WORKS: (inserts 'test1' for department)
<?php

        $department = null;
        $stmt = $db->prepare("INSERT INTO product (department) VALUES (?)");
        $stmt->bindParam(1, &$department);
        $department = 'test1';
        $stmt->execute();

?>

DOESN'T WORK:  (inserts null for depertment ) 

<?php

        $department = null;
        $stmt = $db->prepare("INSERT INTO product (department) VALUES (?)");
        $stmt->bindParam(1, $department);
        $department = 'test1';
        $stmt->execute();

?>