BILL NUMBER: SB 1765	CHAPTERED
	BILL TEXT

	CHAPTER  927
	FILED WITH SECRETARY OF STATE  SEPTEMBER 30, 2004
	APPROVED BY GOVERNOR  SEPTEMBER 29, 2004
	PASSED THE SENATE  AUGUST 25, 2004
	PASSED THE ASSEMBLY  AUGUST 23, 2004
	AMENDED IN ASSEMBLY  JUNE 17, 2004
	AMENDED IN SENATE  APRIL 21, 2004
	AMENDED IN SENATE  APRIL 12, 2004

INTRODUCED BY   Senator Sher
   (Coauthors:  Senators Chesbro and Kuehl)
   (Coauthor:  Assembly Member Koretz)

                        FEBRUARY 20, 2004

   An act to add Chapter 8 (commencing with Section 119400) to Part
15 of Division 104 of the Health and Safety Code, relating to
pharmaceutical marketing.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1765, Sher.  Pharmaceuticals:  marketing practices.
   The Sherman Food, Drug, and Cosmetic Law regulates the packaging,
labeling, and advertising of drugs and devices.
   This bill would require a pharmaceutical company to adopt and
update a Comprehensive Compliance Program that is in accordance with
a related federal government publication.  The bill would require the
Comprehensive Compliance Program to include, among other provisions,
policies on interactions with health care professionals and limits
on gifts and incentives to medical or health professionals.  The bill
would require each pharmaceutical company to establish explicitly in
its Comprehensive Compliance Program a specific annual dollar limit
on gifts, promotional materials, or items or activities that the
pharmaceutical company may give or otherwise provide to an individual
medical or health care professional, with certain exemptions.
   This bill would require a pharmaceutical company to (1) annually
declare, in writing, compliance with the Comprehensive Compliance
Program and the bill, (2) make its Comprehensive Compliance Program
and written acknowledgment of compliance available to the public on
its Web site, and (3) provide a toll-free telephone number where a
copy or copies of the Comprehensive Compliance Program and written
declaration of compliance may be obtained.
   The bill would require its provisions to become operative on July
1, 2005.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The trade association known as the Pharmaceutical Research and
Manufacturers of America (PhRMA) has developed voluntary guidelines
for pharmaceutical companies that pertain to gifts and financial
incentives provided to doctors.
   (b) The Office of Inspector General (OIG) within the United States
Department of Health and Human Services has developed
recommendations for pharmaceutical companies that pertain to gifts,
financial incentives, and other matters relating to the development,
manufacturing, marketing, and sales of pharmaceutical products.
   (c) The PhRMA guidelines state, "We are also concerned that our
interactions with healthcare professionals not be perceived as
inappropriate by patients or the public at large."
   (d) The OIG guidelines state, "A comprehensive compliance program
provides a mechanism that addresses the public and private sectors'
mutual goals of reducing fraud and abuse; enhancing health care
provider operational functions; improving the quality of health care
services; and reducing the cost of health care."
   (e) It is therefore the intent of the Legislature in enacting this
act to achieve the goals expressed in both the PhRMA voluntary
guidelines and the OIG voluntary guidelines and to ensure greater
adherence by pharmaceutical companies to both sets of existing
guidelines by requiring pharmaceutical companies to adopt policies
that ensure compliance with those guidelines.
  SEC. 2.  Chapter 8 (commencing with Section 119400) is added to
Part 15 of Division 104 of the Health and Safety Code, to read:

      CHAPTER 8.  DRUG MARKETING PRACTICES

   119400.  The following definitions shall apply for purposes of
this chapter:
   (a) "Dangerous drug" means any drug that is unsafe for self-use
and includes either of the following:
   (1) Any drug that bears the legend "Caution:  federal law
prohibits dispensing without prescription," "Rx only," or words of
similar import.
   (2) Any drug or device that, pursuant to federal or state law, may
be dispensed only by prescription, or that is furnished pursuant to
Section 4006 of the Business and Professions Code.  "Dangerous drug"
does not include labeled veterinary drugs.
   (b) "Medical or health professional" means any of the following:
   (1) A person licensed by state law to prescribe drugs for human
patients.
   (2) A medical student.
   (3) A member of a drug formulary committee.
   (c) "Pharmaceutical company" means an entity that is engaged in
the production, preparation, propagation, compounding, conversion, or
processing of dangerous drugs, either directly or indirectly, by
extraction from substances of natural origin or independently by
means of chemical synthesis or by a combination of extraction and
chemical synthesis.  "Pharmaceutical company" also means an entity
engaged in the packaging, repackaging, labeling, relabeling, or
distribution of dangerous drugs.  "Pharmaceutical company" also
includes a person who engages in pharmaceutical detailing,
promotional activities, or other marketing of a dangerous drug in
this state on behalf of a pharmaceutical company.  "Pharmaceutical
company" does not include a licensed pharmacist.
   119402.  (a) Every pharmaceutical company shall adopt a
Comprehensive Compliance Program that is in accordance with the April
2003 publication "Compliance Program Guidance for Pharmaceutical
Manufacturers," which was developed by the United States Department
of Health and Human Services Office of Inspector General (OIG).  A
pharmaceutical company shall make conforming changes to its
Comprehensive Compliance Program within six months of any update or
revision to the "Compliance Program Guidance for Pharmaceutical
Manufacturers."
   (b) Every pharmaceutical company shall include in its
Comprehensive Compliance Program policies for compliance with the
Pharmaceutical Research and Manufacturers of America (PhRMA) "Code on
Interactions with Health Care Professionals," dated July 1, 2002.
The pharmaceutical company shall make conforming changes to its
Comprehensive Compliance Program within six months of any update or
revision of the "Code on Interactions with Health Care Professionals."

   (c) Each pharmaceutical company shall include in its Comprehensive
Compliance Program limits on gifts or incentives provided to medical
or health professionals, in accordance with this chapter.
   (d) (1) Each pharmaceutical company shall establish explicitly in
its Comprehensive Compliance Program a specific annual dollar limit
on gifts, promotional materials, or items or activities that the
pharmaceutical company may give or otherwise provide to an individual
medical or health care professional in accordance with the
"Compliance Program Guidance for Pharmaceutical Manufacturers" and
with the "Code on Interactions with Health Care Professionals."
   (2) Notwithstanding paragraph (1), drug samples given to
physicians and healthcare professionals intended for free
distribution to patients, financial support for continuing medical
education forums, and financial support for health educational
scholarships are exempt from any limits if that support is provided
in a manner that conforms to the "Compliance Program Guidance for
Pharmaceutical Manufacturers" and the "Code on Interactions with
Health Care Professionals."
   (3) Payments made for legitimate professional services provided by
a health care or medical professional, including, but not limited
to, consulting, are exempt from any limits, provided that the payment
does not exceed the fair market value of the services rendered, and
those payments are provided in a manner that conforms to the
"Compliance Program Guidance for Pharmaceutical Manufacturers" and
with the "Code on Interactions with Health Care Professionals."
   (e) The pharmaceutical company shall annually declare, in writing,
that it is in compliance with both its Comprehensive Compliance
Program and this chapter.  The pharmaceutical company shall make its
Comprehensive Compliance Program and its annual written declaration
of compliance with the program available to the public on the
pharmaceutical company's Web site and shall also provide a toll-free
telephone number where a copy or copies of the Comprehensive
Compliance Program and written declaration of compliance may be
obtained.
   (f) This section shall become operative on July 1, 2005.