1
2
3
4
5
6
7
8
9 A BILL
10
11 TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA,
12 1976, BY ADDING SECTION 44-6-60 SO AS TO REQUIRE
13 PRESCRIPTION DRUG MANUFACTURERS AND LABELERS
14 TO SUBMIT MARKETING ACTIVITIES AND EXPENSE
15 REPORTS TO THE DEPARTMENT OF HEALTH AND
16 HUMAN SERVICES ANNUALLY, TO SPECIFY THE
17 CONTENTS OF THESE REPORTS, AND TO REQUIRE THE
18 DEPARTMENT TO ANALYZE THE IMPACT OF THESE
19 ACTIVITIES AND EXPENSES ON COST, UTILIZATION,
20 AND DELIVERY OF HEALTH CARE IN THIS STATE AND
21 TO SUBMIT THIS INFORMATION TO THE GOVERNOR
22 AND GENERAL ASSEMBLY.
23
24 Whereas, the General Assembly finds that the price of prescription
25 drugs in this State and across the nation has been increasing at an
26 alarming rate over the past decade; and
27
28 Whereas, prescription drug costs are increasing at a faster rate than
29 any other component of health care and are driving the increase in
30 overall health care costs, as is apparent by the ubiquitous nature of
31 the marketing and public information campaigns relating to
32 prescription drugs, pharmaceutical manufacturers put a great deal
33 of resources into marketing their products; and
34
35 Whereas, it is in the interest of assisting this State in its role as a
36 purchaser of prescription drugs and administrator of prescription
37 drug programs, to enable the State to determine the scope of
38 prescription drug marketing costs and their effect on the cost,
39 utilization, and delivery of health care services, and thus, further
40 the role of the State as guardian of the public interest. Now,
41 therefore,
42
[1335] 1
1 Be it enacted by the General Assembly of the State of South
2 Carolina:
3
4 SECTION 1. Article 1, Chapter 6, Title 44 of the 1976 Code is
5 amended by adding:
6
7 “Section 44-6-60. (A) As used in this section:
8 (1) „Labeler‟ means a person or entity, having a labeler code
9 from the Federal Food and Drug Administration, that receives a
10 prescription drug from the manufacturer or a wholesaler of the
11 drug, and repackages the drug to be dispensed in this State.
12 (2) „Manufacturer‟ means a manufacturer of prescription
13 drugs dispensed in this State, and includes the subsidiary or
14 affiliate of the manufacturer.
15 (3) „Marketing‟ means advertising and promotional activities
16 for prescription drugs dispensed in this State including, but not
17 limited to, those activities described in subsection (B).
18 (B) On or before July first of each year, every manufacturer and
19 labeler shall file a report with the department on its marketing
20 activities conducted in this State. The report must be submitted in
21 such form and manner, and include the payment of a fee as is
22 established by the department. Each report must include the value,
23 nature, purpose, and recipient of marketing expenses including, but
24 not limited to:
25 (1) all expenses associated with advertising, marketing, and
26 direct promotion of prescription drugs through radio, television,
27 magazines, newspapers, direct mail, internet, and telephone
28 communications as they pertain to residents of this State;
29 (2) with regard to all health care providers including health
30 insurers and health maintenance organizations, the following
31 information:
32 (a) all expenses associated with educational or
33 informational programs, materials and seminars, and remuneration
34 for promoting or participating in educational or informational
35 sessions, regardless of whether the manufacturer or labeler
36 provides the educational or informational sessions or materials;
37 (b) all expenses associated with food, entertainment, and
38 gifts valued at more than seventy-five dollars and anything
39 provided to a health care provider for less than market value;
40 (c) all expenses associated with trips and travel; and
41 (d) all expenses associated with product samples, except
42 for samples that will be distributed free of charge to patients; and
[1335] 2
1 (3) the aggregate cost of all employees and contractors of the
2 manufacturer or labeler who directly or indirectly engage in the
3 advertising or promotional activities listed in items (1) and (2),
4 including all forms of payment to these employees and contractors.
5 The cost reported pursuant to this item shall reflect only that
6 portion of payment to employees and contractors that pertains to
7 activities within this State or to recipients of the advertising or
8 promotional activities who are residents of or are employed in this
9 State.
10 (C) The following marketing expenses are not subject to the
11 reporting requirements of this section:
12 (1) expenses of seventy-five dollars or less;
13 (2) reasonable compensation and reimbursement for
14 expenses in connection with a bona fide clinical trial of a new
15 vaccine, therapy, or treatment; and
16 (3) scholarships and reimbursement of expenses for
17 attending a significant educational, scientific, or policy-making
18 conference or seminar of a national, regional, or specialty medical
19 or other professional association if the recipient of the scholarship
20 is chosen by the association sponsoring the conference or seminar.
21 (D) Annually before January first, the department shall submit a
22 report, providing information in aggregate form, on prescription
23 drug marketing expenses, reported pursuant to this section, to the
24 Governor, and the General Assembly. Beginning January 1, 2008,
25 and every two years thereafter, the department shall provide a
26 report to the Governor and General Assembly providing
27 information in aggregate form, containing an analysis of the data
28 submitted to the department, including the scope of prescription
29 drug marketing activities and expenses and their effect on the cost,
30 utilization, and delivery of health care services and any
31 recommendations with regard to marketing activities of
32 prescription drug manufacturers and labelers.
33 (E) Notwithstanding any other provision of law, all information
34 submitted to the department pursuant to this section is confidential
35 and is not subject to disclosure under the Freedom of Information
36 Act. However, data compiled in aggregate form by the department
37 for the purposes of reporting required by this section is subject to
38 disclosure, as long as it does not reveal trade information that is
39 protected by state or federal law.
40 (F) A person who violates any provision of this section is
41 subject to a civil penalty of ten thousand dollars, plus court costs
42 and attorney‟s fees.
[1335] 3
1 (G) The department shall promulgate regulations necessary to
2 carryout the provisions of this section.”
3
4 SECTION 2. Section 44-6-60(G) of the 1976 Code, as added by
5 Section 1 of this act takes effect upon approval of the Governor
6 and the remainder of the bill takes effect January 1, 2007.
7 ----XX----
8
[1335] 4