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New Regulations Governing the Relationship Between New Jersey Health Care Providers and Pharmaceutical Manufacturers

April 2018

CSG Health Care & Hospital Alert

The New Jersey Department of Law and Public Safety, Division of Consumer Affairs, recently promulgated a new rule governing the relationship between pharmaceutical manufacturers and physicians or other health care providers who prescribe pharmaceuticals. The rule generally establishes requirements in the following areas, each of which are summarized below: (1) permitted and prohibited gifts/payments; (2) annual payment cap; and (3) required disclosures. Note that the rule only applies to relationships with pharmaceutical manufacturers, not medical device manufacturers.

Permitted and Prohibited Gifts and Payments
The new rule (the “Rule”) establishes categories of gifts and payments a prescriber of pharmaceuticals (a “Prescriber”) may and may not accept from a pharmaceutical manufacturer, which are generally as follows:
 

PERMITTED Gifts/Compensation

PROHIBITED Gifts/Compensation

Educational items that have little or no value to the Prescriber outside of his or her practice, such as anatomical models

Any item of value that does not advance disease or treatment education, such as: pens, note pads, mugs, and/or items intended for personal benefit (i.e., flowers, sporting equipment, artwork, etc.)

Subsidized event registration fees at education events, but only if the subsidy is available to all participants

Entertainment or recreational items (e.g., theater or sports tickets and vacation trips)

Modest meals (defined as food and/or refreshment which does not exceed $15.00 per Prescriber) provided at an education or promotional event*

Meals, except as otherwise permitted by the Rule

Fair market value compensation for bona fide services (see definition below) with respect to an education event, promotional activity, participation on advisory bodies, or under consulting arrangements

Gift cards or cash equivalents

Reasonable payment for travel, lodging, and other personal expenses**

Payment to support the cost of travel or attendance at an education event or promotional activity if the Prescriber is not a faculty member with respect to such event

Certain royalty and licensing fees

 




























Definition of “Bona Fide Services”

In order for services to be considered “bona fide services,” the Rule requires an agreement between a Prescriber and pharmaceutical manufacturer to be in writing and include certain information regarding the Prescriber’s engagement, such as the legitimate need for the Prescriber’s services and the connection between the competence, knowledge, and expertise of the Prescriber and the purpose of the arrangement.

Services Payment Cap
Under the Rule, a Prescriber may not accept more than $10,000 in the aggregate during any calendar year from all pharmaceutical manufacturers for bona fide services for speaking at promotional activities, participation on advisory boards, and pursuant to consulting arrangements. The $10,000 cap does not apply to payments for (1) speaking at education events (as defined in the Rule); (2) performing research activities (as defined in the Rule); or (3) certain royalty and licensing fees.

Disclosure Requirements
A Prescriber speaking at an education event or promotional activity must disclose, at the beginning of the presentation, if he or she has accepted payment from the sponsoring pharmaceutical manufacturer within the preceding five years. A Prescriber who is an employee of a pharmaceutical manufacturer and who also provides patient care must disclose to patients his or her employment with the pharmaceutical manufacturer. Such a Prescriber, however, is exempt from the compensation prohibitions of the Rule.


*Modest meals are permitted under the following circumstances: 1) When provided through the event organizer at an education event, provided the meals facilitate the educational program to maximize prescriber learning; and 2) when provided by a manufacturer to non-faculty Prescribers through promotional activities.

**Such payment/remuneration may be provided in connection with: 1) serving as a speaker, faculty organizer or academic program consultant for an educational or promotional event; (2) participation on advisory bodies or consulting arrangements; (3) research activities; and (4) employment recruitment.



For more information regarding the Rule and what it means for you or your business, please contact your CSG attorney or the authors listed below.

David Hyman | Member | dhyman@csglaw.com | 973.530.2009

Nicole DiMaria | Member | ndimaria@csglaw.com | 973.530.2111

Jonathan Keller | Associate | jkeller@csglaw.com | 973.530.2172