NY Governor Patterson Proposes Legislation Restricting Pharmaceutical Company Gift-Giving to Docs

New York’s Governor Patterson recently proposed tougher laws that would prevent pharmaceutical companies from giving gifts to doctors to entice them to promote the use of specific prescription drugs to their patients. Despite recent problems with the gift-giving practice, the pharmaceutical industry is fighting the governor’s proposal, arguing that the federal government already regulates its marketing practices.

New York isn’t the first state to propose legislation that affects pharmaceutical companies. In fact, nine other states have already enacted legislation. Overall, Governor Patterson argues that the proposed legislation “will benefit patient care and reduce costs in the Medicaid program, as more expensive drugs will not be prescribed for the wrong reasons.” Nevertheless, Jan Faiks, a pharmaceutical company vice president argues that the move is unnecessary since the industry already has a voluntary code of conduct. However, as Lisa Ullman, the assistant counsel to the governor counters, the code of conduct is voluntary and not all pharmaceutical companies have adopted the code. Most importantly, there are no enforcement standards.

Under Patterson’s proposal, drug makers that violate the law would pay between $15,000 and $250,000 per violation and health care professionals who broke the law would pay $5,000 to $10,000 per violation. The New York Department of Health would be responsible for enforcing the law, relying on whistleblowers to report pharmaceutical abuses. While Patterson and his administration don’t estimate much in extra revenue from cutting Medicaid payments for prescription drugs, they do want New Yorkers to be safe and to know that they are being prescribed medications for the right reasons.