[Federal Register Volume 77, Number 43 (Monday, March 5, 2012)]
[Rules and Regulations]
[Pages 12997-13009]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-5279]


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DEPARTMENT OF VETERANS AFFAIRS

38 CFR Part 1

RIN 2900-AN42


Drug and Drug-Related Supply Promotion by Pharmaceutical Company 
Representatives at VA Facilities

AGENCY: Department of Veterans Affairs.

ACTION: Final rule.

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SUMMARY: This final rule amends the Department of Veterans Affairs (VA) 
regulations regarding access to VA facilities by pharmaceutical company 
representatives. The purposes of the rule are to reduce or eliminate 
any potential for disruption in the patient care environment, manage 
activities and promotions at VA facilities, and provide pharmaceutical 
company representatives with a consistent standard of permissible 
business practice at VA facilities. The amendments will facilitate 
mutually beneficial relationships between VA and pharmaceutical company 
representatives.

DATES: Effective Date: This final rule is effective April 4, 2012.

FOR FURTHER INFORMATION CONTACT: Louis E. Cobuzzi, PBM Services (119), 
Veterans Health Administration, Department of Veterans Affairs, 810 
Vermont Avenue NW., Washington, DC 20420; (202) 461-7362. (This is not 
a toll-free number).

SUPPLEMENTARY INFORMATION: Under 38 U.S.C. 303, the Secretary of 
Veterans Affairs is responsible for ``the proper execution and 
administration of all laws administered by the Department and for the 
control, direction, and management of the Department.'' The Secretary 
has authority to prescribe all rules necessary to carry out the laws 
administered by the Department, such as section 303 regarding control 
and management of the Department. See 38 U.S.C. 501(a). VA has 
implemented this authority, as it pertains to management of VA 
facilities, in 38 CFR part 1.
    VA amends 38 CFR part 1 to regulate access to VA medical facilities 
by pharmaceutical company representatives promoting drugs and drug-
related supplies. Currently, many policies regarding access to VA 
facilities are established and maintained at the local level, either by 
Veterans Integrated Service Network (VISN) leaders or by administrators 
at particular facilities. A VISN, which we define in Sec.  1.220(b), is 
a network of VA medical facilities located in a particular region. 
There are 21 such regions, and the areas that they service can be found 
at http://www.vacareers.va.gov/networks.cfmm. On May 11, 2010, we 
proposed VA-wide rules that would be followed at the VISN and local 
levels.
    We received five comments on the proposed rule. Although we make a 
few modifications based on these comments and some organizational 
changes for improved clarity, we otherwise adopt the rule as proposed 
for the reasons discussed in the May 11, 2010, notice. A detailed 
consideration of the comments follows.

Requests for New Definitions

    In response to the comments concerning the scope of Sec.  1.220 as 
a whole, we have added a ``Scope'' paragraph, designated as paragraph 
(a), that states: ``This rule governs on-site, in-person promotional 
activities, including educational activities, by pharmaceutical company 
representatives at VA medical facilities. It does not apply to the 
distribution of information and materials through other means.'' This 
note clarifies that the rule governs only physical access to VA medical 
facilities and that information and materials can be distributed 
through other means than in-person at a VA medical facility. Consistent 
with this clarification of the scope of the rule, we have revised the 
heading of Sec.  1.220 to ``On-site activities by pharmaceutical 
company representatives at VA medical facilities.'' Because we inserted 
a new paragraph (a) and made other organizational changes to the rule, 
the paragraph designations used in the proposed rule have changed. 
Throughout this rulemaking we cite to both the proposed rule paragraph 
designation and the final rule paragraph designation.
    We note that we have made a technical revision to correctly refer 
to the ``official National Formulary.'' The proposed rule had referred 
to the ``official National Formulary of the United States,'' which is 
not the correct title of the National Formulary.
    A commenter stated that the proposed rule does not clearly define 
``educational programs and materials.'' The commenter stated that 
proposed paragraph (d) ``appears to apply to programmed events with an 
educational, rather than promotional, purpose * * * and the materials 
associated with such events.'' To clarify the applicability of proposed 
paragraph (d), now designated as paragraph (f), we have added the 
following: ``An educational program is a pre-scheduled event or meeting 
during which a pharmaceutical company representative provides 
information about a drug or drug-related supply.'' We have also 
modified the word ``materials'' where it appears in paragraph (f) with 
the word ``associated'' to make clear that the materials discussed in 
paragraph (f) are those materials intended for use in connection with 
an educational program. We note that this definition applies only to 
this section and does not apply to the similar terms as used by other 
U.S. Government agencies, such as the Food and Drug Administration 
(FDA), in their regulations or guidances.

[[Page 12998]]

