We have repeatedly advocated for the licensing and “professionalization” of “marketers” in the drug and alcohol treatment space for quite some time. It seems self-evident. Aside from drawing a clean line between those who are endeavoring to altruistically match patients with providers, contrasted with those simply engaged in human trafficking, the ability to effectively market within this space (and patient acquisition) continues to be the issue requiring the most immediate governmental regulatory intervention.
On this point, the American Health Lawyers Association (“AHLA”) have recently reported on the City of Chicago amending its city’s laws to add “pharmaceutical representative” to the list of business activities requiring occupational licensing, even in the face of strong industry opposition.
What does this have to with the drug and alcohol treatment industry and nefarious marketing??
Actually, the City claims that the new licensing requirement is intended to combat an increase in opioid abuse.
According to the October 6, 2016, Chicago-Cook County Task Force on Heroin, 403 people accidentally died in Chicago last year from opioid overdoses.
Set to take effect July 1, 2017, the ordinance requires all individuals who market or promote pharmaceuticals to health care professionals to pay an annual licensing fee of $750.
The ordinance defines “pharmaceutical” as “a medication that may legally be dispensed only with a valid prescription from a health care professional,” with “health care professional” defined as a “physician or other health care practitioner who is licensed to provide health care services or to prescribe pharmaceutical or biologic products.”
To obtain a license, an individual must submit an application to the Commissioner of Business Affairs and Consumer Protection and must include a description of the type of work in which the applicant will engage.
Prior to applying, an individual must complete a professional education course that will be determined by rule by the Commissioner of Public Health.
A licensed pharmaceutical representative also must complete at least five hours of continuing professional education prior to renewal to include ethics, pharmacology, and pharmaceutical marketing laws and regulations.
In addition to the educational requirements, the ordinance includes onerous disclosure requirements. Also, upon request, or at time intervals established by the Commissioner of Public Health, a pharmaceutical representative must provide the following information to the Commissioner or his or her designee:
- All contacted healthcare professionals within the City of Chicago;
- number of times such professionals were contacted;
- location and duration of the contacts;
- promoted pharmaceuticals;
- value of product samples, materials, or gifts provided; and
- if and how compensation for contact was provided.
In addition, licensed pharmaceutical representatives will have to abide by an as-yet-to-be determined list of Commissioner of Public Health-established ethical standards.
Licensed pharmaceutical representatives are also barred from (1) engaging in deceptive marketing, “including the knowing concealment, suppression, omission, misleading representation, or misstatement of any material fact”; (2) using a misleading title to suggest they are licensed to practice medicine or other medical-related profession; or (3) attending patient examinations absent patient consent.
Violations can lead to the suspension or revocation of licenses and penalties can range from $1,000 to $3,000 per offense, and an individual commits a new offense every day he or she is not in compliance with the ordinance.
In the coming 18 months, it is anticipated that the Chicago Commissioners of Public Health and Business Affairs and Consumer Protection will further be adopting a number of regulations to implement aspects of the new ordinance, such as regulations concerning the required continuing professional education and ethical standards for pharmaceutical representatives.
However, with this ordinance, Chicago only becomes the second major city – after the District of Columbia – to adopt a municipal ordinance regarding the licensing of pharmaceutical sales representatives.
The licensing scheme is expected to raise an estimated $1 million annually, which will be utilized to administer the program and treat addiction.
Much thanks to Jesse A. Witten and Adam G. Yoffie and the Drinker Biddle & Reath LLP law firm for bringing this matter to our attention.