Life Science Compliance Update

January 21, 2016

Washington, D.C. Changes Pharmaceutical Detailer License Requirements

Pharmaceutical and life sciences companies have long used detailing as a way to effectively communicate the benefits and features of a certain product to physicians. In 2008, the Washington, D.C. city council became the first legislative body in the country to require a license for all active pharmaceutical detailers, even those who promote over-the-counter drugs, or those who worked in the District on a temporary or emergency basis.

The measure, known as SafeRx, requires detailers to adhere to an ethics code, receive continuing education, pay a licensure fee, and promote their products in an honest and nonmisleading way. For sales reps who operate without a license, a fee of up to $10,000 could be assessed against them.

Many opposed the D.C. measure, including physicians, for a variety of reasons, one of which was they felt as though the requirement that physicians tell their patients about risks of off-label use of medicines was unnecessary, intrusive, and time consuming. At least one physician stated that this measure would not be a cost saver (as the D.C. Council intended), as he would likely wind up prescribing a more expensive on-label drug instead of a cheaper off-label alternative, to avoid a forced disclosure.

However, late last year, buried in the Fiscal Year 2016 Budget Support Act of 2015, Washington, D.C. carved out a small exemption to the pharmaceutical detailing law. Previously, it was illegal to engage at all in the practice of pharmaceutical detailing in the District unless you had a license. The District has now changed its law so that if you are engaged in detailing for less than thirty consecutive calendar days per year, you no longer need a detailing license.

DC Pharmaceutical Detailer License Requirements

To obtain a license, detailers have to prove that they graduated from a recognized institution of higher education, pay a fee, and submit a notarized statement that they agree to abide by the ethics code set by the D.C. Board of Pharmacy. Detailers who are able to demonstrate that they have been "performing the functions of a pharmaceutical detailer...on a full-time, or substantially full-time, basis" for at least twelve months prior to March 2008 do not have to submit to the education requirement.

Additionally, for renewal of a D.C. Pharmaceutical Detailer license, a minimum of fifteen credit hours of approved continuing education during the two-year period the license is effective.

Other Requirements Under DC Law

Under D.C. law, a pharmaceutical detailer is to maintain a log of communications with healthcare professionals and their representatives. The log should include information such as who the detailer visited, the date and time of the visit, the products discussed, whether samples where provided, and the type of materials provided to the healthcare professional.

What Does This Change Mean?

While this may be a welcome change, it is unclear what the definition of "consecutive" is. With an unclear definition, different companies may choose to take different interpretations of the law change. For example, certain companies may opt to interpret it in such a way that reps who are dedicated and assigned to D.C. will continue to obtain licensure, while district managers and reps assigned to multiple areas (including the District) will not, since they are not likely to be engaged in detailing for thirty or more consecutive days.

It is too soon to fully understand the ramifications of this change and what other ways companies may opt to interpret it. One thing is sure, one less regulation and a little more latitude for pharmaceutical detailers is a welcome change.

D.C. was the first (and only) legislature to adopt such a strict measure for pharmaceutical detailers, and it will be interesting to see if they start to disintegrate other portions of the licensure requirements as time passes.

Problems Abound with Ohio Drug Price Ballot Petition

As you may recall, we have previously written about ballot initiatives in California and Ohio that are attempting to provide relief from increasing drug prices. While the California measure has recently qualified for the ballot, the Ohio measure has recently hit a roadblock. PhRMA has filed, through their lawyer, a request that Ohio Secretary of State (SOS), Jon A. Husted, review the some of the signatures submitted on behalf of the initiative.

As previously written, the Ohio Drug Price Relief Act, would require the state to pay no more for medicines that the U.S. Department of Veterans Affairs, who gets a twenty-four percent discount on average manufacturer prices.