    The commenter also argued that proposed paragraph (d), now 
designated as paragraph (f), may be susceptible to a broad 
interpretation that would cover ``most promotional materials,'' such as 
documents that instruct patients on how to take their medication or 
educate physicians about the side-effects associated with particular 
medications. This commenter, as well as others, appears to be concerned 
with the general breadth and scope of proposed paragraph (d), and we 
agree that these can be clarified. The purpose of proposed paragraph 
(d) was to monitor materials distributed on VA grounds in connection 
with an educational program. As explained in the proposed rule, we have 
concerns that a VA patient will obtain such materials and misinterpret 
them, which could interfere with that patient's clinical course of 
treatment. As explained above, we revised the rule so that this 
paragraph clearly applies to educational programs and the materials 
associated therewith. On-site distribution of materials outside the 
context of an educational program is addressed in paragraph (h)(6) of 
the final rule, as discussed later in this rulemaking.
    One commenter suggested that VA delete proposed paragraph (d) 
entirely because there is insufficient clarity about what constitutes 
``programs,'' noting that the rule could restrict the provision of 
educational materials mandated by the FDA. To address this comment, we 
have explicitly stated in current paragraph (f) that ``[t]he approval 
authority will deem suitable any educational program and associated 
materials if it is part of a risk evaluation and mitigation strategy or 
other duty imposed by the Food and Drug Administration.'' However, we 
note that even such educational programs must be submitted to the 
approval authority for review to ensure appropriate scheduling and that 
such educational program is indeed an obligation imposed by the FDA. We 
also note, as explained later in this preamble, that the required 
notice for an educational program may be given on a shortened basis in 
certain cases.
    Also related to proposed paragraph (d), commenters requested that 
VA define ``summary of the program and all materials'' and ``well in 
advance of the proposed date.'' VA's intent is to require that all 
educational programs and associated materials be submitted, and the 
inclusion of the word ``summary'' caused confusion in this regard, so 
we removed the word ``summary'' from the paragraph. For ``well in 
advance of the proposed date,'' we have changed the phrase in current 
paragraph (f) to read: ``at least 60 days before the proposed date of 
the educational program or distribution of associated materials, unless 
VA agrees in an individual case to a different date.'' We believe that 
this gives VA adequate notice, while allowing for flexibility in cases 
where the pharmaceutical company cannot provide 60 days advance notice 
and VA agrees that, in a particular case, we do not need the full 60 
days to review the materials.
    A commenter requested that VA define ``non-promotable,'' as used in 
proposed paragraph (b)(2), because the word could be interpreted 
subjectively, and therefore may not be applied consistently in the 
field. Commenters also requested that VA publish a list of non-
promotable drugs. We agree that it will be useful to pharmaceutical 
company representatives to provide information about where to find a 
list of such drugs. Thus, we define non-promotable drugs as ``drugs 
designated by VA as non-promotable'' and inform the public that a list 
of such drugs will be available upon request or on VA's Web site at 
http://www.pbm.va.gov. We have also removed the following sentence from 
proposed paragraph (b)(2), now designated paragraph (c)(3): ``A list of 
the drugs or drug-related supplies classified by VA as non-promotable 
is available at www.pbm.va.gov, or may be requested by contacting the 
local office of the Chief of Pharmacy Services.'' This sentence is no 
longer necessary because virtually identical language has been used in 
the definition for non-promotable drugs.
    We disagree with additional comments suggesting that VA should 
develop a mechanism that allows pharmaceutical manufacturers to 
participate in the determination of whether a drug is non-promotable. 
We reject the commenters' suggestions in order to maintain the safety 
of our patients, and so that we can continue to make quick, important 
clinical responses to scientific and medical developments related to 
pharmaceutical products. VA must independently determine which drugs to 
designate as non-promotable. In determining whether a drug is non-
promotable, VA considers many factors, including price, a determination 
that a certain drug has no clinical benefit, or a finding that 
promotional materials exceed the clinically determined specific use of 
a drug--such as when VA makes a clinical decision to utilize a drug for 
a narrow purpose. For example, there may be a drug or new molecular 
entity that does not appear on the VA National Formulary (VANF), which 
VA uses to treat patients for diseases that VA would otherwise be 
unable to treat. In such instances, VA must continue to maintain strict 
adherence to its criteria-for-use and prevent undesired promotion of a 
drug. Therefore, VA must be able to designate a drug as non-promotable 
in order to enforce any attempt by pharmaceutical company 
representatives to systematically promote the use of a certain drug for 
uses outside of those sanctioned by VA. Finally, we note that VA will 
rarely, if ever, classify a drug as non-promotable. In fact, we 
currently do not have any drugs classified as non-promotable, as 
reflected on our Web site at http://www.pbm.va.gov.
    Commenters suggested that VA define ``facility initiative,'' as 
used in proposed paragraph (b)(4). We understand that this term may 
create some confusion, and rather than define the term, we have revised 
the regulation text so that it no longer uses that term and instead 
fully explains the requirements. Specifically, in new paragraph (c)(2), 
we clarify the meaning of the requirements that we set forth in 
proposed paragraphs (b)(3) and (4). We require that the promotions must 
have ``significant educational value and must not inappropriately 
divert VA staff from other activities that VA staff would otherwise 
perform during duty hours, including patient care and other educational 
activities.'' This language accurately clarifies intent of the previous 
``facility initiatives'' language. We reject an additional request that 
VA identify the decision-maker who determines whether these 
requirements for promotion are met under the rule. VA respects the need 
for its various facilities to be permitted to initiate creative 
responses to the needs of their specific patient population, as well as 
surrounding communities. Moreover, different facilities will have 
different management resources available to make these determinations. 
We will continue to allow each facility to delegate to the appropriate 
staff member to make this determination.
    Commenters recommended that VA define ``promote'' or ``promotion'' 
in order to clarify that safety discussions and scientific exchanges 
are not included in the rule. Commenters also suggested that we clarify 
whether medical or clinical liaisons are specifically excluded from 
being considered promoters. We understand that employees of 
pharmaceutical companies attempting to visit VA facilities work in 
different capacities and possess varying levels of expertise. We also 
understand that this could lead to confusion about application of the 
rule. We clarify this issue by defining a

[[Page 12999]]

``pharmaceutical company representative'' as ``any individual employed 
by or contracted to represent a pharmaceutical manufacturer or 
retailer.'' By defining pharmaceutical company representative broadly, 
we remove any ambiguity as to whether an employee of a pharmaceutical 
company, contracted or otherwise, should follow the procedures set out 
in this rule. Clinical liaisons may freely discuss the benefits of a 
medication manufactured or sold by their employer simply by following 
the requirements set out under this rule. We also note again that 
pharmaceutical company representatives are free to provide safety and 
scientific information through means other than on-site, in-person, 
visits to VA facilities.
    Commenters suggested that VA define the terms ``manufacturer 
sponsored program,'' ``promotional materials,'' ``patient education 
materials,'' and ``individual departments.'' We disagree with the 
commenters' suggestions because the meaning of each of these terms is 
clear in the context of the rule. They are accepted terms of art in the 
industry that are well understood by pharmaceutical company 
representatives and VA staff. Commenters also suggested that VA define 
the term ``marketing activities'' as used in proposed paragraph (d)(2). 
We have decided to remove this paragraph referencing ``marketing 
activities'' because we believe that the requirements for educational 
program and associated materials are adequately described in the rest 
of proposed paragraph (d), now designated paragraph (f).

Requests for Modifications to Proposed Definitions

    Commenters suggested that VA modify the definition of ``drugs'' to 
clarify the meaning of chemicals, the impact on drugs used for medical 
research, the basis for decisions based on drugs, and who that 
decision-maker will be. To address these comments, we have decided to 
adopt the definition of ``drug'' used in the Federal Food, Drug, and 
Cosmetic Act (21 U.S.C. 301 et seq.). We modified the definition only 
to remove internal cross-references. By doing so, we hope to eliminate 
the confusion expressed by the commenters. As we stated in the preamble 
to the proposed rule, we intend the term ``drug'' ``to be inclusive of 
all items typically promoted by pharmaceutical sales representatives,'' 
and thus have adopted the definition used by Congress in the Federal 
Food, Drug, and Cosmetic Act. We note that nothing in this regulation 
is intended to conflict with FDA's regulation regarding the promotion 
of investigational new drugs, see 21 CFR 312.7.
    Several commenters recommended modifications to the definition of 
``drug-related supplies'' because they assert that it is unclear 
whether VA intends to include medical devices in this definition. We 
believe that the term as defined properly and clearly covers those 
devices required to use a given drug in accordance with the prescribed 
use, but we have added as examples of such supplies inhalers, spacers, 
insulin syringes, and tablet splitters. These devices are generally 
given out by VA pharmacies in our patient setting, as opposed to other 
offices within VA facilities.
    One commenter stated that including test strips and testing devices 
is not justified because the rule is ``aimed at promotion of particular 
pharmaceuticals and pharmaceutical representatives.'' Whether a 
representative is promoting a drug or a testing device associated with 
a drug, it is important that VA be able to limit the effects of such 
promotion on patient care. Again, we make no changes based on these 
comments.
    Several commenters also requested clarification of the definition 
of ``criteria-for-use.'' One commenter suggested that VA adjust the 
definition to require compliance only with VA's national criteria-for-
use standards, and do away with the authorization of exceptions at the 
local level. We disagree with these suggestions and will continue to 
provide local VA facilities the ability to make necessary decisions 
that are in the best interest of their patients with regard to 
criteria-for-use, based on geographic or other factors specific to the 
patient population at each VA facility. We also clarify that this 
rulemaking does not alter the well-established practice for learning 
about national and local criteria-for-use and the VANF. At the local 
level, pharmaceutical company representatives will continue to request 
criteria-for-use from the appropriate VA employee at the appropriate 
VISN Office, or the Office of the Chief of Pharmacy Services. We 
further note, in response to comments regarding mature brands, that all 
national criteria-for-use requirements are listed on VA's Web site.
    One commenter suggested that VA exclude medical residents from 
being considered ``health professional students'' under proposed 
paragraph (f)(5), now designated paragraph (h)(3), because residents 
have prescribing power and therefore should receive drug information. 
We reject this suggestion because we believe that it would be 
inappropriate to allow, as a general rule, drug marketing to target 
health professional students who are still in training. Such marketing 
is designed to promote the sale of a particular product, and not to 
educate health professionals about a variety of pharmaceutical 
products. In addition, under the rule, VA has the flexibility to allow 
all trainees including residents to receive marketing information at 
the discretion of the VA staff member providing clinical supervision. 
In this regard, we changed the language in paragraph (h)(3) to ``the 
staff member providing clinical supervision'' rather than simply 
``clinical staff member.'' We believe this revision adds clarity.
    Finally, we note that we are changing a reference used in the 
definition for ``VA National Formulary (VANF) drugs and/or drug-related 
supplies.'' We are changing ``local office of the Chief of Pharmacy 
Services'' to the ``VA medical facility's Chief of Pharmacy Services.'' 
This is simply a technical edit that makes this clause consistent with 
the language added in definitions discussed above, and provides more 
clarity to the public. We make a similar change to proposed paragraphs 
(e)(1), now designated paragraph (g)(1)) and proposed paragraph (f)(2), 
now designated paragraph (h)(1). Specifically, we change references to 
``local policies'' and ``local office of the Chief of Pharmacy 
Services'' to ``medical center policy'' and ``VA medical facility 
office of the Chief of Pharmacy Services.''

