New Jersey Proposes Enhanced Limitations on Payments From Pharmaceutical Companies to Health Care Providers

by Glenn P. Prives

The New Jersey Division of Consumer Affairs recently proposed enhanced limitations on payments from pharmaceutical companies to health care providers.  Those licensees affected by the proposed rules are the following:  physicians, podiatrists, physician assistants, advanced practice nurses, dentists and optometrists.

With limited exceptions, providers would not be able to accept any of the following from pharmaceutical manufacturers or their agents:

  • gifts
  • payments
  • stock
  • stock options
  • grants
  • scholarships
  • subsidies
  • charitable contributions
  • entertainment or recreational items, such as tickets to theater or sporting events, or leisure or vacation trips
  • meals
  • any item of value that does not advance disease or treatment education, including:
  • pens, note pads, clipboards, mugs or other items with a company or product logo
  • items intended for the personal benefit of the prescriber or staff, such as floral arrangements, sporting equipment, artwork, or items that may have utility in both the professional and non-professional setting, such as electronic devices
  • any payment in cash or cash equivalent, such as a gift certificate
  • any payment or direct subsidy to a non-faculty prescriber to support attendance at, or as remuneration for time spent attending, or for the costs of travel, lodging, or other personal expenses associated with attending any continuing education event or a promotional activity

There are some exceptions to the proposed limitations:

  • items designed for educational purposes for patients
  • a manufacturer subsidized registration fee at a continuing education event if that fee is available to all event participants
  • modest meals provided through the event organizer at a continuing education event, provided the meals facilitate the educational program to maximize prescriber learning and are capped at the fair market value of $15.00 per prescriber
  • modest meals provided to non-faculty prescribers through promotional activities no more than four times in a calendar year from the same manufacturer, each of which is capped at the fair market value of $15.00 per prescriber
  • fair market value compensation for providing bona fide services as a speaker or faculty organizer or academic program consultant for a continuing education event (subject to disclosure to attendees), plus reasonable payment and remuneration for travel, lodging, and other personal expenses associated with such services and continuing education credit if permitted by the licensee’s licensing board
  • fair market value compensation (capped at $10,000 per year from all pharmaceutical manufacturers) for providing bona fide services as a speaker or faculty organizer or academic program consultant for a promotional activity (subject to disclosure to attendees), plus reasonable payment or remuneration for travel, lodging, and other personal expenses associated with such services, but no continuing education credit
  • fair market value compensation for participation on advisory bodies or under consulting arrangements, but subject to the aforementioned $10,000 per year cap (together with payments for services for a promotional activity)

A provider can still receive samples from manufacturers, provided that the licensee does not charge patients for the samples and dispenses samples in accordance with the licensee’s licensing board.

The New Jersey Board of Medical Examiners, Board of Dentistry and Board of Optometry already have regulations that govern the relationships between their respective licensees and pharmaceutical companies, but the proposed regulations will both clarify and strengthen the existing rules.

While restrictions on payments to providers exist in other states, New Jersey’s proposed rules appear to be particularly stringent.  Pharmaceutical companies will need to carefully review their policies on all interactions with providers and, if the rules are passed, revise them accordingly as well as educate and monitor their employees and contractors for compliance.  Providers will also need to carefully track their relationships with pharmaceutical companies.  The regulations, if passed, will burden both parties.