SECTION 1.  Chapter 12 of the General Laws, as appearing in the 2002 Official Edition, is hereby further amended by inserting after section 10 the following section:-

Section 10A. (a) In order to protect the public interest by vigorously enforcing existing laws that discourage fraud, regulate public charities, and preserve access to affordable, high quality prescription drugs, the attorney general shall designate an assistant attorney general to coordinate the activities of the office relating to prescription drug pricing and marketing.  Such activities shall include, but not be limited to, the investigation and prosecution of Medicaid fraud and other fraudulent drug pricing schemes disadvantaging the commonwealth or its citizens, including the filing of false or misleading reimbursement claims or price reports, the investigation and prosecution of unfair and deceptive acts or practices by pharmaceutical manufacturing companies or their agents, including misconduct in the marketing of prescription drugs to prescribers, pharmacists and hospitals in the commonwealth, and the exploration of the relationship between the pharmaceutical industry and the public charities of the commonwealth, including the investigation and prosecution of illegal conduct involving gifts, educational or research grants, or other economic benefits provided by a pharmaceutical company or an agent of a pharmaceutical company to a public charity the circumstances of which reasonably call into question whether such funds are being put to a charitable purpose or indicate a breach of the public trust in the administration of a public charity. 

(b) In addition to any other authority he may have, the attorney general may conduct an investigation upon application to and with the approval of a justice of the trial court whenever he reasonably believes that certain practices of the pharmaceutical industry or of a public charity regulated by the attorney general, including a hospital, threaten to increase the cost to the commonwealth or its citizens or limit the availability of prescription drugs.  In conducting such investigation, he may:  (a) take testimony under oath; (b) examine or cause to be examined any relevant documentary material of whatever nature; and (c) require attendance during such examination of documentary material of any person having knowledge of the documentary material and take testimony under oath or acknowledgment in respect of any such documentary material.  The nature, contents and procedure for any notice issued by the attorney general relating to the taking of testimony, examinations or attendance shall be as set forth in subsections 2 to 7, inclusive, of section 6 of chapter 93A, unless the attorney general determines that other existing procedures are more likely to produce relevant information.

SECTION 2.  Section 2 of chapter 112 of the General Laws, as appearing in the 1998 Official Edition, is hereby amended by inserting after the words “inactive practitioner.”, in line 120, the following sentence:- A physician shall also submit a completed gratuity disclosure statement as set forth in section 5N with the renewal application.

SECTION 3. The sixth paragraph of section 5 of said chapter 112, as so appearing, is hereby amended by inserting after clause (q) the following clause:-

                              (r) a summary of the contents of the gratuity disclosure statement, including the donor’s name, address and the amount of any reported gift made to the physician, as required under section 5N.

SECTION 4.  Said chapter 112 is hereby amended by inserting after section 5M, inserted by section 4 of chapter 141 of the acts of 2000, the following two sections:-

                                    Section 5N.  (a) For purposes of this section, the following words shall have the following meanings:

                                    "Gift", a payment, entertainment, subscription, advance, services or anything of value, unless consideration of equal or greater value is received. “Gift" shall not include a commercially reasonable loan made in the ordinary course of business, anything of value received by inheritance, or a gift received from a member of the reporting person's immediate family or from a relative within the third degree of consanguinity of the reporting person or of the reporting person's spouse or from the spouse of any such relative.

                                    "Immediate family", a spouse and any dependent children residing in the reporting person's household.

                                    “Medical device”, an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part, or accessory, which is:

                                    (1) recognized in the official National Formulary, or the United States Pharmacopeia, or any supplement to them,

                                    (2) intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals, or

                                    (3) intended to affect the structure or any function of the body of man or other animals, and which does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of its primary intended purposes.

                                    "Person", a business, individual, corporation, union, association, firm, partnership, committee, or other organization or group of persons.

                                    “Prescription drugs”, any and all drugs upon which the manufacturer or distributor has placed or must, in compliance with federal law and regulations, place the following or a comparable warning: “Caution federal law prohibits dispensing without prescription.”

                                    (b) Every physician required to register with the board of registration in medicine shall file a gratuity disclosure statement for the two preceding calendar years with the board at the time the physician applies for an initial or renewal registration certificate. 

