Shanghai Introduces China's First Medical Representative Registration Management Measures

The Administrative Measures for the Registration of Pharmaceutical Sales Representatives Have Finally Been Released, Clarifying That Pharmaceutical Companies Are the Responsible Entities, Permitted Only to Conduct Academic Promotion, and Requiring That Filing Information Be Made Publicly Available.

VCBeat (WeChat ID: vcbeat), August 25 – Recently, the Shanghai Municipal Food and Drug Administration released a public notice soliciting comments on the “Trial Measures for the Registration and Management of Pharmaceutical Representatives in Shanghai (Draft for Comment)” (hereinafter referred to as the “Opinions”), sparking intense discussion within the industry.

Following the General Office of the State Council’s issuance in February of this year of the “Several Opinions on Further Reforming and Improving Policies for Drug Production, Circulation, and Use” (Document No. 13), and the release in May of the “Key Tasks for Deepening Healthcare System Reform in 2017” (hereinafter referred to as the “Tasks”), Shanghai has taken the lead nationwide by piloting the first local implementation rules for establishing a “Pharmaceutical Representative Registration and Management” system.

Many people still vividly recall the uproar caused by China Central Television’s exposure at the end of last year of pharmaceutical sales representatives bribing doctors. Pharmaceutical sales representatives, a profession seen as emerging with “original sin,” are regarded as key drivers behind inflated drug prices. To regulate pharmaceutical distribution, reforms must first target this group.

The “Opinions” issued by the Shanghai Municipal Food and Drug Administration are divided into four chapters and twenty-two sections, providing detailed provisions on the professional recognition of medical representatives, responsible entities, information registration, supervision and administration, and public disclosure.

The "Opinions" stipulate that medical representatives are professionals who engage in the dissemination, communication, and feedback of pharmaceutical products on behalf of pharmaceutical manufacturing enterprises. Medical representatives are responsible for formulating plans for pharmaceutical products (with a focus on new drugs)Academic Promotion Plan and Program, convey drug-related information to healthcare professionals, assist them in rational drug use, and collect and provide feedback on clinical drug utilization and adverse drug reactions.

This means that, from a regulatory perspective, pharmaceutical sales representatives will be limited to academic promotion, and the kickback- and volume-driven promotional model will become a thing of the past.

Pharmaceutical manufacturing enterprises shall be responsible for the management of their employed medical representatives., in accordance with industry management regulations and job requirements, impose restrictions on the educational background, major, and work experience of medical representatives, enter into formal labor contracts with them, and provide clear authorization.Conduct annual integrity education and professional training for pharmaceutical sales representatives., to ensure that the professional conduct of pharmaceutical sales representatives complies with relevant regulations.

Pharmaceutical companies should tighten recruitment criteria for medical representatives, raise standards for their professional competence, conduct regular integrity training, and ensure that their practices remain lawful and compliant.

Information registration is a key focus of the “Opinions.” The “Opinions” require that the registration of medical representative information be conducted in accordance with the principles of honesty and good faith,Ensure the Authenticity of Registration InformationNo one may forge, alter, lend, or transfer the registration information of medical representatives.

All medical representatives working in medical institutions in Shanghai shall be registered and filed.. The registration information of medical representatives in Shanghai shall be reviewed and entered by the pharmaceutical manufacturing enterprises that employ them, which shall also be responsible for the authenticity of the registered information.

Items to be registered for medical representatives include the representative’s name, gender, ID number, educational background, years of professional experience, and contact telephone number, as well as the name, business registration address, and legal representative of the affiliated pharmaceutical manufacturing enterprise.

Medical representative registration is conducted online."The Shanghai Medical Representative Registration System" is the sole platform for medical representative registration.; Once the information is registered online, it becomes effective immediately and a registration certificate is generated, which enterprises can print on their own.

Medical representative registration information, with the exception of ID numbers and contact phone numbers, may be disclosed to the public via the website.Medical institutions in Shanghai may query information on pharmaceutical representatives and their affiliated enterprises through the “Shanghai Pharmaceutical Representative Registration System.”

In terms of supervision and administration, the "Opinions" deliver a "heavy blow" to the management of medical representatives. The "Opinions" point out that drug manufacturing enterprises shall strictly implement their primary responsibility, strengthen education on laws, regulations, and professional ethics for medical representatives, and provide standardized training on business practices.Medical representatives who violate laws and regulations or engage in serious dishonesty shall be subject to strict disciplinary action, and their individual adverse records shall be submitted to the “Shanghai Medical Representative Registration System.”

Regarding the heavily regulated issue of “kickbacks,” the Opinion explicitly states that medical representatives and their affiliated enterprises engage inActs of commercial bribery that constitute a crime shall be subject to criminal liability in accordance with the law.; if the act does not constitute a crime, it shall be handled by the administrative department for industry and commerce in accordance with the law.

