China’s main healthcare regulatory bodies, including the National Medical Products Administration, released draft administrative measures for pharmaceutical representatives intended to strengthen anti-corruption efforts and clarify obligations and compliance expectations in China’s healthcare industry.
Seven main regulatory authorities overseeing the healthcare industry in China, including China’s National Medical Products Administration (NMPA) and the State Administration for Market Regulation (SAMR), jointly released a draft version of the Administrative Measures for Pharmaceutical Representatives for Public Comment (Draft Administrative Measures). Once finalized and implemented, the Draft Administrative Measures will replace the current Administrative Measures for Record-Filing of Pharmaceutical Representatives (for Trial Implementation) (Record-Filing Measures) which have been in effect since December 1, 2020.
Compared with the Record-Filing Measures, the Draft Administrative Measures highlight the anti-corruption emphasis and shed more light on obligations and compliance expectations for pharmaceutical representatives (PRs) as well as other parties involved in pharmaceutical academic promotion, including the Marketing Authorization Holders (MAHs), healthcare institutions, and healthcare professionals (HCPs). Notably, the Draft Administrative Measures clarify that PRs should be employed by the MAHs, and the MAHs should be the primary responsible party for the pharmaceutical academic promotion conducted by PRs.
The Draft Administrative Measures expand the single regulation standpoint under the Record-Filing Measures from the administrative record-filing of PRs mainly supervised by the NMPA to a more extensive multi-authority supervision, combining the enforcement forces from healthcare administration, medical insurance administration, market regulation, and even the public security bureau for potential bribery-related violations.
Emphasis on PRs’ Key Responsibility of Pharmaceutical Academic Promotion
The Draft Administrative Measures refine the definition of PRs under the Record-Filing Measures, clarifying that PRs should be employed by MAHs to convey, communicate, and provide feedback on drug information and also be dedicated to pharmaceutical academic promotion.
In addition, the Draft Administration Measures limit the permitted pharmaceutical academic promotion of PRs to (1) conveying drug-related information to HCPs; and (2) collecting and providing feedback on clinical use, adverse reaction, and clinical demands, etc., of drugs. Two other main tasks of PRs under the current Record-Filing Measures—i.e., formulating plans and programs for promotion of pharmaceutical products and assisting in rational use of pharmaceutical products of MAHs by HCPs—have been removed in the Draft Administration Measures.
Such revisions highlight the regulatory focus of separating the pharmaceutical academic promotion of PRs from the sales-driven marketing of traditional sales representatives, and the emphasis of avoiding undue influence on HCPs’ prescription practices.
Strengthen the Prohibition of Linking Academic Promotion to Sales Results
The Draft Administrative Measures retain the provisions in the Record-Filing Measures, stipulating that “MAHs shall not assign drug sales tasks to pharmaceutical representatives, and require pharmaceutical representatives to collect payments, process purchase and sales bills, and carry out other sales activities,” and that PRs should not “undertake sales tasks, collect payments, process purchase and sales bills, and other sales activities” during pharmaceutical academic promotion.
These retained provisions have been the subject of longstanding debate in China’s pharmaceutical industry, with some questioning whether a violation would occur only if both “assigning drug sales tasks to pharmaceutical representatives” and “requiring pharmaceutical representatives to collect payments, process purchase and sales bills, and carry out other sales activities” were present simultaneously.
As one of the main enforcement authorities under the Draft Administrative Measures, the SAMR appears to be more straightforward in this regard. The SAMR explicitly states that “healthcare companies are prohibited from assigning sales targets to pharmaceutical representatives and promotion representatives of medical devices” in its draft version of the Compliance Guidelines for Pharmaceutical Companies to Prevent Commercial Bribery Risks (for public comment) released in October 2024.
In light of the above, although the Draft Administrative Measures repeat the two provisions related to sales tasks under the current Record-Filing Measures without change, the view of competent regulatory authorities now appears to be clearer and stricter that pharmaceutical academic promotion should be distinguished from ordinary sales-driven marketing promotion and should not be directly linked to sales results.
From this perspective, the Draft Administration Measures may indicate stringent control to prohibit the assignment of sales tasks to PRs (regardless of whether any specific sales activities have been carried out), as PRs are supposed to be dedicated to pharmaceutical academic promotion other than being driven by the sales results.
Tighten the Scope of Pharmaceutical Academic Promotion and Elaborate the Prohibitions for PRs
As discussed above, the main content of PRs’ pharmaceutical academic promotion has been limited to those related to pharmaceutical information communication under the Draft Administrative Measures to prevent PRs from potentially being involved in sales-related promotion planning or intervening in HCPs’ rational use of drugs in clinical practices. In addition, the Draft Administrative Measure removes the enumeration of permitted forms of pharmaceutical academic promotion of PRs in the Record-Filing Measures, including without limitation, academic conferences, and seminars.
Together with the narrow-down of the scope of permitted activities, the Draft Administrative Measures further strengthen the control over PRs’ pharmaceutical academic promotion by integrating and refining the negative list of prohibited activities previously scattered in other compliance regulations or guidelines.
In addition to retaining the prohibitions under the Record-Filing Measures on collection of prescription statistics, undue influence on HCPs’ prescription or clinical use of drugs, etc., the Draft Administrative Measures add and elaborate the prohibitions on PRs’ provision of sales-amount-or-volume-attached donation, financial aid or sponsorship to healthcare institutions, improper transfer of value to HCPs or healthcare institutions in the form of donations, financial aid or sponsorship, infringement of patient information and internal information of healthcare institutions.
These revisions highlight the regulatory focus that pharmaceutical academic promotion by PRs should be independent from drug sales activities, and the interactions between PRs and HCPs as well as healthcare institutions should not be, in any way, attached to sales results of any specific pharmaceutical products.
