Pharmaspective

Arizona Considering Bill to Permit Pharmaceutical Manufacturers and Their Reps to Engage in Truthful Promotion of an Off-label Use of a Drug, Biological Product or Device

 

The Arizona House of Representatives recently introduced House Bill 2382 (H.B. 2382), also known as the "Free Speech in Medicine Act." H.B. 2382 would permit pharmaceutical manufacturers and their representatives to engage in "truthful promotion of an off-label use of a drug, biological product or device." H.B. 2382 would not, however, require health care insurers, other third-party payors, or other health plan sponsors to provide coverage for the cost of any off-label use of a drug, biological product or device as a treatment.

 

H.B. 2382 would prohibit employees or agents of the state from enforcing or applying Arizona's current law, which bars the misbranding of a drug or device, against a pharmaceutical manufacturer or its representative for engaging in truthful promotion of an off-label use of a drug, biological product or device. State employees or agents are further prohibited from prosecuting a pharmaceutical manufacturer or its representative for engaging in this activity. 

 

H.B. 2382 would  also prohibit the state and all of its subdivisions from using personnel or financial resources "to enforce or cooperate with the federal government's attempt to enforce or apply [21 U.S.C. §331 or §352] against or otherwise prosecute a pharmaceutical manufacturer or its representative solely for engaging in truthful promotion of an off-label use of a drug, biological product or device." These sections of the federal law generally prohibit the introduction of misbranded drugs into interstate commerce.

 

Further, H.B. 2382 would prohibit the Arizona Board of Pharmacy, the Arizona Medical Board, the Arizona Board of Osteopathic Examiners in Medicine and Surgery, and the Department of Health Services from revoking, failing to renew, or taking any other action against the license of a pharmaceutical manufacturer or its representatives, a health care institution, or a physician solely for engaging in truthful promotion of an off-label use of a drug, biological product or device.

 

For the purposes of H.B. 2382, the term "off-label use" means "the use of a United States Food and Drug Administration-approved drug, biological product or device in a manner other than the use approved by the United States Food and Drug Administration."

 

Please click on the following link to view a copy of H.B. 2382: https://goo.gl/zJBfqL. 

Update: Chicago Adopts Amendments to the City's Management Ordinance to Provide Licensing, Education, and Reporting Requirements for Pharmaceutical Representatives (With Some Changes)

The City of Chicago has adopted amendments to the city's Management Ordinance to provide licensing, education, and reporting requirements for pharmaceutical representatives.  This initiative is one in a series of measures to combat opioid and heroin addiction in the City of Chicago and Cook County. As adopted, no person will be permitted to conduct business as a pharmaceutical representative without first having obtained a pharmaceutical representative license. Pharmaceutical representatives that conduct business in the City of Chicago for fewer than fifteen days per calendar year will not be required to obtain a license (as originally proposed, ten days). Prior to obtaining an initial license, pharmaceutical representatives must complete a professional education course as determined by the Commissioner of Public Health ("Commissioner"). The fee for a pharmaceutical representative license is $750 every two years (as originally proposed $1,500).

 

The adopted amendments also require the Commissioner to establish by rule continuing education requirements as a condition for an initial or a renewal pharmaceutical representative license. At minimum, all pharmaceutical representatives will be required to complete five (5) hours of continuing professional education prior to renewing their licenses (as originally proposed, 15 hours). Additionally, the adopted amendments require pharmaceutical representatives, upon request or at time intervals prescribed by the Commissioner, to provide the following information to the Commissioner:

 

1. A list of health care professionals contacted and the number of times the health care professional was contacted;
2. The location and duration of the contact;
3. The pharmaceuticals promoted;
4. Whether product samples, materials, or gifts of any value were provided to the health care professional, and the value of the products, materials, or gifts; and
5. Whether and how the health care professional was compensated for contact with the pharmaceutical representative.

