BILL REQ. #:  S-2348.1 

READ FIRST TIME 02/27/07.   

     AN ACT Relating to prescription drug marketing and disclosure; adding a new chapter to Title 69 RCW; and prescribing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The purpose of this chapter is to require disclosure and reporting of gifts, grants, and gratuities made by pharmaceutical manufacturing companies, directly or indirectly, to any person or entity authorized to prescribe, dispense, or purchase prescription drugs in Washington.

NEW SECTION.  Sec. 2   The definitions in this section apply throughout this chapter unless the context clearly requires otherwise.
     (1) "Department" means the department of health.
     (2) "Gift, fee, or payment" includes any subsidy or other economic benefit provided in connection with detailing, promotional, or other marketing activities by the company directly or through its pharmaceutical marketers. This does not include payments made in conjunction with returned merchandise, overpayments, and other normal course-of-business financial dealings unrelated to detailing, promotional, or other marketing activities.
     (3) "Group purchasing organization" means any group of two or more hospitals, nursing homes, or other health care organizations that collectively purchase either directly from a pharmaceutical manufacturing company or by accessing contracts through another group.
     (4) "Health benefit plan administrator" means any person or entity who manages or administers a private, self-insured health benefit plan or public employee health benefit plan and any person who manages or administers health benefit plans for another person, including health insuring corporations and sickness and accident insurers under contract to provide managerial and administrative services.
     (5) "Pharmaceutical detailing, promotional, or marketing activities" means promotional or educational activities by pharmaceutical marketers directed at physicians, their staff, or other health care professionals who prescribe, dispense, or administer prescription drugs.
     (6) "Pharmaceutical manufacturing company" means an entity that is engaged in the production, preparation, propagation, compounding, conversion, or processing of prescription drugs, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, or by a combination of extraction and chemical synthesis, or any entity engaged in the packaging, repackaging, labeling, relabeling, or distribution of prescription drugs. This term does not include pharmacists or pharmacies licensed under this chapter or pharmacy operations of any integrated delivery system undertaken for the benefit of patients obtaining care through that system.
     (7) "Pharmaceutical marketer" means a person, agent, or representative who, while employed by or under contract to represent a pharmaceutical manufacturing company, engages in pharmaceutical detailing, promotional activities, or other marketing of prescription drugs in this state to any entity or person authorized to prescribe, dispense, or purchase prescription drugs in this state.
     (8) "Pharmacy benefit manager" means a person or business entity that administers or otherwise assists with prescription drug benefit services including formulary management, rebates, discounted pharmacy network, mail service pharmacies, and electronic claims processing. Such services may be provided on behalf of a health insurer, an employer-sponsored health benefit plan, or an agency of the state.

NEW SECTION.  Sec. 3   (1) On or before January 1st of each year, every pharmaceutical manufacturing company must disclose to the department the value, nature, and purpose of any gift, fee, or payment made to any:
     (a) Entity that employs a health care professional licensed under Title 18 RCW who is authorized to prescribe or dispense prescription drugs;
     (b) Hospital licensed under chapter 70.41 RCW;
     (c) Health benefit plan administrator;
     (d) Group purchasing organization or pharmacy benefit manager; or
     (e) Other entity authorized to purchase prescription drugs in this state.
     (2) Disclosure to the department must:
     (a) Include direct payments made by the company as well as indirect payments made through any other entity at the direction of or with the implied or express knowledge of the company;
     (b) Include the names of all practices or entities receiving a gift, fee, or payment;
     (c) Be made in electronic format in a manner prescribed by the department;
     (d) Initially be made on or before January 1, 2009, for the twelve-month period ending June 30, 2008; and
     (e) Include the name and address of the individual responsible for the company's compliance with the provisions of this section.

NEW SECTION.  Sec. 4   The department shall:
     (1) Report annually on the disclosures made under this section to the legislature and the governor on or before March 1st of each year;
     (2) Post its findings on its internet site, by pharmaceutical manufacturer and by recipient; and
     (3) Keep confidential all trade secrets, as defined in RCW 19.108.010. The disclosure form must permit the company to identify any information that is a trade secret.

NEW SECTION.  Sec. 5   The following are exempt from disclosure under this chapter:
     (1) Professional samples of a drug provided to a prescriber for free distribution to patients;
     (2) Items with a total combined retail value, in any calendar year, of not more than one hundred dollars;
     (3) A reasonable payment to the sponsor of a medical conference, professional meeting, or other educational program, provided the payment is not made directly to a practitioner and is used solely for bona fide educational purposes;
     (4) Publications and educational materials; or
     (5) Salaries or other benefits paid to employees.

NEW SECTION.  Sec. 6   The attorney general may bring an action in Thurston county superior court for injunctive relief, costs, and attorneys' fees, and to impose on a pharmaceutical manufacturing company that fails to disclose as required by this chapter a civil penalty of not more than ten thousand dollars per violation. Each unlawful failure to disclose constitutes a separate violation.

NEW SECTION.  Sec. 7   The department may adopt rules to implement the provisions of this chapter.

NEW SECTION.  Sec. 8   This chapter may be known and cited as the prescription drug marketing and disclosure act.

NEW SECTION.  Sec. 9   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.

NEW SECTION.  Sec. 10   Sections 1 through 9 of this act constitute a new chapter in Title 69 RCW.