NY State Senate Bill 2017-S4001

Senate Bill S4001

2017-2018 Legislative Session

Requires manufacturers and labelers of prescription drugs dispensed in this state to annually report marketing expenses to the department of health

download bill text pdf

Archive: Last Bill Status - In Senate Committee Health Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

Please enter your contact information

First Name

Last Name

Email Address

A valid email address is required.

Home address is used to determine the senate district in which you reside. Your support or opposition to this bill is then shared immediately with the senator who represents you.

Optional services from the NY State Senate:

Create an account. An account allows you to officially support or oppose key legislation, sign petitions with a single click, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.

Include a custom message for your Senator? (Optional)

Enter a message to your senator. Many New Yorkers use this to share the reasoning behind their support or opposition to the bill. Others might share a personal anecdote about how the bill would affect them or people they care about.

Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2018	referred to health
Feb 01, 2017	referred to health

2017-S4001 (ACTIVE) - Details

Current Committee:: Senate Health
Law Section:: Public Health Law
Laws Affected:: Amd §206, Pub Health L; amd §§208 & 612, Tax L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S2855
2013-2014: S3270
2015-2016: S2625

2017-S4001 (ACTIVE) - Summary

Requires manufacturers and labelers of prescription drugs dispensed in this state which engage in marketing activities in the state to annually report marketing expenses to the department of health; imposes a $10,000 civil fine for failure to report; eliminates deductibility for certain expenses incurred in the advertising of prescription drugs.

2017-S4001 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S4001

 TITLE OF BILL :  An act to amend the public health law, in relation
to requiring the manufacturer or labeler of each prescription drug to
annually report the marketing costs of such drug to the department of
health and to amend the tax law, in relation to eliminating
deductibility for certain expenses incurred in the advertising of
prescription drugs

 PURPOSE OR GENERAL IDEA OF BILL :

To require the state Department of Health to collect information on
pharmaceutical company expenditures incurred in the marketing of
prescription drugs and to report to the governor and the legislature
the impact of these expenditures on drug utilization, health insurance
premiums, and other matters.

 SUMMARY OF SPECIFIC PROVISIONS :

Section one sets out the legislative intent of this measure. Section
two adds a new paragraph (w) to subdivision 1 of section 206 of the
Public Health Law to require the commissioner of the Department of
Health (DOH) to conduct a cost/benefit analysis of the advertising and
promotional activities associated with the provisions of prescription
drugs in New York State. In performing this function, the commissioner
is directed to collect information from pharmaceutical companies (and

pharmaceutical companies are directed to provide such information),
related to advertising, marketing and so-called "drug detailing"
activities, including: 1) funds spent on health care professionals,
hospitals, clinics, pharmacy benefits management employees and managed
care employees on education materials, food and entertainment, gifts,
trips and travel, free samples, seminars and income; and 2)
advertising in NYS, including radio, television, the internet and
daily and weekly periodicals, billboards, signs, and direct
correspondence. After collecting this data, the commissioner is
required to analyze it and make recommendations to the Governor and
the legislature on the costs associated with advertising and
promotional activities, on prescription drug utilization, inpatient
admissions, ambulatory care, invasive procedures, health care visits,
premium rates, and quality.

 JUSTIFICATION :

Prescription drug costs represent a growing component in health care.
According to the federal Health Care Financing Administration (HCFA,
personal spending on prescription drugs rose 228% from 1988 to 1998.
Some observers see that as a positive trend, arguing that effective
drug regimens prevent inpatient admissions and other costly
procedures, and that marketing is necessary to inform consumers and
health care practitioners about products.

Critics of the practices, however, believe that the rise in
prescription drug spending correlates with the amounts pharmaceutical
companies are spending on marketing, advertising and "detailing" drugs
in the media and directly with health care professionals, and point to
some troubling trends with implications for both the quality and cost
of health care:

* The number of sales representatives employed by drug companies
nearly doubled since 1996, rising from 41,000 to 83,000;

The drug industry sponsored more than 314,000 physician "events" last
year, ranging from catered lunches in hospital conference rooms to
weekend getaways at resorts, nearly double the number four years
earlier; and of the drugs responsible for the nearly 19% rise in

spending for pharmaceuticals last year, the four top sellers were
among the top ten most heavily marketed drugs.

Some observers contend that the massive amounts spent on these
promotional activities has led to inappropriate use of some drugs with
serious consequences for health care quality, underutilization of less
costly generic drugs, conflicts of interest for providers and added
unnecessary health care costs. A January study by the Journal of the
American Medical Association (JAMA) found that marketing directly
influences the drugs that doctors prescribe. And an April 1995 JAMA
article concluded that over 10% of the statements marketing
representatives made about drugs contradicted information readily
available to them.