Requests for Clarification

    For clarity, we have restructured the content of proposed 
paragraphs (b) and (c) regarding the basic requirements for promotion, 
into newly designated paragraphs (c), (d), and (e). The proposed rule 
addressed the requirements for promotion in terms of three categories 
of drugs and drug-related supplies: (1) VANF drugs and drug-related 
supplies, and non-VANF drugs and drug related supplies with criteria-
for-use; (2) non-VANF drugs and drug-related supplies without criteria-
for-use; and (3) new molecular entities. This final rule continues to 
address drugs and drug-related supplies in terms of these three 
categories, however, to make the requirements associated with each of 
these three categories of drugs or drug-related supplies more clear, we 
have broken the rule out into separate paragraphs addressing each 
category of drug or drug-related supply. The substance of these 
sections remains virtually the same with organizational changes for 
clarity. Paragraph (c) provides the requirements for

[[Page 13000]]

promotion of VANF drugs and drug-related supplies, and non-VANF drugs 
and drug related supplies with criteria-for-use. Paragraph (d) provides 
the requirements for promotion of non-VANF drugs and drug-related 
supplies without criteria-for-use, which include an approval 
requirement on top of the three requirements under paragraph (c). 
Similarly, paragraph (e) provides the requirements for promotion of new 
molecular entities, which include an approval requirement on top of the 
requirements found under paragraph (c).
    One consistent concern expressed by the commenters was the 
relationship between this rule and laws administered by the FDA. As 
explained throughout this rulemaking, we have made clarifications where 
commenters have noted the possibility of a perceived conflict. Thus, we 
have clarified that promotion must be consistent with FDA laws and VA 
criteria-for-use. We note that nothing in this regulation should be 
construed as permitting promotional or educational activities that are 
not in compliance with applicable FDA requirements.
    The proposed rule had stated that educational programs and 
associated materials must conform to the requirements detailed in 
paragraphs (d)(1) through (9), now designated paragraphs (f)(1) through 
(6). A commenter recommended that we clarify in proposed paragraph (d) 
whether educational programs and associated materials will be deemed 
suitable if they satisfy those requirements. We accept this 
recommendation and have changed the language in the rule to reflect 
this clarification. Paragraph (f) now states: ``[E]ducational programs 
and associated materials will be deemed suitable if the approval 
authority determines that they conform to the following requirements.'' 
We have also removed the word ``new'' as a modifier for ``drug'' and 
``drug-related supply.'' We believe that the use of the term ``new 
drug'' could confuse sales representatives because this is a term that 
is specifically defined by the Federal Food, Drug, and Cosmetic Act. 21 
U.S.C. 321(p). VA used the word ``new'' in the proposed rule to limit 
this sentence only to drugs and drug-related supplies that are 
``already on the VANF but ha[ve] not yet been reviewed by VA[.]'' 
Because this clause already exists in the regulation text, the word 
``new'' is extraneous and is removed.
    Another comment suggested that VA clarify the ``clear 
identification'' requirements that had appeared in proposed paragraphs 
(d)(6) and (d)(7), in order to give companies proper notice about how 
to comply with the rule. As explained below, we have replaced the 
``clear identification'' requirement with a specific requirement that 
educational programs and associated materials regarding a drug, drug-
related supply, or therapeutic indication be submitted to a specific 
approval authority. With respect to educational programs and associated 
materials regarding non-VANF drugs or drug-related supplies without 
criteria-for-use, we have cross-referenced the approval and other 
requirements found in newly designated paragraph (d). We note that the 
60-day submission requirement applies to all proposed educational 
programs and associated materials.
    One commenter requested that VA clarify that the provision of 
journal articles that increase the reader's knowledge should be 
specifically exempted from the rule, or otherwise advise how journal 
articles may be provided in compliance with the rule. There exist 
multiple avenues for the distribution of journal articles and similar 
information and therefore we decline to make any change in response to 
this comment. First, we note that VA staff and patients are free to 
research and acquire any medical literature they see fit. Second, as 
noted above, we have clarified in new paragraph (a) that ``[t]his rule 
governs on-site, in-person promotional activities * * *. It does not 
apply to the distribution of information and materials through other 
means.'' Therefore, journal articles may be distributed in connection 
with on-site activities as long as the pharmaceutical company 
representative complies with the requirements of this rule. Further, 
nothing in this rule can or should be interpreted to prevent the 
distribution of such materials through means other than on-site, in-
person distribution (e.g., through the mail). For further guidance, we 
note that parties distributing journal articles or other reprints that 
contain off-label uses should consult the FDA's ``Good Reprint 
Practices for the Distribution of Medical Journal Articles and Medical 
or Scientific Reference Publications on Unapproved New Uses of Approved 
Drugs and Approved or Cleared Medical Devices.''
    We received multiple comments requesting clarification of the 
content of proposed paragraph (e), now designated paragraph (g), as it 
relates to the provision of free drugs by pharmaceutical company 
representatives. We agree with the comments that ``donations'' is a 
misleading phrase to use because it might connote charitable donation 
programs in which pharmaceutical companies participate. Therefore, we 
have removed all references to ``donations'' and instead use the term 
``samples.'' One commenter asked that VA clarify the meaning of the 
phrase ``trial-use'' and clarify the relationship between proposed 
paragraph (e)(2) and clinical trials. The phrase ``trial-use'' was 
intended to refer to the use of the samples on a trial basis. However, 
as the comment demonstrates, use of the word ``trial'' might connote 
formal clinical trials. Therefore, we have revised proposed paragraph 
(e)(2), now designated paragraph (g)(2), to remove the reference to 
``trial-use'' and instead state that ``[a]ll usage information 
pertaining to the intended use of these drugs or drug-related supplies 
must be forwarded to the VISN Pharmacist Executive or VISN Formulary 
Committee.''
    Further comments on proposed paragraph (e)(2), now designated 
paragraph (g)(2), suggest that VA should clarify the conduct that 
constitutes compliance with this paragraph, and clarify whether VA 
employees may accept samples from their own personal, non-VA 
physicians. We have made minor revisions to the language of this 
section to clarify the requirements for drug samples. First, we clarify 
that the pharmaceutical company representative ``must submit samples of 
drugs and drug-related supplies for approval to the person at the 
medical facility to whom such responsibility is delegated under local 
policy, usually the Director.'' Second, we require that ``[a]ll usage 
information pertaining to these drugs or drug-related supplies must be 
forwarded to the VISN Pharmacist Executive or VISN Formulary 
Committee.'' Third, assuming approval of a drug or drug-related supply 
has been obtained, we require that ``[a]ll samples of drugs or drug-
related supplies must be delivered to the Office of the Chief of 
Pharmacy Services for proper storage, documentation and dispensing.'' 
Third, this rule does not regulate the conduct of VA employees when 
receiving medical care from their own physicians, and nothing in this 
rule may be construed as regulating the private relationship between a 
VA employee and his or her personal doctor. Therefore, we make no 
change to the statement that ``[d]rug or drug-related supply samples 
may not be provided to VA staff for their personal use.'' Finally, we 
removed the clause ``the intended use of'' in reference to information 
that ``must be forwarded to the VISN Pharmacist Executive or VISN 
Formulary Committee. We did not intend to limit ``information'' to the 
intended use of the drug; rather, we intended to require that 
pharmaceutical

