Life Science Compliance Update

March 29, 2017

Chicago Releases Draft Rules on Industry Representative Licensure

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In a city where crime rates are sky-high and illegal drugs are easily picked up on the street, on November 16, 2016, the City of Chicago passed an ordinance that, effective July 1, 2017, requires pharmaceutical sales representatives to become licensed before they can promote prescription drugs to health care providers within city limits. 

Mayor Rahm Emanuel states that the new licensing requirement is part of a larger series of efforts by the city to combat heroin and opioid addiction. However, the law will impose significant new burdens on any pharmaceutical manufacturer with sales representatives who call on health care providers in Chicago.

The draft rules for this ordinance were released on March 17, 2017.

These recently-released draft rules provide additional detail regarding the licensure requirements as well as other associated education and disclosure requirements with which pharmaceutical representatives will be expected to comply beginning in July of this year.

To obtain their initial licensure as a pharmaceutical representative, applicants must complete an online course, for which proof of completion must be submitted. The cost of the initial license will run each representative $750. Then, to maintain the license, representatives must complete a minimum of five hours of continuing professional education every year thereafter. 

Approved providers for continuing professional education can be found on the city’s website. Making this burden even more onerous, continuing education provided by pharmaceutical manufacturers to their employees will not be accepted as fulfilling the requirement, unless the manufacturer previously applied for, and received, approval. A licensed representative who does not meet these continuing education requirements may face substantial penalties, including suspension or revocation of the license, inclusion in a public list of representatives whose licenses have been revoked, and/or a fine between $1,000 and $3,000 per day of violation.

In addition to the professional education requirement, pharmaceutical representatives will also be required to track and report certain sales information on an annual basis or upon request by the Commissioner of Public Health. This information must include: a list of the health care professionals who were contacted, the location and duration of each contact, the pharmaceuticals that were promoted, and whether product samples or any other compensation was offered in exchange for the contact.

For applicants who receive initial licensure, the time period for the data that must be collected and reported shall cover an 11-month period, starting on the first day of licensure and exactly ending one month before its expiration. For representatives with a renewed license, the data shall cover a 12-month period that will begin one month before the license renewal and will end one more before its expiration.  If the Commissioner of Public Health requests the information at any other time, the request will designate the time period the submission must cover, and it will be due within 30 days of the request.

A pharmaceutical representative who is found to have violated any provision of the Ordinance or these rules will be subject to suspension or revocation of licensure and/or a fine of $1,000 to $3,000 per day of violation. Inexplicably, once a license is revoked, it cannot be reinstated for a period of two years from the date of revocation.

These new requirements will place a significant burden on pharmaceutical manufacturers and their sales representatives who work in Chicago. Late last year, in an attempt to prevent the ordinance from going into effect, a coalition of sixteen pharmaceutical companies, along with organizations such as the Illinois Chamber of Commerce, the Illinois Manufacturer’s Association, the Epilepsy Foundation of Greater Chicago, and the Pharmaceutical Research and Manufacturers of America, wrote a letter to the City Council of Chicago expressing its concerns. The group noted, “[t]hese proposed reporting requirements are unnecessary and duplicating, creating an unnecessary tax on one of the most important sectors of our economy.”

The public is invited to submit any comments it may have on the proposed rules by April 2, 2017. readers are encouraged to send in comments, especially those local to the Chicago area to submit their comments about these regulations. The pharmaceutical industry is one of the most regulated industries in the country as it is.  The FDA requires reps to distribute REMS information on drugs that their company provides.  It is not clear how tracking the office visits and amount of time spent with healthcare providers by pharmaceutical reps is in the public interest.

March 24, 2017

Fourth Due Diligence Summit for Life Sciences

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The 4th Due Diligence Summit for Life Sciences, taking place on May 18 and 19 of this year in Boston, Massachusetts at the Hyatt Regency Boston. This is a cross-functional life science event focused on the needs of due diligence professionals. This conference will highlight the latest merger and acquisition trends in the market, educate due diligence professionals on the different aspects and challenges faced by cross-functional team members, and provide attendees with the strategies and insight they need to effectively conduct thorough due diligence to ensure a profitable investment in a new product, portfolio, company or strategic alliance.

 

This event is the perfect platform for due diligence professionals to convene with their functional counterparts to discuss the best ways to work across their organization, as well as with external advisors. The event also provides attendees a multitude of networking opportunities. Join your peers at the industry’s leading event to gain valuable insight from industry leaders, and take advantage of the quality networking opportunities at this two-day action-packed event.

 

Attendees will learn how to create and deploy an effective gap analysis to identify gaps in the product portfolio and regulatory standards; gain valuable insight from cross-functional due diligence team members, as well as leaders in the medical device and biotech industries; understand how to develop strategic objectives for a deal and accelerate synergies to ensure a high-performance organization; learn how to evaluate and effectively manage strategic alliances through case studies from industry leaders; and evaluate the scope, validity, and enforceability of a target’s patterns.

 

If you are interested in attending, you can register here.

March 20, 2017

Accountability: The shifting landscape of compliance responsibilities

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The meaning of effectiveness of healthcare compliance programs has shifted in recent years. This article examines that shift and what it means for the role of the Compliance Officer including the need to evaluate and oversee a portfolio of risks.

Now that we are two months into the new year, this is a good time to reflect and examine the effectiveness of healthcare compliance programs. The measure of what “effective” means has changed dramatically in recent years. When the PhRMA Code on Interactions With Health Care Professionals (“Code”) was published in 2002, and for many years after, effectiveness was essentially defined by a company’s compliance department as adhering to the OIG’s Seven Elements of an Effective Compliance Program, as well as providing review and approval of individual activities or transactions. It was essentially the compliance department’s responsibility to “police” the organization and prevent them from making poor decisions. Today’s measure of effectiveness still hinges on decision-making, but the accountability is more squarely placed on the shoulders of the decision makers.

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