by Jonathan Vatner | July 01, 2006

Over the past decade, the pharmaceutical meetings landscape had gotten considerably more difficult to navigate. Most recently, a number of state legislators have been crafting rules to limit pharmaceutical marketing -- and, by extension, related meeting planning -- at the state level. Though the intention has been good (i.e., lower marketing costs could help lower the price of prescription drugs), the result for those who must comply with the regulations has been a mountain of paperwork and a mounting uncertainty over what the rules require them to do.
    “It started in California, and it’s spreading like cancer,” says Fred Wilson, category manager of CME at the Procter & Gamble Health Care Research Center in Mason, Ohio. “It’s a nightmare.”

California’s big step
Most meeting planners who work for pharmaceutical companies adhere to the PhRMA Code, a voluntary program limiting marketing and gifts to physicians, proposed in 2002 by the Pharmaceutical Research and Manufacturers of America, the largest association of such companies in the United States.
    But the code is voluntary, after all, and after its adoption some industry observers continued to complain that pharmaceutical companies’ marketing practices still needed to be reined in. (The Food and Drug Administration put out regulations in 1997 to prevent the companies from promoting unapproved uses for medications, but that only affects the content, rather than the amount, of marketing.) In response, the U.S. Office of the Inspector General issued a “guidance” to prevent the practice of using gifts and plush trips as kickbacks to doctors based on prescribing practices.
    The concept of a guidance is relatively new. In 2003, to lower the costs of policing various companies, the government laid down loose guidelines for good behavior and expected individual firms to form their own compliance programs. Companies whose programs were not up to snuff would be investigated, warned and sometimes fined.
    In 2004, the California legislature decided this guidance was not enough. Every penny spent on pharmaceutical marketing inflates the price of medications, went the reasoning. In addition, it was recognized that drug companies have an interest in pushing the newest, most expensive medicines, which could influence doctors to prescribe those when cheaper alternatives would do. With the intent of keeping prescription-drug prices down, the California legislature made the voluntary PhRMA Code and the suggested OIG guidance into law as of July 1, 2005.
    The legislation has created its own problems, however. First, the PhRMA Code and the OIG guidance were not conceived as precisely delineated laws. There is a margin of error built into both measures in allowing individual companies to decide for themselves how best to market their medications while avoiding conduct that could be construed as a bribe.
    “The PhRMA Code has a lot of shalls and shoulds and this-would-be-a-good-idea,” explains Natasha Nelson, Esq., chief ethics and compliance officer for the U.S. branch of Sankyo Pharma Inc., based in Parsippany, N.J. “Did the California law change every verb to ‘must’? That’s the way most pharma companies have interpreted it.”
    Second, it becomes a challenge for the planner to figure out which seminars are affected by the law. Is it only for companies with an office in California? For meetings held in California? Or for doctors who practice in California, regardless of where they attend a meeting? What about doctors with practices in two states attending a meeting in a third?