State Laws Seek to Regulate Sales Rep & Physician Interactions

ByJacob Vazquez
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State Laws Seek to Regulate Sales Rep & Physician Interactions

How Some States are Limiting Sales Rep Access to Physicians

Many states, including Vermont, Maine, and Colorado, have passed laws that regulate how drug reps can market to prescribers. Many of these laws are centered around price transparency and comparisons to generics.

These state-mandated restrictions are on top of an outright ban on sales reps visits that many hospitals and health systems already have in place.

Vermont Has Led the Way on Sales Rep Regulations

For several years, Vermont has had laws in place that dictate how sales reps can interact with prescribers during in-person visits. Vermont’s pharmaceutical marketer price disclosure has led the way, with several other states following suit with similar laws. 

Vermont’s price disclosure law requires that when sales reps market a drug to prescribers, they must disclose:

  • The average wholesale price (AWP) per pill
  • The drug’s AWP in relation to other drugs in the same class

In addition, reps marketing to prescribers in Vermont must report any marketing related expenditures they incur. The distribution of drug samples, which has long been a staple of sales rep visits, is included in these expenditures.

Pharmaceutical companies who have expenditures of any amount over $0 must report their expenditures annually. Companies reporting expenditures must pay a $500 registration fee before each state-mandated reporting period. 

Hospital Multinational Doctors Looking On Laptop.

Maine Seeks Drug Price Transparency

On an annual basis, Maine plans to publicly report prescription drug prices. In order to make this transparency possible, the governor recently enacted several bills. Pharmaceutical companies will be required to report certain drug price increases.

Unlike Vermont, Maine is not requiring that drug reps communicate this price information when meeting with prescribers. Rather, price information will be shared on a publicly accessible website, where both doctors and patients can access the information.

This means physicians will have access to certain price information whether or not they meet with sales reps. For physicians who have price concerns or questions, this may decrease their desire and need to meet with sales reps.  

Northeastern States are Pushing for Drug Importation from Canada

That fact that Vermont and Maine are requiring more transparency about drug prices is no coincidence, as both states could easily import more affordable drugs from Canada. In fact, both Vermont and Maine have passed bills approving the importation of prescription drugs.

However, both states’ plans are in limbo as they await federal approval and guidance. If Vermont and Maine are able to import drugs from Canada, marketing from U.S. drug reps could become irrelevant. 

Colorado Also Looks at Wholesale Drug Costs

While nothing is on the books in Colorado to promote the importation of drugs, cost transparency laws have been enacted. The state has enacted its own laws requiring:

  • That the wholesale acquisition cost (WAC) must be disclosed by drug reps.
  • Reps must also disclose the names and WAC of three generic prescription drugs from the same therapeutic class, when such generics are available.  
Doctor and colleague looking at medical report and having a discussion

What is the Impact of these State Laws?

While these state laws don’t outright ban sales reps from visiting physicians, the requirements do put a significant burden on drug companies. Sales reps must be trained to act in accordance with the new laws, as well as adhere to record-keeping and reporting requirements.

This is in addition to the limitations hospitals and health systems are already placing on drug reps.

In-Person Meetings are Already on the Decline

For many physicians, the days of leisurely lunches with sales reps are over. Over the last year, there’s been a sharp decrease in the number of prescribers who are permitted to meet in-person with pharmaceutical reps. 

In 2017, just over half of all practices owned by hospitals and health systems banned drug reps from visiting their doctors. Also, across all specialties, 40% of all physicians were reportedly no longer meeting with sales reps according to Healthcare Finance.

There doesn’t seem to be any regional trends when it comes to physicians being permitted to meet with sales reps.

The top three states where drug reps still had the highest accessibility to prescribers in 2017 were scattered throughout the U.S.: New Jersey, North Dakota, and Mississippi. In those three states, between 69 and 72 percent of doctors were accessible by drug pharma reps.

Doctors Overwhelmingly Favor Brief Meetings

Policy & Medicine reports that physicians overwhelmingly favor brief interactions with drug reps.

85% of physicians in 2018 said their ideal interaction with a drug rep lasted no longer than five minutes

In a five-minute meeting, discussing wholesale acquisition costs will no doubt eat up precious marketing time.

Young chinese doctor woman showing a timeout gesture.

Alternatives to Face-to-Face Meetings

Drug companies must rely on alternatives to face-to-face meetings if they want to reach physicians who are banned from meeting with reps. 

The good news is that the majority of doctors, 79%, preferred an “e-detail” over an in-person visit in 2018.

While most prescribers said they preferred electronic communications with sales reps, very few have been engaging in it.

Only 12% of physicians reported engaging in any remote forms of communication, such as an email or a phone call in 2018.

Alternatives to the traditional face-to-face meeting remain an untapped strategy. 

However, technology is proving to be a double-edged sword. While digital resources may offer sales reps a loophole in marketing to prescribers, physicians are able to easily access information on their own.

A report published by Decisions Resources Group in 2019 found that 49% of physicians said they were able to answer drug-related questions on their own.

These physicians often turn to digital resources, claiming they “never had a question for a representative that they couldn’t find answers for online.”

Doctors are using a computer and discussing.

State Laws Add to an Already Rapidly Changing Landscape

Today, pharmaceutical companies face many obstacles when marketing directly to physicians. Recent state laws are only compounding barriers put in place by hospitals and health systems.

In addition, physicians’ own perceptions are quickly changing how they view and want to interact with sales reps. 

This restrictive climate is forcing pharmaceutical companies to look at alternative communication methods to fuel sales growth. It’s clear that pharmaceutical companies must change their approaches and strategies, as they are increasingly getting squeezed out of the picture.

For more information on how to stay relevant in this changing landscape, please contact us for free below! 

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