 

Further, the adopted amendments require the Commissioner to establish a list of ethical standards for pharmaceutical representatives and incorporate the list into the rules. In addition to these rules, the adopted amendments prohibit pharmaceutical representatives from engaging in deceptive or misleading marketing of pharmaceutical products, including the knowing "concealment, suppression, omission, misleading representation, or misstatement of any material fact." Pharmaceutical representatives are also prohibited from using a title or designation that could lead a licensed health professional to believe that the pharmaceutical representative is licensed to practice "medicine, nursing, dentistry, optometry, pharmacy, or other similar health occupation, in [Chicago], unless the pharmaceutical representative currently holds such a license." Pharmaceutical representatives are further prohibited from attending patient examinations without the consent of the patient.

 

The adopted amendments define a "health care professional" to be "any physician or other health care practitioner licensed to provide health care services or to prescribe pharmaceutical or biologic products." The term "pharmaceutical representative" is "a person who markets or promotes pharmaceuticals to health care professionals."

 

The adopted amendments will go into effect on July 1, 2017.

Chicago, Illinois Mayor Proposes Amendments to the City's Management Ordinance to Provide Licensing, Education, and Reporting Requirements for Pharmaceutical Representatives

 

On November 1, 2016, Mayor Rahm Emanuel of Chicago, Illinois proposed amendments to the city's Management Ordinance to provide licensing, education, and reporting requirements for pharmaceutical representatives.  This initiative is one in a series of measures to combat opioid and heroin addiction in the City of Chicago and Cook County. If passed as proposed, no person would be permitted to conduct business as a pharmaceutical representative without first having obtained a pharmaceutical representative license. Pharmaceutical representatives that conduct business in the City of Chicago for fewer than ten days per calendar year would not be required to obtain a license. Prior to obtaining an initial license, pharmaceutical representatives must complete a professional education course as determined by the Commissioner of Public Health ("Commissioner"). The fee for a pharmaceutical representative license would be $1,500.

 

The proposed amendments would also require the Commissioner to establish by rule continuing education requirements as a condition for an initial or a renewal pharmaceutical representative license. At minimum, all pharmaceutical representatives would be required to complete fifteen (15) hours of continuing professional education prior to renewing their licenses. Additionally, the proposed amendments would require pharmaceutical representatives, upon request or at time intervals prescribed by the Commissioner, to provide the following information to the Commissioner:

 

1. A list of health care professionals contacted and the number of times the health care professional was contacted;
2. The location and duration of the contact;
3. The pharmaceuticals promoted;
4. Whether product samples, materials, or gifts of any value were provided to the health care professional, and the value of the products, materials, or gifts; and
5. Whether and how the health care professional was compensated for contact with the pharmaceutical representative.

 

Further, the proposed amendments would require the Commissioner to establish a list of ethical standards for pharmaceutical representatives and incorporate the list into the rules. In addition to these rules, the proposed amendments would prohibit pharmaceutical representatives from engaging in deceptive or misleading marketing of pharmaceutical products, including the knowing "concealment, suppression, omission, misleading representation, or misstatement of any material fact." Pharmaceutical representatives would also be prohibited from using a title or designation that could lead a licensed health professional to believe that the pharmaceutical representative is licensed to practice "medicine, nursing, dentistry, optometry, pharmacy, or other similar health occupation, in [Chicago], unless the pharmaceutical representative currently holds such a license." Pharmaceutical representatives would be further prohibited from attending patient examinations without the consent of the patient.

 

The proposed amendments define a "health care professional" to be "any physician or other health care practitioner licensed to provide health care services or to prescribe pharmaceutical or biologic products." The term "pharmaceutical representative" is "a person who markets or promotes pharmaceuticals to health care professionals."

Second Circuit: Truthful Off-label Promotion of Prescription Drugs is Protected by the First Amendment

By Laura C. Conway

On December 3, 2012, the United States Court of Appeals for the Second Circuit ruled that a pharmaceutical sales representative could not be convicted for truthful off-label promotional statements made to physicians about a drug that had been approved by the FDA for other uses.  United States v. Caronia, 09-5006-cr  (2d Cir. Dec. 3, 2012). 

 

Caronia was a sales representative who promoted Xyrem, a drug that was approved for two specific uses and carried a “black box warning.”  Caronia detailed physicians who might prescribe the product and helped establish a speakers program where the drug was discussed.   During the course of a government investigation, Cardonia was recorded promoting the drug for unapproved uses, including unapproved indications and unapproved subpopulations.  The government did not allege that the statements at issue were untruthful or misleading. 

