Senate Bill S909

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   909

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by Sens. KRUEGER, HASSELL-THOMPSON, HUNTLEY, PARKER, SERRANO
  -- 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  a
  cost/benefit  analysis  of  pharmaceutical advertising and promotional
  expenses

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Legislative intent. The legislature finds and declares as
follows: (1) More than almost all other consumer purchases, the purchase
of medications has a direct, discernible impact on the health, life  and
pocketbooks  of  New  York state citizens. (2) A substantial and growing
portion of the price of prescription drug products  and  their  cost  to
consumers  and  the  state  is  represented by advertising, particularly
direct-to-consumer advertising through mass media,  company  advertising
and  promotional  activities  through  the education of the personnel of
managed care plans, pharmaceutical benefits management companies, hospi-
tals and clinics and health care professionals by means of salespersons'
detailing,  seminars  and  conferences,  and  indirect  advertising  and
promotion  to health care professionals and their staffs and the person-
nel of managed care plans, and pharmaceutical benefits management compa-
nies, hospitals and clinics through entertainment, meals, travel, trips,
promotional items, free samples and free supplies,  all  of  which  also
include  the salaries of the growing legions of drug representatives and
salespersons. (3) There has been marked increase in spending by  pharma-
ceutical  companies  for direct-to-consumer advertising since the liber-
alization of federal regulations governing these practices in 1997.  (4)
Researchers have indicated that assumptions of the amount of advertising
are  based  on  extrapolation  from data in the public domain since they
were unable to obtain data directly from the  pharmaceutical  companies.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD04078-02-1

S. 909                              2

(5)  Pharmaceutical  companies  claim  that advertising dollars are well
spent in that they facilitate  dialogue  between  patients  and  doctors
about  diseases  and  conditions  that  are widely undertreated, thereby
leading  to  diagnoses and prescriptions that save lives or even greater
costs resulting from delays in treatment, while consumer groups point to
evidence that advertising may be leading consumers to make inappropriate
demands for newer, costlier medicines, when less expensive drugs may  be
as  or  more  appropriate.  (6)  Health  insurance  companies claim that
direct-to-consumer advertising motivates consumers to seek  more  expen-
sive  drugs  than  necessary  or  unnecessary  drugs  which, in turn, is
responsible in part for large increases in  health  insurance  premiums.
(7) There are no accurate reported figures on what pharmaceutical compa-
nies  spend  on  advertising,  educational and promotional activities to
influence provider practices, consumer demand or market share.  (8)  New
York  state  and  local  governments will spend over one billion dollars
this year on prescription drugs as costs continue to increase.  (9)  The
legislature  needs  data  that  is reliable and valid regarding industry
direct-to-consumer advertising and drug detailing practices.   (10)  The
legislature hereby determines that it must require pharmaceutical compa-
nies  to  provide  data through the disclosure of their expenditures for
mass media direct-to-consumer advertising, correspondence  to  consumers
and direct and indirect advertising through education, entertainment and
promotional  samples  and  giveaways to health care professionals, their
offices and staffs, and for the personnel  of  managed  care  plans  and
pharmaceutical  benefits  management companies and hospitals and clinics
to determine its impact on provider practices and consumers demand.
  S 2. Subdivision 1 of section 206 of the public health law is  amended
by adding a new paragraph (s) to read as follows:
  (S)  CONDUCT  A  COST/BENEFIT  ANALYSIS OF ADVERTISING AND PROMOTIONAL
ACTIVITIES ASSOCIATED WITH THE PROVISION OF PRESCRIPTION DRUGS  TO  THIS
STATE'S  CITIZENS  BY  PHARMACEUTICAL  COMPANIES. THE COMMISSIONER SHALL
UTILIZE A METHODOLOGY TO DETERMINE THE IMPACT  UPON  THE  NECESSITY  FOR
INPATIENT HOSPITAL CARE, MAJOR AMBULATORY SERVICES, INVASIVE PROCEDURES,
NUMBERS  OF  VISITS  TO  HEALTH  CARE PROFESSIONALS AND HEALTH INSURANCE
PREMIUM RATES RELATIVE TO THE  COSTS  ASSOCIATED  WITH  ADVERTISING  AND
PROMOTIONAL  ACTIVITIES DIRECTED TOWARD THIS STATE'S CITIZENS BY PHARMA-
CEUTICAL COMPANIES.  AT  REASONABLE  INTERVALS,  AS  DETERMINED  BY  THE
COMMISSIONER,  BUT  IN NO EVENT LESS FREQUENT THAN QUARTERLY, PHARMACEU-
TICAL COMPANIES WHICH PROVIDE PRESCRIPTION DRUGS  IN  THIS  STATE  SHALL
PROVIDE  THE  COMMISSIONER  WITH  INFORMATION NECESSARY TO CARRY OUT ITS
DUTIES UNDER THIS SECTION.  PHARMACEUTICAL COMPANIES OR THEIR  REPRESEN-
TATIVES  WHO  PROVIDE PRESCRIPTION DRUGS IN THIS STATE SHALL DISCLOSE IN
THE AGGREGATE ALL ADVERTISING AND PROMOTIONAL COSTS TO THE  COMMISSIONER
AS FOLLOWS:
  (1)  FOR  EVERY  HEALTH  CARE PROFESSIONAL WHO PRESCRIBES PRESCRIPTION
DRUGS AND FOR EVERY MANAGED CARE PLAN, PHARMACEUTICAL  BENEFITS  MANAGE-
MENT COMPANY, HOSPITAL AND CLINIC WHICH PROVIDES PRESCRIPTION DRUGS, THE
DOLLAR  AMOUNTS SPENT ON THE PROFESSIONAL, THAT PROFESSIONAL'S STAFF AND
THE PERSONNEL OF THE MANAGED CARE PLAN AND THE  PHARMACEUTICAL  BENEFITS
MANAGEMENT  COMPANY,  HOSPITAL  AND CLINIC, AND THE DOLLAR AMOUNT OF THE
PORTION  OF  THE  PHARMACEUTICAL  COMPANIES'  DETAIL  PERSONS'  SALARIES
ATTRIBUTABLE TO ACTIVITIES LISTED BELOW:
  (I)   EDUCATION  AND  EDUCATIONAL  MATERIALS,  REGARDLESS  OF  WHETHER
PROVIDED IN THE PLACE OF BUSINESS OF THE HEALTH CARE  PROFESSIONAL,  THE
MANAGED  CARE  PLAN, THE PHARMACEUTICAL BENEFITS MANAGEMENT COMPANY, THE
HOSPITAL OR CLINIC OR, IN ANOTHER SETTING, AND REGARDLESS OF WHETHER THE

