A new administrative rule issued by the New Jersey Attorney General took effect last month that places significant limitations on the payments and gifts that pharmaceutical manufacturers can provide to prescribers licensed in the Garden State.  The rule, “Limitations on and Obligations Associated with Prescriber Acceptance of Compensation from Pharmaceutical Manufacturers,” is set forth at N.J. Admin. Code 13:45J.

Unlike other so-called sunshine laws and the PhRMA Code of Ethics, this new rule applies directly to prescribers in the state, including physicians, podiatrists, physician assistants, advanced practice nurses, dentists, and optometrists.  Prescribers who violate the law may be subject to disciplinary action by their licensing board (including revocation or suspension of their license) and civil monetary penalties.  However, pharmaceutical manufacturers should also familiarize themselves with the particulars of the new rule and adjust their own internal policies, procedures, and prescriber arrangements accordingly, to assist their prescriber partners with these new compliance obligations.

Notable aspects of the new administrative rule include the following:

$10,000 Annual Cap on Payments for Services.  Effective for contracts entered into on or after January 16, 2018, a prescriber licensed in New Jersey may not accept more than $10,000 in the aggregate from all pharmaceutical manufacturers in any calendar year for providing services such as speaking at promotional activities, participating on advisory boards, or consulting.  The cap does not apply to payments for presentations at educational events, research activities, or royalties and licensing fees.

Written Agreement.  For new arrangements entered into on or after January 16, 2018, a prescriber providing services to a pharmaceutical manufacturer must have a written agreement with the manufacturer formalizing the services to be provided.  The written agreement must:

  • Describe the services that the prescriber will provide;
  • Include the dollar value of the payment and other consideration to be received by the prescriber, which must be based on the fair market value of the services;
  • Require that meetings held in association with the services occur in venues and other circumstances conducive to the services provided and that the activities related to the services be the primary focus of the meeting; and
  • Describe or include the following:
    • The legitimate need for services;
    • The connection between the competence, knowledge, and expertise of the prescriber and the purpose of the arrangement;
    • How participation of the prescriber is reasonably related to achieving the identified purpose;
    • The manner by which the prescriber will maintain records concerning the arrangement and the services provided by the prescriber; and
    • An attestation that the prescriber’s decision to render services is not unduly influenced by a pharmaceutical manufacturer’s agent.

Permitted Gifts and Payments.  A prescriber licensed in New Jersey may accept the following from a pharmaceutical manufacturer or its agent:

  • Meals valued at $15 or less provided through the event organizer at an educational event, provided the meals facilitate the educational program to maximize prescriber learning;
  • Meals valued at $15 or less provided by a manufacturer to a non-faculty prescriber during promotional activities;
  • Items designed primarily for educational purposes for the patients or prescriber that have minimal or no value to the prescriber outside of his or her professional responsibilities, such as anatomical models or materials directly related to patient care or prescriber education;
  • A subsidized registration fee for an education event, provided that the subsidized fee is available to all event participants;
  • Payment for bona fide services (subject to the cap and written agreement requirements summarized above);
  • Reasonable payment for travel, lodging, and other personal expenses in connection with research activities or employment recruitment; and
  • Sample medications that are intended to be used exclusively for the benefit of the prescriber’s patients.

Prohibited Gifts and Payments.  A prescriber licensed in New Jersey may not accept the following from a pharmaceutical manufacturer or its agent:

  • Entertainment or recreational items, such as tickets to theater or sporting events, or leisure or vacation trips
  • Any item of value that does not advance disease or treatment education, including:
    • Pens, note pads, mugs, or other items with a company or product logo
    • Any item intended for the personal benefit of the prescriber or his or her staff, such as floral arrangements, sporting equipment, artwork, or electronic devices
    • Any payment in cash or a cash equivalent, such as a gift card
    • Any payment or subsidy associated with attending an educational event or promotional activity, unless the prescriber is a speaker at the event
  • Meals valued at more than $15