Chicago Comes Down Hard On Pharmaceutical Sales Industry

Renee E. Coover | 1.11.17

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As if the pharmaceutical sales industry was not competitive enough, a new Chicago ordinance requiring all pharmaceutical sales representatives to be licensed in order to promote prescription drugs to health care providers is making things even tougher.

 

The ordinance, which will not take effect until July 1, 2017, received a litany of strenuous objections from pharmaceutical manufacturers and industry organizations but it passed unanimously as part of a larger effort by Chicago Mayor Rahm Emanuel to combat heroin and opioid addiction by imposing new requirements on pharmaceutical sales reps in the city. Based on data from a Chicago Heroin Task Force, last year over 400 people died in Chicago from opioid overdoses allegedly because the pharmaceutical industry misrepresented the safety of opioid medications, leading to misuse and abuse of prescription drugs.

 

Although medical device representatives and distributors are not required to be licensed under the new Ordinance, it comes with a litany of requirements for pharmaceutical sales representatives who call on health care providers in the City of Chicago. Once it passes, the ordinance will require applicants to complete a professional education course, established by the Commissioner of Public Health, pay an initial application and annual renewal fees of $750, and complete a minimum of 5 hours of continuing education to maintain a license.

 

Along with these licensing requirements, the ordinance mandates record-keeping, requiring sales representatives to track the number – and possibly even provide the names – of health care professionals they contact, note whether the pharmaceutical company pays health care professionals for their time, describe the pharmaceuticals promoted, disclose whether the reps leave samples with health care providers, and report this data to City Officials upon request.

 

Pharmaceutical sales representatives will also be expressly prohibited from deceptive or misleading marketing and advertising practices. Specifically, if any sales representative is found to have deceptively promoted a prescription drug, used a professional designation suggesting the rep holds a license to practice medicine or another medical profession, or is present for any patient examination without the patient’s consent, the rep could face a fine of up to $3,000 per offense for violating the ordinance.

 

The industry views this new ordinance as an unnecessary tax on a very important sector of the health care industry and a coalition of pharmaceutical companies and healthcare organizations has expressed its concerns to the City Council and the Mayor.  Many fear that the ordinance will have similar results to Washington D.C.’s 2008 pharmaceutical licensing requirements which drove out many drug companies and their pharmaceutical representatives, because of the city’s law.

 

It is still unclear as to how, or if, this type of ordinance, which many see as a tax increase and penalty, will be successful in combating opioid addiction in Chicago. But what is clear is that pharmaceutical companies and manufacturers should begin preparing their sales representatives to comply with the new ordinance this summer.

 

If you have questions regarding this Chicago ordinance or other health care related questions, please contact Renee Coover at rcoover@byrdadatto.com or 773-831-4701

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