Pharma Sales & Marketing Laws
Federal, state and local laws aim at preventing fraudulent sales and practices by pharmaceutical businesses and their representatives. The federal government regulates pharmaceutical sales and marketing through guidelines issued by Office of the Inspector General of the Department of Health and Human Services, and by the U.S. Food and Drug Administration. Compliance with prevailing laws and regulations prevents pharmaceutical businesses from being subject to hefty penalties and the risk of losing their customers.
The "Compliance Program Guidance for Pharmaceutical Companies" published by HHS in 2003 requires businesses engaged in drug sales and distribution to develop polices on market compliance. These market compliance polices mainly relate to the interaction between pharmaceutical representatives and physicians. The practice where pharmaceutical representatives offer health care providers with drug samples, gifts, and consultations as a marketing strategy may make the business criminally liable under the anti-kickback statute.
Under what is commonly referred as the “Sunshine Rule,” a pharmaceutical business fulfills periodic reporting and disclosure requirements relating to promotional activities. Federal law requires the companies to disclose gifts offered to physicians that exceed $500 a year. Several states also have disclosure requirements. The Pharmaceutical Research and Manufacturers of America "Code on Interactions with Healthcare Professionals" — an industry attempt to self-regulate — also requires pharmaceutical businesses to disclose payments exceeding $100 made to physicians as gifts.
The District of Columbia was the first jurisdiction to enact legislation requiring sales representatives of pharmaceutical companies to have a license to sell pharmaceutical products. The legislation requires pharmaceutical sale representatives to follow a set code of conduct, and not engage in deceptive marketing practices. Most states, including Arizona, regulate the conduct of pharmaceutical sales representatives through guidelines issued by national organizations such as Accreditation Council for Continuing Medical Education and the Pharmaceutical Research and Manufacturers of America.
Failure to comply with sales and marketing laws makes a pharmaceutical business liable to penalties under both federal and state laws. Penalties include fines, or imposition of corporate integrity agreements that require a business to undergo inspection and subsequent implementation of internal changes. A business may also suffer loss of its premises and consumer base, and damage to the reputation of the organization. A pharmaceutical business has a responsibility to provide its sales representatives with training programs to educate them on sales and marketing laws to ensure compliance.