Oregon Enacts Pharmaceutical Representative Licensure & Disclosure Law

On July 19, 2021, Oregon’s Governor, Kate Brown, signed into law Senate Bill 763 that requires pharmaceutical representatives to obtain a license prior to marketing or promoting pharmaceutical products to health care providers. The law also grants the Director of the state’s Department of Consumer and Business Services (“DCBS”) the authority to require licensees submit sample and spend disclosures and additional information related to their interactions with health care providers. DCBS may adopt rules or take any other action prior to the laws operative date of January 1, 2022.

Purpose of SB 763

When passed by Oregon’s Senate on June 21 on a vote of 19-9, Senator Deb Patterson, a chief sponsor of the bill, stated in a press release issued by the Oregon Senate Democrats that “Senate Bill 763 is a commonsense way to rein in a problematic tactic that keeps prescription drug costs high, making closed door meetings transparent to Oregon consumers and ensuring ethical practices.”  According to Senator Patterson, the ‘problematic tactic’ she refers to is the marketing of “high-cost brand medications” by sales representatives. She also added that “[t]his marketing practice contributes to writing more prescriptions for well-marketed medications rather than more affordable versions of similar pharmaceuticals, contributing to financial strain faced by those who depend on them.”

In the press release, the Senate Democrats cited findings from a 2019 JAMA article that found that “[f]rom 1997 through 2016, spending on medical marketing of drugs, disease awareness campaigns, health services, and laboratory testing increased from $17.7 to $29.9 billion” and that “marketing to medical professionals accounted for the highest proportion of spending, increasing from $15.6 billion in 1997 to $20.3 billion in 2016.” That study did not investigate whether the licensure of sales representatives could lead to a decrease in prescription drug prices.

Key Definitions

“Pharmaceutical representative” means a person that markets or promotes pharmaceutical products to health care providers.

“Pharmaceutical product” means a medication that may be legally dispensed only with a valid prescription from a health care provider

“Health care provider” means a person that is licensed, certified or otherwise authorized under the laws of this state to prescribe, provide or dispense pharmaceutical products to patients for the purposes of diagnosis, treatment or care of disease, injury or congenital conditions including, but not limited to, a person who is: (A) A physician or physician’s assistant; (B) A nurse practitioner; (C) A psychiatrist; (D) A pharmacist; or (E) A hospital, clinic or pharmacy.

Licensure Requirements

Prior to engaging the marketing or promotion of pharmaceutical products to health care providers, pharmaceutical representatives must obtain a license from Oregon’s Department of Consumer and Business Services (“DCBS”). This requirement does not apply to pharmaceutical representatives engaging in this activity “for fewer than 15 days during each calendar year.” The conditions of initial licensure will include completion of a professional education course that the Director of DCBS specifies by rule and the payment of a $750 license fee. Annual renewal conditions include completion of least five hours of continuing education that the Director of DCBS specifies by rule and an applicant or a
licensee may not receive professional education from the applicant’s or licensee’s employer, as well as paying the $750 license fee.

Disclosure of Interactions

The Director of DCBS has the authority to “request or at intervals [] specifie[d] by rule” that a licensee provide the following documentation:

• Documentation that shows that the licensee has completed education required under this section;
• A list of health care providers within the state that the licensee contacted since the director’s last request or during the previous calendar year, as appropriate;
• The number of times the licensee contacted each health care provider;
• The location and duration of the licensee’s contact with each health care provider;
• Which pharmaceutical products the licensee promoted;
• Whether the licensee provided the health care provider with any product samples, materials or gifts and, if so, the monetary value of the samples, materials or gifts; and
• Whether and how the licensee otherwise compensated the health care provider for contact with the licensee.

It remains unclear how this part of the law will be implemented. Since the law is aimed at licensee and not at pharmaceutical manufacturers, the disclosure of this information is not preempted by federal reporting under the federal Open Payments Program or FDA’s requirement that manufacturers report drug sample information under Section 6004 of the Affordable Care Act.

Penalties

Licensees that violate any of the law’s provisions can have their license suspended or revoked. Additionally, licensees can be fined not less than $1,000 and not more than $3,000 for each violation. Each day during which a violation continues constitutes a separate violation.

Takeaway

Oregon now joins Nevada, the City of Chicago, and the District of Columbia that impose similar requirements on pharmaceutical representatives. Although pharmaceutical manufacturers are not included within the scope of Oregon’s law, the burden to ensure compliance will fall upon compliance departments. We will continue to monitor the implementation of Oregon’s law and recommend that companies take part in the rulemaking process.