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Use caution when defining "gifts," say compliance officers

Pharma Compliance Alert, June 28, 2006

Pharmaceutical companies that are trying to keep up with the various state reporting laws should take caution in how they define the word "gift," Robert Freeman, US compliance officer and compliance counsel for Serono and Bert Johnson, Kyphon's chief compliance officer, said earlier this month during Pharmaceutical Executive's Marketing and Sales Summit in Philadelphia.

Definitions can be ambiguous and can vary from state to state, and items that a company may not consider a gift may be included in a state's gift definition, they said. For example, Minnesota prohibits drug companies from providing gifts of value to healthcare providers. Although a company may not consider a modest meal a gift, Minnesota does. Guidance from the state Board of Pharmacy, which enforces the law, says modest meals are considered gifts. In addition, the value of the meal is included in the $50 per physician annual gift-giving limit. However, there are exceptions to Minnesota's "meals as gifts" rule. Meals aren't considered gifts "if the practitioner is serving on the faculty at a professional educational conference or meeting" or is providing "'substantial professional and consulting services' as part of a genuine research project."

Maine is another state in which there is still ambiguity about what may be considered a gift. In that state, it is unclear whether paying a doctor to speak at a dinner is considered a gift that needs to be reported. Although it is not included in the state's definition, such a payment is not part of the exclusions, either. Learn more here.

Other gray areas in the definition of a gift include educational and indirect grants.

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