[[Page 13001]]

companies forward appropriate information.
    We also revised the last sentence of proposed paragraph (e)(1), now 
designated paragraph (g)(1), to remove the words ``of travel'' that had 
appeared in the proposed rule, because the statutory authority applies 
to all gifts in support of VA staff official travel, not just ``[g]ifts 
of travel.''
    Another comment requested that the prohibition on pharmaceutical 
company representative visits and the distribution of materials, in 
instances where VA staff or departments indicate that they wish not to 
be called on by pharmaceutical company representatives, should exclude 
visits and materials that are necessary for patient safety, such as 
product recalls or critical, substantive changes to warnings about 
particular medications. We decline to make any changes based on this 
comment. First, we note that most communications of this nature can be 
made more quickly and effectively through electronic or telephonic 
communication, and personal visits should not be required. Second, the 
rule does not prohibit on-site distribution of any patient safety 
materials to the VA medical facility office of the Chief of Pharmacy 
Services or similar other appropriate authority for distribution as 
necessary for patient safety. In other words, if necessary, important 
patient safety information can be provided in-person to the VA medical 
facility office of the Chief of Pharmacy Services or other appropriate 
authority for distribution by VA.
    A similar comment suggested that VA include a patient-safety 
exception to the educational programs and associated materials 
requirement in proposed paragraph (d)(4), now designated paragraph 
(f)(3). Specifically, the commenter requested that the rule permit 
documents and discussions related to an FDA-required risk evaluation 
and mitigation strategy, as well as product safety warning and other 
labels. We recognize the value of the information and did not intend 
the rule to conflict with any FDA requirements. Therefore, we have 
revised the rule to specify the permissibility of solicitation of 
protected health information or patient participation in pharmaceutical 
company-sponsored programs when ``required by Federal laws and 
regulations such as an educational program that is part of a risk 
evaluation and mitigation strategy required by the Food and Drug 
Administration.''
    One commenter requested that VA clarify in proposed paragraph (f) 
whether pharmaceutical company representatives will be permitted to 
leave materials for individuals or departments on the do-not-call list 
when they are on-site for a scheduled appointment with another 
provider. We have clarified in newly designated paragraph (h)(1) that 
pharmaceutical company representatives may not ``leave any materials 
for'' any individuals or departments on the do-not-call list. The 
reason for this prohibition is that leaving products in this manner may 
disrupt our medical professionals' regular activities, particularly 
given that such professionals have put their names on a do-not-call 
list. Moreover, patients who see such products may be misled into 
believing that VA endorses the use of such product. As noted several 
times in this notice, nothing in this rule prohibits the transmission 
of materials by mail, and for the purposes of facilities management, we 
would prefer that materials be distributed in this manner.
    A commenter requested that VA define or provide examples of a 
``medical center conference'' in proposed paragraph (f)(6), now 
designated paragraph (h)(4), and provide an exception allowing 
pharmaceutical company representatives who sign a form or agreement to 
attend such conferences. We decline to define the term or provide 
examples because we believe this term is unambiguous. We reject the 
requested exception because patient-specific information may be 
discussed at medical center conferences, and an exception allowing 
pharmaceutical company representatives to attend these conferences 
would be inconsistent with VA's vigorous protection of patient privacy. 
We note that we have revised the phrase ``patient-specific material'' 
to ``information regarding individual patients.'' We believe that this 
language more precisely reflects the intended notion of protection of 
patient privacy. In addition, we have reworded the paragraph so that it 
says that a ``pharmaceutical company representative may not attend a 
medical center conference where information regarding individual 
patients is discussed,'' where the proposed rule had said that a 
``sales representative is not allowed to attend a medical center 
conference where patient-specific material is discussed.'' The new 
phrasing is consistent with now designated paragraph (g)(3) and does 
not change the meaning.
    Another comment suggested that VA clarify that this rule is 
implemented in the spirit of supporting appropriate pharmaceutical 
company representative access to VA facilities and staff. We agree with 
the spirit of this comment. VA fully intends to continue our positive 
relationships with pharmaceutical companies and pharmaceutical company 
representatives in the future. However, there is no need to revise the 
rule to add such a statement.

Comments That Provisions of the Rule are Redundant, or are Governed by 
Other Law or Guidance

    As discussed earlier in this rulemaking, some commenters indicated 
that portions of the rule are unnecessary because the regulated 
behavior is also subject to other laws and/or regulations. For example, 
one comment stated that we need not regulate the provision of gifts or 
food to VA employees, because pharmaceutical company representatives 
are already subject to other ethical guidelines that address the 
behavior of pharmaceutical company representatives in this regard. We 
make no changes based on these comments. Such other laws and/or 
regulations are consistent with our regulation, and certainly restating 
the requirements in our own regulation does not adversely affect 
anyone, notwithstanding the commenters' characterization of these 
provisions as being ``redundant.'' Moreover, centralizing the relevant 
information in a single regulation will have administrative benefits. 
Other commenters objected to portions of the rule that they perceived 
as conflicting with or being duplicative of other laws and regulations. 
We address these comments below.
    The limitations on the pharmaceutical company provision of food and 
gifts to VA employees are consistent with Standards of Ethical Conduct 
applicable to Executive Branch Employees, and restating the 
requirements in our own regulation provides clarity and does not 
adversely affect anyone, notwithstanding the commenters' 
characterization of these provisions as being ``redundant.'' To the 
extent that industry ethical standards impose similar requirements on 
their sales representatives, we note that such restrictions may be 
revised by industry. Moreover, centralizing the relevant information in 
a single regulation will have administrative benefits. One commenter 
stated that the rule's criteria-for-use requirements can conflict with 
the FDA's approval of certain prescribing information, also known as 
``labeling.'' We make no changes based on these comments. While FDA 
approves drugs for certain purposes or uses based on the population at 
large and potential uses for the drug, VA further considers how a 
certain drug may be best-used for the benefit of our