S. 909                              3

PHARMACEUTICAL COMPANY DIRECTLY OR INDIRECTLY PROVIDES THE EDUCATION AND
EDUCATIONAL MATERIALS;
  (II) FOOD AND ENTERTAINMENT;
  (III)  GIFTS,  OR  ANYTHING WHICH IS RECEIVED WITHOUT CONSIDERATION OF
EQUAL OR GREATER VALUE;
  (IV) TRIPS;
  (V) TRAVEL;
  (VI) FREE SAMPLES;
  (VII) SEMINARS;
  (VIII) REDUCED PRICES ON PRESCRIPTION DRUGS; AND
  (IX) INCOME.
  (2) PHARMACEUTICAL COMPANIES WHICH ADVERTISE IN MEDIA TO REACH  A  NEW
YORK  AUDIENCE  AND  PHARMACEUTICAL  COMPANIES WHICH CORRESPOND DIRECTLY
WITH CONSUMERS IN THIS STATE SHALL DISCLOSE THE AGGREGATE  COST  OF  THE
ADVERTISING  OF PRESCRIPTION DRUGS IN THE MEDIA AND IN CORRESPONDENCE TO
THE CONSUMER. FOR PURPOSES OF THIS SUBPARAGRAPH,  MEDIA  SHALL  INCLUDE,
BUT  NOT  BE  LIMITED  TO, RADIO, TELEVISION, THE INTERNET AND DAILY AND
WEEKLY MAGAZINES AND NEWSPAPERS, BILLBOARDS AND SIGNS. FOR  PURPOSES  OF
THIS  SUBPARAGRAPH,  CORRESPONDENCE  SHALL  MEAN  DIRECT MAIL, TELEPHONE
COMMUNICATIONS AND ELECTRONIC MAIL DIRECTED TO SPECIFIC  INDIVIDUALS  OR
HOUSEHOLDS. PHARMACEUTICAL COMPANIES SHALL DISCLOSE THE AGGREGATE OF THE
PORTION  OF SALARIES OF THEIR DRUG REPRESENTATIVES AND SALESPERSONS THAT
HAVE ALL OR PART OF THEIR EMPLOYMENT IN ACTIVITIES ENUMERATED IN SUBPAR-
AGRAPH ONE OF THIS PARAGRAPH.
  (3) THE COMMISSIONER SHALL COLLECT AND COMPILE  DATA  FROM  PHARMACEU-
TICAL  COMPANIES  REQUIRED  TO PROVIDE INFORMATION UNDER THIS PARAGRAPH.
THE COMMISSIONER SHALL USE APPROPRIATE MEASURES TO ANALYZE  AND  COMPARE
DATA  WITH  DATA ON INPATIENT HOSPITAL STAYS, AMBULATORY SERVICES, INVA-
SIVE PROCEDURES AND VISITS TO HEALTH CARE PROFESSIONALS TO  CONDUCT  THE
COST/BENEFIT ANALYSIS REQUIRED UNDER THIS PARAGRAPH.
  (4)  THE  COMMISSIONER  SHALL DISSEMINATE DATA IN ACCORDANCE WITH THIS
PARAGRAPH AND SHALL, NO LATER THAN TWO YEARS FROM THE EFFECTIVE DATE  OF
THIS PARAGRAPH, DISCLOSE HIS OR HER FINDINGS AND MAKE RECOMMENDATIONS TO
THE  GOVERNOR,  THE TEMPORARY PRESIDENT OF THE SENATE AND SPEAKER OF THE
ASSEMBLY ON THE COSTS ASSOCIATED WITH ADVERTISING AND PROMOTIONAL ACTIV-
ITIES BY PHARMACEUTICAL COMPANIES, ON  THE  IMPACT  OF  ADVERTISING  AND
PROMOTIONAL  ACTIVITIES  UPON THE UTILIZATION OF PRESCRIPTION DRUGS, THE
NECESSITY OF INPATIENT HOSPITAL STAYS, AMBULATORY CARE, INVASIVE  PROCE-
DURES,  VISITS TO HEALTH CARE PROFESSIONALS AND HEALTH INSURANCE PREMIUM
RATES.
  S 3. This act shall take effect immediately.