Vermont Governor Signs Drug Detailing Measure (Reuters Health)

Originally published by Reuters Health, June 13, 2002

NEW YORK (Reuters Health) — Vermont has become the first state in the nation to require pharmaceutical manufacturers and marketers to disclose payments and gifts made to healthcare providers to promote their drugs.

The disclosure provision is part of a sweeping prescription drug pricing measure that Governor Howard Dean, a physician and potential candidate for the White House in 2004, signed at a ceremony today.

Under a compromise reached by Vermont House and Senate lawmakers late last month, drug companies will be required to begin disclosing gifts and fees made to healthcare providers “on or before January 1, 2004, for the 12 month period ending June 30, 2003.” The measure exempts cash and gifts under $25.

The bill also requires the state to negotiate supplemental rebates for Medicaid and state assistance programs and expands the use of prior authorization.

“Vermont is saying to this industry: Enough. Spending on pharmaceuticals has shot up more than 17% in one year alone,” Dean said today. “We have to do everything we can to keep the price of drugs affordable for people, particularly seniors whose lives depend on these medications but whose income often can’t cover the cost.”

The measure is Vermont’s latest attempt to rein in the cost of prescription drugs. In 2000, the state enacted a measure extending Medicaid rates on drugs to low-income residents who do not quality for the program. The pharmaceutical industry opposed it, and last June a three-judge panel of the US Court of Appeals in Washington, DC, ruled in favor of the Pharmaceutical Research and Manufacturers of America (PhRMA), saying that the federal government “lacked authority to approve the project.”

PhRMA isn’t planning to take the state to court over the new disclosure law, spokesman Jeff Trewhitt told Reuters Health. “It’s certainly their prerogative to pursue this law, and what we think they’ll find in the vast majority of cases is that the relationship between pharmaceutical reps and physicians is appropriate and constructive,” he said.