Bill Text: NY S03270 | 2013-2014 | General Assembly | Amended
Bill Title: Requires manufacturers and labelers of prescription drugs dispensed in this state which engage in marketing activities in the state to annually report marketing expenses to the department of health; imposes a $10,000 civil fine for failure to report; eliminates deductibility for certain expenses incurred in the advertising of prescription drugs.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-01-24 - PRINT NUMBER 3270A [S03270 Detail]
Download: New_York-2013-S03270-Amended.html
S T A T E O F N E W Y O R K ________________________________________________________________________ 3270--A 2013-2014 Regular Sessions I N S E N A T E January 31, 2013 ___________ Introduced by Sen. KRUEGER -- read twice and ordered printed, and when printed to be committed to the Committee on Health -- recommitted to the Committee on Health in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the public health law, in relation to requiring the manufacturer or labeler of each prescription drug to annually report the marketing costs of such drug to the department of health and to amend the tax law, in relation to eliminating deductibility for certain expenses incurred in the advertising of prescription drugs THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: 1 Section 1. Legislative intent. The legislature hereby finds and 2 declares that the price of prescription drugs in this state and across 3 the nation has been increasing at an alarming rate over the past decade. 4 Prescription drug costs are increasing at a faster rate than any other 5 component of health care and are driving the increase in overall health 6 care cost. As is apparent by the ubiquitous nature of the marketing and 7 public information campaigns relating to prescription drugs, pharmaceu- 8 tical manufacturers put a great deal of resources into marketing their 9 products. This has been especially true since the 1997 relaxation of 10 federal laws relating to prescription drug advertising. It is in the 11 interest of assisting this state in its role as a purchaser of 12 prescription drugs and administrator of prescription drug programs, to 13 enable the state to determine the scope of prescription drug marketing 14 costs and their effect on the cost, utilization and delivery of health 15 care services, and thus further the role of this state as guardian of 16 the public interest. 17 S 2. Section 206 of the public health law is amended by adding a new 18 subdivision 29 to read as follows: EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD01521-02-4 S. 3270--A 2 1 29. THE COMMISSIONER IS AUTHORIZED AND DIRECTED TO REQUIRE MANUFACTUR- 2 ERS OR LABELERS OF PRESCRIPTION DRUGS, WHICH DISPENSE SUCH DRUGS IN THIS 3 STATE AND WHICH EMPLOY, DIRECT OR UTILIZE MARKETING REPRESENTATIVES IN 4 THE STATE, TO REPORT THE MARKETING COSTS OF EACH OF ITS PRESCRIPTION 5 DRUGS DISPENSED IN THIS STATE. 6 (A) DEFINITIONS. AS USED IN THIS SUBDIVISION, UNLESS THE CONTEXT 7 CLEARLY INDICATES OTHERWISE, THE FOLLOWING TERMS SHALL HAVE THE FOLLOW- 8 ING MEANINGS: 9 (I) "LABELER" MEANS ANY PERSON OR ENTITY, HAVING A LABELER CODE FROM 10 THE FEDERAL FOOD AND DRUG ADMINISTRATION, THAT RECEIVES A PRESCRIPTION 11 DRUG FROM THE MANUFACTURER OR A WHOLESALER OF SUCH DRUG, AND REPACKAGES 12 SUCH DRUG TO BE DISPENSED IN THIS STATE. 