On December 22, 2017, the New Jersey Attorney General finalized new rules governing physician interactions with pharmaceutical companies. Titled “Limitations on and Obligations Associated with Prescriber Acceptance of Compensation From Pharmaceutical Manufacturers,” the Rule sets a $10,000 yearly cap on the amount, through contracts and payments, that a prescriber may accept from manufacturers in a calendar year for “bona fide services.” Additionally, the Rule subjects physicians to a cap on meals provided in relation to the activities. These limitations will apply to all contracts entered into on or after January 15, 2018.
While similar guidelines had previously been set forth in the Pharmaceutical Research and Manufacturers of America (PhRMA) Code of Ethics for their member companies with respect to gifts to prescribers and generally applied to pharmaceutical manufacturers, this Rule now similarly holds prescribers responsible for their arrangements with manufacturers. By establishing the cap, New Jersey seeks to address ongoing national concerns about whether treatment decisions of prescribers are being improperly influenced by pharmaceutical manufacturers.
Notable points of the Rule include:
- Definition of “Pharmaceutical Manufacturer” – The Rule is intended to be applicable to arrangements between prescribers and any entity that (i) is engaged in the production, preparation, propagation, compounding, conversion, or processing of prescription drugs or biologics, by extraction from substances of natural origin, or independently by means of chemical synthesis; or (ii) is directly engaged in the packaging, repackaging, labeling, relabeling, or distribution of prescription drugs or prescription biologics (with the exception of pharmacies holding a permit issued by the Board of Pharmacy or healthcare facilities licensed by the Department of Health)
- “Bona Fide Services” Yearly Cap – Those services provided by a prescriber pursuant to an arrangement formalized in a written agreement including, but not limited to, presentations as speakers at promotional activities and education events, participation on advisory boards, and consulting arrangements will be subject to a $10,000 yearly cap. The written agreement between the prescriber and the manufacturer must include the dollar value of the consideration to be received by the prescriber, based on the Fair Market Value of the services. Research and education related payments are exempted from this cap.
- Prohibition on Gifts and Payments – A prescriber may not accept any financial gift, benefit, or other item of value (ie., entertainment or recreational items, pens, note pads, gift certificates, etc.) from the pharmaceutical manufacturer. Educational materials and payments relating to research activities are excepted from the prohibition.
- Meal Cap – A prescriber is limited to a $15 cap on meals provided by a pharmaceutical manufacturer in the course of the bona fide services.
It is important for prescribers to conduct a review of their arrangements with drug manufacturers to ensure compliance with the Rule. Prescribers should also consider implementing a compliance manual to establish strict regulatory compliance with applicable federal and state laws and regulations. Contact Frier Levitt today to speak to an attorney to ensure that your prescriber-pharma relationships are compliant.
