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Pharmaceutical companies face new laws on marketing and use of medical information

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Two new laws enacted by the California Legislature regulate the marketing practices of pharmaceutical companies (Senate Bill 1765), and impose new requirements on companies that collect medical information in the course of marketing activities (Senate Bill 1633).

SB 1765 will require pharmaceutical companies to adopt a comprehensive compliance program that is in accordance with the "Compliance Program Guidance for Pharmaceutical Manufacturers," published by the Office of Inspector General (OIG) of the Department of Health and Human Services in April 2003. Each company's program must include policies that comply with the Pharmaceutical Research and Manufacturers of America "Code on Interactions with Health Care Professionals."

In addition to requiring pharmaceutical companies to adopt these previously voluntary OIG and PhRMA guidelines, the new law goes beyond the guidelines by mandating that the company's policies establish specific limits on gifts or incentives provided to health care professionals who buy their products.

Drug samples intended for free distribution to patients, financial support for continuing medical education and payments for legitimate professional services (e.g., product consulting) are exempt from these limits, but such payments must be reasonable. Each pharmaceutical company is required to make an annual written declaration that it is in compliance with the new law, and must also make its compliance program available to the public on its Web site.

The second new law, SB 1633, prohibits businesses from requesting an individual's medical information for marketing purposes without disclosing how that information will be used or disclosed, and obtaining the individual's consent. The law applies to organizations that are not currently covered by the California Confidentiality of Medical Information Act, or CMIA, which already imposes similar requirements on healthcare providers.

Under this new law, a business may not orally request medical information directly from an individual unless the business: (1) orally discloses in the same conversation that it is obtaining the information for marketing purposes; and (2) obtains the consent of the individual. The organization must record the entire conversation and maintain the recording for two years.

SB 1633 also prohibits organizations from requesting medical information in writing (including online requests), unless the organization clearly and conspicuously discloses that the information will be used for marketing purposes, and obtains the written consent of the individual.

The author of SB 1633 noted that the legislation was enacted because many consumers have been approached in public locations and asked to fill out a survey requesting medical information without realizing that the information would be sold to marketers for use in promoting items or services.

The two new laws continue California's trend of going beyond federal laws in areas pertaining to business ethics, patient confidentiality and consumer protection.

Scarano is a partner in Foley and Lardner's Health Law Department, based in the firm's Del Mar office. His practice includes representing Life Sciences companies in compliance, reimbursement and regulatory matters. Comments regarding this column can be sent to editor@sddt.com. All letters are forwarded to the author.

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