Massachusetts Votes to Legalize Drug Company Kickbacks to Doctors

(MoneyWatch)  The Massachusetts House's vote to repeal a ban on drug companies giving free lunches to doctors isn't just about the bizarre way the restaurant industry seems to control healthcare policy in the Bay State. It's about ending a laudable experiment in transparency, and cloaking the way pharmaceutical companies give money and gifts to doctors in order to boost prescription sales.

When the gift ban went into effect into effect in 2008, it also required drug companies to disclose all payments and gifts they gave to Massachusetts doctors on an annual basis. You can access the database, which is downloadable in spreadsheet form, here.

This database is a rare and valuable thing for anyone who believes there ought to be transparency in pharmaceutical marketing and healthcare policy. It's not just that it exists -- there are only a handful of others in existence -- it's also that it's downloadable and searchable, which others are not. If the Massachusetts gift ban is repealed, the database goes with it.

You might point out that the federal healthcare reform act also contains a "Physician Payments Sunshine" law which requires that companies disclose payments to doctors nationally, and that the federal law prevents states from collecting similar information. So why care about the Massachusetts database? Because the Obamacare database is full of holes, and the states are still permitted to collect information that the Affordable Care Act doesn't allow. The federal law contains these exemptions for drug companies:

The law exempts educational material provided for the benefit of patients, rebates and discounts, loans of covered devices, items provided under warranty, dividend or investment interests in a publicly-traded security or mutual fund, and payments made to a physician who is a patient, or an employee of the reporting company.

Prescription drug and device samples are also exempted from the Sunshine provision, but a separate section of the health reform law requires reporting of information on samples to HHS.

The state law, by contrast, is really simple and covers virtually everything:

... any fee, payment, subsidy or other economic benefit with a value of at least $50, ...

That "any ... economic benefit" section is key because drug companies frequently use indirect payments such as discounts, rebates, credit or extra amounts of drugs as kickbacks to doctors and clinics.

The Massachusetts politicians who voted to repeal the gift ban say this is all about helping the state's catering-services-industrial-complex, but the real benefit will go to companies who want to obscure the way kickbacks lubricate the drug business. With luck, the gift ban repeal will be removed from the budget bill before it gets to the governor's desk.

This is the second year the Massachusetts House has voted to repeal the ban; the state Senate so far has rebuffed efforts to weaken or strike down the law.

Related:

• There Is Such a Thing as a Free Lunch, and Massachusetts Wants to Make It Law
• 10 Reasons Drug Prices Always Go Up -- and What We Can Do About It
• The Big Pharma Transparency Report Card: Congratulations, Merck. Lilly? Needs Improvement

Image by Flickr user gemb1, CC.