Drug Reps Set to Become Slaves to Their iPads

In recent weeks SRxA’s Word on Health has run a number of stories about iPads.  For the record, we don’t have shares in Apple, nor do we even have iPads, though we’re keeping our fingers crossed that Father Christmas might bring us one this year.   This latest iPad related post is particularly interesting as it could potentially change the pharmaceutical industry forever.

Last week, GlaxoSmithKline (GSK) sales reps were handed a lesson in “be careful what you wish for.”  If they win their ongoing U.S. Supreme Court appeal over overtime pay, their employers may well make them slaves to their iPads by introducing factory worker style rules for clocking in and out.

For our readers unfamiliar with the case, hundreds of GSK ’s pharmaceutical sales reps signed on to a class action lawsuit demanding overtime pay. The suit  was filed in 2006 by lead plaintiff Anthony Coultrip, who worked for GSK between 2003 and 2005 and hinges on a counter-intuitive definition of what a sales rep actually is. Under federal labor law, salespersons who earn commissions are exempt from protections requiring overtime pay for extra hours worked. Drug reps, however, don’t actually “sell” drugs – they merely promote them and the sale occurs later at the pharmacy. The GSK reps argue that makes them “promotion workers” whose work is so routine that they ought to get overtime.

Anyway…back to the story. If the Supreme Court rules in favor of Mr Coultrip and his colleagues, and institutes overtime pay, life for the nation’s 90,000 drug reps could change dramatically.  Instead of the relative independence and limited accountability that they enjoy today, the life of a pharma sales rep could become a nightmare  of check-ins, surveillance, time-sheets and electronic monitoring.

Hardly surprising given that a huge sum of money is at stake here.  Since the litigation began, at least 19 pharmaceutical companies have been sued by sales reps demanding overtime pay.

To try to minimize overtime payment liability, industry analysts predict that clocking in and out of work via an iPad will soon become the most important act of a rep’s day. Failure to clock in and out may result in loss of pay for that period of time.  Repeatedly “forgetting to clock in or out” may result in disciplinary action including the possibility of termination.

Taking this to extremes, industry insiders predict a scenario in which:

  • Reps will be GPS tracked to verify time and location for all work related time during the work day.
  • The same tracking will also be used to verify mileage for business versus personal use of the company car.
  • Any rep planning to take more than two hours of personal time during a workday may have to get prior approval for a vacation day.
  • Drug reps work will not be allowed to work more than 8 hours per day or more than 40 hours per week without prior written approval from their manager.
  • If reps receive emergency customer calls, outside of their work day hours, they will have to adjust subsequent work time so as not to exceed the 40 hours per week maximum.
  • They will be required to clock out and back in for their mandatory 15 minute breaks, in the morning and afternoon.  They will not be allowed to skip breaks or to do work related activities during breaks.
  • Because all work related travel time will count against the 8 hour work day, most company meetings will be by tele- or video-conference to avoid travel.

However, not all  reps believe they deserve overtime. On cafepharma , the anonymous bulletin board for drug industry gossip, some have suggested that reps don’t work the hours they are meant to work, let alone qualify for overtime.

What’s better?  Is overtime pay worth the loss of freedom and Draconian restrictions?  As always, we’d love to hear from you.

Statistical Significance is Nothing to be Sneezed at Says US Supreme Court

If you have ever had a stuffy nose or invested your hard-earned cash in the stock market, the facts of a recent Supreme Court case will probably disturb you.

The case, Matrixx Initiatives Inc. v. Siracusano involved the popular homeopathic nose spray – Zicam.

This product was responsible for the vast majority of Matrixx’s revenues, and investors loved the company because the nasal remedy sold well.  The stock price soared, but then the company learned that Zicam had caused some users to lose their sense of smell.  As it turned out,  approximately 130 users had reported the adverse side effect, the medical term for which is anosmia.

Although the common view of anosmia is that it is a trivial inconvenience, it can have a number of harmful effects.  Not only do patients find food less appetizing, their loss of smell can also be dangerous because it hinders the detection of gas leaks, fire, and spoiled food. Loss of smell may also lead to the loss of libido.

Matrixx, however, concerned that the news would lead to a loss in sales, decided not to report the rare side effect to investors.    The company’s reasoning?  The side effect was not the kind of “material information” that securities laws would require it to disclose because it was not statistically significant when considered in the context of the patients who had used the drug.

The problem for Matrixx arose when national news got wind of the anosmia side effect.  This lead to the issue of FDA warnings and ultimately Matrixx’s decision to take the drug off the market, causing stock prices to fall.

So, investors sued the company saying that the undisclosed information was indeed “material” and might have caused them to make a different decision about whether to buy Matrixx stock.

During the trial, in a brief to the court, PhRMA said, “A collection of adverse event reports that is not statistically significant does not permit a reasonable inference that a particular medicine actually caused the reported adverse event.”

The Supreme Court disagreed.  In a unanimous opinion by Justice Sotomayor, it made clear that the word “material” does not equate with “statistically significant”.  Instead, the Court said, the important consideration is what information a reasonable investor would regard as relevant to the decision to buy stock; such an inquiry would include questions about the source and reliability of the information.  While not all reports to authorities about side effects would be material under this test, the Court held, those about the Zicam side effect would have been because they came from medical experts.

While almost everyone involved in pharmaceutical marketing is aware of the FDA’s “Fair Balance” requirements it seems that full disclosure must now include all corporate, as well as product, information.  In fact, the Supreme Court ruling may have greater repercussions for adverse event reporting by the drug industry than any guidelines the FDA has ever issued!