	Introduction1

State measures, media attention, and a recent Senate committee hearing have brought attention to the issue of pharmaceutical companies' gifts and payments to physicians. This report first discusses the arguments for and against a federal requirement that pharmaceutical companies disclose gifts and payments. Finally, it analyzes potential legal hurdles to a federal disclosure requirement. Groups opposing a federal disclosure provision argue that disclosure is unnecessary because existing guidelines within the medical and pharmaceutical-marketing professions discourage unethical behavior. State Disclosure Measures

Legislation requiring pharmaceutical companies to disclose gifts and payments to physicians is already in effect in Maine, Minnesota, Vermont, West Virginia, and the District of Columbia. The state laws are fairly similar; they all require disclosure on an annual basis and exempt certain categories of gifts and payments. Also, although the methods differ, all states provide for dissemination of the disclosed information to the public or to state legislatures. Legal Analysis of a Federal Disclosure Requirement

If Congress were to enact a federal disclosure requirement, it would likely survive judicial scrutiny. Specifically, pharmaceutical companies might argue that mandatory disclosure of gifts and payments to physicians violates their First Amendment freedoms of speech and association. A federal provision would likely survive a compelled speech challenge. Mandatory disclosure of gifts and payments to physicians appears reasonably related to potential governmental interests, such as transparency and patient protection. Even if a court found that the pharmaceutical company-physician relationship constituted an "association" such that it triggered right of association claims under the First Amendment, it is unlikely that a court would find that a disclosure law violated privacy of association rights because the Court has upheld disclosure laws against freedom of association challenges in other contexts. Senator Herb Kohl and others have indicated support for the introduction of federal legislation that would require pharmaceutical companies to disclose gifts and payments made to physicians, arguing that such a measure is necessary in order to prevent a negative result for health care cost and quality. Most state laws exempt certain categories of gifts from the reporting requirements, including product samples intended for free distribution to patients and gifts worth less than a specified amount.
A recent Senate hearing, state efforts, and media attention have brought the issue of pharmaceutical companies' gifts and payments to physicians into focus. Pharmaceutical companies sometimes give gifts or make payments to doctors as part of their marketing efforts. Senator Herb Kohl has expressed interest in introducing a federal bill that would mandate disclosure of such gifts and payments. This report briefly outlines the arguments for and against a federal disclosure measure. Next, it describes the state disclosure laws already in effect. Finally, it analyzes potential legal hurdles to a federal disclosure requirement.
Proponents of disclosure express concern that gifts and payments from pharmaceutical companies increase prescription drug costs and create incentives for physicians that obscure patients' best interests; they argue that disclosure would alleviate those problems by providing transparency. Opponents of disclosure emphasize the educational benefits that marketing provides; in addition, they argue that disclosure is unnecessary because existing professional codes, such as American Medical Association guidelines, discourage pharmaceutical representatives and physicians from engaging in unethical behavior.
Several states and the District of Columbia have enacted legislation requiring pharmaceutical companies to disclose gifts and payments made to physicians. The state laws require disclosure to the states of such gifts and payments on an annual basis. Certain categories of gifts and payments are exempted from reporting requirements under most of the state laws. For example, nearly all of the laws exempt product samples intended for free distribution to patients and gifts worth less than a certain amount. The state laws also provide for dissemination to the public or state legislatures of information disclosed pursuant to the laws.
If a federal disclosure requirement was enacted and subsequently challenged, it appears likely to survive judicial scrutiny on First Amendment grounds. If pharmaceutical companies challenged a federal disclosure measure, they would likely argue that it violates their First Amendment rights of freedom of speech or association. However, governmental interests, for example in transparency or patient protection, might be sufficient to survive the applicable tests under compelled speech, restricted speech, and private association precedents.