Vermont Amends Gift Prohibition Law: Requires Reporting of Samples, Permits Coffee at Pharma Booths (Starbucks Breathes a Sigh of Relief)

June 8, 2010

By Jeffrey N. Wasserstein

Loyal readers of the FDA Law Blog have followed (with bated breath) the saga of Vermont’s law that prohibits pharmaceutical and medical device companies from giving many items that are permitted under the PhRMA Code and AdvaMed Code.  The plot has thickened even further with the recent passage of S. 88, which became law on May 27, 2010, albeit without the governor’s signature (he objected to some of the very provisions we’ll be discussing below). 

Most notably, the bill amends the existing law to provide that samples that may be given to patients include not only prescription items, but also over-the-counter drugs, nonprescription medical devices, or items of nonprescription durable medical equipment.  Nota bene:  “Sample” was also defined to include “starter packs and coupons or other vouchers that enable an individual to receive a prescribed product free of charge or at a discounted price.”  While permissible, the kicker here is that beginning on or before April Fools’ Day 2012, companies must disclose all samples that have been disseminated in Vermont during the prior calendar year, identifying for each sample the product, recipient, number of units, and dosage.  While pharmaceutical companies already track samples for purposes of compliance with the PDMA sample tracking requirements, the Vermont requirement also applies to coupons and vouchers for free or discounted prescription products, OTC products and nonprescription devices and DME which are not currently tracked.

The Vermont law does not apply by its terms to any samples required to be reported under the Patient Protection and Affordable Care Act of 2010 (a/k/a Healthcare Reform), which we summarized here, as long as the Vermont Attorney General determines that the U.S. Department of Health and Human Services ("HHS") will collect and report state- and recipient-specific information regarding samples.  How this will play out, remains to be seen. 

On the bright side, we have seen at various booths throughout the country at professional meetings and conferences signs that say “Dogs and Vermont Physicians Need Not Apply for Coffee”.  (Ok, we exaggerate slightly, but see below.) 

No food for you!

The new law clarifies that the provision of coffee or other snacks or refreshments at a booth at a conference or seminar is permitted, and does not even need to be reported!  Barristas from Bennington to Newport rejoice!

Other notable changes include permitting companies to provide grants for fellowship salary support, provided the manufacturer is completely hands-off, including that the institution requesting the grant selects the fellows, the manufacturer imposes no demands or limits on the use of the funds, and (demonstrating that Vermont doesn’t quite understand why companies might want to fund such fellowships), the fellowship cannot be named for the sponsoring manufacturer.  The law also clarifies that companies may sponsor continuing medical education programs and the sponsor may, in its discretion, use such funding to provide for meals and other food at the conference.  There was some  confusion prior to this law as to the permissibility of funding for CME where the CME provider used the funding for meals.  Clarity achieved!  Fund away!

We kid because we care.  As we noted in one of our prior posts on Vermont, states are free to experiment.  At some point, the experimentation goes too far.  As noted by the Governor of Vermont in his statement explaining why he was refusing to sign the bill and was allowing it to become law without his signature, “physicians, non-profits and other organizations across Vermont have expressed significant concern about the chilling effect certain provisions could have on the ability of low-income Vermonters to receive free samples of vital prescription drugs.”  At some point, companies will weigh the cost of doing business in Vermont and decide that it isn’t worth it.  Or, they will do business and decide it’s not worth providing coupons, vouchers or samples to physicians in Vermont, thereby avoiding the hassle of reporting to the Vermont Attorney General.  That cannot be good for Vermont patients, as noted by Governor Jim Douglas.  But at least we know companies can give Vermont MDs a cup of joe at the next professional meeting.

Categories: Drug Development