The purpose of this bill is to authorize the commissioner of health to
collect data on the marketing and promotional activities of drug
companies, determine impact on utilization of drugs, avoided costs,
prescription trends and other matters, and report back to the governor
and the legislature on their findings. Furnishing policymakers with
up-to-date information on the impact of drug company marketing
practices and their effects will help guide decisions on these
critical issues.

 FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
Immediate.

2017-S4001 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4001
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             February 1, 2017
                                ___________
 
 Introduced  by Sens. KRUEGER, PERKINS -- read twice and ordered printed,
   and when printed to be committed to the Committee on Health
 
 AN ACT to amend the public health law,  in  relation  to  requiring  the
   manufacturer  or  labeler of each prescription drug to annually report
   the marketing costs of such drug to the department of  health  and  to
   amend  the  tax  law,  in  relation  to  eliminating deductibility for
   certain expenses incurred in the advertising of prescription drugs
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Legislative  intent.  The  legislature  hereby  finds and
 declares that the price of prescription drugs in this state  and  across
 the nation has been increasing at an alarming rate over the past decade.
 Prescription  drug  costs are increasing at a faster rate than any other
 component of health care and are driving the increase in overall  health
 care  cost. As is apparent by the ubiquitous nature of the marketing and
 public information campaigns relating to prescription drugs,  pharmaceu-
 tical  manufacturers  put a great deal of resources into marketing their
 products. This has been especially true since  the  1997  relaxation  of
 federal  laws  relating  to  prescription drug advertising. It is in the
 interest of  assisting  this  state  in  its  role  as  a  purchaser  of
 prescription  drugs  and administrator of prescription drug programs, to
 enable the state to determine the scope of prescription  drug  marketing
 costs  and  their effect on the cost, utilization and delivery of health
 care services, and thus further the role of this state  as  guardian  of
 the public interest.
   §  2.  Section 206 of the public health law is amended by adding a new
 subdivision 31 to read as follows:
   31. THE COMMISSIONER IS AUTHORIZED AND DIRECTED TO REQUIRE MANUFACTUR-
 ERS OR LABELERS OF PRESCRIPTION DRUGS, WHICH DISPENSE SUCH DRUGS IN THIS
 STATE AND WHICH EMPLOY, DIRECT OR UTILIZE MARKETING  REPRESENTATIVES  IN
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05559-01-7

