California Senate Passes Stringent Restrictions on Drug Company “Gifts” To Physicians
On May 18, 2017, the California State Senate passed groundbreaking legislation sponsored by State Senator Mike McGuire that would restrict pharmaceutical companies from giving gifts and incentives to medical professionals. This legislation, SB 790, severely restricts pharmaceutical companies from providing flights, travel, speaking fees, entertainment, consulting payments, or other financial benefits to health care providers.
According to Senator McGuire, “…growing evidence reveals that financial relationships between some physicians and pharmaceutical companies confirm what has been suspected – financial incentives change minds.” Doctors who receive industry gifts such as meals, travel, speaking fees and royalties were two to three times more likely to prescribe costly name-brand drugs than equivalent generic drugs that were lower priced, according to a recent study by University of California, San Francisco.
Senator McGuire explains the importance of the bill in protecting both patients and tax payers while also lowering the costs of prescription drugs. “Throughout the state, some of our largest hospitals and medical centers have realized the importance of limiting gifts from the pharma industry to doctors – it’s time the State of California bans these types of gifts and incentives, which will put patients above profits,” said Senator McGuire. Data shows that in 2014 California physicians received the highest number of gifts and payments from pharmaceutical companies of any state. “The facts are clear. Current voluntary efforts are not enough. California physicians and medical professionals lead the nation in the number of gifts taken, over $1.4 billion in 2014. SB 790 will curb financial payments, gifts and incentives to medical professionals and help drive down the skyrocketing costs of prescription drugs for millions in California.”
In recent years, California has begun to fall behind on safeguards relating to limiting pharma gifts and incentives. Eight other states and the District of Columbia, along with California’s largest hospitals such as Kaiser, the University of California Medical Centers, Stanford and many Federally Qualified Health Centers have implemented policies restricting or outright banning pharma gifts to doctors. But, data shows that California physicians, in 2014, received the highest number of gifts and payments from pharmaceutical companies of any state. Growing evidence clearly suggests that there is a direct correlation between gifts and incentives provided by the pharmaceutical industry and prescribing patterns of brand name drugs.
Each year in the US, $73 billion is spent on brand name drugs for which an equivalent generic is available at a significantly lower cost. This has a big impact on taxpayers since Medicare pays for 1 in every 4 prescriptions in the United States.
SB 790 will now move forward to the Assembly.