The Business Council opposes the Article VII budget language, found in Part B of S. 6608/A.9708, which adds new sections to the Public Health Law to restrict the marketing of pharmaceutical products, biologics, and medical devices to health care providers. This bill would have a significant, adverse impact on the ability of these manufacturers to market their goods and services, as well as on clinical research in New York.  Furthermore, manufacturers are already subject to federal laws and guidance, supplemented by recently updated industry standards, in these matters.

The state’s pharmaceutical and biotechnology industry is a vital part of our manufacturing sector and the state’s overall economy.  The proposed legislation will negatively impact New York’s economy by impeding the growth of the pharma/biotech industry.  It will undermine the state’s ability to attract and retain pharma/biotech industry, and drive investment in this extraordinarily competitive industry to other states and nations.

Marketing Interference

This bill imposes requirements on the legitimate marketing of goods and services by pharmaceutical companies - marketing rules which no other industry in New York is subject to. The marketing restrictions would hinder engagement between pharmaceutical representatives and physicians and other medical professionals and a process by which prescribers are educated about these products.

The bill constitutes marketing interference in a free-market system through the imposition of government regulation of the right of a business or manufacturer to develop a product, bring it to market, promote it, and educate and inform a consumer about it, including all known benefits and risks.  In this instance, better healthcare - through a more informed prescriber – is provided by health care providers having access to this valuable information.

In January 2009, the pharmaceutical industry’s trade association adopted enhanced voluntary guidelines, which some manufacturers supplement with their own, even more stringent guidelines that are intended to limit payments and gifts.  In addition, the U.S. Health and Human Services’ Office of the Inspector General has issued marketing guidelines to ensure that reciprocal arrangements are prohibited between manufacturers and health professionals.  Furthermore, the U.S. Food and Drug Administration regulates all information and promotional materials distributed about a prescription drug.

New York’s Innovation Economy: Promote, Don’t Punish

New York’s pharma/biotech industry and their products are an asset, and not a liability, for our health-care system and our economy.  It is a major statewide industry that spends billions on research and development, employs thousands in high-paying jobs and generates hundreds of millions of dollars in tax revenue and in rebates to offset the cost of Medicaid and other state programs.

The biopharmaceutical industry directly employs in New York State 55,446 people and is responsible for a total of 130,464 jobs. Of those directly employed, 13,189 work for manufacturing organizations (which includes biopharmaceutical companies that both conduct research and manufacture products), and the remaining 42,257 work for research organizations – the very high wage, high growth jobs our regional and state economic development agencies are trying to attract to New York State.   

Reducing Healthcare Costs, Impacting Prescribing Habits?
Not By Marketing Interference

The Business Council’s members have identified employee healthcare – the cost of healthcare and how to pay for it - as their No. 1 cost-of-doing-business concern.  Yet, interfering with the legitimate marketing of goods and services is not the solution for reducing the cost of healthcare in general, or prescription drug spending, in particular.

New York should work to promote a legislative and regulatory environment that fosters innovation and encourages companies that develop state of the art medicines to do business in this state.  The Legislature should reject this proposed budget language that would diminish the future of the biopharmaceutical industry in New York State and negatively impact the state’s economy by impeding job growth, stifling innovation, and discouraging investment in the state’s pharma/biotech sector.