Vermont’s Prescribed Products Gift Ban and Disclosures Act

Pharmacy TimesAugust 2023
Volume 89
Issue 8

The law has impacted the number of physicians receiving payment from drug companies.

Major pharmaceutical companies have continued to be a focal point in legislative debates on a variety of topics at both the state and federal levels. The opioid crisis has now somewhat subsided in contrast to its peak in 2015,1 but that crisis has been characterized as one precipitated by exploitative pharmaceutical company practices and unethical physician relations, distinguishing it from other drug epidemics. Some abnormal features of the opioid crisis have landed it in national news, in part due to the business model of some pharmaceutical companies that allegedly made the crisis almost inevitable. Typically, pharmaceutical companies engage in drug product development and, in turn, receive a patent to incentivize innovation and enable profit from their medication invention.

Judge gavel and stethoscope. The law in medicine, the sentence on medical negligence | Image credit: Adragan -

Gavel and stethoscope | Image credit: Adragan -

However, some firms engaged in marketing activities that included offering gifts as incentives for physicians to prescribe their medications. This ubiquitous practice resulted in approximately 66% of physicians at hospitals receiving some form of payment from pharmaceutical companies.2

Policies like the Physician Payments Sunshine Act of 2010 were enacted to mitigate this issue by increasing transparency,3 but the Sunshine Act fell short of its goal because it only mandated that drug manufacturers covered by federal health care programs report the expenditures to the secretary of the US Department of Health and Human Services.4 Since then, states have sought to pass more stringent laws to lower prescription opioid death rates. Vermont is integral to this discussion because many have recognized its opioid legislation as the most stringent in the country, and it has inspired some other states, such as California, to follow its lead.5


In 2009, Vermont passed 18 VSA §§ 4631a, 4632,6 which banned pharmaceutical companies from offering gifts and incentives to health care providers, only allowing for a few expenditures that must be reported to the state attorney general. Vermont’s law has substantially impacted the number of physicians receiving payment from drug companies at hospitals, with only 19.5% receiving payment vs the 66% national average.2 It has also been associated with a decrease in prescription opioid deaths due to those products being replaced by illicitly manufactured fentanyl and heroin.7

The Figure7 shows the involvement of prescription opioids in opioid fatalities from 2010 to 2019. When the law was first enacted in 2009, prescription opioids were involved in all 3 of the most common opioid fatalities. By 2019, it was only listed once and fell to number 3.7

One impact of Vermont’s legislation is the California gift ban bill, SB 790, that is modeled after it. The bill was passed in the state’s senate in 2017 and was enacted into law in 2018 after a few amendments.8 The bill’s sponsor, state Senator Mike McGuire (D, California), was motivated by research showing a positive relationship between payment from drug companies and increased prescriptions.9 As of 2016, California was 1 of only 8 states with some form of law regulating pharmaceutical marketing.10


Despite some states not enacting policy changes, they have pursued lawsuits against pharmaceutical companies for compensation for the opioid crisis. Purdue Pharma, for example, was sued by various states and pleaded guilty to fraud in 2020 for falsely marketing their opioids to physicians and unlawfully increasing the amount they were enabled to sell to health care providers.11 Moreover, as of June 2022, the US Department of Justice has operated a regulatory agency called the New England Prescription Opioid Strike Force that investigates nefarious activities by health care providers, such as illegal opioid prescriptions.12

In contrast, state and federal legislative efforts to control how pharmaceutical companies interact with health care providers have had a slow journey. Part of the reason for this could be that there are supporting data for both sides of the argument concerning stringent opioid laws. For instance, the American Medical Association reported that when prescriptions decrease, opioid overdoses increase, although it makes no distinction between prescription and illicit opioid involvement.13 Proponents for gift bans, like Senator McGuire, retort that data show physicians’ professional judgments are impeded when they receive gifts from pharmaceutical companies. One study found that even gifts totaling less than $20 resulted in an increase in prescription rates.14

The Vermont legislation has an interesting interplay with the Physician Payments Sunshine provisions of the Affordable Care Act.6 The wording of the Affordable Care Act requires that manufacturers’ allowable expenditures and permitted gifts to physicians and teaching hospitals be reported to the federal government. If a financial act is covered by that federal law, a state may not require manufacturers to make such a disclosure at that lower level of government.

Regardless of gift banning laws becoming espoused at the federal level or in more states, it is important for pharmacists and other health care providers to be cognizant of the potential for more stringent opioid prescribing policies and crackdowns. Although much of the cause of the opioid crisis has moved from prescriptions, federal focus is still being placed on health care providers, specifically in the northeastern part of the country.

About the Authors

Eriel N. Burns is a political science major at the University of Kentucky in Lexington.

Joseph L. Fink III, JD, DSC (HON), BSPHARM, FAPHA, is professor emeritus of pharmacy law and policy and the former Kentucky Pharmacists Association Professor of Leadership at the University of Kentucky College of Pharmacy.


  1. Ciccarone D. The triple wave epidemic: supply and demand drivers of the US opioid overdose crisis. Int J Drug Policy. 2019;71:183-188. doi:10.1016/j.drugpo.2019.01.010
  2. Ornstein C, Jones RG. Doctors at southern hospitals take the most payments from drug, device companies. NPR. June 29, 2016. Accessed July 7, 2023.
  3. Physician financial transparency reports (Sunshine Act). Accessed July 7, 2023.
  4. Physician Payments Sunshine Act of 2010, 42 USC §6002 (2010). Accessed July 7, 2023.
  5. Sullivan T. California Senate passes ban on “gifts” to physicians. Policy & Medicine. Updated May 4, 2018. Accessed July 7, 2023.
  6. Vermont Attorney General Thomas J. Donovan Jr. Prescribed product disclosures for reporting year 2018. April 2020. Accessed July 7, 2023.
  7. Vermont Department of Health. Opioid-related fatalities among Vermonters. March 2020. Accessed July 7, 2023.
  8. Pharmaceutical Gift Ban. S 790. 2017-2018 session (Ca 2018). Accessed July 7, 2023.
  9. Peppars G. Senate passes bill restricting gifts from pharma companies to doctors. KRCR. May 19, 2017. Accessed July 7, 2023.
  10. King M, Bearman PS. Gifts and influence: conflict of interest policies and prescribing of psychotropic medications in the United States. Soc Sci Med. 2017;172:153-162. doi:10.1016/j.socscimed.2016.11.010
  11. Opioid manufacturer Purdue Pharma pleads guilty to fraud and kickback conspiracies. News release. US Department of Justice Office of Public Affairs. November 24, 2020. Accessed July 7, 2023.
  12. Justice Department’s Criminal Division creates New England Prescription Opioid Strike Force to focus on illegal opioid prescriptions. News release. US Department of Justice Office of Public Affairs. June 29, 2022. Accessed July 7, 2023.
  13. Report shows decreases in opioid prescribing, increase in overdoses. News release. American Medical Association. September 21, 2021. Accessed July 7, 2023.
  14. Tiller L. Getting their fix: doctor’s dependency on big pharma. Bus, Entrepreneurship & Tax L Rev. 2018;2(2):492-507. Accessed July 7, 2023.

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