New Hampshire Quietly Considers Prohibition Of Physician Relationships With Medical Device Companies
On March 29, 2012, the New Hampshire House of Representatives recommended for passage HB 1725. If passed, HB 1725 would prohibit all health care practitioners from prescribing or referring any U.S. Food and Drug Administration class II or class III implantable medical device if the practitioner stands to profit, directly or indirectly, from the sale of the device, or from performing any procedure involving the device.
Proponents of the bill assert that it is necessary to address growing concerns regarding physician-owned distributors (“PODs”). As drafted, however, the bill reaches much further than PODs by incorporating the definition of "ownership interest" from Sections 125:25-a to 125:25-c of the New Hampshire Revised Statutes, which requires practitioners to disclose to patients and licensing authorities “any and all ownership interests” the practitioner has in entities that provide diagnostic and therapeutic services. A relationship that triggers the disclosure requirements, therefore, is not limited to PODs. As a result, HB 1725 could prohibit legitimate intellectual property relationships between practitioners and medical device companies that exist to develop and promote life-saving medical devices. Thus, the bill could significantly affect a practitioner’s ability to continue practicing in his or her specialty in New Hampshire if that practitioner has an ownership interest in a medical device related to his or her practice.
In addition to constituting an unfair or deceptive act or practice in violation of New Hampshire law, failure to comply with the prohibition would expose practitioners to a $5,000 fine per procedure for a first offense and potential suspension or loss of professional licensure, and up to a $10,000 fine, for a second offense.
HB 1725 has been fast-tracked to the New Hampshire Senate, where it is expected to meet with approval. A hearing has been scheduled for this Thursday, April 19.