California Senate passes SB 790 restricting Pharmaceutical Industry Gifts to Medical Professionals

State Senator Mike McGuire’s groundbreaking legislation that significantly restricts pharmaceutical companies from giving gifts and incentives to medical professionals was approved today in the Senate.

SB 790 severely restricts pharmaceutical companies from providing flights, travel, speaking fees, consulting payments, entertainment or other economic benefits to health care providers.

California has an opportunity to put patient care and drug affordability before corporate profits with SB 790.

“I’ll be the first to say that the vast majority of physicians and medical professionals put the needs of their patients first. There’s a reason why doctors answer the call to practice medicine – to help people in their time of need,” Senator McGuire said. “But growing evidence reveals that financial relationships between some physicians and pharmaceutical companies confirm what has been suspected – financial incentives change minds.”

A recent UCSF study showed that doctors who receive industry gifts such as meals, travel, speaking fees and royalties were two to three times more likely to prescribe costly name-brand drugs than equivalent lower priced generic drugs in their specialty.

Similarly, a Harvard Medical School study found that Massachusetts physicians prescribed a larger proportion of brand-name statins — the category of drugs that treat high cholesterol — the more industry money they received.

“This bill is all about protecting patients, taxpayers and driving down the costs of prescription drugs,” Senator McGuire said. “Throughout the state, some of our largest hospitals and medical centers have realized the importance of limiting gifts from the pharma industry to doctors – it’s time the State of California bans these types of gifts and incentives, which will put patients above profits.”

In recent years, California has begun to fall behind on safeguards relating to limiting pharma gifts and incentives. Eight other states and the District of Columbia, along with California’s largest hospitals such as Kaiser, the University of California Medical Centers, Stanford and many Federally Qualified Health Centers have implemented policies restricting or outright banning pharma gifts to doctors. But, data shows that California physicians, in 2014, received the highest number of gifts and payments from pharmaceutical companies of any state – at $1.44 billion. While the vast majority of physicians put the needs of their patients first, growing evidence clearly suggests that there is a direct correlation between gifts and incentives provided by the pharmaceutical industry and prescribing patterns of brand name drugs.

Each year in the U.S., $73 billion is spent on brand name drugs for which an equivalent generic is available at a significantly lower cost. This has a big impact on taxpayers since Medicare pays for 1 in every 4 prescriptions in the United States.

The use of gifts is of significant concern to vulnerable populations. For example, medical professionals prescribing in California’s foster care system in recent years have received, on average, more than twice the amount in payments and incentives from drug companies when compared with the typical California doctor.

Senator McGuire was successful in passing legislation last year creating protections for foster youth against the over-prescription of mind-numbing drugs. During several hearings over the past two years, Senator McGuire became increasingly aware that doctors prescribing in the foster care system were receiving a troubling number of gifts and payments. But the problem is larger than the foster care system, and statewide regulation is needed.

“The facts are clear. Current voluntary efforts are not enough. California physicians and medical professionals lead the nation in the number of gifts taken, over $1.4 billion in 2014. SB 790 will curb financial payments, gifts and incentives to medical professionals and help drive down the skyrocketing costs of prescription drugs for millions in California,” Senator McGuire said.

SB 790 will now move forward to the Assembly.