 S. 4001                             2
 
 THE  STATE,  TO  REPORT  THE MARKETING COSTS OF EACH OF ITS PRESCRIPTION
 DRUGS DISPENSED IN THIS STATE.
   (A)  DEFINITIONS.  AS  USED  IN  THIS  SUBDIVISION, UNLESS THE CONTEXT
 CLEARLY INDICATES OTHERWISE, THE FOLLOWING TERMS SHALL HAVE THE  FOLLOW-
 ING MEANINGS:
   (I)  "LABELER"  MEANS ANY PERSON OR ENTITY, HAVING A LABELER CODE FROM
 THE FEDERAL FOOD AND DRUG ADMINISTRATION, THAT RECEIVES  A  PRESCRIPTION
 DRUG  FROM THE MANUFACTURER OR A WHOLESALER OF SUCH DRUG, AND REPACKAGES
 SUCH DRUG TO BE DISPENSED IN THIS STATE.
   (II)  "MANUFACTURER"  MEANS  A  MANUFACTURER  OF  PRESCRIPTION   DRUGS
 DISPENSED  IN  THIS STATE, AND SHALL INCLUDE THE SUBSIDIARY OR AFFILIATE
 OF SUCH MANUFACTURER.
   (III) "MARKETING" MEANS ADVERTISING  AND  PROMOTIONAL  ACTIVITIES  FOR
 PRESCRIPTION  DRUGS  DISPENSED  IN THIS STATE INCLUDING, BUT NOT LIMITED
 TO, THOSE ACTIVITIES DESCRIBED IN PARAGRAPH (B) OF THIS SUBDIVISION.
   (B) MANNER OF REPORTING. ON OR  BEFORE  JULY  FIRST  EACH  YEAR  EVERY
 MANUFACTURER  AND LABELER SHALL FILE A REPORT WITH THE DEPARTMENT ON ITS
 MARKETING ACTIVITIES CONDUCTED IN  THIS  STATE.  SUCH  REPORT  SHALL  BE
 SUBMITTED IN SUCH FORM AND MANNER, AND INCLUDE THE PAYMENT OF SUCH A FEE
 AS  SHALL  BE  DETERMINED  BY  THE  COMMISSIONER. EACH SUCH REPORT SHALL
 INCLUDE THE VALUE, NATURE, PURPOSE AND RECIPIENT OF  MARKETING  EXPENSES
 INCLUDING, BUT NOT LIMITED TO:
   (I)  ALL  EXPENSES  ASSOCIATED  WITH ADVERTISING, MARKETING AND DIRECT
 PROMOTION OF PRESCRIPTION DRUGS THROUGH  RADIO,  TELEVISION,  MAGAZINES,
 NEWSPAPERS,  DIRECT MAIL AND TELEPHONE COMMUNICATIONS AS THEY PERTAIN TO
 RESIDENTS OF THIS STATE;
   (II) WITH REGARD TO ALL PROVIDERS OF HEALTHCARE SERVICES REGULATED  BY
 THE  DEPARTMENT UNDER THE PROVISIONS OF ARTICLE TWENTY-EIGHT, THIRTY-SIX
 OR FORTY-FOUR OF THIS CHAPTER, INCLUDING  HEALTH  MAINTENANCE  ORGANIZA-
 TIONS  ESTABLISHED PURSUANT TO ARTICLE FORTY-THREE OF THE INSURANCE LAW,
 THE FOLLOWING INFORMATION:
   (A)  ALL  EXPENSES  ASSOCIATED  WITH  EDUCATIONAL   OR   INFORMATIONAL
 PROGRAMS,  MATERIALS  AND  SEMINARS,  AND  REMUNERATION FOR PROMOTING OR
 PARTICIPATING IN EDUCATIONAL OR INFORMATIONAL  SESSIONS,  REGARDLESS  OF
 WHETHER THE MANUFACTURER OR LABELER PROVIDES THE EDUCATIONAL OR INFORMA-
 TIONAL SESSIONS OR MATERIALS,
   (B)  ALL EXPENSES ASSOCIATED WITH FOOD, ENTERTAINMENT AND GIFTS VALUED
 AT MORE THAN SEVENTY-FIVE DOLLARS, AND ANYTHING  PROVIDED  TO  A  HEALTH
 CARE PROFESSIONAL FOR LESS THAN MARKET VALUE,
   (C) ALL EXPENSES ASSOCIATED WITH TRIPS AND TRAVEL, AND
   (D)  ALL  EXPENSES ASSOCIATED WITH PRODUCT SAMPLES, EXCEPT FOR SAMPLES
 THAT WILL BE DISTRIBUTED FREE OF CHARGE TO PATIENTS; AND
   (III) THE AGGREGATE COST OF  ALL  EMPLOYEES  AND  CONTRACTORS  OF  THE
 MANUFACTURER  OR LABELER WHO DIRECTLY OR INDIRECTLY ENGAGE IN THE ADVER-
 TISING OR PROMOTIONAL ACTIVITIES LISTED IN SUBPARAGRAPHS (I) AND (II) OF
 THIS PARAGRAPH, INCLUDING ALL FORMS OF PAYMENT  TO  SUCH  EMPLOYEES  AND
 CONTRACTORS.  THE  COST  REPORTED  PURSUANT  TO  THIS SUBPARAGRAPH SHALL
 REFLECT ONLY THAT PORTION OF PAYMENT TO EMPLOYEES AND  CONTRACTORS  THAT
 PERTAINS  TO ACTIVITIES WITHIN THIS STATE OR TO RECIPIENTS OF THE ADVER-
 TISING OR PROMOTIONAL ACTIVITIES WHO ARE RESIDENTS OF OR ARE EMPLOYED IN
 THIS STATE.
   (C) EXCEPTIONS. THE FOLLOWING MARKETING EXPENSES SHALL NOT BE  SUBJECT
 TO THE REPORTING REQUIREMENTS OF THIS SUBDIVISION:
   (I) EXPENSES OF SEVENTY-FIVE DOLLARS OR LESS;