13 (II) "MANUFACTURER" MEANS A MANUFACTURER OF PRESCRIPTION DRUGS 14 DISPENSED IN THIS STATE, AND SHALL INCLUDE THE SUBSIDIARY OR AFFILIATE 15 OF SUCH MANUFACTURER. 16 (III) "MARKETING" MEANS ADVERTISING AND PROMOTIONAL ACTIVITIES FOR 17 PRESCRIPTION DRUGS DISPENSED IN THIS STATE INCLUDING, BUT NOT LIMITED 18 TO, THOSE ACTIVITIES DESCRIBED IN PARAGRAPH (B) OF THIS SUBDIVISION. 19 (B) MANNER OF REPORTING. ON OR BEFORE JULY FIRST EACH YEAR EVERY 20 MANUFACTURER AND LABELER SHALL FILE A REPORT WITH THE DEPARTMENT ON ITS 21 MARKETING ACTIVITIES CONDUCTED IN THIS STATE. SUCH REPORT SHALL BE 22 SUBMITTED IN SUCH FORM AND MANNER, AND INCLUDE THE PAYMENT OF SUCH A FEE 23 AS SHALL BE DETERMINED BY THE COMMISSIONER. EACH SUCH REPORT SHALL 24 INCLUDE THE VALUE, NATURE, PURPOSE AND RECIPIENT OF MARKETING EXPENSES 25 INCLUDING, BUT NOT LIMITED TO: 26 (I) ALL EXPENSES ASSOCIATED WITH ADVERTISING, MARKETING AND DIRECT 27 PROMOTION OF PRESCRIPTION DRUGS THROUGH RADIO, TELEVISION, MAGAZINES, 28 NEWSPAPERS, DIRECT MAIL AND TELEPHONE COMMUNICATIONS AS THEY PERTAIN TO 29 RESIDENTS OF THIS STATE; 30 (II) WITH REGARD TO ALL PROVIDERS OF HEALTHCARE SERVICES REGULATED BY 31 THE DEPARTMENT UNDER THE PROVISIONS OF ARTICLE TWENTY-EIGHT, THIRTY-SIX 32 OR FORTY-FOUR OF THIS CHAPTER, INCLUDING HEALTH MAINTENANCE ORGANIZA- 33 TIONS ESTABLISHED PURSUANT TO ARTICLE FORTY-THREE OF THE INSURANCE LAW, 34 THE FOLLOWING INFORMATION: 35 (A) ALL EXPENSES ASSOCIATED WITH EDUCATIONAL OR INFORMATIONAL 36 PROGRAMS, MATERIALS AND SEMINARS, AND REMUNERATION FOR PROMOTING OR 37 PARTICIPATING IN EDUCATIONAL OR INFORMATIONAL SESSIONS, REGARDLESS OF 38 WHETHER THE MANUFACTURER OR LABELER PROVIDES THE EDUCATIONAL OR INFORMA- 39 TIONAL SESSIONS OR MATERIALS, 40 (B) ALL EXPENSES ASSOCIATED WITH FOOD, ENTERTAINMENT AND GIFTS VALUED 41 AT MORE THAN SEVENTY-FIVE DOLLARS, AND ANYTHING PROVIDED TO A HEALTH 42 CARE PROFESSIONAL FOR LESS THAN MARKET VALUE, 43 (C) ALL EXPENSES ASSOCIATED WITH TRIPS AND TRAVEL, AND 44 (D) ALL EXPENSES ASSOCIATED WITH PRODUCT SAMPLES, EXCEPT FOR SAMPLES 45 THAT WILL BE DISTRIBUTED FREE OF CHARGE TO PATIENTS; AND 46 (III) THE AGGREGATE COST OF ALL EMPLOYEES AND CONTRACTORS OF THE 47 MANUFACTURER OR LABELER WHO DIRECTLY OR INDIRECTLY ENGAGE IN THE ADVER- 48 TISING OR PROMOTIONAL ACTIVITIES LISTED IN SUBPARAGRAPHS (I) AND (II) OF 49 THIS PARAGRAPH, INCLUDING ALL FORMS OF PAYMENT TO SUCH EMPLOYEES AND 50 CONTRACTORS. THE COST REPORTED PURSUANT TO THIS SUBPARAGRAPH SHALL 51 REFLECT ONLY THAT PORTION OF PAYMENT TO EMPLOYEES AND CONTRACTORS THAT 52 PERTAINS TO ACTIVITIES WITHIN THIS STATE OR TO RECIPIENTS OF THE ADVER- 53 TISING OR PROMOTIONAL ACTIVITIES WHO ARE RESIDENTS OF OR ARE EMPLOYED IN 54 THIS STATE. 55 (C) EXCEPTIONS. THE FOLLOWING MARKETING EXPENSES SHALL NOT BE SUBJECT 56 TO THE REPORTING REQUIREMENTS OF THIS SUBDIVISION: S. 3270--A 3 1 (I) EXPENSES OF SEVENTY-FIVE DOLLARS OR LESS; 2 (II) REASONABLE COMPENSATION AND REIMBURSEMENT FOR EXPENSES IN 3 CONNECTION WITH A BONA FIDE CLINICAL TRIAL OF A NEW VACCINE, THERAPY OR 4 TREATMENT; AND 5 (III) SCHOLARSHIPS AND REIMBURSEMENT OF EXPENSES FOR ATTENDING A 6 SIGNIFICANT EDUCATIONAL, SCIENTIFIC OR POLICY-MAKING CONFERENCE OR SEMI- 7 NAR OF A NATIONAL, REGIONAL OR SPECIALTY MEDICAL OR OTHER PROFESSIONAL 8 ASSOCIATION IF THE RECIPIENT OF THE SCHOLARSHIP IS CHOSEN BY THE ASSOCI- 9 ATION SPONSORING THE CONFERENCE OR SEMINAR. 