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Iowa Gift Ban Exempts Promotional Products
Volume 625
July 9, 2009

In a win for the ad specialty industry, a new Iowa law that bans gifts to doctors from pharmaceutical companies includes an exemption for promotional products. The exemption was granted after a nearly year-long process involving extensive legislative talks and hearings as well as a letter writing campaign spearheaded by leading Iowa distributors. "Even though we're competitors, it goes to show that you have to work together in this industry," says Lee Cochran, president of Counselor Top 40 distributor Newton Manufacturing (asi/283300).

Listed as Iowa Senate File 389 and designed to improve health care coverage for children in the Hawkeye State, the bill recently was signed into law. In addition to banning the gifting of doctors, the legislation was authored to prevent insurance companies from offering so-called kickbacks to prospects seeking group health care plans. From its inception to its passing, the bill received strong support from Iowa political leaders, but without changes would have created significant sales limitations for distributors in the state. "It would have challenged the idea of being pro business," Cochran says.

In recent years, states like Vermont and Massachusetts have introduced legislation to ban promotional gift-giving, particularly related to the health care industry. Through oft-termed "sunshine bills," legislators have sought to reduce the influence of drug manufacturers on patient treatments, requiring pharmaceutical companies to disclose any and all compensation to doctors – including promotional items. And The United States Congress is currently considering a similar bill, called The Physician Payments Sunshine Act of 2009.

Activists have argued that bans are necessary to prevent doctors from being persuaded to prescribe the drugs produced by gifting pharmaceutical companies, which sometimes entice physicians with free meals or travel packages. These all-encompassing bills have frequently included bans on promotional products as well, with legislators largely unwilling to offer any exemptions or monetary thresholds, until now. "The government shouldn't be influencing business decisions," says Cochran.
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