The inclusion of a repeal of the “gift ban” law in economic development legislation that passed the Mass. House of Representatives on a 145-4 vote has pleased many in the medical device industry.
Richard Packer, CEO of Chelmsford, Mass.-based cardiac device maker Zoll Medical Corp. (NSDQ:ZOLL), told MassDevice that it’s “silly” that a doctor can visit Zoll but the company isn’t allowed to serve them a sandwich.
Zoll sells capital equipment, Packer said, so it’s more practical for doctors to visit the company than for Zoll representatives to make visits to doctors’ offices. the ban prevents his company from serving visiting doctors refreshments.
“Since the ban has come into play [a year ago],” he told us, “I don’t think we’ve hosted anyone here in Massachusetts because it’s just too embarrassing not to be able to offer them a cup of coffee or a doughnut in the morning.”
It’s a common practice in the industry to bring healthcare providers to companies’ facilities to train on various devices and procedures. Packers said many firms have had to curtail those activities in the Bay State, noting that if companies stop training Massachusetts doctors, they can’t penetrate the Commonwealth’s market.
And the legislation came at a bad time for the industry, he added. For Zoll, “there’s no way to quantify not being able to build relationships, not being about give someone a Coke in your factory, not having people come visit. It’s death by a thousand cuts.”
Legislators who support the ban said other states are pursuing similar legislation and predicted the law could help reduce healthcare costs and protect the interests of patients, not device and drug makers. Opponents countered that the law has not led to demonstrable reductions in healthcare costs and discourages out-of-state interests from doing business in Massachusetts.
Senate minority leader Richard Tisei (R-Wakefield), who’s also running for lieutenant governor, called the ban “foolhardy” and is glad the legislation passed the House.
“Anything that makes it unappealing to do business in Massachusetts is probably a mistake,” Tisei told us. “We’ve imposed restrictions on pharmaceutical and medical device companies that are more restrictive than those that are in place on legislators, which is ridiculous.”
The law sends the wrong message, Tisei said.
“We should be doing everything we can to be promoting Massachusetts as a business-friendly state, as opposed to a state that thinks that everybody in the industry is corrupt. And that’s the message we send out.”
Tisei voted for a restaurant exemption that failed in the Senate on a 19-18 vote during debate on the state budget. The House proposal — although nearly identical to the Senate’s — gives members an advantage their colleagues in the Senate didn’t have: it retains the $50 gift ban reporting requirement, rather than striking the ban entirely.
Supporters of the gift ban said the state has already heavily invested in implementing the law and should give it more time.
Boston University law professor and pharmaceutical industry monitor Kevin Outterson said the law has not been in effect long enough to have an impact on the industry. The repeal’s inclusion in the economic development package is the result of a mixture of business and politics, Outterson said.
The device industry should be happy because the ban means they can spend less on marketing, he added, eliminating an expensive “arms race” in the quest to influence doctors’ opinions.
Packer doesn’t think the proposed legislation affects the “arms race.” The gift ban does affect his ability to have a physician visit his factory and to meet with them off-hours, when they aren’t looking to book and bill for medical procedures. Under a code of conduct promoted by the industry’s national lobby, AdvaMed, the industry is self-policed and there are no longer extended training sessions for doctors at posh resorts or trips to Red Sox games, he said.
The device industry got caught up in a campaign against the pharmaceutical industry, Packer said. Pharma reps frequently visit doctors’ offices and hold lunches there, “but no one goes to Pfizer to look at the Pfizer factory to decide whether they’re going to prescribe Lipitor.”
Outterson told MassDevice in June 2009 that the proximity of doctors to the development process is viewed as the crux of the conflict of interest issue for the medical device industry. Doctors don’t create pharmaceuticals and they don’t typically make trips to pharmaceutical companies when figuring out what drugs to prescribe. They do, however, often make trips to device companies for training and, in some cases, develop products themselves.
“You have to work with the doctors,” he said in the 2009 interview, “there’s no doubt about that. But in most of the areas of innovation in our economy, the people doing the innovating are not also the people who decide who buys the product.”