New Nevada Law Requires Companies to Adopt a Marketing Code of Conduct
July 5, 2007On June 14, 2007, Nevada Governor Jim Gibbons signed into law Assembly Bill 128, which is similar to the drug marketing compliance law that went into effect in California in July 2005. Nevada’s new law, which goes into effect on October 1, 2007, requires a manufacturer or wholesaler who employs a person to sell or market a drug or device in the state to adopt a marketing code of conduct establishing the practices and standards that govern the marketing and sale of their products. The marketing code of conduct must be based on applicable legal standards and should guarantee that the manufacturer’s actions are “intended to benefit patients, enhance the practice of medicine and not interfere with the independent judgment of health care professionals.”
The new marketing code of conduct requirement can be fulfilled by adopting the most recent version of the Pharmaceutical Research and Manufacturers of America’s (“PhRMA’s”) “Code on Interactions with Healthcare Professionals,” which California currently requires drug companies to have adopted. In California, companies must adopt new versions of the PhRMA Code within 6 months of any PhRMA Code update. In Nevada, however, it is unclear whether a company that has adopted PhRMA’s Code is required to adopt subsequent revisions of PhRMA’s Code to remain in compliance and, if so, how long a company would have to do so. The Nevada Board of Pharmacy may clarify this point in a future rulemaking.
Unlike California’s law, the Nevada marketing law does not require that any particular elements be included in a company’s marketing code of conduct. For instance, the Nevada law does not require companies to specify limits on gifts or incentives to health professionals. While California requires companies to adopt the Office of Inspector General’s April 2003 “Compliance Program Guidance for Pharmaceutical Manufacturers,” Nevada does not. Nevada also does not currently require a company to post its marketing code of conduct on its website, as is required in California.
In addition to adopting a marketing code of conduct, each company marketing or selling drugs or devices in Nevada must take a number of complementary actions. First, each company must adopt a training program to regularly train appropriate staff regarding the company’s marketing code of conduct. All sales and marketing staff must receive this training. Second, each company must conduct an annual audit to monitor compliance with its marketing code of conduct. Third, a company must adopt procedures for investigating non-compliance with its code. Finally, each company must identify a compliance officer responsible for developing, operating, and monitoring the code.
Each company subject to this law must also make an annual report to the Nevada Board of Pharmacy. The report must contain: (1) a copy of the company’s marketing code of conduct; (2) a description of its training programs; (3) a description of its investigation policies; (4) the name and contact information of the responsible compliance officer; and (5) a certification that the company has conducted its annual audit and is in compliance with the law. The legislation also directed the Board of Pharmacy to “adopt regulations providing for the time of the submission and the form of the information required.” The date of the initial report was not specified in the statute.