Vermont’s Pharmaceutical Laws Move Toward Fuller Disclosure

Vermont can take pride in its health achievements. When states are ranked in terms of four groups of health determinants personal behaviors, the community environment, health policies, and clinical care Vermont ranked #1 in 2007, the most recent year for which the data are available. The state’s achievements include a low prevalence of obesity, a high rate of high school graduation, low rates of violent crime and infectious disease, a low proportion of children in poverty, low uninsurance, high immunization coverage, strong prenatal care, a high ratio of primary physicians-to-population, and a low rate of preventable hospitalizations. These translate into favorable health outcomes: few days of poor health (mental and physical), low infant mortality, and a low rate of premature death.

When the state pioneered in passing a Pharmaceutical Marketing Disclosure Law in 2002, there was much interest in the information provided and how it would affect marketing to health care providers. The law required pharmaceutical manufacturers to disclose payments made to doctors, hospitals, universities, and others that prescribe or dispense pharmaceuticals. These payments include consulting and speakers’ fees, travel expenses, gifts, and other payments proffered by the companies in exchange for marketing their products.

In 2007, when Public Citizen examined the data for 2002-2004, it found that 61 percent of payments were not released to the public. The reason? The enacted legislation had a sizeable loophole which exempted pharmaceutical companies from disclosing payments that could be construed as "trade secrets." Moreover, Public Citizen found that the information was difficult to get and that 75 percent of the publicly disclosed information did not allow data users to identify the recipient. Public Citizen obtained the information required for its assessment only after protracted negotiations with Vermont’s Office of the Attorney General and a Freedom of Information Act request.

The most recent report from the state Attorney General, published in April 2009, reveals that in fiscal year 2007-2009 78 manufacturers spent $2,935,248 on 2,280 Vermont providers to market pharmaceutical products. The top five spenders accounted for 52 percent of all expenditures. Similarly, a majority of all payments went to a small fraction of providers: 60 percent of total payments went to 4.3 percent of all providers. As a group, psychiatrists received the largest share of payments, totaling nearly half a million dollars. But this was skewed by the fact that one psychiatrist received more than $112,000, the most spent on any one person that year. Additionally, 25 providers received more than $20,000 each in cash or benefits, and 10 received more than $50,000 each.

When the data are broken down by drug, 70 percent was spent on the top 13 percent of all drugs marketed. The greatest marketing costs were spent on drugs aimed at treating attention-deficit/hyperactivity disorder (ADHD). Expenditures for the next seven top-ranked drugs covered only three indications: depression, Alzheimer’s, and diabetes.

Despite the state’s attempt at transparency, the data became increasingly incomplete over time. Whereas in 2002-2004 some 61 percent of the payments were cloaked under the label of "trade secrets," the most recent report showed that fully 83 percent of the most recently reported payments fell under that rubric and were therefore shielded from public scrutiny. As a result, the pharmaceutical companies showed a decline of 30 percent in marketing expenditures over the past five years.

In order to plug this loophole and provide consumers with more complete and specific information, in May 2009 the Vermont legislature enacted a bill which eliminates the "trade secret" cover. The bill also allows Vermonters to know how much, if any, individual doctors are receiving in cash payments from which manufacturers and for what drugs. The legislation, which had the support of the Vermont Medical Society and the Vermont Public Interest Research Group, also bans most gifts to doctors and other health care professionals. Still allowed are free drug samples, an exemption which many legislators fought to the keep and which assured the legislation’s passing by a vote of 137 to 4.

Through this act, Vermont has overtaken Massachusetts and Minnesota as the state with the most comprehensive legislation regarding the disclosure of gifts and payments to prescribers. The state has therefore secured its status as a leader in the health field, allowing consumers to know who is getting how much for what purpose.