 

Caronia was convicted in the trial court for conspiracy to introduce or deliver misbranded drugs into interstate commerce, in violation of the Food, Drug and Cosmetic Act (FDCA).  The Second Circuit vacated this conviction.  The government, according to the court, incorrectly argued that off-label promotion alone constitutes “misbranding.”  The court found that the FDCA does not expressly prohibit the promotion of drugs for off-label use, but noted that promotional statements could constitute proof of an intent to use a drug in a manner that the FDA had not approved and was inconsistent with the label, which would be actionable under the FDCA. 

 

The court concluded that the government prosecuted Caronia not for his intent to sell misbranded drugs based on his statements regarding the drug’s off-label uses, which does not implicate the First Amendment, but rather for the act alone of making statements about off-label uses for the drug, which does implicate the First Amendment.  The court held that the First Amendment protects this type of commercial speech and that the government could not overcome the heightened scrutiny applicable to such commercial speech.  The court looked to the United States Supreme Court’s recent decision, Sorrell v. IMS Health, in which the Court held that “[s]peech in aid of pharmaceutical marketing . . . is a form of expression protected by the Free Speech Clause of the First Amendment."  131 S. Ct. 2653, 2659 (2011).   

 

In reaching its decision, the Second Circuit reasoned that the statements were truthful; the FDCA does not expressly prohibit the promotion of drugs for off-label use; physicians are permitted to prescribe the drug for unapproved uses, and persons other than pharmaceutical companies and their sales representatives may advise physicians of off-label uses of drugs that the FDA had approved for other uses.  The court interpreted the misbranding provisions of the FDCA as “not prohibiting and criminalizing the truthful off-label promotion of FDA-approved prescription drugs” and concluded that “the government cannot prosecute pharmaceutical manufacturers and their representatives under the FDCA for speech promoting the lawful, off-label use of an FDA-approved drug.” 

 

The court noted that its decision was limited to FDA-approved drugs for which off-labels uses are permitted and that the FDA is authorized to regulate prescription drug marketing.  In addition, the court made clear that off-label promotion that is false or misleading is not protected by the First Amendment. 

 

            One of the three judges on the panel dissented from the decision and issued a lengthy opinion arguing that Caronia’s conviction should have been upheld.  In this dissent, the court disagreed with the majority’s interpretation of the government’s position and contended that Caronia was prosecuted because his speech revealed an intent to sell the drug for a use that was inconsistent with the drug’s label, not for the speech itself.  As such, the court noted, the First Amendment did not apply and did not protect Caronia’s statements.  Even if the First Amendment did apply, the dissent stated, the FDCA’s misbranding provision precludes promotion of off-label uses and passes constitutional muster.  The dissent argued that the majority opinion serves as a disincentive to pharmaceutical manufacturers to go through the premarket drug approval process and undercuts the purpose of the FDCA and the FDA to ensure the safety and efficacy of drugs before they are marketed.    

 

The Caronia decision is not binding on trial courts outside of the Second Circuit and likely is not the last word on this subject.  We anticipate a request for further review by the full panel of the Second Circuit or review by the United States Supreme Court.  Until the United States Supreme Court reviews the decision, off-label promotion is subject to prosecution outside of the Second Circuit.  In addition, both in and out of the Second Circuit, off-label promotion by sales representatives remains potentially actionable because, among other things, the government could argue that it is evidence of an intent to sell a misbranded drug.

