Shortly after Connecticut’s 2023 legislative session kicked off, Governor Ned Lamont announced a series of policy initiatives aimed at reducing health care costs and undertaken in collaboration with the Connecticut Hospital Association. “An Act Protecting Patients and Prohibiting Unnecessary Health Care Costs” (“the Act”), which was passed by the Connecticut Legislature in early June and signed into law by Governor Lamont in late June, implements some of those initiatives. Among other things, the Act targets pharmaceutical marketing practices and imposes extensive reporting requirements. These provisions apply to “pharmaceutical manufacturers” and come into effect on October 1, 2023.
Broadly, the provisions require “pharmaceutical manufacturers” that employ “pharmaceutical representatives” to register annually with the Department of Consumer Protection (“DCP”) as “pharmaceutical marketing firms” and provide annual reports to DCP containing various information about their employed “pharmaceutical representatives.” The provisions also require “pharmaceutical representatives” to disclose specific information to prescribing practitioners and pharmacists and provides DCP with the authority to impose penalties for non-compliance.
The nuance lives in the Act’s definitions, and several key questions remain open, including to what extent the Act applies to medical device and technology manufacturers.
To Whom Does the Act Apply?
While the Act targets drug manufacturers, with a focus on prescription drugs, it applies generally to “pharmaceutical manufacturers” that employ “pharmaceutical representatives.”
The term “pharmaceutical manufacturers” is defined to include:
- “(A) [a] person, whether within or without the boundaries of the state of Connecticut, that prepares, cultivates, grows, propagates, compounds, converts or processes a drug, device or cosmetic, directly or indirectly, by extraction from substances of natural origin, by 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, or
- (B) [a] sterile compounding pharmacy, as defined in section 20-633b of the general statutes that dispenses sterile pharmaceuticals without a prescription or a patient-specific medical order intended for use in humans.”
The term also “includes a virtual manufacturer, as defined in section 20-571 of the general statutes.”
The term “pharmaceutical representative” is defined as “any person, including, but not limited to, a sales representative, who markets, promotes or provides information regarding a legend drug for human use to a prescribing practitioner and is employed or compensated by a pharmaceutical manufacturer.” As these definitions demonstrate, it is notably unclear at this point whether (and which) device companies are subject to the Act.
For example, device manufacturers may not be subject to the Act given the reference to “legend drugs” in the Act’s definition of “pharmaceutical representatives.” The Act states that “legend drug” has the same meaning as provided in section 20-571 of the general statutes, which defines a “legend drug” as “a drug that is required by any applicable federal or state law to be dispensed pursuant only to a prescription or is restricted to use by prescribing practitioners only, or means a drug that, under federal law, is required to bear [certain] legends.”
The same section separately defines a “legend device,” and the definition of “legend drug” expressly excludes devices. Thus, one could fairly read the Act as not applying to companies that only manufacturer and sell devices because such companies do not employ “pharmaceutical representatives” as defined under the Act.
It is possible this and other issues will be clarified as a result of any forthcoming regulations or agency guidance. Under the Act, the Commissioner of DCP has authority to adopt regulations to implement the Act, but the status of those regulations and the opportunity to comment is currently unknown. DCP has established a registration webpage where it promises “more information will be posted.”
What Does the Act Entail?
First, the Act requires “pharmaceutical manufacturers” that employ “pharmaceutical representatives” to register annually with DCP as a “pharmaceutical marketing firm,” defined as “a pharmaceutical manufacturer that employs pharmaceutical representatives.” These registrations must be renewed by June 30th of each year. Registration and renewal fees are each $150 and are nonrefundable. In the case of late renewals, the Act imposes a late fee of $100 for each year the registration is not renewed, in addition to the annual renewal fee.
Second, “pharmaceutical marketing firms” must provide DCP with a list of all individuals employed as “pharmaceutical representatives” upon initial registration and annually thereafter. They must also notify DCP when they hire “pharmaceutical representatives” and when “pharmaceutical representatives” are no longer employed by the “pharmaceutical marketing firm.” Such notifications must be provided within two weeks of the event. These lists will then be prominently posted by DCP on their website.
Third, by July 1, 2024, “pharmaceutical marketing firms” must provide DCP with annual reports (in a form and manner yet-to-be prescribed by DCP) containing “the following information regarding the performance for the previous calendar year of each of its pharmaceutical sales representatives identified to the department”:
- The aggregate number of contacts (“contact” is defined as “any communication transmitted in person or by telephone, electronic mail, text message or other electronic means between a pharmaceutical representative and a prescribing practitioner or pharmacist, to promote or provide information relating to a legend drug”) such pharmaceutical sales representative had with prescribing practitioners and pharmacists;
- The specialty of each prescribing practitioner and pharmacist with whom such pharmaceutical sales representative made contact;
- Whether product samples, materials, or gifts of any value were provided to a prescribing practitioner or such practitioner’s staff in a prescribing practitioner’s office or to a pharmacist; and
- An aggregate report of all free samples, by drug name and strength, in a form and manner prescribed by the commissioner.
DCP will then analyze the submissions and compile and post an annual report on the activities of the “pharmaceutical representatives.”
Finally, any “pharmaceutical representatives” who market prescription drugs in Connecticut must provide certain written disclosures to any prescribing practitioners and pharmacists with whom they have contact. Such disclosures must be made each time “pharmaceutical representatives” contact prescribing practitioners and pharmacists and must include the list price of any prescription drug discussed with the prescribing practitioner or pharmacist (based on the dose and quantity as described in the medication package insert) and, if available, information on any variations of the drug’s efficacy on different racial and ethnic groups.
The Act provides DCP with the authority to impose penalties for violations. Such penalties include refusal to issue or renew registration; the right to revoke, suspend, or place conditions on registration; and penalties of up to $1,000 per violation.
Several open questions exist regarding the specific requirements of the Act and how it will be implemented, even beyond the open question discussed above of whether (and which) device companies will be subject to the Act. For example, will companies be required to disclose information about pharmaceutical representatives who reside and/or are employed outside of Connecticut? Will there be any exceptions to the reporting requirements? If a company manufactures both drugs and devices, does the Act apply to their entire operation or only those operations directly related to the prescription drugs? To what extent will these reporting requirements be preempted by federal law? Companies potentially subject to the Act should be thinking critically through these and other questions. Potentially forthcoming implementing regulations from DCP may provide clarifying guidance, but once again, we do not know for certain if and when such guidance may become available.
However, one thing is clear about what this Act means for companies that fall under the definition of “pharmaceutical manufacturers”: a lot more reporting and record-keeping will be required. We will continue to follow all developments related to the Act, particularly in relation to its applicability to device manufacturers. In the meantime, if you have any questions, please do not hesitate to contact the authors of this article or any other health care lawyers at Reed Smith.