[[Page 13002]]

unique patient population. While VA criteria-for-use may be more 
specialized or tailored than FDA-approved labeling, such criteria-for-
use will not contradict FDA-approved labeling. If a pharmaceutical 
company representative believes that VA criteria-for-use contradicts 
FDA-approved labeling, that representative should seek clarification 
from the VISN Pharmacist Executive, or Chief of Pharmacy Services, or 
designee.
    One commenter stated that VA should consider alternatives to the 
requirement that VA officials in the field review all educational 
programs and associated materials because the materials are already 
regulated by FDA, and the review requirement would place a large 
administrative burden on VA facilities. Another commenter requested 
that VA exclude from the rule educational materials that FDA does not 
require companies to disseminate, but does require to be submitted for 
FDA review, because a second layer of review is redundant and may 
undermine FDA's expertise if VA reaches a conclusion that differs from 
FDA. We decline to make any changes based on this comment. 
Pharmaceutical company representatives should only be distributing 
material that conforms with Federal laws and regulations including 
those administered by the FDA. Whether an educational program and 
associated materials are appropriate for a scheduled event is a 
narrower question. For example, a pharmaceutical company representative 
may seek approval for an educational program regarding a diabetes drug, 
but also wish to include materials related to a blood pressure drug. 
The VA approval authority could deny approval of the materials based on 
the inclusion of irrelevant material. However, this denial would not be 
a second review of the content of the FDA-approved material.
    One commenter recommended that VA provide an appropriate staff 
member with discretionary authority to permit manufacturer-sponsored 
programs due to their potential benefit to patients. We reject this 
recommendation because the final rule presents pharmaceutical company 
representatives and companies with a clear procedure, described in 
proposed paragraph (d), now designated paragraph (f), to obtain 
approval for such programs at VA facilities. VA facilities' highest 
priority must at all times be to provide direct care to its patients, 
and must have the ability to limit the quantity and timing of programs 
so as not to impede clinicians' ability to provide care. It is 
inevitable that limited openings and competing programs will require 
that VA facilities determine which option is most clinically 
appropriate for its patients. For example, a VA facility may schedule a 
program detailing a new flu vaccination just before the start of flu 
season because it is timely and will impact a greater number of 
patients at their individual facility, rather than host a requested 
program about prenatal care. We note that the program about prenatal 
care need not be rejected outright and may be considered for a future 
date. Paragraph (f) will ensure that the clinical interests of VA's 
patients at each facility remain the most important factor in 
determining whether to permit educational programs and materials at VA 
facilities.
    Another comment suggests that the requirement in proposed paragraph 
(d)(5), now designated paragraph (f)(4), that allows qualified VA 
pharmacy staff to grant exceptions to the logo display limitations may 
lead to unequal application in the field and should be removed. We 
disagree with this comment. Each VA medical facility must consider the 
needs of its individual patient populations in reaching determinations 
about educational materials, and we do not intend to limit their 
discretion by requiring VAMC acceptance or rejection of such materials. 
We note as well that the rule has specific standards that will prevent 
or minimize the potential for unequal application in the field, which 
include that the logo or name need not be removed if it is 
inconspicuous or if legal requirements (e.g., trademark requirements) 
make removal impractical. As explained previously, we have also added 
the statement that ``this requirement does not apply to labeling 
required by the Food and Drug Administration,'' so as to ensure that 
this provision of the regulation does not conflict with FDA laws and 
regulations.
    One commenter objected to the prohibition on labeling drug samples 
as ``samples,'' because that restriction contradicts with the 
Prescription Drug Marketing Act, which requires samples to be labeled 
as such. We agree with this comment and have removed the prohibition on 
labeling drug samples as ``samples.''

Recommended Policy Changes

    One commenter requested an exception for the distribution of 
information about new molecular entities to certain VA decision-makers, 
including the VISN Pharmacist Executives, Chiefs of Pharmacy, specialty 
physicians and formulary decision-makers for each VAMC and VISN. As 
discussed above, the rule does in fact authorize the promotion of new 
molecular entities under proposed paragraph (c)(3), now designated 
paragraph (e). New molecular entities may be promoted at the discretion 
of a VISN Pharmacist Executive, Chief of Pharmacy Services, or 
designee. We do not believe it is necessary--or the best use of VA's 
resources--to limit the Executive's discretion in selecting a designee, 
or to require in all VISNs that the individuals described by the 
commenter be authorized to make this decision.
    We have revised the definition of ``new molecular entity'' in 
proposed paragraph (a). The proposed rule defined the term as ``an 
active ingredient that has never before been marketed in the United 
States in any form,'' which would be a virtually impossible standard to 
measure, as there is no clear way to determine whether an ingredient 
has ``ever'' been marketed ``in any form.'' Therefore, we have revised 
the definition of the term to read: ``a drug product containing an 
active ingredient that has never before received U.S. Food and Drug 
Administration approval.'' Because VA lacks the expertise of FDA to 
independently analyze new molecular entities for safety and other 
purposes, we rely on those determinations already made by FDA regarding 
such entities. This revision should clarify some of the commenters' 
confusion as to the definition of new molecular entities, and in 
addition no longer defines the term in connection with marketing.
    A separate comment was that VA should not require authorization by 
VISN Pharmacist Executives or the Chief of Pharmacy for promotion of 
non-VANF drugs, because each VA Medical Center could potentially adopt 
a different administrative approach, which may lead to educational 
disparity among VA staff. We reject this suggestion and continue to 
grant each VISN the flexibility to determine whether the promotion of a 
non-VANF drug is appropriate given the needs of its unique patient 
population. Adopting a single national policy regarding the promotion 
of non-VANF drugs would negatively impact patient care because VA 
medical centers must consider the specific needs of their patient 
population based on unique geographic and other demographic factors. 
For example, drugs such as certain antibiotics can and should be 
treated differently for rural and urban populations in order to 
maximize the effectiveness of the drug. Other examples would include 
facilities located in communities in which a particular illness is more 
prevalent, such as certain respiratory infections, or facilities that 
focus on the treatment of

[[Page 13003]]

