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How to Keep Out of Regulatory Quicksand


Pharmaceutical Executive

Pharmaceutical ExecutivePharmaceutical Executive-05-01-2005
Volume 0
Issue 0

OIG now requires corporate marketing departments and field sales reps to not only document how they promote products, but to also-for the first time-demonstrate the "intent" of marketing activities.

Government regulators have never watched pharma sales forces as closely as they do today. On top of familiar reporting requirements, such as how many samples were given to whom, federal regulators want to know what marketers were thinking. Why, they sometimes want to know, did a sales rep give one physician more samples than another one down the hall? If they want more specifics, they can even ask for a rep's call notes. And while the reps are keeping up with federal laws, they have to learn a new set of regulations for every state in their territory. In some states, for example, nurse practitioners can sign sample receipts, but in others, doctors must sign personally for their samples.

Even the hardest charging sales reps recognize that paperwork is part of the job, but many top performers always think about selling first, and filing reports when they can. Putting off the paperwork is tempting, especially if it saves enough time for an extra office visit or two. But, neglecting the rules of state and federal agencies is dangerous. Careless mistakes can lead to big fines and deliberate shortcuts—forging the signature of a doctor who's out of the office—can land a sales rep and his company in criminal court.

Keeping a top-flight sales force up to date requires continuous training in a vast web of regulations including the Prescription Drug Marketing Act (PDMA); Title 21 Code of Federal Regulations, Part 11 (21 CFR Part 11); the Office of Inspector General Guidelines for Industry (OIG); the Health Insurance Portability and Accountability Act (HIPAA); and a growing network of state regulations. (See "Spot the Quicksand.")


The 1987 PDMA, which was revised in 2000, aims to prevent tampering, thwart potential drug diversion, and guarantee the distribution of safe drugs and sample products to providers and consumers. PDMA reporting requirements have become a (burdensome) industry standard, but violations still create serious problems. Simple reporting mistakes, including little things like neglecting to note a date or the number of samples distributed, are considered minor violations, which are punishable by fines. But deliberate falsifications, such as faking a record, forging a provider's signature, or selling samples to a pharmacist are criminal acts punishable by heavy fines or prison time.

Manufacturers are creating training programs to keep reps and their managers up to date on PDMA regulations. Compliance consciousness must become an integral element in daily field-selling routines. Well-trained managers must be prepared to coach and direct their teams on compliance issues. And, reps must understand the corporate compliance rationale as well as the government regulations.

QUIZ: Spot the Quicksand

State Regulations

Individual state legislatures and pharmacy boards implement regulations to supplement the federal PDMA, so basic regulations, including rules for sampling midlevel practitioners such as physician assistants and nurse practitioners, vary from state to state. These providers write more than ten percent of all prescriptions, but reps need to know if their state requires a collaborative (with a physician) agreement, a delegation of authority letter (from a physician), or specific state paperwork. Some states have also passed restrictions on or reporting requirements for promotional gifts, personal use programs, scheduled sample mailings, or the value of samples submitted to storage-location inspections. California has even established OIG guidance as state law.

Even when reps comply with all federal guidelines, they and their managers may still be violating a state regulation—often without knowing it. In addition to PDMA compliance training, some manufacturers have added training programs in state regulations. A few companies have created alliances with state and local governments to assemble the regulatory data the sales managers need to train reps. Some are automating the reporting process and selecting technology platforms such as Target Sofware's Target Mobile Field Sales Manager, which monitors sales force activity. Such systems build compliance into the system by, for example, flagging doctors on call lists who are not authorized to receive samples and electronically alerting reps to other potential sampling violations.


21 CFR Part 11

In 1997, the federal government passed 21 CFR Part 11, partially in response to requests by manufacturers and vendors to be able to submit electronic sample records instead of paper. The government has published and recalled these guidelines twice since then, and a third revision is currently pending. The rapidly changing regulations pose one challenge for companies. The different electronic platforms favored by physicians create another headache.

Although the burden of responsibility for 21 CFR Part 11 ultimately lies with companies, reps are responsible for producing valid, reliable data. Policies must be established to hold reps and their managers accountable for accurate reporting; they should be terminated for non-compliance. Reasonable guidelines might include requiring that reps file data every week, capture signatures electronically, and store data on a laptop computer provided by the company. If reps were to file data less often, provide only paper signatures, or use their personal computer to store data, they would be considered non-compliant and could be terminated.

Training sales reps to comply with 21 CFR Part 11 starts with clearly communicating the company's electronic reporting policy, including the corporate and individual penalties for non-compliance. Managers must demonstrate the company's sample tracking system, explain the sample reconciliation process, and test field personnel on the concepts and procedures.


When the OIG was charged with preventing fraud and abuse in the federal healthcare system, its 2003 guidelines effectively became a new set of regulatory hurdles for pharma manufacturers. Today, in addition to documenting how they promote products, marketing departments and field reps must, for the first time, demonstrate the "intent" of their marketing activities.

For example, if reps visited five doctors and distributed five hundred samples before the new OIG regulations went into effect, they only needed to report the total number of samples distributed to each physician to be PDMA compliant. Today, reps must explain their rationales for distributing 50 samples to one physician and 300 to another.

To support such reasoning, reps must demonstrate, for example, that they did not encourage off-label use by providing samples to a specialized physician with a patient population unlikely to need the medication. The rep must also prove that he or she did not offer an excessive number of samples for use with non-insured patients. The government could also ask to see reps' call notes to determine if telltale language involving agreements, arrangements, deals, understandings or trial use was used to describe a sales call.

Formal OIG training should be part of the standard sales training model. To foster compliance, managers might coach reps on how to speak with physicians when they discuss sampling practices. Role-play scenarios can help reps see when a sample might be regarded as an inducement. Managers should also coach reps on completing call notes using appropriate language.


There was a time not too long ago when physicians took sales calls at the nurse's station. Sales reps hung around while nurses and patients received instructions, while pharmacy calls were placed, or even when the doctor wrote up patient notes. Physicians and reps discussed the benefits of a product for specific patients, citing details of the actual patient's case. Reps placed reminder stickers and educational material directly into patient files. Nurses would even provide lists of expectant mothers to infant-products reps, so they could send out coupons. Today, all of these practices would be considered HIPAA violations.

HIPAA has limited reps' access to physicians' offices. Today many provider offices require reps to sign HIPAA compliance agreements as a requirement for calling on them. Even after completing those forms, reps are typically denied access to exam rooms and patient files. Instead of discussing details of specific patients with a physician's office staff, doctors and reps talk about anonymous patient "scenarios." These discussions typically occur far from patients, in a secluded office or near the sampling closet. Reps who violate any of the established HIPAA protocols could be banned from the office.

HIPAA training should be embedded in company detailing protocols. To insure that reps understand the field application of the policy, each should undergo a role playing session that outlines different physician office scenarios. The sales management team should also organize ongoing field coaching.

Putting It All Together

Like it or not, regulation has become a major factor shaping pharma sales and marketing efforts. Chief compliance officers need to work with the sales department to assure that training includes more than field promotion and product training activities.

Meeting sales goals is still the top priority, but companies cannot sustain profitability unless sales reps and marketing executives meet regulatory requirements. As additional layers are added and compliance becomes more complex, companies will have to invest more resources in comprehensive, legally sound training programs for their field sales reps—and for the people who manage them.

Steven Tarnoff is executive vice president and a managing partner of the Franklin Group, a division of Ventiv Health. He can be reached at starnoff@franklinpharmaservices.com.

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