Full Text of Decision: United States v. Caronia, 09-5006-cr  (2d Cir. Dec. 3, 2012)

The Supreme Court to Determine Whether Pharmaceutical Sales Representatives are Entitled to Overtime Pay

By: Sandra González

    Since our previous post, Should Sales Representatives Be Entitled to Overtime Pay?, we have continued to track the circuit split between the Second and Ninth Circuits on the issue of whether pharmaceutical sales representatives are entitled to overtime-pay.  The United States Court of Appeals for the Second Circuit found that sales representatives were not exempt from the Fair Labor Standards Act (“FLSA”) overtime-pay requirements, thus, they were entitled to overtime-pay.  In re Novartis Wage and Hour Litigation, 611 F.3d 141 (2d Cir. 2010).  However, the United States Court of Appeals for the Ninth Circuit ruled that pharmaceutical sales representatives are not entitled to overtime pay under FLSA.  Christopher v. SmithKlineBeecham Corp., 635 F.3d 383 (9th Cir. 2011).  Notably, two weeks after the Ninth Circuit decided Christopher, the Supreme Court denied review of the Second Circuit’s decision.  The Court’s denial of certiorari left many wondering about the repercussions that the circuit split would have on the industry.  Last month, PhRMA filed an amicus brief with the Supreme Court in which the organization requested review of the Ninth Circuit’s decision.  In that brief, PhRMA stated that “[u]ntil this circuit split is resolved, PhRMA members are exposed both to potentially staggering retrospective liability and to uncertainty over whether they must undertake major restructuring that would have significant consequences for the industry and its employees[.]”

On November 28, 2011, the Supreme Court agreed to review the Ninth Circuit’s case.  Upon review, the Supreme Court will examine two issues:  (1) whether deference is owed to the Secretary of the U.S. Department of Labor’s interpretation of the FLSA’s outside sales exemption and related regulations; and (2) whether the FLSA’s outside sales exemption applies to pharmaceutical sales representatives. 

Regarding  the first issue, the Department of Labor (“Department”) sided with the sales representatives in Christopher, stating that the outside sales exemption in the FLSA does not apply to pharmaceutical sales representatives.  Furthermore, in its brief to the Supreme Court, the Department stated that the Ninth Circuit’s opinion undermines “several decisions of the Supreme Court . . . instructing courts to defer to an agency’s interpretation of its own regulation unless ‘that interpretation is plainly erroneous or inconsistent with the regulation[.]’”  The Department argues that by denying deference to the Secretary’s interpretation, the Ninth Circuit has wrongfully expanded the definition of the outside sales exemption. 

The second issue will turn on the Supreme Court’s classification of the activities that pharmaceutical sales representatives engage in as “promotional” or as “making sales.”  If the Supreme Court rules that pharmaceutical sales representatives engage in promotional activities and do not “make sales,” the FLSA outside sales exemption would no longer apply and, absent application of another exemption, such as the administrative exemption, pharmaceutical companies would face multi-billion dollar repercussions. 

The Supreme Court will likely decide the issue in June of 2012.  Until then, we are left with a number of questions:  Why did the Supreme Court deny review of the Second Circuit’s decision, but grant review of the Ninth Circuit’s ruling?  Does the Supreme Court agree with the Second Circuit’s ruling?  If so, what are the implications for pharmaceutical companies?  Should companies start rethinking the industry’s current selling model and their current organizational structures? 

Legislators in Maine and Massachusetts Make Noise About Disclosure and Gift Ban Laws

 
In a prior post, “Vermont Marketing Disclosure Reports Move from Fiscal Year to Calendar Year,” we queried whether any state would amend their marketing disclosure laws to allow the federal  law to completely preempt the state requirements.  While we have not seen any state legislature pass a bill to repeal its disclosure laws and rely solely on the federal laws, a number of state legislators are finally making much needed noise in opposition of their state-specific disclosure and gift ban laws.  Specifically, in Massachusetts, House Speaker Robert DeLeo (D) recently went on record to voice his opposition to Massachusetts ban on gifts and meals from pharmaceutical companies to doctors.  In Representative DeLeo’s opinion, the gift and meal ban is a “hindrance” to job creation and deters companies from doing business in Massachusetts.  Additionally, in Maine, Republican legislators presented Maine bill LD 719 to repeal certain state disclosure requirements, which the Governor of Maine signed into law today.  Maine’s bill LD 719 goes into effect September 28, 2011 and will repeal specific sections of Maine’s Revised Statutes that currently require manufacturers and labelers of prescription drugs to annually disclose certain expenses related to marketing.  LD 719 will also repeal other sections of the Maine’s law that require the disclosure of the average manufacturer price and best price of certain drugs and the disclosure of clinical trials on prescription drugs on a publicly accessible website.  The sponsor of this bill, Representative Meredith Strang Burgess, stated that “the general theme this session is to stop making Maine more difficult than other states [for business].  We certainly want to make sure we’re being smart [about regulation], but at the same time not going too far and letting the free market prevail.” 