a specific disease or disability. A single national policy would prove 
too rigid to meet the needs of VA patients at the local level.
    Another commenter stated that VA should presumptively disallow 
educational programs and materials focusing on non-VANF drugs or drug-
related supplies because promotion of such drugs can undercut the 
legitimacy of VA's medical formulary. We do not agree with the 
commenter to the extent that the comment can be read to suggest that 
non-VANF drugs without criteria-for-use should never be promotable. We 
believe that the provisions of newly-designated paragraph (d) contain 
sufficient safeguards on promotion of such drugs and drug-related 
supplies.
    On the other hand, one comment suggested that VA not discourage the 
dissemination of educational programs or associated materials that 
focus on non-VANF drugs or drug-related supplies, because physicians 
only stand to better serve their patients by having access to such 
information. We have made several modifications to the rule to clarify 
the requirements for educational programs and associated materials 
regarding (1) a drug, drug-related supply, or new therapeutic 
indication for a drug that is already on the VANF, but has not yet been 
reviewed by VA; or (2) non-VANF drugs or drug-related supplies without 
criteria-for-use. Specifically, we have revised the substance of 
proposed paragraph (d)(6), now designated paragraph (f)(5), to require 
submission and approval of educational programs and associated 
materials regarding a drug, drug-related supply, or therapeutic 
indication to the VA medical facility's Chief of Pharmacy Services or 
designee. In turn, we removed the requirement that such educational 
programs and materials be clearly identified as discussing a new drug, 
drug-related supply, or therapeutic indication. We believe that 
submission to and approval by the Chief of Pharmacy Services or 
designee will ensure that such educational programs and associated 
materials are suitable. Similarly, we have revised the substance of 
proposed paragraph (d)(7), now designated paragraph (f)(6), to permit 
educational programs and associated materials regarding non-VANF drugs 
or drug-related supplies without criteria-for-use only if those drugs 
or drug-related supplies may be promoted under newly designated 
paragraph (d), which contains the requirements for promotion of non-
VANF drugs or drug-related supplies without criteria-for-use. This 
revision removes the language from the proposed rule stating that such 
educational programs and associated materials ``are discouraged.'' 
Again, we believe that the review and approval procedures for these 
educational programs will ensure that these educational programs and 
associated materials are suitable.
    One commenter requested that VA require direct comparison between 
industry-sponsored and non-sponsored sources in any disclosure. We 
agree with this comment with respect to educational programs and 
associated materials and added a new paragraph (f)(2) requirement that 
such a comparison be made where both industry-sponsored and non-
sponsored sources of information exist for FDA-approved uses of a 
particular drug. We believe that such a comparison will provide VA 
staff with the ability to review the full range of data that exists for 
a particular drug within the limits established by FDA through 
comprehensive research, which will enable them to make the best 
decisions for VA patients. This commenter also suggested that VA 
educational material requirements should include a uniform format for 
disclosure of industry sponsorship. Additionally, the commenter 
recommended that VA regulate the format of disclosures in accordance 
with findings that maximize the effectiveness of disclosures on 
reducing the influence of marketing over physicians' decision-making. 
VA acknowledges the potential advantages to a uniform format and 
increased knowledge about the impact of disclosures, but these 
recommendations are beyond the scope of this particular rulemaking.
    One commenter suggested that VA change the requirement that 
educational programs and materials must not contain company names or 
logos, stating that the requirement in proposed paragraph (d)(1) that 
such materials disclose any industry sponsorship, directly conflicts 
with proposed paragraph (d)(5), which states that no company names or 
logos may appear on patient educational materials. We make no changes 
based on this comment and note that the provision in proposed paragraph 
(d)(1) relates to introductory remarks and announcement brochures for 
educational programs. In contrast, proposed paragraph (d)(5) pertains 
to patient education materials. Therefore, we do not agree that any 
conflict exists between the two provisions. We note that proposed 
paragraphs (d)(1) and (5) are now designated as paragraphs (f)(1) and 
(4).
    With respect to the limitation in proposed paragraph (d)(5), now 
designated paragraph (f)(4), on name and logos on patient educational 
materials, one commenter argued that smaller drug manufacturers will be 
unable or unwilling to produce literature specifically for VA due to 
cost. We note again that this rule applies only to in-person 
activities, and that companies (large or small) who do not wish to 
comply with paragraph (f) are free to continue to distribute their 
materials through other means. Nevertheless, we have inserted a 
sentence to clarify that proposed paragraph (d)(5), now designated as 
paragraph (f)(4), concerning logos, ``does not apply to labeling 
required by the Food and Drug Administration.''
    According to one commenter, VA should permit physicians to grant 
meetings with pharmaceutical company representatives in patient care 
areas, particularly where working with a physician in a patient care 
area is necessary. We make no changes based on this comment. VA is 
committed to protecting patient privacy and generally does not find it 
appropriate for a pharmaceutical company representative to attend a 
meeting in a patient care area. However, we note that at many VA 
medical facilities, the offices for key VA staff members working in the 
emergency rooms are physically located within the emergency room 
itself. We do not intend to prevent qualified VA staff from holding 
meetings with pharmaceutical company representatives in their offices 
simply because the office is within the emergency room. We therefore 
have clarified that the patient-care area of the emergency room does 
not include staff offices that may be located in the emergency room by 
adding a parenthetical to that effect after ``emergency rooms'' in the 
list of ``patient-care areas'' under paragraph (h)(5), which was 
proposed paragraph (f)(7).
    Another commenter suggested that VA should permit brochures in 
patient waiting areas because there is no disruption to treatment, and 
recommended that literature meeting FDA requirements should be 
presumptively permissible, and the display of a company's logo should 
not be restricted. We decline to permit brochures in patient waiting 
areas and have moved this prohibition from the section of the rule 
discussing educational programs and associated materials to the section 
of the rule discussing conduct of pharmaceutical company 
representatives more generally to clarify that distribution of such 
educational material is limited not only in connection with an 
educational program. This provision is now located

[[Page 13004]]

at paragraph (h)(6) and states: ``Pharmaceutical company 
representatives may only distribute materials on-site at the time and 
location of a scheduled appointment or educational program. In no 
circumstances may materials be left in patient care areas.'' We believe 
that the prohibition on placement of materials in patient care areas is 
necessary because manufacturer-sponsored brochures may not be 
consistent with VA's drug therapy management processes and could lead 
to confusion. VA occasionally determines that for the purposes of its 
patient population, the best use of a given drug may be for a specific 
use, rather than the broad array of conditions that FDA may have 
approved the drug for. Therefore, patients may become confused if 
promotional materials appear inconsistent with the VA clinician's 
appropriate use of the drug. Providing brochures in patient waiting 
areas could also create a perceived VA bias for or against certain 
products.
    A commenter asserted that proposed paragraph (d)(3) would have a 
negative effect on patient care by preventing distribution of materials 
regarding Patient Assistance Programs (PAPs). Proposed paragraph (d)(3) 
stated that ``[p]romotional materials are not to be placed in any 
patient care area.'' As explained above, this provision was moved to a 
different part of the rule, is now designated as paragraph (h)(6), and 
states: ``Pharmaceutical company representatives may only distribute 
materials on-site at the time and location of a scheduled appointment 
or educational program. In no circumstances may materials be left in 
patient care areas.'' Patients who are using a particular drug and who 
require information distributed specifically to them through a PAP will 
not be affected by this paragraph; however, the distribution of such 
materials will have to be performed in accordance with the regulation. 
Under the regulation, PAP-related materials may be distributed directly 
by a pharmaceutical representative on-site pursuant to a scheduled 
appointed or approved educational program, or indirectly via mail. This 
will have no negative impact on patient care because VHA has always 
ensured, and will continue to ensure, that patients obtain any 
information necessary for their care.
    A commenter asserted that the rule can be read to apply to drug 
company provision of items in connection with research trials. We 
emphasize that the marketing or in-person solicitation of any approved 
drug is governed by this regulation. This will have no impact, however, 
on the process for approving research protocols; it simply affects when 
and how materials concerning drugs are marketed on-site at VA 
facilities.
    Finally, a commenter raised a concern that the regulation will 
undermine the ability of Federal Supply Schedule (FSS) contractors to 
market products that are on the FSS. Placement of a product on the FSS 
merely affects the price that VA will pay for the product. It has no 
impact on the in-person solicitation or promotion of that drug within 
VHA facilities. Whether or not a drug is on the FSS should not 
authorize a company's sales representative to behave differently from 
representatives of drugs that are otherwise recognized or approved for 
distribution to VA patients.

