S T A T E O F N E W Y O R K
________________________________________________________________________
2623
2015-2016 Regular Sessions
I N S E N A T E
January 27, 2015
___________
Introduced by Sens. KRUEGER, HASSELL-THOMPSON, 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:
1 Section 1. Legislative intent. The legislature finds and declares as
2 follows: (1) More than almost all other consumer purchases, the purchase
3 of medications has a direct, discernible impact on the health, life and
4 pocketbooks of New York state citizens. (2) A substantial and growing
5 portion of the price of prescription drug products and their cost to
6 consumers and the state is represented by advertising, particularly
7 direct-to-consumer advertising through mass media, company advertising
8 and promotional activities through the education of the personnel of
9 managed care plans, pharmaceutical benefits management companies, hospi-
10 tals and clinics and health care professionals by means of salespersons'
11 detailing, seminars and conferences, and indirect advertising and
12 promotion to health care professionals and their staffs and the person-
13 nel of managed care plans, and pharmaceutical benefits management compa-
14 nies, hospitals and clinics through entertainment, meals, travel, trips,
15 promotional items, free samples and free supplies, all of which also
16 include the salaries of the growing legions of drug representatives and
17 salespersons. (3) There has been marked increase in spending by pharma-
18 ceutical companies for direct-to-consumer advertising since the liber-
19 alization of federal regulations governing these practices in 1997. (4)
20 Researchers have indicated that assumptions of the amount of advertising
21 are based on extrapolation from data in the public domain since they
22 were unable to obtain data directly from the pharmaceutical companies.
23 (5) Pharmaceutical companies claim that advertising dollars are well
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03353-01-5
S. 2623 2
1 spent in that they facilitate dialogue between patients and doctors
2 about diseases and conditions that are widely undertreated, thereby
3 leading to diagnoses and prescriptions that save lives or even greater
4 costs resulting from delays in treatment, while consumer groups point to
5 evidence that advertising may be leading consumers to make inappropriate
6 demands for newer, costlier medicines, when less expensive drugs may be
7 as or more appropriate. (6) Health insurance companies claim that
8 direct-to-consumer advertising motivates consumers to seek more expen-
9 sive drugs than necessary or unnecessary drugs which, in turn, is
10 responsible in part for large increases in health insurance premiums.
11 (7) There are no accurate reported figures on what pharmaceutical compa-
12 nies spend on advertising, educational and promotional activities to
13 influence provider practices, consumer demand or market share. (8) New
14 York state and local governments will spend over one billion dollars
15 this year on prescription drugs as costs continue to increase. (9) The
16 legislature needs data that is reliable and valid regarding industry
17 direct-to-consumer advertising and drug detailing practices. (10) The
18 legislature hereby determines that it must require pharmaceutical compa-
19 nies to provide data through the disclosure of their expenditures for
20 mass media direct-to-consumer advertising, correspondence to consumers
21 and direct and indirect advertising through education, entertainment and
22 promotional samples and giveaways to health care professionals, their
23 offices and staffs, and for the personnel of managed care plans and
24 pharmaceutical benefits management companies and hospitals and clinics
25 to determine its impact on provider practices and consumers demand.
26 S 2. Subdivision 1 of section 206 of the public health law is amended
27 by adding a new paragraph (v) to read as follows:
28 (V) CONDUCT A COST/BENEFIT ANALYSIS OF ADVERTISING AND PROMOTIONAL
29 ACTIVITIES ASSOCIATED WITH THE PROVISION OF PRESCRIPTION DRUGS TO THIS
30 STATE'S CITIZENS BY PHARMACEUTICAL COMPANIES. THE COMMISSIONER SHALL
