Bill Brady said he lost 20 percent of his restaurant sales four years ago after Massachusetts put in place stringent new rules preventing drug companies from taking doctors out for meals.
“It definitely had a major impact on our business,” said Brady, who owns Sonoma Restaurant in Princeton. “And the servers — it took a substantial amount of money out of their pockets.”
Last fall, however, the state relaxed the restrictions, and Brady, along with other restaurateurs, is counting on a return of the lucrative drug company business.
The ban, among the most restrictive in the country, took effect in 2008 and prohibited pharmaceutical companies and medical-device makers from buying physicians meals outside their workplaces. The goal was to prevent manufacturers from unduly influencing doctors’ decisions about what drug brands they prescribe.
But for some restaurants, the result was a drop in revenue, according to Stephen Clark, the Massachusetts Restaurant Association’s director of government affairs, who based his assessment on members’ anecdotes. Affected businesses, he said, ranged from upscale bistros to casual sandwich shops.
At Aquitaine Group, which owns seven restaurants in and around Boston, including Aquitaine and Cinquecento, the impact of the regulations was not immediately apparent, partner Jeffrey Gates said. A drop in business caused by the financial crisis initially masked the effect of the meal ban, he said. But when the regular diners started coming back, the medical meals did not.
Aquitaine’s Union Bar and Grille in Boston’s South End had previously hosted an average of two pharmaceutical company meals a week, each with seven or eight people, Gates said.
“In an 80-seat restaurant, on a Tuesday night, that is 10 percent of your business,” he said. “On a busy Thursday, it’s a 5 percent loss.”
The restaurant industry objected to the rules, joining an opposition that included pharmaceutical companies and even some doctors, who resented the implication that they could be bought with a lavish dinner.
The state listened to their concerns, and in July, Governor Deval Patrick signed a budget that included an amendment to allow drug and medical-device makers to pay for “modest” meals at what are defined as informational sessions. The regulations, which don’t set a spending limit for meals or exclude alcoholic beverages, were finalized in November.
In the weeks since the change, business has started to improve, but it may never rebound to levels before the ban, Brady said.
Where he used to book parties of 15 to 18 doctors and medical company representatives, he now gets groups of six or eight.
“It’s not near what I’d like to see, but it shows promise,” he said.
The story is similar throughout the industry, Clark said. Pharmaceutical companies, he said, are taking the first steps toward returning to their old approach, assessing marketing budgets and reaching out to restaurants.
One factor holding drug makers back may be a need to figure out what exactly is expected of them under the new rules.
The reporting requirements are of particular concern in the industry, said Marjorie Powell, senior assistant general counsel for PhRMA, the major pharmaceutical industry trade group in the United States.
The rules calls for drug companies and device makers to report the amount they spend on meals for informational sessions, the location of the event, the product under discussion, and “other information as determined necessary.”
That last item is especially worrisome to some companies, Powell said.
“No one knows when the commissioner might decide to ask for something,” she said. “It means that your system for collecting and recording info faces some uncertainty.”
Some groups are concerned that by loosening the meal ban, the state is putting corporate interests ahead of patients’ well-being.
“We think it is imperative that patients not be used as pawns for restaurant revenues,” said Amy Whitcomb Slemmer, executive director of Health Care for All, a health care consumer advocacy group based in Boston.
The expense of dining out is likely to be passed on to patients through increased prescription drug prices, she said. And, she said, the term “modest meal” leaves too much room for interpretation.
The regulations define it as “similar to what a health care practitioner might purchase when dining at his or her own expense.”
In a memo accompanying the rules, the Department of Public Health argues that a spending cap, which Health Care for All and others supported, would have been “ a simplistic approach to a complex regulatory provision.”Continued...