the new rules are not intended to force companies to disclose confidential information, impede medical research, or block the training of healthcare providers, issues that have all been raised by industry groups and executives. And Patrick said he is confident the state health depart ment could develop regulations consistent with both the law and the state's commitment to strengthen the life sciences sector, a statement that reassured some executives.
"All interested parties will have a full opportunity to participate and comment on the development of those regulations," Patrick said.
Before he signed the legislation, industry associations and companies made an aggressive push to derail the proposal. In an opinion piece in the Globe last week, the leaders of the state medical device and biotech industry trade groups warned the rules would "repel investment in the Bay State."
But companies now say they have no immediate plans to move their operations out of state or stop participating in clinical trials in Massachusetts.
"We have a strong commitment to Massachusetts and value our relationships," said Daniel McIntyre, a spokesman for pharmaceutical giant Wyeth, which has about 2,700 employees in Massachusetts.
Firms said they are waiting to see how the state crafts the regulations governing what payments must be disclosed and what gifts are still permitted.
"Until the rule-making process is over, it's hard to assess" the impact, said Renee Connolly, a spokeswoman for drug maker EMD Serono Inc. in Rockland.
That doesn't mean companies aren't concerned. A Genzyme Corp. executive fretted that if the marketing regulations are drafted too narrowly, it could make it less appealing to conduct clinical trials in Massachusetts.
"I am not so much worried about Genzyme or the drug industry in Massachusetts as about academic medical centers," said Roger Louis, chief compliance officer for the Cambridge biotechnology company, adding that it's unclear what the final rules will say.
Last week, Biogen Idec Inc.'s top research executive, Cecil Pickett, warned Patrick the new law could potentially force the Cambridge biotech company to disclose exactly how much it pays doctors on staff, compromising "confidential salary information," since it requires companies to disclose payments to doctors of more than $50.
In addition, he complained the law could force the company to make public "sensitive proprietary" information about its arrangements with medical researchers to conduct clinical trials.
But it turns out the federal government already posts extensive information about clinical trials online, including the names of the corporate sponsors and principal investigators, though not the dollar amounts they are paid. Also, Biogen Idec spokesman Tim Hunt said the state could ease concerns about staff salaries being revealed by exempting employees from the rules or letting companies avoid having to disclose the exact amount of the payments.
Metzger, of Smith & Nephew, said the company had been planning to expand a medical training facility in Andover to teach doctors how to use its latest tools, but has put the process on hold until it sees the final regulations. He said the company wants to make sure the new rules do not bar it from reimbursing doctors for their time and travel expenses.
"We're hoping to work with them on the interpretation of the law so that it doesn't inhibit the industry's or companies' ability to educate surgeons," Metzger said.
Several industry associations, however, said they remain pessimistic about the impact of the law. Mark Leuchtenberger, chairman of the Massachusetts Biotechnology Council, said in a statement: "Companies will no doubt reconsider whether to relocate, expand, or do business with Massachusetts."
Ken Johnson, senior vice president for the Pharmaceutical Research and Manufacturers of America, or PhRMA, said, "We're hopeful, but not entirely optimistic" that the rules will allow companies to continue to work with doctors.
At least two other states already have passed laws to limit the pharmaceutical industry's influence on doctors. Minnesota banned gifts of more than $50 from drug companies, while Vermont has forced drug companies to disclose gifts of more than $25. In addition, other states have considered restrictions. The laws are intended to discourage medical companies from essentially bribing doctors into pushing their products.
To help alleviate concerns about such tactics, PhRMA last month tightened its voluntary code of conduct by barring companies from buying doctors everything from meals at restaurants to mugs and other trinkets. A number of Massachusetts companies, including Biogen Idec, EMD Serono, Genzyme, and Sepracor Inc. in Marlborough, said they plan to abide by the code when it takes effect in January. But unlike the state, the industry association doesn't have authority to investigate complaints or issue penalties for violations of its rules.
Unlike PhRMA's code, the state's marketing rules will be mandatory, but Brian Rosman, research director for the Boston advocacy group Health Care for All, said he doubts they will cause difficulties for companies.
"We think the fears are way overblown," Rosman said. "All this does is put into effect the voluntary code of conduct that they said they will live by anyway."
Todd Wallack can be reached at twallack@globe.com. 