PhRMA Updates Marketing Code for Interacting with Healthcare Professionals; California Law Mandates Updates to Comprehensive Compliance Programs of Covered Pharmaceutical and Medical Device Companies

On July 10, 2008, the Pharmaceutical Research and Manufacturers of America ("PhRMA") updated its voluntary code of conduct applicable to the marketing of pharmaceutical products to healthcare professionals. PhRMA's original Code on Interactions with Healthcare Professionals ("the Code") became effective on July 1, 2002. The new Code takes effect in January 2009. Like the 2002 version, the 2009 version of the Code addresses interactions relating to marketed products and product pre-launch activities, including activities involving relationships between pharmaceutical companies and clinical investigators, consultants and educators.

The revised Code includes the following significant changes:

• Prohibition of non-educational gifts (such as mugs, pens and notepads) to healthcare professionals. Under the 2002 Code, pharmaceutical representatives could offer small gifts associated with a healthcare professionals' practice. The new Code bans gift-giving on the basis it contributes to public misperceptions about the relationships between pharmaceutical representatives and healthcare professionals.

• Restriction on the provision of restaurant meals to healthcare professionals. Under the 2002 Code, pharmaceutical representatives could provide modest restaurant meals in conjunction with informational presentations to healthcare providers. Now, the Code provides that meals in conjunction with educational presentations should be limited to in-office or in-hospital settings.

• Clarification of permissible consultant and speaker arrangements. The new Code includes more detailed guidelines for speaking and consulting agreements with healthcare professionals. Recreational and entertainment activities in conjunction with consultant engagements and speaker training are expressly prohibited. Consultants and speakers sitting on committees that develop practice guidelines also are now advised to disclose the nature and existence of their relationships with pharmaceutical companies to their committees.

Other portions of the updated PhRMA Code address the following: the need for corporate compliance policies and procedures; training of company representatives about the laws, regulations and standards governing interactions with healthcare professionals; certification of the existence of processes for compliance with the Code; and restrictions on pharmaceutical companies' support for continuing medical education events.

It is important for all pharmaceutical and medical device companies to note that while PhRMA's Code is voluntary, effective July 1, 2005, California Health & Safety Code § 119402 mandates any "pharmaceutical company" (definition provided below) doing business in California to adopt a Comprehensive Compliance Program ("CCP") that is in accordance with the April 2003 publication Compliance Program Guidance for Pharmaceutical Manufacturers ("CPG"), developed by the United States Department of Health and Human Services Office of Inspector General. The California statute further mandates that each CCP must include policies for compliance with the PhRMA Code dated July 1, 2002 and a pharmaceutical company must update its CCP within six months of any update or revision of the CPG or Code. Accordingly, pharmaceutical companies doing business in California should update their internal policies to ensure compliance with the revised Code.

The California statute defines "pharmaceutical company" as "an entity that is engaged in the production, preparation, propagation, compounding, conversion, or processing of dangerous drugs, either directly or indirectly, by extraction from substances of natural origin or independently by means of chemical synthesis or by a combination of extraction and chemical synthesis. . . . [or] an entity engaged in the packaging, repackaging, labeling, relabeling, or distribution of dangerous drugs. . . . [or] a person who engages in pharmaceutical detailing, promotional activities, or other marketing of a dangerous drug in [California] on behalf of a pharmaceutical company."

The California statute defines "dangerous drugs" as "any drug that is unsafe for self-use and includes either of the following: (1) Any drug that bears the legend 'Caution: federal law prohibits dispensing without prescription,' 'Rx only,' or words of similar import; (2) Any drug or device that, pursuant to federal or state law, may be dispensed only by prescription, or that is furnished pursuant to Section 4006 of the Business and Professions Code."

A copy of the Code is available at: http://www.phrma.org/files/PhRMA%20Marketing%20Code%202008.pdf.

A copy of the California statute us available at: http://caselaw.lp.findlaw.com/cacodes/hsc/119400-119402.html.

 

This material is made available for information purposes only, and should not be relied upon to resolve specific legal questions.