Are these marketing disclosure laws and/or gift and meal bans putting these states at a competitive disadvantage?  What if life science companies choose to limit (or even stop) their sales and marketing activities in the more burdensome states?  Detailing and related sales activities, which often occur in conjunction with a meal, provide healthcare professionals with valuable information regarding new medications and can serve to improve patient care.  By discouraging or forbidding these activities, the general public may not have the most current information regarding advances in treatment options.  While I agree that the government should regulate and discourage bad behavior, it appears that some state regulations may have crossed the line from smart, effective regulation to burdensome, over-regulation. 

The common theme of legislators’ oppositions to disclosure and gift ban laws is job creation.  Other legislators that remain steadfast in their support of such laws continue to defend those laws as being important and effective in driving down drug costs.  Will this position be weakened once the data disclosed to the federal government is made available to all state governments?  How will states justify more stringent state-specific requirements when other states are gaining the benefit of the federal disclosure data without the burden and cost of having a state-specific disclosure law?

Vermont's Data Mining Law Backfires

The introduction of Vermont’s Data Mining Law and the subsequent court battle and rulings may have accidentally encouraged focused pharmaceutical detailing, the exact practice Vermont sought to squash.  In June 2007 the Vermont legislature passed its Prescription Confidentiality Law.  According to its text, the Vermont legislature believed that prohibiting the use of prescription information for marketing purposes would protect the privacy of prescribers and ensure that health care costs are contained.  Without  this prescription information pharmaceutical representatives of branded manufacturers would no longer be able to target physicians with certain prescribing habits, and their ability to promote their drugs effectively would be diminished.  Ironically, however, the legal battle, the press and the Supreme Court’s recent Opinion remind people how effective and powerful focused pharmaceutical detailing can be.  In recent years, many pharmaceutical companies have looked at new avenues for promotion, including increased visibility on the Internet.  One often wondered whether the days of traditional detailing were numbered.  After reading the majority opinion, however, I am more convinced than ever that pharmaceutical detailing has a place at the table.  The majority opinion points out that Vermont practitioners consider detailing based on prescriber identifying information to be “very helpful.” Not only do many prescribers find such information informative, but the recent review of the practice suggests that it is very effective. The state itself claimed in its brief that “pharmaceutical marketing has a strong influence on doctor’s prescribing practices.”  The majority decision also suggests that the government prohibited such detailing because “it found it too persuasive.”  Who knew that Vermont’s law prohibiting the use of prescribing information for marketing would have the unintended effect of creating a record establishing how useful and effective it can be?   In the wake of Vermont’s failure it will certainly be interesting to see if pharmaceutical companies place renewed energy on detailing. 

YouTube: The New “Homemade Bread”

 
     In prior post, “Bad Ads, Beware!,” we queried if we should expect to see a rise in Bad Ad complaints.  It looks like the answer to our query may be “yes.”  On May 5, 2011, DDMAC issued  an Untitled Letter to Warner Chilcott (US), LLC, resulting from a complaint submitted to the DDMAC Bad Ad program.  The complaint was made to FDA in response to a video posted on YouTube by members of the Warner Chilcott sales force.  According to the DDMAC Untitled Letter, the YouTube video was approximately 60-seconds long and included a sales representative describing the product and presenting claims about the drug’s dosing benefits to a staff member in a physician’s office.  The video did not include any risk information related to the use of the drug.  The video allegedly was also not submitted to FDA under cover of Form FDA-2253 at the time of initial dissemination of the video. 

 As life sciences companies navigate how to comply with FDA regulations when formally  promoting their products using digital technology and social networking websites, it looks like now they may also need to address the “informal”  activities of their sales teams and other employees to avoid scrutiny.  Is YouTube, and even Facebook and LinkedIn, becoming the digital version of “Homemade Bread?”  How far do companies need to go to monitor and regulate their employees’ personal use of social networking websites? 

