Vermont is cracking down on the pharmaceutical industry's longtime practice of wooing physicians with sometimes costly perks under a new law requiring company sales representatives to report to the state all gifts worth more than $25.
The law, signed yesterday by Democratic Gov. Howard Dean, exempts free pharmaceutical samples but otherwise applies to a vast array of gifts, from calendars to free trips.
A list of gifts in excess of the $25 limit will be published annually by the state attorney general.
Such gift giving has been a common sales tactic. More than 60% of U.S. physicians recently surveyed for the Kaiser Family Foundation said they had received free meals, event tickets or travel from drug company representatives. Some 13% of respondents reported having received actual financial benefits from companies.
''Vermont is saying to this industry: Enough,'' said Dean, a physician. ''We have to do everything we can to keep the price of drugs affordable for people, particularly seniors whose lives depend on these medications but whose income often can't cover the cost.''
The new state law extends beyond reporting requirements, expanding the state Medicaid program's 3-month-old preferred drug list to encourage use of less-expensive medications as well as rebates from pharmaceutical companies.
It comes at a time when drug costs -- which are rising at an annual rate of about 17% -- have gained huge momentum as a political issue. Similar limits on gifts to physicians have been proposed in Maine and New York. In Hawaii, a bill signed last month by Gov. Benjamin Cayetano, a Democrat, requires drug companies to disclose their annual advertising budgets in the state.
The Vermont Medical Society, which represents about half of the state's 2,700 licensed physicians, has called for tighter restrictions on drug company salespeople and has supported the legislation. The American Medical Association, which did not take a position on the legislation, has a voluntary ethics code that limits gifts to $100 or less as long as they primarily benefit patients.
Earlier this year, the Pharmaceutical Research and Manufacturers of America, Washington, the industry trade group, adopted an ethics policy decreeing that salespeople should no longer provide costly gifts such as expensive dinners or high-priced tickets to Broadway plays or sporting events.
The drug industry spent about $15.7 billion to promote its products in 2000. About $13.2 million went directly to physicians. It is estimated drug companies spend anywhere from $8,000 to $13,000 on each U.S. physician.