Senator McGuire introduces Bill Restricting Pharmaceutical Industry Gifts to Medical Professionals

Tuesday, April 25, 2017

Sacramento, CA – State Senator Mike McGuire has introduced legislation that significantly restricts pharmaceutical companies from giving incentives and gifts to medical professionals – a practice that has been widespread in California and throughout the United States. This practice has proven to result in medical professionals prescribing expensive and over-priced prescription drugs to their patients.

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, and Stanford 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 – at $1.44 billion. While the vast majority of physicians put the needs of their patients first, 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.

“This bill is all about protecting patients from overpriced prescriptions. Extensive research and exhaustive studies have shown there is a direct correlation between medical professionals who receive gifts and the prescription of expensive brand-name drugs,” Senator McGuire said. “Throughout the state, large 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.”

Recent studies from UCSF and Harvard link industry payments to physicians and prescribing rates.

Each year in the U.S., $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. 

Studies have shown the pharmaceutical industry spends over $20 billion in marketing every year in the United States. A majority of those marketing dollars are spent on promotions targeting medical professionals. That interaction with the pharmaceutical industry is associated with negative consequences that includes unnecessary drug prescriptions, drug cost increases borne by the patient and less availability of generic drugs.

SB 790 gives California an opportunity to put patient care and drug affordability before corporate profits. The bill would significantly restrict the manufacturer of a prescribed product from offering or giving gifts and incentives such as travel and lodging, consulting fees and expensive meals and alcohol to health care providers. 

The use of gifts is of significant concern to vulnerable populations. For example, medical professionals prescribing in California’s foster care system in recent years have received, on average, more than twice the amount in payments and incentives from drug companies when compared with the typical California doctor.

Senator McGuire was successful in passing legislation last year creating protections for foster youth against the over-prescription of mind-numbing drugs. During several hearings over the past two years, Senator McGuire became increasingly aware that doctors prescribing in the foster care system were receiving a troubling number of gifts and payments. But the problem is larger than the foster care system, and statewide regulation is needed. 

“The vast majority of medical professionals in California do their job well and put the needs of their patients first. But, the facts are clear. Current voluntary efforts are not enough to curb this growing trend and protect patients from overpriced prescriptions. SB 790 will restrict pharmaceutical gifts and help control drug costs,” Senator McGuire said.

SB 790 will be heard in the Senate Health Committee Wednesday afternoon.

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