(c) The gratuity disclosure statement shall contain the name and address of the donor, and the fair market value, if determinable, of any gifts aggregating more than $100 in the two preceding calendar years, if the recipient is a physician and the source of such gifts is a person who manufactures, sells, distributes, markets, advertises or promotes prescription drugs or medical devices for use by physicians.

(d) Physicians who fail to file a completed gratuity disclosure statement with the board may be subject to the revocation or suspension of their licenses to practice and a fine of up to $5000.

(e) The board shall annually submit a report to the house and senate committees on ways and means to the joint committee on health care compiling data submitted pursuant to section 5M of chapter 112, assessing the extent of gratuities provided to physicians by the pharmaceutical industry, analyzing differences across physicians by practice specialty, and exploring the utility and legality of matching individual physicians’ prescribing patterns with gratuities received to determine the extent of the correlation between pharmaceutical industry marketing and physician behavior. 

Section 5O.  (a) In order to maintain public confidence in the profession and to protect patients, the board may propose rules, based on its expertise, experience and information gathered pursuant to section 5N, that restrict or prohibit the acceptance by licensed physicians of certain categories or types of gifts from individuals who manufacture, sell, distribute, market, advertise or promotes prescription drugs or medical devices for use by physicians. 

SECTION 5.  Said chapter 112 is hereby amended by inserting after section 25 the following new section:-

                                    Section 25A.  (a) Every hospital pharmacy required to register with the board of registration in pharmacy shall annually disclose the following information relating to the activities of the hospital in which such pharmacy is located, in a form approved by the board:

(1) gifts, including anything of value, unless consideration of equal or greater value is received, received by the hospital from any pharmaceutical company or an agent of a pharmaceutical company.  Information disclosed pursuant to this section shall contain the name and address of the donor, and the fair market value, if determinable, of any gifts aggregating more than $100 in the two preceding calendar years, if the recipient is an employee of the hospital and the source of such gifts is a person who manufactures, sells, distributes, markets, advertises or promotes prescription drugs or medical devices for use by hospitals and physicians;

(2) educational or research grants provided to the hospital by any pharmaceutical company or agent of a pharmaceutical company, including the purpose of and terms of the grant and the obligations of the hospital under the grant;

(3) all agreements or contracts between the hospital and any pharmaceutical company or agent of any pharmaceutical company, including the obligations of and benefits to the hospital of such agreements of contracts. 

(b) A hospital pharmacy that fails to file the information required by this section with the board may be subject to the revocation or suspension of its license to practice and a fine of up to $5000.

(d) The board shall annually submit a report to the house and senate committees on ways and means to the joint committee on health care compiling data submitted pursuant to this section, assessing the extent of gratuities provided to hospitals by the pharmaceutical industry, analyzing the use of educational and research grants from or other agreements with the pharmaceutical industry; and exploring the relationship between prescribing patterns in a hospital and that hospital’s relationships with particular pharmaceutical companies to determine the extent of the correlation between pharmaceutical industry marketing and hospital and physician behavior. 

(e) In order to maintain public confidence in the hospital pharmacist and hospital industries and to protect patients, the board may propose rules, based on its expertise, experience and information gathered pursuant to this section, that restrict or prohibit the acceptance by hospitals of certain categories or types of gifts from individuals who manufacture, sell, distribute, market, advertise or promotes prescription drugs or medical devices for use by physicians. 

SECTION 6.  Notwithstanding any general or special law to the contrary, for the benefit of the commonwealth’s Medicaid program, the comptroller shall transfer from the General Fund to the Children’s and Seniors’ Health Care Assistance Fund established under section 2FF of chapter 29 of the General Laws, all payments received in each fiscal year by the commonwealth pursuant to any administrative proceeding, claim or action undertaken, joined or participated in by the attorney general against a manufacturer of prescription drugs on the basis of such manufacturer’s marketing practices, price or cost reporting practices, or on any other basis the foundation of which is in part that the action of the pharmaceutical manufacturer resulted in part in higher prescription drug costs to the commonwealth’s Medicaid program.  The amount of such payments shall be certified by the attorney general to the comptroller.  The comptroller may make such transfers over the course of the applicable fiscal year as he deems necessary, but the total of all such transfers shall not be less than the amount certified by the attorney general.