Update on Medical Device Manufacturer Marketing Activities: State and Federal Restrictions and Reporting Requirements

by Reed Smith
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As most medical device manufacturers are aware, states are increasingly imposing marketing restrictions on device manufacturers through laws that previously focused more specifically on pharmaceutical manufacturers. These laws affect compliance activities and relationships with providers, and create new reporting obligations. The impact is significant in that these state laws directly influence how companies conduct business and interact with customers, but implementation is complicated by the variations that exist between states.

Some of these state laws are not entirely new. For example, Massachusetts and Vermont have had such laws in place since 2008 and 2009, respectively, and many companies by now have experience with reporting payments to health care professionals, as both Massachusetts and Vermont reports were due in 2010. Nonetheless, additional states have recently adopted marketing laws, and those states that have had laws in place for several years continue to revise the requirements by amendment or publication of additional guidance.

Most significantly, under the federal Patient Protection and Affordable Care Act (“ACA”), beginning March 31, 2013, and annually thereafter, device manufacturers must report payments to physicians and teaching hospitals during the preceding calendar year. This means manufacturers must be prepared to track payments in a comprehensive manner as of January 1, 2012. The Centers for Medicare & Medicaid Services (“CMS”) is now in the early stages of developing specific provisions to implement the new ACA provisions, with publication of proposed regulations to occur not later than October 1, 2011. As we report below, CMS recently held a conference call to receive preliminary input from interested parties.

This Client Alert provides a brief overview of the existing state marketing laws that apply to device manufacturers, including recent changes to those laws, as well as federal reporting requirements under the ACA. Although the laws discussed may apply broadly to other entities, we refer below specifically to medical device manufacturers. For ease of reference, we include at the end of this Client Alert a chart outlining the applicable legal requirements.

Please see full alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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