In order to be placed on the ballot in Ohio, activists needed to first collect 91,677 signatures to force the state legislature into taking action on the proposal. If the state legislature refused to take action within four months of receiving the proposed law, the activists needed to collect an addition 91,677 signatures for the measure to be placed on the ballot.

Not So Fast

The required signatures were collected, in part, on behalf of several activists and activist groups, including the AIDS Healthcare Foundation. As Bricker & Eckler, LLP, counsel to PhRMA, noted in their letter to Ohio SOS, there are two "statistically and legally significant issues" at stake with regard to the signatures collected.

False Circulator Affidavits

Ohio is one of the few states that require a petition circulator swear under oath that he or she personally witnessed each individual signature on the petition. A circulator affidavit is provided on each initiative petition and must be signed in the presence of a notary public.

According to Christopher N. Slagle, counsel who drafted the letter on behalf of PhRMA, "a sizeable percentage of the part-petitions" have false circulator affidavits because the circulator attested to "having witnessed significantly more signatures than actually appear on the actual part petition." Mr. Slagle points to one recurring example, where the circulator affidavit swore to 28 signatures, but the part-petition only had one or two signatures. Mr. Slagle attached as reference to his letter a listing of the 6,435 part-petitions (containing 40,612 signatures) that were affected by this potentially illegal move.

In Ohio, failure to provide an accurate number of signatures gathered renders the part-petition invalid. Under Ohio law, "no initiative or referendum part-petition is properly verified if it appears on the face thereof ... [that the circulator's] statement is false in any respect."

Ohio courts have recognized that the requirement for circulators to accurately list the number of signatures they have witnessed is a reasonable requirement that protects against the fraudulent practice of them adding additional signatures later. Ohio courts, however, also support a reasonable approach where circulators are permitted to demonstrate that their part-petition should not be denied because the signature discrepancies were minor and isolated; and a reasonable explanation for such discrepancies is provided. Here, however, it is clear that 6,435 part-petitions is more than "minor and isolated." Mr. Slagle believes that allowing circulators to attest to a certain number of signatures under oath and allowing additional signatures to be submitted after the fact "renders the statutory requirement for a circulator to witness signatures effectively meaningless."

Altered Petitions

The other issue with some of the petitions is that a "significant number" seem to have been altered by someone other than the circulator or the signer. Exhibit B to Mr. Slagle's letter listed 5,598 part-petitions, representing 118,574 signatures, that contained signatures that were "clearly stricken by someone other than the circulator or signer."

Ohio law only authorizes three people to strike signatures from a petition before it is filed: the circulator, the signer, and an attorney-in-fact acting pursuant to Ohio law. Mr. Slagle believes that some person, other than one of the three people permitted, struck the questionable signatures and altered the petitions in such a way that the petitions cannot be verified.

It is up to the Board of Elections to determine the validity of a signature on a part-petition, not a "money-making, petition circulat[ing] company[y]." While Mr. Slagle, PhRMA, and concerned citizens everywhere may want these stricken signatures and part-petitions to be invalidated, all that has been asked of at this point in time is that a review take place to determine if the electors involved authorized their attorney-in-fact to strike their signatures.


Two days after Secretary of State Husted asked election officials to take a second look at the more than 171,000 signatures collected in the part-petitions, activists filed suit attempting to stop such a review.

It is interesting to think about why, if the signatures were collected in accordance with the law, the activists would be so concerned about election officials taking a second glance at them? Only time will tell what the outcome is, but we are watching this case closely to see whether the law, or activist emotion, prevails.

January 08, 2016

Kentucky Attorney General Settles Two Cases Against Life Science Companies

Kentucky Attorney General Jack Conway has settled a lawsuit with Purdue Pharma, the manufacturer of OxyContin, for $24 million. AG Conway also settled a suit with Johnson & Johnson over their drug Risperdal for $15.5 million. Neither company admits to any wrongdoing in the settlements.