31 UTILIZE A METHODOLOGY TO DETERMINE THE IMPACT UPON THE NECESSITY FOR
32 INPATIENT HOSPITAL CARE, MAJOR AMBULATORY SERVICES, INVASIVE PROCEDURES,
33 NUMBERS OF VISITS TO HEALTH CARE PROFESSIONALS AND HEALTH INSURANCE
34 PREMIUM RATES RELATIVE TO THE COSTS ASSOCIATED WITH ADVERTISING AND
35 PROMOTIONAL ACTIVITIES DIRECTED TOWARD THIS STATE'S CITIZENS BY PHARMA-
36 CEUTICAL COMPANIES. AT REASONABLE INTERVALS, AS DETERMINED BY THE
37 COMMISSIONER, BUT IN NO EVENT LESS FREQUENT THAN QUARTERLY, PHARMACEU-
38 TICAL COMPANIES WHICH PROVIDE PRESCRIPTION DRUGS IN THIS STATE SHALL
39 PROVIDE THE COMMISSIONER WITH INFORMATION NECESSARY TO CARRY OUT ITS
40 DUTIES UNDER THIS SECTION. PHARMACEUTICAL COMPANIES OR THEIR REPRESEN-
41 TATIVES WHO PROVIDE PRESCRIPTION DRUGS IN THIS STATE SHALL DISCLOSE IN
42 THE AGGREGATE ALL ADVERTISING AND PROMOTIONAL COSTS TO THE COMMISSIONER
43 AS FOLLOWS:
44 (1) FOR EVERY HEALTH CARE PROFESSIONAL WHO PRESCRIBES PRESCRIPTION
45 DRUGS AND FOR EVERY MANAGED CARE PLAN, PHARMACEUTICAL BENEFITS MANAGE-
46 MENT COMPANY, HOSPITAL AND CLINIC WHICH PROVIDES PRESCRIPTION DRUGS, THE
47 DOLLAR AMOUNTS SPENT ON THE PROFESSIONAL, THAT PROFESSIONAL'S STAFF AND
48 THE PERSONNEL OF THE MANAGED CARE PLAN AND THE PHARMACEUTICAL BENEFITS
49 MANAGEMENT COMPANY, HOSPITAL AND CLINIC, AND THE DOLLAR AMOUNT OF THE
50 PORTION OF THE PHARMACEUTICAL COMPANIES' DETAIL PERSONS' SALARIES
51 ATTRIBUTABLE TO ACTIVITIES LISTED BELOW:
52 (I) EDUCATION AND EDUCATIONAL MATERIALS, REGARDLESS OF WHETHER
53 PROVIDED IN THE PLACE OF BUSINESS OF THE HEALTH CARE PROFESSIONAL, THE
54 MANAGED CARE PLAN, THE PHARMACEUTICAL BENEFITS MANAGEMENT COMPANY, THE
55 HOSPITAL OR CLINIC OR, IN ANOTHER SETTING, AND REGARDLESS OF WHETHER THE
S. 2623 3
1 PHARMACEUTICAL COMPANY DIRECTLY OR INDIRECTLY PROVIDES THE EDUCATION AND
2 EDUCATIONAL MATERIALS;
3 (II) FOOD AND ENTERTAINMENT;
4 (III) GIFTS, OR ANYTHING WHICH IS RECEIVED WITHOUT CONSIDERATION OF
5 EQUAL OR GREATER VALUE;
6 (IV) TRIPS;
7 (V) TRAVEL;
8 (VI) FREE SAMPLES;
9 (VII) SEMINARS;
10 (VIII) REDUCED PRICES ON PRESCRIPTION DRUGS; AND
11 (IX) INCOME.
12 (2) PHARMACEUTICAL COMPANIES WHICH ADVERTISE IN MEDIA TO REACH A NEW
13 YORK AUDIENCE AND PHARMACEUTICAL COMPANIES WHICH CORRESPOND DIRECTLY
14 WITH CONSUMERS IN THIS STATE SHALL DISCLOSE THE AGGREGATE COST OF THE
15 ADVERTISING OF PRESCRIPTION DRUGS IN THE MEDIA AND IN CORRESPONDENCE TO
16 THE CONSUMER. FOR PURPOSES OF THIS SUBPARAGRAPH, MEDIA SHALL INCLUDE,
17 BUT NOT BE LIMITED TO, RADIO, TELEVISION, THE INTERNET AND DAILY AND
18 WEEKLY MAGAZINES AND NEWSPAPERS, BILLBOARDS AND SIGNS. FOR PURPOSES OF
19 THIS SUBPARAGRAPH, CORRESPONDENCE SHALL MEAN DIRECT MAIL, TELEPHONE
20 COMMUNICATIONS AND ELECTRONIC MAIL DIRECTED TO SPECIFIC INDIVIDUALS OR
21 HOUSEHOLDS. PHARMACEUTICAL COMPANIES SHALL DISCLOSE THE AGGREGATE OF THE
22 PORTION OF SALARIES OF THEIR DRUG REPRESENTATIVES AND SALESPERSONS THAT
23 HAVE ALL OR PART OF THEIR EMPLOYMENT IN ACTIVITIES ENUMERATED IN SUBPAR-
24 AGRAPH ONE OF THIS PARAGRAPH.
25 (3) THE COMMISSIONER SHALL COLLECT AND COMPILE DATA FROM PHARMACEU-
26 TICAL COMPANIES REQUIRED TO PROVIDE INFORMATION UNDER THIS PARAGRAPH.
27 THE COMMISSIONER SHALL USE APPROPRIATE MEASURES TO ANALYZE AND COMPARE
28 DATA WITH DATA ON INPATIENT HOSPITAL STAYS, AMBULATORY SERVICES, INVA-
29 SIVE PROCEDURES AND VISITS TO HEALTH CARE PROFESSIONALS TO CONDUCT THE
30 COST/BENEFIT ANALYSIS REQUIRED UNDER THIS PARAGRAPH.
31 (4) THE COMMISSIONER SHALL DISSEMINATE DATA IN ACCORDANCE WITH THIS
32 PARAGRAPH AND SHALL, NO LATER THAN TWO YEARS FROM THE EFFECTIVE DATE OF
33 THIS PARAGRAPH, DISCLOSE HIS OR HER FINDINGS AND MAKE RECOMMENDATIONS TO
34 THE GOVERNOR, THE TEMPORARY PRESIDENT OF THE SENATE AND SPEAKER OF THE
35 ASSEMBLY ON THE COSTS ASSOCIATED WITH ADVERTISING AND PROMOTIONAL ACTIV-
36 ITIES BY PHARMACEUTICAL COMPANIES, ON THE IMPACT OF ADVERTISING AND
37 PROMOTIONAL ACTIVITIES UPON THE UTILIZATION OF PRESCRIPTION DRUGS, THE
38 NECESSITY OF INPATIENT HOSPITAL STAYS, AMBULATORY CARE, INVASIVE PROCE-
39 DURES, VISITS TO HEALTH CARE PROFESSIONALS AND HEALTH INSURANCE PREMIUM
40 RATES.
41 S 3. This act shall take effect immediately.