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No preemption means more rules, more headaches for pharma companies

Pharma Compliance Alert, September 19, 2007

The Physician Payments Sunshine Act, introduced by Senators Charles Grassley (R-Iowa) and Herb Kohl (D-Wis.) does not include an explicit preemption clause. If the act, which would require drug manufacturers to disclose the amount of money and other gifts they give to physicians, passes it could mean more paperwork for pharmaceutical companies.

Phama companies currently have to report money and gifts in some states. Each state has its own specific rules and reporting forms. Without a preemption clause, the federal rule will be another layer of tracking and paperwork for companies, increasing the amount of time and effort companies have to spend to make sure they are in compliance with each different law.

"It won't be an implied preemption," Dan Miller, deputy attorney general and director of the Medicare fraud unit in Delaware, said at CBINET's Tracking State Laws and Aggregate Spend conference. "If they want to preempt, they would come out and say so."

One reason for not preempting the state laws is healthcare regulation is generally left to the states, according to Miller.

Gordon Smith, executive vice president of the Maine Medical Society, also doubts the federal law will preempt the state laws because every state has its own interests.

"States will fight to keep their rights to this kind of legislation," Smith said.

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