December 3, 2009

Office of The Attorney General
- Anne Milgram, Attorney General
Division of Consumer Affairs
- David Szuchman, Director

• Report on Physician Compensation Arrangements
• Report on Physician Compensation Arrangements Executive Summary

Trenton, NJ - Attorney General Anne Milgram today released a report from the Division of Consumer Affairs recommending new regulations to curtail the potential for conflicts of interest between doctors and pharmaceutical companies and medical device manufacturers.

The recommendations address the impact of potential conflicts on patient care, and set forth new policies to be considered by the Board of Medical Examiners, the Board of Pharmacy, the Department of Health and Senior Services and academic medical centers.

Serving as a complement to voluntary industry codes, proposed regulations would ban doctors from accepting any gifts or fees or travel expense reimbursement from any pharmaceutical or medical device manufacturers. In addition, the proposed reforms bar physicians from accepting free food and meals in office settings or at promotional dinners.

Recommended regulations would also require doctors who do serve as consultants to pharmaceutical companies or medical device manufacturers to publicly disclose every two years the acceptance of more than $200 in consulting fees, or honoria, or funding for research or education.

“The proposed regulations accompanying the report on physician compensation are designed to ensure that patient care is guided by the unbiased exercise of doctors’ best judgments,” Attorney General Milgram said, in endorsing the report’s recommendations. “It is critical to minimize the potential for conflicts and it is critical that patients are made aware of any financial relationship between a physician and a pharmaceutical company or medical device manufacturer. Such relationships could bias medical decision-making.”

The report recommends tight controls on what is known in the pharmaceutical industry as “data mining,” or tracking physician prescription information. All physicians would have to be notified when renewing their licenses that they can opt out of having information about their prescriptions sold by pharmacists to healthcare information organizations, which collect information on prescriptions for pharmaceutical company marketing. In addition, the report recommends that the Board of Pharmacy amend its regulations to require pharmacies to maintain documentation that doctors have consented to the sale of their prescribing information. The report also recommends legislation to restrict the use and sale of prescriber information for commercial purposes.

The report – policy recommendations from the Division of Consumer Affairs -- was presented to the Attorney General by David Szuchman, the director of the Division of Consumer Affairs. Szuchman and Division’s staff met with physicians, pharmacists, hospital executives, and pharmaceutical industry and insurance company representatives in compiling the report.

Several states, including Vermont, Maine, Massachusetts, Minnesota and West Virginia have imposed disclosure obligations on the pharmaceutical industry. The New Jersey report recommends adopting specific requirements directed at the state’s 33,000 doctors who are licensed by the state Board of Medical Examiners.

The Pharmaceutical Research and Manufacturers of America (PhRMA) and the Advanced Medical Technology Association (AdvaMed) have adopted voluntary codes of ethics that prohibit member companies from providing entertainment, vacations or meals to physicians, unless the meals are modest and at a medical office or in a clinical setting. The proposed New Jersey regulations would go beyond the industry codes, banning all food except at accredited continuing medical education events where physicians must pay the fair market value of modest meals provided.

Proposed Board of Medical Examiners’ regulations would expressly forbid a licensee from accepting any payment or subsidy to support attendance at an accredited continuing medical education program. These regulations would prohibit fees or travel expense reimbursement for attending company-sponsored meetings unless a doctor appears as a paid consultant or as a teacher at the meeting.

Any items for personal use, like CDs, DVDs, entertainment and sporting events tickets, would be forbidden.

The regulations would allow doctors to accept items that could directly benefit patients, such as prescription samples or anatomical models used in doctors’ offices.

Physicians can serve as consultants and participate in the research and development of new treatments and therapies, and enter into financial contracts with drug and medical device manufacturers. But those financial relationships should be fully disclosed by the physicians every two years when licenses are renewed. The report also recommends that the Board of Medical Examiners create a searchable database to make physician-disclosed information available to the public. The report further recommends that the Legislature pass legislation requiring manufacturers to disclose payments to physicians.

In the area of continuing medical examination, the report recommends that CME credit is only received by doctors for courses that are accredited by the Accreditation Council for Continuing Medical Education (ACCME) and specifically bar the CME provider from obtaining advice from a company that subsidizes the course, creating a separation between educational content and the source of the subsidy.

The report also makes recommendations concerning physicians-in-training, physician accountability, academic detailing and potential conflicts in health care facilitiesg.

The Board of Medical Examiners and the Board of Pharmacy are being asked to review the report and initiate a rule-making process. Any regulations the Boards decide to propose would then be published in the New Jersey Register, allowing a full opportunity for anyone interested to comment. Any finalized regulation would await consideration of those comments, a process that would be likely to take at least six months.

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