Connecticut Law Imposes New Requirements on Pharmaceutical Manufacturers, Defined to Include Device and Cosmetic Manufacturers, that Employ “Pharmaceutical Sales Representatives”

Public Act No. 23-171: An Act Protecting Patients and Prohibiting Unnecessary Health Care Costs (Act) took effect in Connecticut on October 1, 2023. Under the Act, a pharmaceutical manufacturer (PM) that employs pharmaceutical sales representatives (PSRs) is required to register with the Connecticut Department of Consumer Protection (Department) as a so-called “pharmaceutical marketing firm” (PMF). As discussed in our previous blog post, there are few jurisdictions in the United States that require registration or licensure of PSRs, and up until now, these obligations were placed on PSRs at the individual level. However, this new Connecticut law deviates from the typical regulatory scheme. In this post, we will provide an overview of the affirmative obligations that the Act imposes on PMs, PMFs, and PSRs and compare them to the laws, regulations, and ordinances of other United States jurisdictions.

PM Registration Requirements

Under the Act, PMs that employ PSRs are required to register annually with the Department as PMFs. The definition of a PM is extremely broad and extends well beyond the “pharmaceutical” realm. A PM can be either a sterile compounding pharmacy that dispenses sterile pharmaceuticals without a prescription or:

 “A person, whether within or without the boundaries of the state of Connecticut, that produces, prepares, cultivates, grows, propagates, compounds, converts or processes a drug, device or cosmetic, directly or indirectly, by extraction from substances of natural origin, by means of chemical synthesis or by a combination of extraction and chemical synthesis, or that packages, repackages, labels or relabels a container under such manufacturer’s own trademark or label or any other trademark or label, or a drug, device, or cosmetic for the purpose of selling the drug, device or cosmetic.”

Virtual manufacturers are also included under the scope of PMs. Under Connecticut law, a “virtual manufacturer” means a person who:

• Owns the new drug application or abbreviated new drug application number of an FDA-approved prescription drug;
• Owns the unique device identification number, as available, for a prescription device;
• Contracts with a contract manufacturing organization for the physical manufacture of their drugs, devices or cosmetics;
• Is not involved in the physical manufacture of their drugs, devices, or cosmetics; and
• At no time takes physical possession of or stores their drugs, devices, or cosmetics.

PMs must pay a $150 fee upon registration and renewal as a PMF, with annual renewals due to be completed no later than June 30th on a going-forward basis. Due to the Act’s October 1, 2023 effective date, affected entities are required to register and begin actively ensuring compliance with the associated reporting requirements no later than June 30, 2024. Failure to register or renew timely exposes the PM to a $100 late fee.

Substantive Reporting Requirements of PMFs

Confusingly, the law’s definition of a PSR does not include reference to “devices or cosmetics” and therefore it is currently unclear whether a PM that is covered by the statute as a result of its activities related to producing medical device or cosmetic products would need to comply with the Act. A PSR is defined in relevant part as any person “who markets, promotes or provides information regarding” a human prescription drug to prescribing practitioners and who is “employed or compensated” by a PM.   

As part of its initial registration, a PMF is required to provide to the Department a list of all individuals it employs as PSRs. The PMF must update this list within two weeks if a new PSR is hired or if a PSR is no longer employed with the PMF, and the list should be updated if needed in conjunction with the PMF’s annual registration renewals. The Department of Consumer Protection will post to its website the most recent list provided by each PMF. If the PMF has not identified the PSR to the Department, the PSR cannot perform their duties for the PMF in Connecticut, pursuant to the Act.

Although the Act provides a timeline for these PMF reports to be provided to the Department, it does not indicate whether additional detail – beyond the status of the PSRs’ employment – must also be provided. Under the Washington D.C. regulations governing pharmaceutical detailers, by comparison, when such a person leaves the employ of a pharmaceutical company, they must not only notify the local Board of Pharmacy within ten days but must also provide the contact information of someone at their former company.

In addition, no later than July 1, 2024, a registered PMF is required to provide to the Department certain performance information for each of the PSRs that it has previously identified. The Department has not yet prescribed the format upon which this report should be made, but per the statute, information that must be reported includes:

• The aggregate number of “contacts” the PSR had with prescribing practitioners and pharmacists;
  • “Contact” is defined to include both in-person and electronic communications, such as communications by telephone, email, text message, or other electronic means, which are undertaken to promote or provide information regarding a prescription drug.
• The specialty of each prescribing practitioner and pharmacist with whom that contact was made;
• Whether the PSR provided product samples, materials, or gifts of any value to the prescribing practitioner or such practitioner’s staff in a prescribing practitioner’s office or to a pharmacist; and
• An aggregate report of the drug name and strength of all free samples provided.

