News & Press: Legal Updates

Vermont's Senate Bill 104 Signed Into Law

Saturday, July 09, 2011  
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M E M O R A N D U M
Privileged and Confidential

DATE: June 9, 2011
RE: Urgent: Vermont Senate Bill 104
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On May 6th, the Vermont House and Senate passed Senate Bill 104 ("SB 104”). The bill will prohibit all payments made to health care professionals for their participation in market research sponsored by the pharmaceutical industry beginning on July 1, 2011. With SB 104, Vermont will become the first state to enact legislation that explicitly makes paying compensation to health care providers for survey participation illegal. Vermont’s aggressive prohibition of market research stands in stark contrast to the increased understanding of the importance of research in other states (such as Minnesota and Massachusetts) and the loosening of hurdles in those states for research.

Currently, it is CASRO’s understanding that very little research is done in Vermont, because of Vermont’s existing statute that requires physician-level reporting of compensation for survey participation. As originally drafted, SB 104 would have beneficially changed Vermont’s statute to explicitly permit market research blinded to the manufacturer and to make such payments only reportable in the aggregate. While CASRO believes that many pharmaceutical companies would have remained wary of conducting research in Vermont, on the whole the original draft of SB 104 was a positive move towards reestablishing pharmaceutical market research in the state.

The new text of SB 104 was introduced on May 5th and by the next day the bill was rammed through both of Vermont’s legislative chambers. SB 104 provides "except as described in subdivisions (a)(1)(B) [attendance at an educational seminar] and (c) [bona fide clinical trials] no manufacturer or other entity on behalf of a manufacturer shall provide any fee, payment, subsidy, or other economic benefit to a health care provider in connection with the provider’s participation in research.” 18 V.S.A. §4631(c). The Vermont Attorney General’s office has already distributed a memo to pharmaceutical manufacturers making it clear that this prohibition applies to market research. Each such payment could result in a fine to the manufacturer of $10,000.

CASRO requested clarification from the Vermont Attorney General’s office regarding the application of the law to payments made to physician respondents as part of syndicated research. The Vermont Attorney General’s office by an e-mail from Kate Whelley McCabe, an Assistant Attorney General in the Public Protection Division, confirmed that "truly syndicated research” would be permissible. This position was confirmed on a conference call with the pharmaceutical industry on June 16th, and will be further reflected in the final guidance to be issued by the Vermont Attorney General’s
office.

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