That said, further refinement would be needed to specify the implementation details, otherwise such revisions may create new uncertainties for MAHs and PRs in terms of the appropriate forms and the compliance boundaries of pharmaceutical academic promotion to be carried out by PRs and leave arguably excessive discretion for law enforcement agencies. For example, reasonable questions may arise regarding the boundary between the permitted collection and provision of feedback on the clinical use of drugs and the relatively broad prohibition of “activities that could interfere or influence rational use of drugs in clinical practices.”
Extend the Responsibility and Supervision of PRs’ Pharmaceutical Academic Promotion to Healthcare Institutions
In addition to restating the requirements for record-filing of PRs by MAHs via the designated filing platform of NMPA under the current Record-Filing Measures, the Draft Administrative Measures expressly require that before carrying out pharmaceutical academic promotion, MAHs should also register the PRs with the corresponding healthcare institutions where they intend to carry out pharmaceutical academic promotion by submitting the record-filing information of these PRs including without limitation, a power of attorney signed by the MAHs, the certificates of identity, and the record-filing forms of relevant PRs.
Further, the Draft Administrative Measures require that healthcare institutions designate an internal department to register and manage PRs carrying out academic promotion inside the corresponding healthcare institutions and maintain a corresponding ledger to record the registration and activities of these PRs. Further, it is now mandatory under the Draft Administrative Measures that healthcare institutions log on the NMPA’s designated filing platform to verify the identity of PRs and maintain corresponding records for further inquiry.
In the current practice, while the Record-Filing Measures generally require that pharmaceutical academic promotion of PRs be subject to prior consent of corresponding healthcare institutions, in the absence of a unified mandatory requirement, not all the healthcare institutions have established a corresponding internal control mechanism to record and monitor activities of PRs or would verify the information of relevant PRs through NMPA’s designated platform when the PRs come to the healthcare institutions, leaving loopholes for unfiled persons to fraudulently use the identity of a filed PR to interact with HCPs inside the healthcare institutions.
These revisions in the Draft Administrative Measures indicate the regulatory trend under which healthcare institutions are required to actively undertake responsibilities to manage and supervise pharmaceutical academic promotion of PRs. Accordingly, it is anticipated that healthcare institutions would strengthen their internal control mechanism in this regard, and apply stricter requirements to standardize in-hospital visits of PRs, including without limitation, a nation-wide implementation of the “Three Fixes” (fixed timing, fixed location, and fixed persons) and “Four Haves” (have reservation, have agenda, have record, and have monitoring) requirements currently applied by the health administration in Shanghai.
Specify Qualifications of PRs and Impose New Restrictions on MAHs for PRs Employment
As discussed above, the Draft Administrative Measures now require that PRs should be employed by MAHs, and MAHs should enter into employment contracts as well as a compliance commitment letter with its PRs.
If implemented as it is currently drafted, this revision means that the option under the current Record-Filing Measures allowing an MAH to either employ a PR by itself through an employment contract or appoint a PR who is not necessarily an employee of the MAH through an authorization letter would no longer be permitted. In the current practice, the foresaid option creates a possible arrangement where MAHs subcontract PRs, as seen in the practice of Contract Sales Organizations (CSOs) hiring PRs and MAHs authorizing PRs solely through an authorization letter which may add extra “layer” to separate the MAHs from compliance risks arising from the practices of such subcontracted PRs.
Further, the Draft Administrative Measures specify the qualification requirements for PRs, requiring that PRs should have (1) bachelor or above degree (or intermediate or above professional title) in medicine, pharmacy, or related majors, (2) clinical or pharmaceutical theoretical knowledge and practical experience, (3) pharmacological knowledge appropriate to the pharmaceutical products to be promoted, (4) training from the MAH and pass the relevant assessment. Notably, the Draft Administrative Measures specifically prohibit MAHs from employing unqualified PRs and PRs that have historic commercial-bribery-related records.
Establish Anti-Commercial Bribery Focused Comprehensive Supervision and Enforcement Mechanism
The Draft Administrative Measures call for a comprehensive supervision and enforcement mechanism with the primary focus against commercial bribery during pharmaceutical sales and distribution, which is not limited to the multi-authority collaborative supervision among law enforcement agencies, but also encourage industry self-discipline as well as social supervision in reporting potential misconducts by PRs and MAHs. This echoes the previous implementation of whistleblowing as a strategy against corruption. Enforcement agencies in Beijing, Chongqing, Hainan, Yunnan, Sichuan, Shanxi, and Fujian have already introduced new channels for reporting corruption-related matters in the healthcare sectors.
Further, the Draft Administrative Measures adopt more comprehensive and diversified risk control measures applied by multiple enforcement agencies against MAHs and PRs in violation, including restriction on duration of academic promotion inside healthcare institutions, restriction on entering into specific health institutions, restriction on participating in drug pricing and procurement evaluation, restriction on signing the designated medical insurance service agreement, etc.
Notably, the Draft Administrative Measures restate the penetrating credit evaluation on MAHs who have been involved in repeat offenders, large-scale bribes, and bribes involving multiple individuals, as introduced by the annual framework guideline of China’s anti-corruption campaign in the healthcare sector in 2024, the Notice on Issuing the Key Points of Correcting Improper Practices in Pharmaceutical Purchase and Sales as well as Medical Services in 2024.
It is anticipated that the Draft Administrative Measures will be further refined and clarified when officially released or in subsequent implementation guidelines. While the implementation details are still pending, we believe the Draft Administrative Measures to some extent illustrate the general regulatory trend of enhancing regulation over pharmaceutical academic promotion, and the anti-corruption and anti-bribery focus. MAHs should be mindful of strategic and operational implications as they prepare for the impending enforcement of the Draft Administrative Measures:
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