AG Conway stated that, "[t]hese companies engaged in reckless behavior that put our citizens at risk. Both companies knowingly and aggressively marketed drugs they knew to be harmful in order to drive profits. I am pleased we were able to recover damages for the Commonwealth and recover funds to help expand addiction treatment in Kentucky."

Purdue Pharma

Kentucky initially filed the lawsuit against Purdue Pharma in 2007, accusing Purdue Pharma of marketing the prescription painkiller as "nonaddictive," since it slowly released doses of the drug over a period of twelve hours. However, if the pill was crushed, it lost its time-release qualities and created an instant high for the user.

Officials also claimed that Purdue Pharma encouraged doctors who were not necessarily trained in pain management to overprescribe the opioid pain reliever to Kentucky patients. The allegations included claims that sales representatives falsely "told doctors that OxyContin wasn't addictive and was less likely to be abused than other opioid drugs."

Kentucky officials alleged that the marketing practices led to a wave of addiction and increased medical costs throughout the state. The addiction and increased spending tended to center around eastern Kentucky, where many injured coal miners were prescribed the medicine.

Purdue Pharma will pay Kentucky $12 million followed by another $12 million over the next eight years ($1.5 million each year). By court order, Kentucky is to spend the money from the settlement on addiction treatment programs. In addition to the funds, injunctive relief that was set to expire in 2017 is extended.

This settlement follows a 2007 settlement where Purdue Pharma and three company executives pleaded guilty in Virginia federal court to making misleading claims about the potential for people to become addicted to OxyContin. The judge in that case ordered the company to pay over $630 million. Forty-nine other states settled their own claims against the company that same year; Kentucky was the lone holdout.

Purdue Pharma General Counsel Philip C. Strassburger stated that the company has been working on reducing the abuse of prescription opioids for the past ten years. He believes that the settlement will allow the company to "focus on bringing innovative abuse-deterrent medicines to patients and our other efforts to combat prescription drug abuse and overuse."

Strassburger emphasized Purdue Pharma's efforts to reduce opioid abuse, including implementing "industry-leading programs to reduce the abuse and overuse of prescription opioids, including our 2010 reformulation of OxyContin with abuse-deterrent properties." Purdue Pharma's efforts can be seen on their website.

This settlement does not take care of the entire case, however. According to AG Conway, the case is "still facing significant legal issues." The Kentucky Supreme Court is determining whether Purdue Pharma missed a deadline to dispute the facts of the case. A copy of the settlement can be found here.

Johnson & Johnson

Janssen Pharmaceuticals, a subsidiary of Johnson & Johnson, marketed Risperdal, a second-generation antipsychotic prescription drug, to children before the Food and Drug Administration (FDA) approved it to do so in 2007. Janssen failed to disclose that Risperdal might cause a hormonal imbalance, resulting in potential breast tissue development and infertility in boys and girls.

Officials alleged that Janssen was aware of the risk and did not update the warning label. Janssen was also alleged to market Risperdal for a non-FDA approved use in treating dementia in non-schizophrenic elderly patients, going so far as to create an elder care sales force, despite having its own study that showed Risperdal doubled the risk of death in the elderly. Janssen pleaded guilty to federal charges of misbranding in 2013 regarding the promotions to the elderly.

In response to the settlement, AG Conway stated, "Going forward, we have tough terms in the settlement that will govern the way Risperdal can be marketed in the future here in Kentucky. It is my hope that the General Assembly will allocate the money to expand addiction treatment in Kentucky."

In addition to the settlement amount, Janssen is prohibited from "promoting Risperdal for non-FDA approved uses or for populations in which it is not approved."

A copy of the settlement can be found here.

These cases represent the most recent in the string of cases where Attorneys General have gone after pharmaceutical companies. With the seemingly endless media coverage of prescription drug prices, and the congressional inquiries into the same, it is likely that cases like this will continue into the foreseeable future. A vibrant compliance program and hands-on management can make all the difference in pharmaceutical companies around the country.


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