Legislative Analysis
Phone: (517) 373-8080
DRUG MANUFACTURER GIFTS TO PRESCRIBERS http://www.house.mi.gov/hfa
House Bill 4357 (H-1) as reported from committee Analysis available at
Sponsor: Rep. John R. Roth http://www.legislature.mi.gov
Committee: Health Policy
Complete to 3-22-21
SUMMARY:
House Bill 4357 would amend the Public Health Code to prohibit a drug manufacturer or
wholesale distributor from giving or offering certain gifts to prescribers and provide other
requirements concerning the sale, promotion, or marketing of drugs to prescribers.
Under the bill, a drug manufacturer or wholesale distributer or its employees could not
offer or give a gift to a prescriber while engaged in a sales, promotional, or other marketing
activity for a prescription drug. The Michigan Board of Pharmacy could promulgate rules
to implement this provision.
Gift would mean a payment, an advance, a forbearance, or the rendering or deposit
of money, services, or anything else of value, the value of which exceeds $63 in
any one-month period. It would not include a salary paid to an employee or
anything of value provided by the manufacturer or distributor to its salaried
employees.
Gift also would not include any of the following:
• Providing a sample of a drug to a prescriber for distribution to a patient.
• A “modest meal” provided in connection with an informational presentation.
• One or more items with a combined retail value totaling up to $63 in any one-
year period.
• A publication or educational material.
• An item designed primarily for the education of a patient or prescriber.
• A payment to the sponsor of a medical conference, professional meeting, or
other educational program that was not made directly to a prescriber and was
used solely for bona fide educational purposes.
• Funding for a continuing medical or pharmacy education activity, including a
scholarship or educational funding for continuing education, consistent with
standards of the Accreditation Council for Continuing Medical Education or the
Accreditation Council for Pharmacy Education.
• Reasonable compensation, including payment of expenses, for a prescriber’s
professional or consulting services.
• Reasonable compensation, including payment of expenses, for a prescriber to
speak or serve on the faculty at a professional or educational conference or
meeting, including one organized by the manufacturer or distributor.
• A rebate or discount as described in the Health Care False Claims Act.
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 The bill’s provisions would not apply to a manufacturer that manufactures drugs only for
animal use.
A manufacturer or wholesale distributor would have to provide the Board of Pharmacy
with a list identifying its employees who sell, promote, or market drugs intended for human
use to prescribers.
A manufacturer or wholesale distributor would have to ensure the compliance of its
employees with all of the following requirements:
• If the employee provides information about a prescription drug to a prescriber, that the
employee provides to the prescriber, in writing, the wholesale acquisition cost of the
drug.
• That the employee does not engage in deceptive or misleading marketing of a
prescription drug, which would include knowingly leaving out, misstating, or making
a misleading representation of a material fact.
• That the employee does not attend a patient examination without the prior consent of
the patient.
Section 16299 of the Public Health Code provides that a person who violates or helps
another to violate Article 15 of the code is, with some exceptions, guilty of a misdemeanor
punishable by imprisonment for up to 90 days or a fine of up to $100, or both, for a first
offense. For a second or subsequent offense, the person is guilty of a misdemeanor
punishable by imprisonment for at least 90 days and up to 6 months, or a fine of at least
$200 and up to $500, or both.
The bill is tie-barred to HB 4358, which means that it could not take effect unless HB 4358
were also enacted.
Proposed MCL 333.17748g and 333.17748h
BACKGROUND:
The bill is a reintroduction of House Bill 5940 of the 2019-20 legislative session. As
introduced, it was identical to the H-1 substitute for HB 5940,1 which was considered by
the House Health Policy committee and referred to the House Ways and Means committee
in September of 2020.
FISCAL IMPACT:
House Bill 4357 would have an indeterminate fiscal impact on the state and on local units
of government. Individuals convicted of violating the bill could be subject to penalties
under MCL 333.16299. Currently, under section 16299 of the Public Health Code, unless
otherwise stated, a person who violates any provision within Article 15 of the act is guilty
of a misdemeanor. New misdemeanor convictions would increase costs related to county
1
https://www.legislature.mi.gov/documents/2019-2020/billanalysis/House/pdf/2019-HLA-5940-E1A62B8F.pdf
House Fiscal Agency HB 4357 (H-1) as reported Page 2 of 3
 jails and/or local misdemeanor probation supervision. Costs of local incarceration in
county jails and local misdemeanor probation supervision, and how those costs are
financed, vary by jurisdiction. The fiscal impact on local court systems would depend on
how provisions of the bill affected court caseloads and related administrative costs. Any
increase in penal fine revenue would increase funding for public and county law libraries,
which are the constitutionally designated recipients of those revenues. Because there is no
practical way to determine the number of violations that will occur under provisions of the
bill, an estimate of costs to the state or to local units, or revenue for libraries cannot be
made.
The bill would not have a significant fiscal impact on the Department of Licensing and
Regulatory Affairs. Any miscellaneous administrative costs that may arise, including those
for rules promulgation, would likely be sufficiently covered by existing departmental
appropriations.
POSITIONS:
The following entities indicated support for the bill (3-11-21):
• Economic Alliance for Michigan
• Blue Cross Blue Shield of Michigan
• Michigan Association of Health Plans
The following entities indicated opposition to the bill (3-11-21):
• Pharmaceutical Research and Manufacturers of America (PhRMA)
• Otsuka Pharmaceutical
• Michigan Manufacturers Association
Legislative Analyst: Jenny McInerney
Fiscal Analysts: Marcus Coffin
Robin Risko
■ This analysis was prepared by nonpartisan House Fiscal Agency staff for use by House members in their
deliberations, and does not constitute an official statement of legislative intent.
House Fiscal Agency HB 4357 (H-1) as reported Page 3 of 3


Statutes affected:
House Introduced Bill: 333.1101, 333.25211
As Passed by the House: 333.1101, 333.25211