Comments Regarding the Disciplinary Process

    We received a number of comments regarding the proposed 
disciplinary process, including a suggestion to remove proposed 
paragraph (g) in its entirety. We make no changes to the disciplinary 
process based upon the comments because such a process is necessary to 
protect patient safety, as well as VA staff's ability to provide the 
highest quality services to patients. We also note that VA does not 
intend to impose sanctions except as necessary to prevent future 
impropriety. However, it is important that we maintain the ability to 
do so. Although we decline to change the disciplinary process described 
in the proposed rule, we have made organizational changes to the 
disciplinary section of the rule to more clearly describe the process. 
Specifically, proposed paragraph (g) has been designated as paragraph 
(i) and now includes headings. We revised the heading of the entire 
paragraph from ``Failure to properly promote drugs or drug-related 
supplies within VA'' to ``Non-compliance'' because this heading is both 
more concise and accurate. We have also made non-substantive language 
changes for purposes of clarity. For example, we have removed the 
terminology referring to ``sales force'' and ``regional managers'' and 
instead use the defined term ``pharmaceutical company representative'' 
in the interest of clarity and consistency. In addition, we have 
removed the phrase ``commercial visits'' and refer only to ``visits'' 
as the modifier ``commercial'' is unnecessary.
    A commenter suggested that VA clarify in the supplementary 
information of this rulemaking that most often problems between VA and 
pharmaceutical company representatives will be resolved informally and 
that formal action should be limited. We agree with this comment and 
further note that VA seeks to continue the traditionally amicable 
nature of interaction with pharmaceutical company representatives and 
companies at both the national and local levels. We make no changes to 
the regulation based upon the comment.
    Another commenter stated that VA should provide clear guidance on 
which circumstances would justify a penalty to an entire sales force as 
opposed to an individual representative, as well as what would justify 
a penalty extending to other VA facilities. The commenter also 
requested clarification on what is meant by ``permanent revocation of 
commercial visiting privileges.'' We do not believe that the provisions 
are ambiguous. VA will analyze violations on a case-by-case basis. The 
rule provides sufficient notice of the acceptable and unacceptable 
behavior of pharmaceutical company representatives on VA property, and 
the distribution of materials while on VA property. The rule also 
provides sufficient direction as to the process that VA will follow 
when we are required to formally address non-compliant behavior. 
However, in response to the request for greater clarity, we have 
revised the rule so that rather than refer to ``instances of widespread 
misconduct'' in proposed (g)(3), paragraph (i)(2) now refers to 
``multiple instances of misconduct.'' The word ``widespread'' could be 
misinterpreted to refer to the geographical location of the misconduct, 
rather than the recurrence of misconduct.
    A commenter stated that proposed paragraph (g), now designated as 
paragraph (i), denies pharmaceutical companies due process, and 
suggests that VA require the opportunity for a hearing before revoking 
a representative or company's ability to speak with physicians at a VA 
facility. Another commenter requested that VA only limit restrictions 
to the specific VA facility in which the noncompliance with this rule 
occurred. We make no changes to the rule based on these comments. Due 
process concerns are not present here because revocation of visiting 
privileges would not deprive a pharmaceutical company representative of 
a constitutionally protected property interest. Further, we believe 
that the processes described in paragraph (i) are reasonable. Under 
paragraph (i), a pharmaceutical company representative and/or his or 
her supervisor is given notice of the noncompliance and the Director's 
interim action, a 30-day

[[Page 13005]]

window to respond to such notice, and a final written order detailing 
the circumstances of the violation and the reasons for the final 
action. Further, a pharmaceutical company is also given an opportunity 
for review of that final written order by the Under Secretary for 
Health. We have added to the first sentence of paragraph (i)(3) the 
word ``either'' to further clarify that the Director's final order must 
``either'' confirm the action in the notice ``or'' specify another 
action.
    Other related comments stated that VA should be required to notify 
the company of the noncompliance of one of its representatives. We 
believe that the burden to notify the company is properly placed on the 
pharmaceutical company representative. However, this rule does provide 
that VA will notify the appropriate manager or supervisor of the 
pharmaceutical company representative in instances where VA has found 
multiple instances of misconduct by an individual or multiple 
representatives.
    One commenter asked that penalties ``[g]enerally * * * not be 
enforced during the notice period.'' Again, the regulation provides 
clear notice of what behaviors are unacceptable. The type of 
enforcement that would occur during the notice period would be 
restriction of an individual pharmaceutical company representative's 
access to a facility or facilities. We believe that this minimal 
restriction must be enforced during the notice period in order to 
prevent recurrence or escalation of the behavior at issue.
    Additionally, we disagree with one commenter's assertion that the 
activities governed under this rule do not pose a security risk. VA has 
three primary objectives in limiting the privilege of pharmaceutical 
company representatives' promotional activities in VA facilities. 
First, our primary purpose in creating this rule is the protection of 
our patients' safety. Second, we seek to protect the integrity of VA's 
National Formulary and criteria-for-use. Third, we aim to protect the 
amount of time that VA clinicians have to commit to their patients. We 
believe that actions by pharmaceutical company representatives that 
violate any of the provisions of this rule threaten these goals.
    Finally, a commenter asked whether a permanent revocation could be 
subject to subsequent review. We note again that such revocation may be 
appealed by the pharmaceutical company representative or company to the 
Under Secretary for Health within 30 days of the order for revocation.

Legal Arguments

    One commenter contends that the proposed rule would violate the 
First Amendment protection of free speech by requiring that drugs and 
drug-related products, which are non-VANF and which have no criteria-
for-use, may be promoted only if ``the promotion is specifically 
permitted by the VISN Pharmacist Executive, or Chief of Pharmacy 
Services or designee.''
    Specifically, the commenter maintains that the proposed rule's 
procedure for obtaining permission to promote such drugs and drug-
related products results in a content-based restriction on free-speech 
which ``denies patients the benefit of their doctor's most informed 
judgment on what is the right approach for their individual 
situation.'' The commenter states that VA has not explained how the 
above approval requirements are related to the goals enunciated in the 
proposed rule and advocates for decision authority to be given to VA 
medical departments and practitioners rather than pharmacy management.
    We do not agree with the contention that the proposed procedures 
violate the First Amendment guarantee of free speech and thus reject 
the commenter's recommendations that VA give the decision authority to 
medical staff departments and practitioners rather than to pharmacy 
management. We do, however, believe that it is necessary to clarify the 
basis for these procedures.
    First, this additional procedural requirement on promotion of non-
VANF drug and drug-related supplies without criteria-for-use in VA 
hospitals is not a restriction of First Amendment free speech rights. 
We know of no right to discuss products with Government officials 
acting in their official capacity.
    Specifically, the commenter does not contend that certain 
government property, which is open to other speakers, has been closed 
to pharmaceutical company representatives for use in communicating with 
private individuals or public officials not acting as such who might be 
willing to listen to them. Rather, the commenter appears to be claiming 
that pharmaceutical company representatives have an entitlement to a 
Government audience, VA physicians, so that they can express their 
views on non-VANF products without criteria-for-use. VA does not have 
an affirmative duty under the Constitution to listen to these views, 
nor is the Department in any way restricting pharmaceutical company 
representatives from communicating these views to members of the 
public, including VA physicians in their personal capacity, in a proper 
forum for free speech. VA hospitals are not such a forum.
    Additionally, there is an important rationale supporting our 
proposal for more restrictive procedures for promotion of non-VANF 
drugs without criteria-for-use to VA doctors at VA facilities. That 
rationale is primarily based on the need to maintain and enhance 
patient safety. The VANF is a list of drugs that are approved either 
for general use or with specific criteria-for-use. They are placed on 
the VA National Formulary through a rigorous and scientifically-based 
process, in which patient safety is paramount with cost being a 
secondary consideration.
    In this process, VA's Medical Advisory Panel (MAP), which includes 
physicians from both VA and the Department of Defense, and the VISN 
Pharmacist Executives (VPE) Committee reviews drugs and drug related 
supplies, including new molecular entities to determine their 
appropriate use in the VA patient population. An evidence-based process 
is used to determine such appropriate use, with the primary factors 
being patient safety and therapeutic value; improved access to 
pharmaceuticals; promotion of a uniform pharmacy benefit; and reduction 
in the acquisition cost of drugs when feasible. The VANF supplants the 
local and VISN formularies which previously existed. This migration to 
a National Formulary has allowed VA to rely more uniformly on evidence-
based drug evaluations further enhancing patient safety.
    The MAP and VPEs also contribute valuable experience and expertise 
in meeting the unique medication therapy needs of Veterans on an 
ongoing basis. For example, VA uses this expertise to closely manage a 
drug marketed for smoking cessation due to the potential for 
significant adverse drug events in patients with certain clinical 
characteristics that are over represented in the VA patient population. 
Drugs that are not approved for the National Formulary, also known as 
non-formulary drugs, may still be prescribed in specific instances via 
VA's formal non-formulary request process.
    As a participant in the process to determine which drugs will 
appear on the VANF, and the appropriate uses for each, the VISN 
Pharmacist Executive, in consultation with the local Chief of Pharmacy, 
who has ultimate responsibility for prescribing practices at his or her 
facility, are the officials best-suited to determine when to allow 
promotion of Non-VA VANF products without criteria-for-use. Having an 
official with region-wide responsibility

