February 8, 2018

On January 16, a New Jersey law titled “Limitations on and Obligations Associated with Acceptance of Compensation from Pharmaceutical Manufacturers by Prescribers” went into effect. It sets a cap of $15 per prescriber, per meal on breakfasts, lunches and dinners served at promotional events, and it bars physicians from earning more than $10,000 per year — in aggregate — from speaking fees, advisory board participation and consulting related to promotional activities, with the prescriber responsible for documentation and reporting.
The new law’s $15 meal cap is problematic as it effectively eliminates physician-led educational events hosted in off-site venues. Although considered promotional, these types of programs have a long track record of positive outcomes. They provide medical value and advance patient care. This kind of industry education has been widely adopted precisely because the medical industry recognizes the unique benefits it provides.
The stated intent of the law is to “minimize the potential for conflicts of interest between prescribers and pharmaceutical manufacturers.” As it is written, though, it upsets the formula — a compliance-centric practice, it should be noted — that has functioned well for many years, and creates an undue burden on medical professionals as they seek to further their and their peers’ education. The constraints are substantially below what has been nationally generally accepted as standards for reasonable meal costs and compensation caps.
The prevalence of such events, as well as increased participation, shows how much healthcare providers value them. These professionals readily travel to offsite venues — on their own time, no less — to confer with peers and acquire knowledge in an appropriate, distraction-free setting appointed with tools and technology conducive to educational instruction. Removing these attributes that allow them to be more productive and learn more, runs counter to both the spirit and practice of improving the health of ordinary Americans.
An even greater challenge is the reporting mechanism for the $10,000 annual cap — which mandates that prescribers themselves document their compliance. The New Jersey law imposes a de facto new regulatory requirement on healthcare professionals by shifting this administrative burden from Life Sciences firms, which are well-equipped to handle this function thanks to decades of observing compliance regulations, to these individuals.
As a result, it is not unlikely that many New Jersey-licensed prescribers who currently act as speakers, advisors, and consultants will limit their participation to a single pharmaceutical firm, or will opt to curtail their engagement with these programs altogether. This would be a great loss to medical progress. This dynamic industry absolutely needs to keep prescribers apprised of the latest discoveries and innovations in pharmaceutical development. The peer-to-peer dialogue that takes place at these well-regarded forums is invaluable in this regard.
By cracking down on “boondoggles” that don’t exist, we fear this new law will impact doctors’ ability and willingness to share their insights, doing a disservice not only to these medical professionals but to the patient populations who depend on them for care.

Written by:

Christine Croft, CEO, AHM

Christine is AHM’s CEO and is responsible for leading the strategic direction of the Company, sales and business development, organizational effectiveness and operational excellence. She was AHM’s SVP & CFO for three years prior to this and was responsible for financial management, human resources, information technology, facilities and contracts. She also has nineteen years of financial management experience within technology and service industries, including twelve years within Life Sciences.