10 (D) DEPARTMENT REPORTS. ANNUALLY ON OR BEFORE NOVEMBER THIRTIETH, THE 11 DEPARTMENT SHALL SUBMIT A REPORT, PROVIDING INFORMATION IN AGGREGATE 12 FORM, ON PRESCRIPTION DRUG MARKETING EXPENSES TO THE GOVERNOR, TEMPORARY 13 PRESIDENT OF THE SENATE AND SPEAKER OF THE ASSEMBLY. ON OR BEFORE JANU- 14 ARY FIRST, TWO THOUSAND FIFTEEN AND EVERY TWO YEARS THEREAFTER, THE 15 DEPARTMENT SHALL PROVIDE A REPORT TO THE GOVERNOR, TEMPORARY PRESIDENT 16 OF THE SENATE AND SPEAKER OF THE ASSEMBLY, PROVIDING INFORMATION IN 17 AGGREGATE FORM, CONTAINING AN ANALYSIS OF THE DATA SUBMITTED TO THE 18 DEPARTMENT, INCLUDING THE SCOPE OF PRESCRIPTION DRUG MARKETING ACTIV- 19 ITIES AND EXPENSES AND THEIR EFFECT ON THE COST, UTILIZATION AND DELIV- 20 ERY OF HEALTH CARE SERVICES AND ANY RECOMMENDATIONS WITH REGARD TO 21 MARKETING ACTIVITIES OF PRESCRIPTION DRUG MANUFACTURERS AND LABELERS. 22 (E) CONFIDENTIALITY; PUBLIC INFORMATION. NOTWITHSTANDING ANY PROVISION 23 OF LAW TO THE CONTRARY, ALL INFORMATION SUBMITTED TO THE DEPARTMENT 24 PURSUANT TO THIS SUBDIVISION SHALL BE CONFIDENTIAL AND NOT A PUBLIC 25 RECORD AS DEFINED IN SECTION EIGHTY-SIX OF THE PUBLIC OFFICERS LAW. DATA 26 COMPILED IN AGGREGATE FORM BY THE DEPARTMENT FOR THE PURPOSES OF REPORT- 27 ING REQUIRED BY THIS SUBDIVISION SHALL BE A PUBLIC RECORD AS DEFINED IN 28 SECTION EIGHTY-SIX OF THE PUBLIC OFFICERS LAW, AS LONG AS IT DOES NOT 29 REVEAL TRADE INFORMATION THAT IS PROTECTED BY STATE OR FEDERAL LAW. 30 (F) VIOLATIONS. ANY PERSON WHO VIOLATES ANY PROVISION OF THIS SUBDIVI- 31 SION SHALL BE LIABLE TO THE PEOPLE OF THE STATE FOR A CIVIL PENALTY OF 32 TEN THOUSAND DOLLARS, PLUS COURT COSTS AND ATTORNEYS' FEES, WHICH SHALL 33 BE ENFORCED PURSUANT TO TITLE TWO OF THIS ARTICLE. 34 (G) RULES. ANY AND ALL RULES AND REGULATIONS NECESSARY TO IMPLEMENT 35 THE PROVISIONS OF THIS SUBDIVISION SHALL BE PROMULGATED BY THE COMMIS- 36 SIONER. 37 S 3. Paragraph (b) of subdivision 9 of section 208 of the tax law is 38 amended by adding a new subparagraph 21 to read as follows: 39 (21) EXPENSES INCURRED BY A MANUFACTURER OR DISTRIBUTOR OF A DRUG, THE 40 DISPENSING OF WHICH TO A CONSUMER WITHOUT A PRESCRIPTION IS PROHIBITED 41 BY EITHER FEDERAL OR STATE LAW, FOR THE ADVERTISING OF SUCH DRUG TO 42 CONSUMERS. 43 S 4. Subsection (b) of section 612 of the tax law is amended by adding 44 a new paragraph 40 to read as follows: 45 (40) EXPENSES INCURRED BY A MANUFACTURER OR DISTRIBUTOR OF A DRUG, THE 46 DISPENSING OF WHICH TO A CONSUMER WITHOUT A PRESCRIPTION IS PROHIBITED 47 BY EITHER FEDERAL OR STATE LAW, FOR THE ADVERTISING OF SUCH DRUG TO 48 CONSUMERS. 49 S 5. This act shall take effect on the one hundred eightieth day after 50 it shall have become a law; provided that effective immediately, any 51 rules and regulations necessary to implement the provisions of this act 52 on its effective date are authorized to be made on or before such effec- 53 tive date and provided further that the provisions of sections three and 54 four of this act shall take effect immediately and shall apply to taxa- 55 ble years beginning on or after January first of the year in which it 56 shall have become a law.