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Chapter 4.5. Division of Workers' Compensation
Subchapter 1. Administrative Director--Administrative Rules
Article 5.5.2. Medical Treatment Utilization Schedule

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§ 9792.27.20. Pharmacy and Therapeutics Committee - Conflict of Interest.

(a) The conflict of interest standards are intended to ensure that the members of the P&T Committee are free from financial interests or other relationships that could compromise the objectivity of the members of the committee as they perform their duties to consult with the Administrative Director on formulary updates based upon the principles of evidence-based medicine. Appointed members of the P&T Committee must impartially perform formulary update review activities, and must be free of conflicts of interest.
(b) Persons applying to be appointed to the P&T Committee shall not be employed by a pharmaceutical manufacturer, a pharmacy benefits management company, or a company engaged in the development of a pharmaceutical formulary for commercial sale, and shall not have been so employed for 12 months prior to the appointment. A P&T Committee member who undertakes such employment during the term of appointment shall not be eligible to continue to serve on the committee.
(c) Members of the P&T Committee shall not have a substantial financial conflict of interest in relation to a pharmaceutical entity.
(1) “Pharmaceutical entity” means a pharmaceutical manufacturer, pharmaceutical repackager, pharmaceutical relabeler, compounding pharmacy, pharmacy benefits management company, biotechnology company, or any other business entity that is involved in manufacturing, packaging, selling or distribution of prescription or non-prescription drugs, drug delivery systems, or biological agents.
(2) For purposes of this section, “substantial financial conflict of interest” means that the applicant or committee member, or his or her immediate family member, has a direct or indirect financial interest in a pharmaceutical entity, including:
(A) Receipt of income within the previous 12 months, amounting to a total of $500 or more from the pharmaceutical entity, including but not limited to salary, wages, speaking fees, consultant fees, expert witness fees, honoraria, gifts, loans, and travel payments;
(B) Receipt of grants or research funding from the pharmaceutical entity within the previous 24 months;
(C) Has had ownership interest in the pharmaceutical entity at any time during the previous 12 months, including but not limited to, a sole proprietorship, partnership, limited liability company, or stock ownership in a corporation that is not publicly traded;
(D) Investment interest worth $2,000 or more in a publicly-traded pharmaceutical entity, not including an investment held through a diversified mutual fund;
(3) “Immediate family member” means spouse, domestic partner, child, son-in-law, daughter-in-law, parent, mother-in-law, father-in-law, brother or sister;
(4) (A) “Direct financial interest” means an interest held by the applicant or committee member.
(B) “Indirect financial interest” means an interest held by the applicant or committee member's immediate family member, or held by a business entity or trust in which the applicant or committee member owns directly or indirectly, or beneficially, a 10-percent interest or greater.
(d) The members of the P&T Committee shall submit an updated Conflict of Interest Disclosure Form annually, and more frequently if there have been changes in circumstances relating to employment by, or financial interests in, a pharmaceutical entity.
Note: Authority cited: Sections 133, 4603.5, 5307.3 and 5307.27, Labor Code. Reference: Sections 4600, 4604.5, 5307.27 and 5307.29, Labor Code.
1. New section filed 12-7-2017; operative 1-1-2018 pursuant to Government Code section 11343.4(b)(3) (Register 2017, No. 49).

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