 S. 4001                             3
 
   (II)   REASONABLE  COMPENSATION  AND  REIMBURSEMENT  FOR  EXPENSES  IN
 CONNECTION WITH A BONA FIDE CLINICAL TRIAL OF A NEW VACCINE, THERAPY  OR
 TREATMENT; AND
   (III)  SCHOLARSHIPS  AND  REIMBURSEMENT  OF  EXPENSES  FOR ATTENDING A
 SIGNIFICANT EDUCATIONAL, SCIENTIFIC OR POLICY-MAKING CONFERENCE OR SEMI-
 NAR OF A NATIONAL, REGIONAL OR SPECIALTY MEDICAL OR  OTHER  PROFESSIONAL
 ASSOCIATION IF THE RECIPIENT OF THE SCHOLARSHIP IS CHOSEN BY THE ASSOCI-
 ATION SPONSORING THE CONFERENCE OR SEMINAR.
   (D)  DEPARTMENT REPORTS. ANNUALLY ON OR BEFORE NOVEMBER THIRTIETH, THE
 DEPARTMENT SHALL SUBMIT A REPORT,  PROVIDING  INFORMATION  IN  AGGREGATE
 FORM, ON PRESCRIPTION DRUG MARKETING EXPENSES TO THE GOVERNOR, TEMPORARY
 PRESIDENT  OF THE SENATE AND SPEAKER OF THE ASSEMBLY. ON OR BEFORE JANU-
 ARY FIRST, TWO THOUSAND NINETEEN AND EVERY  TWO  YEARS  THEREAFTER,  THE
 DEPARTMENT  SHALL  PROVIDE A REPORT TO THE GOVERNOR, TEMPORARY PRESIDENT
 OF THE SENATE AND SPEAKER OF  THE  ASSEMBLY,  PROVIDING  INFORMATION  IN
 AGGREGATE  FORM,  CONTAINING  AN  ANALYSIS  OF THE DATA SUBMITTED TO THE
 DEPARTMENT, INCLUDING THE SCOPE OF PRESCRIPTION  DRUG  MARKETING  ACTIV-
 ITIES  AND EXPENSES AND THEIR EFFECT ON THE COST, UTILIZATION AND DELIV-
 ERY OF HEALTH CARE SERVICES  AND  ANY  RECOMMENDATIONS  WITH  REGARD  TO
 MARKETING ACTIVITIES OF PRESCRIPTION DRUG MANUFACTURERS AND LABELERS.
   (E) CONFIDENTIALITY; PUBLIC INFORMATION. NOTWITHSTANDING ANY PROVISION
 OF  LAW  TO  THE  CONTRARY,  ALL INFORMATION SUBMITTED TO THE DEPARTMENT
 PURSUANT TO THIS SUBDIVISION SHALL BE  CONFIDENTIAL  AND  NOT  A  PUBLIC
 RECORD AS DEFINED IN SECTION EIGHTY-SIX OF THE PUBLIC OFFICERS LAW. DATA
 COMPILED IN AGGREGATE FORM BY THE DEPARTMENT FOR THE PURPOSES OF REPORT-
 ING  REQUIRED BY THIS SUBDIVISION SHALL BE A PUBLIC RECORD AS DEFINED IN
 SECTION EIGHTY-SIX OF THE PUBLIC OFFICERS LAW, AS LONG AS  IT  DOES  NOT
 REVEAL TRADE INFORMATION THAT IS PROTECTED BY STATE OR FEDERAL LAW.
   (F) VIOLATIONS. ANY PERSON WHO VIOLATES ANY PROVISION OF THIS SUBDIVI-
 SION  SHALL  BE LIABLE TO THE PEOPLE OF THE STATE FOR A CIVIL PENALTY OF
 TEN THOUSAND DOLLARS, PLUS COURT COSTS AND ATTORNEYS' FEES, WHICH  SHALL
 BE ENFORCED PURSUANT TO TITLE TWO OF THIS ARTICLE.
   (G)  RULES.  ANY  AND ALL RULES AND REGULATIONS NECESSARY TO IMPLEMENT
 THE PROVISIONS OF THIS SUBDIVISION SHALL BE PROMULGATED BY  THE  COMMIS-
 SIONER.
   §  3.  Paragraph (b) of subdivision 9 of section 208 of the tax law is
 amended by adding a new subparagraph 22 to read as follows:
   (22) EXPENSES INCURRED BY A MANUFACTURER OR DISTRIBUTOR OF A DRUG, THE
 DISPENSING OF WHICH TO A CONSUMER WITHOUT A PRESCRIPTION  IS  PROHIBITED
 BY  EITHER  FEDERAL  OR  STATE  LAW, FOR THE ADVERTISING OF SUCH DRUG TO
 CONSUMERS.
   § 4. Subsection (b) of section 612 of the tax law is amended by adding
 a new paragraph 42 to read as follows:
   (42) EXPENSES INCURRED BY A MANUFACTURER OR DISTRIBUTOR OF A DRUG, THE
 DISPENSING OF WHICH TO A CONSUMER WITHOUT A PRESCRIPTION  IS  PROHIBITED
 BY  EITHER  FEDERAL  OR  STATE  LAW, FOR THE ADVERTISING OF SUCH DRUG TO
 CONSUMERS.
   § 5. This act shall take effect on the one hundred eightieth day after
 it shall have become a law; provided  that  effective  immediately,  any
 rules  and regulations necessary to implement the provisions of this act
 on its effective date are authorized to be made on or before such effec-
 tive date and provided further that the provisions of sections three and
 four of this act shall take effect immediately and shall apply to  taxa-
 ble  years  beginning  on or after January first of the year in which it
 shall have become a law.

Comments

Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.

Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.