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Maine may require drug makers to report marketing

By Karen Pallarito

Last Updated: 2003-05-30 17:00:33 -0400 (Reuters Health)

NEW YORK (Reuters Health) - Maine lawmakers this week approved a bill requiring prescription drug manufacturers and labelers to file annual reports disclosing how much they spend to market their drugs.

If Gov. John Baldacci signs the bill, Maine would become only the second state, after Vermont, to enact a pharmaceutical marketing disclosure law.

Democratic State Rep. Tom Kane, the bill's sponsor, said the measure is one of several before the state legislature aimed at lowering drug costs by requiring greater transparency from pharmaceutical manufacturers, pharmacy benefit managers and insurers.

Drugmakers insist the prices of their products reflect the costs of research and development, but skeptics believe the industry spends excessively on marketing and advertising. Kane hopes to shed some light on the issue by requiring drug companies to break out their marketing costs.

"It's basically placing as many cards as possible face up on the table so there can be no denial about the amount of money that's spent," he said.

The bill requires disclosure of all advertising, marketing and promotions expenditures, including educational materials, food and entertainment and free drug samples. It exempts expenses of $25 or less.

"It's not going to immediately lower the cost of prescriptions, but it gives the consumer an advantage of understanding of what's being spent," said John Carr, president of the Maine Council of Senior Citizens, which lobbied for the bill's passage.

"In the long run all of those giveaways actually add to the cost of drugs," he added.

The bill would take effect Jan. 1, 2004. Manufacturers or labelers of prescription drugs distributed to Maine residents would have to file a report with the state Department of Human Services by July 1 each year disclosing their marketing expenses.

A company that fails to file a report could be fined $10,000.

Bruce Lott, a spokesman for the Pharmaceutical Research and Manufacturers of America (PhRMA), said the legislation is "aimed at a problem that doesn't exist." He said the bill creates "an unnecessary burden for manufacturers" as well as for the state agency required to receive the reports "and it will provide no useful information."

Lott noted that PhRMA's board last summer unanimously adopted a voluntary code of ethics banning drug company representatives from lavishing doctors with free trips, tickets to theater or sporting events and expensive dinners.

Maine has been particularly vigilant in efforts to curb prescription drug expenses. The U.S. Supreme Court recently cleared the way for the state to implement a program allowing the state to wrest discounts from drugmakers to provide prescription drugs for residents who don't have drug coverage. Firms that refuse to negotiate with the state could have their products placed under "prior authorization," meaning doctors must seek special permission to obtain Medicaid coverage for those drugs.

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