 This Untitled Letter reflects FDA’s continuing commitment to address social media communications  and its expectation that  life science companies get ahead of these issues and address their employees’ activities both in and out of the office, and online.   With large sales teams and global employees, maintaining control in this area may be difficult.  Perhaps now is the time to beef up the external communications policies, the disciplinary policies and the training for company employees in an effort to reduce the risk of an untitled letter or worse.

Whistleblower Study Provides Insight into Which Marketing Actions are Most Likely to Result in Government Action

Many articles focus solely on the new features of the most recent government settlement. An April 5, 2011 article entitled, "Strategies and Practices in Off-Label Marketing of Pharmaceuticals: A Retrospective Analysis of Whistleblower Complaints", however, sheds light on exactly what kind of alleged off-label practices by pharmaceutical companies resulted in government intervention and large settlements between 1996 and 2010. By systematically dividing the purpose of various companies’ off-label campaigns into three different areas, the article found that 85% of the alleged off-label promotion was for unapproved diseases, 54% was for unapproved disease sub-types, and 34% was for an unapproved dosing strategy. The marketing practices which subjected companies to fines and scrutiny can also be broken down into four different strategies (e.g. prescriber, company, payer and consumer-related practices. ) After classifying the practices within the complaints in this manner, it was found that all of the complaints alleged that the off-label promotion involved some prescriber-related practices (including self-serving presentations of literature, free samples, direct financial incentives, and teaching and research activities). Ninety percent of the complaints mentioned company practices, such as unrealistic sales quotas; 56% concerned payer-related strategies; while 44% included some consumer-related practices.

Not only is the breakdown of these whistleblower complaints fascinating, the report’s findings highlight those trends and marketing areas, which expose pharmaceutical companies to the greatest risk. Although its lessons are most apparent to those companies that disregard and/or flagrantly breach the law, they should also be useful to those companies that strive to be compliant. For instance, the report found that 71% of the whistleblowers were sales representatives, 20% were sales and accounting managers, and 9% were unaffiliated physicians. As a result, companies should ensure that their compliance programs include clear and identifiable ways for representatives, managers and outside physicians to report instances of off-label promotion. Hopefully, if these avenues are well-publicized, individuals would alert the company to the illegal promotion before they resort to other remedies. The report also indicated that off-label marketing practices directed to physicians were omnipresent in the sample group, and sales representatives routinely reviewed confidential medical files for potential customers. This demonstrates that every company must implement policies and procedures regarding their interactions with healthcare professionals. Ideally, these guides should identify appropriate and inappropriate behavior, and would specifically prohibit any practice where company representatives receive or review confidential patient information. Lastly, the analysis showed that some companies had policies and procedures, but they were either un-enforced or in some cases, purposefully ignored. This finding suggests that audits are a key component of any working compliance program. In conclusion, by identifying the business areas and practices which are subject to heightened scrutiny and will ultimately become the fodder for future prosecutions, the analysis tells companies what areas and practices they need to carefully monitor to avoid prosecution.

Data Mining Before the Supreme Court Today

In 2007, Vermont enacted a law to restrict how a doctor’s prescribing data  may be used, specifically placing limits on the use of such data for marketing purposes.  IMS Health Inc., a company that sells the prescribing information to pharmaceutical industry clients, joined  with PhRMA and others,  to challenge the Vermont law in federal district court claiming that it violated their right to free speech.  The federal court upheld the law, but an appellate court reversed that decision (in conflict with rulings in Maine and New Hampshire that upheld similar laws in those states).

Today, the Supreme Court will hear oral arguments in Sorrell v. IMS Health Inc., et al., the case brought before the Court by Vermont’s attorney general, William H. Sorrell, that tests whether Vermont’s law violates the free-speech protection of the First Amendment.  Industry and regulators alike will be watching closely for the outcome of this case, which could have a significant impact on the future of pharmaceutical sales and marketing practices.  In recent years, the Court has shown an interest in protecting companies’ commercial free speech rights.  Which way do you think the Court will go in this case?