Connecticut Rolls Out Legislation on Pharmaceutical Sales Reps, Costly Outpatient Drugs

Connecticut will bolster its existing prescription drug reporting and transparency regime with new requirements on pharmaceutical sales representative registration and updates to existing manufacturer transparency reporting, effective October 1, 2023. The legislation prescribing these requirements—House Bill 6669—adds Connecticut to the mounting list of states that have passed related reforms in 2023.

HB 6669 also institutes a number of additional initiatives targeting healthcare costs that are outside the scope of this LawFlash, including but not limited to (1) the establishment of a drug discount card program; (2) the implementation of studies regarding pharmacy benefit manager practices of prescription drug distribution, Medicaid beneficiary health outcomes, and utilization and provider payment practices under Medicare Advantage; (3) amendments to hospital facility fee standards and the certificate of need and 340B programs; and (4) prohibitions on certain anticompetitive contracting practices.

See our previous legislative updates for details on the transparency enactments of New Jersey, Florida, and Minnesota.

PHARMACEUTICAL SALES REPRESENTATIVE REGISTRATION, REPORTING, AND DISCLOSURES

Under HB 6669, Connecticut will now require pharmaceutical manufacturers that employ an individual to perform the duties of a pharmaceutical sales representative to register annually on or before June 30 as a “pharmaceutical marketing firm” and pay a $150 registration fee. Consistent with many state laws, Connecticut defines “manufacturers” to include drug product packagers, repackagers, labelers, and relabelers, in addition to sterile compounding pharmacies and virtual manufacturers.

If a manufacturer does not register, such manufacturer is then prohibited from authorizing an individual (whether an employee or an individual that is simply being compensated by the manufacturer) to perform any of the duties of a pharmaceutical representative in Connecticut. These duties are defined to include marketing, promoting, or providing information regarding a human legend drug to a prescribing practitioner. A “prescribing practitioner” is defined as any licensed individual who is authorized to issue a prescription within that individual’s scope of practice.

As part of the registration process, each pharmaceutical marketing firm (i.e., the manufacturers) must provide the Department of Consumer Protection with a list of all individuals employed by the firm as pharmaceutical sales representatives, which will be published on the department’s website. After submitting its annual list, a pharmaceutical marketing firm must update the department within two weeks of anyone on the list leaving employment or any new hires in the pharmaceutical sales representative role.

Once registered, pharmaceutical marketing firms must, not later than July 1, 2024 for the initial registration and annually thereafter, submit the following information to the department regarding the performance of each of its pharmaceutical sales representatives during the previous calendar year:

• The aggregate number of contacts (defined below) that the pharmaceutical sales representative had with prescribing practitioners and pharmacists
• The specialty of each prescribing practitioner and pharmacist with whom the 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
• An aggregate report of all free samples, by drug name and strength, in a form and manner prescribed by the commissioner

The department will use the reported information on pharmaceutical sales representative activities to compile a report that will be submitted to the Secretary of the Office of Policy and Management and be published on the department’s website.

In addition to the reporting requirements imposed on registered pharmaceutical marketing firms, the pharmaceutical representatives themselves are also required to make certain disclosures. At the time of contact, the pharmaceutical representative must disclose in writing the following information to each prescribing practitioner or pharmacist with whom the pharmaceutical representative engages:

• The list price of a legend drug when a pharmaceutical representative provides information concerning the legend drug to the prescribing practitioner or pharmacist based on the dose and quantity of the legend drug as described in the medication package insert
• Information on the variation efficacy of the legend drug marketed to different racial and ethnic groups, if such information is available

“Contact” is defined broadly to mean any in-person communication or any communication transmitted by phone, email, text message, or other electronic means to promote or provide information relating to a legend drug.

If a pharmaceutical marketing firm fails to comply with any of the above, the Commissioner of Consumer Protection may impose sanctions including (1) refusal to authorize the issuance or renewal of a registration; (2) revocation, suspension, or the imposition of conditions on a registration; or (3) the assessment of penalties up to $1,000 for each violation.

MANUFACTURER TRANSPARENCY REPORTING

Under Connecticut’s existing reporting scheme, the executive director of the Office of Health Strategy is required to publish annually on or before March 1 a list of not more than 10 outpatient prescription drugs that, in the executive director’s discretion, are provided at a substantial cost to the state or are critical to public health and have undergone a specified increase in the drug’s wholesale acquisition cost (WAC).

In response, the manufacturer of an outpatient prescription drug included on the list is required to provide certain disclosures to the office, including a written narrative description of the factors that caused an increase in the WAC of the listed drug as well as aggregate, company-level research and development costs (plus other capital expenditures as the executive director deems necessary) for the most recent year for which final audited data is available.

Once HB 6669 becomes effective, these requirements will remain unchanged. However, HB 6669 will alter the underlying requirements for what constitutes a qualifying drug for inclusion on the executive director’s list as well as create an opportunity for public comment on the list prior to official publication.

Currently, an outpatient prescription drug is only eligible for inclusion on the list if the WAC for the drug, less all rebates paid to the state during the preceding calendar year, (1) increased by at least (i) 20% during the preceding calendar year or (ii) 50% during the preceding three calendar years; and (2) was not less than $60 for a (i) 30-day supply or (ii) course of treatment lasting less than 30 days.

HB 6669 lowers the threshold for both WAC increases and costs for a course of treatment, thereby expanding the pool of possible outpatient drugs eligible for inclusion on the executive director’s list. As amended, an outpatient prescription drug will be eligible for inclusion on the list if the WAC for the drug (1) increased by not less than 16% cumulatively during the preceding two calendar years and (2) was not less than $40 for a course of treatment.

Additionally, HB 6669 creates a minimum 30-day comment period wherein the executive director will publish a preliminary version of the list of outpatient prescription drugs prior to publication of the annual version.

During this comment period, any manufacturer of a listed drug may produce documentation to the executive director to establish that the WAC of the listed drug does not meet the requirements listed above. If the executive director finds that such listed drug does not in fact meet the requirements for publication, then the executive director will remove the drug from the list prior to publication, but not more than 15 days after the comment period closes.

IMPLICATIONS

While publication of costly outpatient drugs is more part and parcel with much of the transparency reporting seen across states, registration of pharmaceutical sales representatives is still uncommon. Connecticut joins just two states—Nevada and Oregon—alongside Chicago and the District of Columbia in requiring licensing or registration of, and requesting or requiring reporting by, pharmaceutical sales representatives.