Where pharmaceutical sales representatives and their affiliated enterprises violate the relevant provisions of the Shanghai Regulations on the Management of Adverse Records for Commercial Bribery in the Pharmaceutical Procurement and Sales Sector, the health and family planning administrative departments and the drug centralized bidding and procurement administrative departments shall impose disciplinary actions in accordance with regulations.

For medical representatives with adverse records, their registration numbers shall be revoked;If a pharmaceutical manufacturer has adverse records, or if five or more medical representatives affiliated with the same enterprise have adverse records within one year, the registration information of all medical representatives from that enterprise shall be revoked.

For registration numbers revoked due to adverse records, the Food and Drug Administration shall promptly notify the municipal health and family planning department and the medical insurance department, and make a public announcement in accordance with relevant regulations. Generally, re-registration will not be granted within two years from the date of revocation. This means that once caught violating regulations, an individual is prohibited from working as a pharmaceutical representative in Shanghai for two years.

As China’s first detailed regulatory framework for the registration and management of medical representatives, Shanghai’s newly issued “Guidelines” still leave many unresolved issues. For instance, if pharmaceutical manufacturers are the sole entities responsible for medical representatives, from where do medical distributors and professional marketing firms (CSOs) derive the legal qualifications for their personnel to engage in marketing activities? Furthermore, given that many small pharmaceutical companies currently lack dedicated academic promotion teams, how can they rapidly build and effectively manage such teams in the short term if medical representatives must be directly employed by the manufacturers themselves?

These issues will all affect the final implementation of the “Opinions.” Of course, the “Opinions” are not yet in their final form; entities and individuals with comments may submit relevant information to the Policy and Regulations Division of the Shanghai Food and Drug Administration by September 30 this year, leaving ample room for further refinement of the “Opinions.”

The “kickback scandal” exposed by CCTV’s undercover reporting late last year struck a nerve among the Chinese public regarding the difficulties and high costs of accessing medical care, leading them to believe thatPharmaceutical Representatives Are the Driving Force Behind Soaring Drug Prices, briefly venting emotions regarding the pharmaceutical system.

By February this year, the provisions on the registration and filing of medical representatives in Document No. 13 issued by the China Food and Drug Administration (CFDA) brought the management of medical representative registration onto the agenda. In May, the General Office of the State Council released this year’s tasks for “Deepening the Reform of the Medical and Healthcare System.” Subsequently, local competent authorities successively announced that they would improve relevant regulations within the year.

Looking back at the evolution of the pharmaceutical sales representative industry, it once served as a bridge between pharmaceutical companies and physicians, introducing globally leading drugs and treatment modalities to China in its early stages.ultimately becoming synonymous with “pharmaceutical corruption”, quite lamentable.

The profession of pharmaceutical sales representative was not originated in China. Initially, there were no pharmaceutical sales representatives in China; it was not until the late 1980s, with the gradual establishment of joint-venture and foreign-funded pharmaceutical companies in the country, that this role was introduced to China as a new development.

Foreign-funded pharmaceutical companiesThe initial function of medical representatives was to introduce the efficacy of drugs to physicians from the perspective of evidence-based medicine., instructions for use, and timely reporting of adverse reactions; sales data has never been used as a performance evaluation metric.

Changes occurred in the mid-1990s, as the number of domestic pharmaceutical companies increased and a large volume of generic drugs entered the market, intensifying competition within the pharmaceutical industry. With similar efficacy and comparable pricing, pharmaceutical representatives began offering gifts, cash envelopes (hongbao), and kickbacks to physicians to influence their prescribing decisions in favor of their companies’ products.“How to Develop Hospital Accounts” and “How to Maintain Relationships” Have Become Mandatory Courses for Pharmaceutical Sales Representatives Entering the Industry.

In a mature healthcare market, originator drugs and surgical instruments indeed require academic promotion and professional support from manufacturers during their clinical adoption. Meanwhile, conventional commercial promotion of pharmaceuticals also falls within the scope of medical representatives’ responsibilities. However, the legal boundary lies in prohibiting the inducement of physicians’ prescribing behaviors through financial incentives. Kickback-driven sales distort physicians’ prescribing practices, skew the market’s compensation structure, ultimately exacerbate doctor-patient relationships, provoke public backlash, and prompt regulatory authorities to take stringent enforcement actions.

According to the data report released by Yaoxie,In 2016, the number of pharmaceutical sales representatives could reach 3 million., amid tightening policies, the future path for these three million people remains undetermined.

However, any reform is accompanied by growing pains. Only with the courage to scrape the bone to remove the poison and the determination to cut off one’s own wrist can the promotional activities of pharmaceutical representatives be brought back on track.