Senate revises drugmaker gift bill

Kim Dixon

WASHINGTON (Reuters) - A revised Senate bill would require drugmakers and medical devicemakers to publicly report gifts over $500 a year to doctors, watering down the standard set in a previous version.

The new language of the Senate bill was endorsed by Eli Lilly and Co., maker of impotence drug Cialis and schizophrenia drug Zyprexa. Lawmakers said they hope the support will spur other companies to back the bill, which had previously required all gifts valued over $25 be reported.

Lavish gifts to doctors from industry -- ranging from golf vacations to pricey dinners -- have come under fire from lawmakers for influencing doctors' prescribing habits. The industry says such gestures are part of its doctor education, but critics say they taint independent decision-making.

"Transparency brings about accountability and benefits everyone, consumers most of all," Sen. Chuck Grassley, an Iowa Republican, said in a statement. Grassley is sponsoring the bill with Democrat Sen. Herb Kohl of Wisconsin.

"We applaud Eli Lilly for endorsing transparency and hope the rest of the pharmaceutical industry follows their lead," Kohl said.

But some consumer groups lamented the changes.

"It is absolutely unacceptable. The whole idea of the registry is it provides a gift by gift annotation," said Peter Lurie, deputy director of Public Citizen's health research unit, who testified at an earlier hearing on the topic.

Penalties for drug and devicemakers in the revised bill were reduced to fines of between $1,000 and $50,000 for each violation, according both Senate offices. The earlier proposal, released last year, set penalties from $10,000 to $100,000 per infraction.

"Penalties need to be significant otherwise these companies will treat it as a cost of doing business," Lurie said.

The new version also pushes back when the bill would go into effect, from 2008 to 2011.

Eli Lilly said it is backing the revised bill in a bid to recapture trust of doctors and patients.

"Any good partnership has to have trust. And a lot of that trust has been deteriorating over time," said Jack Harris, vice president of the U.S. medical division at Lilly.

The revised Senate bill also includes several changes sought by industry, including having the federal law preempt state laws that require disclosure of gifts.

The Pharmaceutical Research and Manufacturers of America, a trade group for big drugmakers, had not taken a position when the first bill was announced. In a statement on Tuesday, it said it hopes any legislation not "inadvertently imply that these transactions are inappropriate."

The group also is worried about the burden placed on doctors and companies to report, according to the statement.