A financial disclosure form that would require pharmaceutical companies to reveal how much they spend on advertising and promotion of brand-name drugs in West Virginia won unanimous approval from the state Pharmaceutical Cost Management Council on Thursday. “All the fans of this legislation have to be very happy with the good step we took today,” said Kevin Outterson, council member and primary author of the disclosure form. However, Outterson stressed that it is only a first step. The form and accompanying regulations first have to be approved by the Legislative Rule-Making Rule Committee, and likely will be challenged in court by the pharmaceutical industry. On Thursday, Marjorie Powell, senior assistant general counsel for national drug industry lobby PhRMA, raised questions about whether the council was overstepping its legal authority by developing the disclosure requirements. “This is much more extreme, we think, than is authorized by the statute,” the Washington, D.C.-based PhRMA attorney told the council. Powell also provided a four-page analysis from the Washington law firm Covington and Burling outlining ways they believe the proposed financial disclosure requirements exceed the council’s authority under the 2004 Pharmaceutical Availability and Affordability Act. State Pharmaceutical Advocate Scott Brown argued that the council should move ahead with the disclosure requirements — and let the Legislature decide if the council had overstepped its authority. “When we send it upstairs, it may look vastly different when we get it back, because we may have overstepped our authority,” he said, referring to the legislative rule-making process. “Honestly, I’d like to get it out of here today,” Brown added. “We have a statutory mandate — our mandate is to develop a [disclosure] form.” As approved Thursday, the form would require drug companies to:

• Disclose all spending on direct-to-consumer advertising for brand-name prescription drugs in West Virginia.
• Disclose how many company representatives work in the state, along with information about salaries and expenditures. These “drug detailers” meet with physicians to promote their company’s brand-name prescription drugs.
• List all gifts, grants or payments to physicians in excess of $25.

Discussions grew heated at times during the lengthy meeting Thursday, particularly over what parts of the disclosures would be public information. PhRMA representatives argued that the information gathered should be confidential, and available only to the council in closed-door sessions. “It was our understanding the information would be used internally by the council...and not be accessible, say, to attorneys doing litigation against a company,” said Phil Reale, a state lobbyist for PhRMA. Countered Outterson, “If a company spent $5 million in West Virginia for direct-to-consumer advertising for a drug later found to be harmful, isn’t that information that could be relevant to the public interest?” Reale said the law is clear that all financial information companies disclose — other than aggregate spending amounts — is confidential and not subject to the Freedom of Information Act. Keith Huffman, the council’s attorney, said the financial disclosure requirements were part of an 11th hour compromise to win passage of the pharmaceutical act, and said the law isn’t entirely clear on what the council can do with the information it receives. “I’m comforted that this is going to go through the rule-making process and the Legislature can say, “Yes, this is what we meant,” or “No, it’s not,’” he said. Earlier Thursday, state AARP president Bill Davis urged the council to move ahead with the disclosure requirements. “AARP shares the frustration of all West Virginians with the high price of prescription drugs,” he said, adding, “This is a significant stride toward empowering West Virginia consumers.