Licensing Sales Reps: Is It a Bad Idea?

An amendment to the proposed Massachusetts State Budget -- recently approved by the State Senate -- could make the state the first in the nation to license pharmaceutical sales reps (see SECTION 100NN) and prohibit them from providing entertainment, gifts, payments or travel to doctors, healthcare facilities or public officials (see SECTION 44L), The Boston Globe reports (see "Senate OK's licensing of drug reps").

SECTION 44L, which was tacked on to the budget by Senator Mark Montigny, Democrat of New Bedford -- the same senator who introduced Senate Bill #402, which also attempted to limit gifts to physicians -- states: "No pharmaceutical manufacturer agent shall knowingly and willfully offer or give to a physician or a member of a physician'’s immediate family, and no physician shall knowingly and willfully solicit or accept from any pharmaceutical manufacturer, gifts of any value at any time."

This is actually more onerous than SB #402, which would require physicians (and other healthcare officials) in the state to file a "gratuity disclosure statement" listing "any gifts aggregating more than $100 in the two preceding calendar years." That bill did not "ban" gifts and did not even set limits on gifts as far as I can see. The state, however, could engage in the "prosecution of illegal conduct involving gifts, educational or research grants, or other economic benefits provided by a pharmaceutical company or an agent of a pharmaceutical company to a public charity [ie, hospital] the circumstances of which reasonably call into question whether such funds are being put to a charitable purpose or indicate a breach of the public trust in the administration of a public charity." This did not include doctors (they are not charities).

Anyway, my main interest is SECTION 100NN regarding licensing pharmaceutical reps.

[If you want to learn more about pharma gifts to physicians, please see a previous Pharma Marketing Blog post on the topic: "Gifts That Keep on Giving" or consider ordering the following Pharma Marketing News reprint: "Free Gifts to Physicians: What's the Big Deal?"]

Is it a bad idea to require pharma sales reps to be licensed?


Why pharma sales reps and not GE light bulb sales people? I don't know. Maybe states require other types of sales people to be licensed. I haven't heard of it, though.

You could say that pharma reps are different -- they sell a product that affects the health of the citizens of a state. Senator Montigny obviously concurs:

"Hairdressers and manicurists must be licensed to work in the Commonwealth," Montigny said. "Pharmaceutical representatives who market prescription drugs and attempt to influence doctors to prescribe name-brand drugs should also be licensed."

But if licensing meant better trained sales reps, then I would favor it. SECTION 100NN does have provision for training as part of the licensing process:

"As a prerequisite to licensing, pharmaceutical representatives shall complete such training as may be deemed appropriate by the department departmentt of public health, in consultation with the board of registration of pharmacy]. As a prerequisite to the renewal of a pharmaceutical representative license, the licensee shall complete continuing education as may be deemed appropriate by the department."

Not only would this open up a new business for training companies, but it could actually make drug reps more effective, depending on the training provided. I assume, for example, that one goal of the training would be to raise the rep's knowledge of the therapy category and competing treatments -- especially generics.

From the experience of people familiar with the preparedness of reps, there are some gaps. Here's an assessment by Michael Kessler, MD, VP of Metamorph Doctors, LLC, a sales rep assessment company:

"Representatives, in general, are scoring lower in their ability to communicate clinical information in a way that is palatable and understandable to the doctor." (As reported in Pharma Marketing News: "Sales Rep Assessment: Shoot the Messenger, the Message, or Both?")

Perhaps doctors are more demanding these days and despite efforts to standardize assessments, they are less forgiving in judging this skill. Nevertheless, this decline in an important indicator is a worrisome trend in light of recent commitments by the pharmaceutical industry to ensure that doctors become more knowledgeable about new drugs, especially before DTC campaigns are launched.

"We also see an across-the-board lack of knowledge of competitors' products or the lack of ability to speak about competitors'’ products in a comparative way," says Kessler. [op cit]

Even sales reps themselves agree that their training levels are inappropriate. According to a G & S survey of pharma sales reps -- see more on this survey in the post "Industry PR & Rep Morale" -- three quarters of respondents agreed that they need more training. 36% felt a need for more disease state training in particular.

Reps also are not very knowledgeable about DTC campaigns relating to their products and their competitors' products: only 40% were very or extremely informed about their products' DTC campaigns and only 10% were that knowledgeable about the competitors' DTC campaigns.

I don't really believe state-mandated training and licensing is the answer to this problem. The effort in Massachusetts, however, represents another exploitation of a chink in pharma's armor that critics are exploiting to pass laws that limit pharmaceutical marketing.

Perhaps the industry has been too busy building their army of reps to properly train them in battlefield conduct and arm them with the knowledge they need to be true "trusted colleagues" of their physician clients.