Similarly, PSRs in Chicago, Illinois are required to submit certain encounter information to the Commissioner of Public Health. In Chicago, PSRs must provide their local oversight agency with a list of health care professionals they interacted with, the pharmaceuticals promoted, and the number of times the PSR contacted the health care professionals. They also must indicate whether they provided any samples, materials, or gifts to the health care professional. However, in comparison, the Chicago ordinance requires the PSR to provide a more detailed account of their encounter with physicians. In addition to describing the number of contacts and identifying the health care professionals, the Chicago ordinance requires the PSR to report the location and duration of each encounter. And, while both the Chicago and Connecticut laws require the reporting of samples, materials, or gifts, the Chicago ordinance takes this a step further and requires the reporting of the value of these items. This additional information that the Chicago ordinance requires is likely more available to the individual PSR, who is dealing with the prescribing practitioner and keeping track of their own activities, rather than the employer PMF, who will be familiar with these encounters more at arms-length and will have to rely on its PSRs to accurately report what they are doing in the field. This practical distinction may explain the Connecticut legislature’s decision not to require PMFs to collect and report more granular information about “gifts” to the Department.

From the information that the PMFs submit pursuant to the Act, the Department will compile a report on the activities of all PSRs operating in Connecticut. The Department will post this first report no later than December 1, 2024, and annually thereafter, to the Department’s website to provide transparency to the public and other interested stakeholders.

Disclosure Requirements of PSRs

Effective October 1, 2023, all PSRs that market “legend” (i.e., prescription) drugs to prescribing practitioners or pharmacists will need to disclose certain information about the drugs in writing during their interactions with those health professionals. A “prescribing practitioner” is defined as an individual licensed by Connecticut, any other state of the United States, or any other United States jurisdiction that is authorized to issue a prescription within their scope of practice. A “pharmacist” is an individual licensed to practice pharmacy under Connecticut law and who is recognized as a health care provider by the state of Connecticut.

At the time of a PSR’s contact with a prescribing practitioner or pharmacist, the PSR must disclose the following information:

• the list price of the drug when the PSR provides information concerning the drug based on the dose and quantity as described in the medication package insert; and
• information, if it is available, on the variation efficacy of the drug marketed to different racial and ethnic groups.

The law does not define the meaning of a prescription drug’s “list price”; however, one interpretation is that it is intended to mean the Wholesale Acquisition Cost (WAC) and that the WAC should be provided to prescribing practitioners. Certain pharmaceutical companies have already adopted this approach. For instance, Takeda Pharmaceuticals has created an Information for Connecticut Prescribers and Pharmacists form for its drug, Takhzyro®, in which the WAC per product package size (i.e. WAC per vial, WAC per prefilled syringe) is listed. Presumably this document is then going to be disseminated by the company’s PSRs to prescribing practitioners when appropriate, either electronically or in paper form.  

Conclusion

In the Governor’s press release upon signing this sweeping legislation, he noted that rising costs in health care are a barrier for many persons in Connecticut and that his “administration is focused on addressing the policies and cost drivers that factor into these prices.” To accomplish this, the Governor stated that rising health care costs need to be addressed from multiple angles, and that all parties – “insurers, hospitals, doctors, employers, and consumers” – must be involved in this effort. It is notable that, in the fifteen years that have passed since Washington, D.C. enacted its pharmaceutical detailer licensure regulations, only three states have followed suit. To contrast, and in line with the Governor’s statements, the Connecticut law differentiates itself from the pack in a focus on the employer of the pharmaceutical sales representatives.

One aspect that PMFs will have to assess is whether their current oversight of PSRs under their employ is adequate for compliance with the law. The Department has the authority to impose penalties on PMs, PMFs, and PSRs that do not comply with the registration, reporting, and/or disclosure requirements outlined above. Such penalties include the revocation, suspension, or placement of conditions on a registration, refusal to issue or renew a registration, or imposition of a $1,000 fine per violation. It will be particularly important to ensure that required data, such as the aggregate number of contacts a PSR has with each individual prescribing practitioner, are accurately reported to the Department. The definition of “contacts” is broad enough to include text messages and “other electronic means” of communication. If these contacts are occurring from an employee’s individual cell phone or, for example, their private social media account via direct messaging, PMFs may have difficulty monitoring the precise number of contacts their PSRs may have had with a prescriber. Additionally, the Connecticut law does not impose an education requirement on PSRs, nor does it require that PMFs obtain documentation verifying the PSRs’ professional education or other qualifications.

Given the unique approach taken in Connecticut, with broader and more lofty policy goals having been articulated as the legislative justification for its passage, it will be interesting to see whether other states adopt a similar approach in imposing regulations on employers or if, slowly but surely, more jurisdictions will require licensure or registration of PSRs using the more “traditional” approach initially adopted by Washington, D.C. over fifteen years ago.

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