Vermont watches drug marketing costs

The state's new prescription drug law requires sales reps to report gifts valued at more than $25.

By Andis Robeznieks, AMNews staff. July 1, 2002.

Signed into law by a physician governor and supported by the state's medical society, Vermont's new prescription drug cost-containment law has garnered a lot of attention as well as pharmaceutical industry criticism.

"The whole thrust is to reimpose market discipline on the pharmaceutical industry," said Gov. Howard Dean, MD, a former practicing internist with presidential aspirations. "I think it will help, in the long run, to reduce pharmaceutical costs."

He said the state could not sustain the costs of prescription drugs and supplies, which have increased by an average of 13% a year since 1992.

Officials hope to lower costs by curbing marketing expenses, and the new law requires drug company sales representatives to report gifts valued above $25 that are given to doctors.

Starting July 1, sales reps will have to report these gifts (free drug samples are excluded) to the state pharmacy board, which will forward the information onto the state attorney general's office.

According to legislative counsel Herb Olson, the cost of collecting and processing this information will be absorbed by the board and attorney general's office. He said the original bill included fees to help cover these costs, but the fees were not included in the final version which was passed into law.

Bobbie Kamen, director of the Vermont AARP chapter, said that even though the attorney general's office won't compile its first gift report for the Legislature until 2004, she still thought that the law would lower costs by changing behavior. [...]