[[Page 13006]]

for prescribing also better serves VA's ability to maintain uniform 
prescribing practices, which, as discussed above, has allowed VA to 
rely more uniformly on evidence-based drug evaluations.
    Under the proposed rule, pharmacy management, the VA professionals 
with the detailed knowledge and expertise to make the decision on 
promotion of drugs that are non-VANF without criteria-for-use would be 
given the authority to make the decision. They would be acting in 
accord with input received from VA physician members of the MAP based 
on their review of available evidenced-based drug evaluations and thus 
best protect VA patients.
    Another commenter requested that VA ``distinguish between 
solicitation of sales and provision of information about a product and 
allow uncensored visits by representatives who abide by VA time, place 
and manner conditions on meetings with the public.'' We make no changes 
based on this comment. First, this rule specifically precludes the 
application of VA's general prohibition against solicitations to 
pharmaceutical company representatives' promotion of drugs. VA strictly 
prohibits solicitation under 38 CFR 1.218(a)(8), yet this rule permits 
promotion, including educational activities, by pharmaceutical company 
representatives within the parameters set forth in the rule. Second, 
this rule sets precisely those ``time, place and manner conditions'' 
that the commenter requested. If the pharmaceutical company 
representative complies with the provisions of this rule, then an on-
site, in-person visit will be granted. We note that pharmaceutical 
company representatives are not communicating with a public audience 
when speaking with VA staff in their professional capacities. On-duty 
VA staff, including health professionals charged with the duty to care 
for VA's patients, must be able to work without disruptions, and VA 
appropriately limits the public's access to VA facilities and staff to 
protect the safety and privacy of VA patients.
    Commenters suggested that VA consult with the United States General 
Services Administration before implementing a rule that may interfere 
with contracts between VA and companies under the FSS rate, at which 
companies are willing to sell in exchange for marketing opportunities. 
We note that in the instance that this regulation interferes with any 
existing contracts, the terms of those contracts will continue to be 
honored. However, VA is not aware of any contracts that exist with any 
pharmaceutical companies that contain provisions like those mentioned 
by the commenter and we therefore make no changes to the rule at this 
time.
    One commenter recommended that VA preempt local policies that may 
treat pharmaceutical company representatives who discuss prohibited 
topics as criminal trespassers. We decline to make any changes to the 
rule based on this comment for the following reasons. Currently, Sec.  
1.218, regarding security and law enforcement at VA facilities, 
describes general behavior that is prohibited on the grounds of VA 
property, and authorizes criminal sanctions in certain circumstances. 
Under Sec.  1.218, persons who are not authorized to enter or remain on 
VA property are subject to a fine and/or a term of up to 6 months in 
prison. Under this final rule, Sec.  1.220, VA may ultimately suspend 
or revoke visiting privileges for a pharmaceutical company 
representative or multiple representatives. Any such determination 
could be appealed to the Under Secretary for Health under paragraph 
(i)(5). If such suspension or revocation were imposed, then those 
representatives would not be authorized to enter VA property and would 
be subject to the sanctions listed in Sec.  1.218(b).
    At the same time, we note that this rule does indeed preempt all 
existing local policies that contradict this rule, as requested by the 
commenter. If the policy described by the commenter violates the rule 
then it is no longer lawful or effective; however, we have not been 
able to authenticate the memorandum described by the commenter.
    A commenter suggested that VA ``adopt[ ] a uniform format for 
disclosure of industry sponsorship.'' We are unsure what is intended by 
this comment, but it appears that the commenter is requesting that VA 
adopt formats adopted by the Journal of the American Medical 
Association. We believe that this rule provides clear national guidance 
on disclosures, and the policies expressed in the rule are based on the 
particular needs of VA. As a government-run, national health care 
provider employing a wide variety of medical professionals and treating 
primarily our nation's veteran population, we believe that it is 
appropriate to adopt specific guidelines relevant to our national 
practice. We make no changes based on this comment.

Effect of Rulemaking on Local Policies

    Some commenters recommended that VA explicitly preempt local 
policies with this rulemaking, or clarify that the new national policy 
will replace all existing local policies and provide substantive 
guidelines to the field. The commenters do not provide, and we are not 
aware of, any examples of official VA statements of policy (such as 
directives or handbook provisions) that conflict with this rule. If we 
were aware of such conflicts, we would specifically rescind such 
statements. Further, this regulation as a matter of law preempts any 
inconsistent local policies.
    To the extent that VA employees in the field require further 
guidance than that provided in the rule, VA will issue policy 
directives and handbooks. This rule does not prevent the issuance of 
such guidance if such guidance is not in conflict with this rule. In 
fact, the existence of this regulation will provide VA a legal basis to 
issue and implement such non-regulatory guidance.
    Title 38 of the Code of Federal Regulations, as revised by this 
final rulemaking, represents VA's implementation of its legal authority 
on this subject. Other than future amendments to this regulation or 
governing statutes, no contrary rules or procedures are authorized. All 
existing or subsequent VA guidance must be read to conform with this 
rulemaking if possible or, if not possible, such guidance is superseded 
by this rulemaking.

Executive Order 12866 and 13563

    Executive Orders 12866 and 13563 direct agencies to assess the 
costs and benefits of available regulatory alternatives and, when 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, and other advantages; distributive impacts; 
and equity). Executive Order 13563 (Improving Regulation and Regulatory 
Review) emphasizes the importance of quantifying both costs and 
benefits, reducing costs, harmonizing rules, and promoting flexibility. 
Executive Order 12866 (Regulatory Planning and Review) defines a 
``significant regulatory action,'' which requires review by the Office 
of Management and Budget (OMB), as ``any regulatory action that is 
likely to result in a rule that may: (1) Have an annual effect on the 
economy of $100 million or more or adversely affect in a material way 
the economy, a sector of the economy, productivity, competition, jobs, 
the environment, public health or safety, or State, local, or tribal 
governments or communities; (2) Create a serious inconsistency or 
otherwise interfere

[[Page 13007]]

with an action taken or planned by another agency; (3) Materially alter 
the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
Raise novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in this Executive 
Order.''
    The economic, interagency, budgetary, legal, and policy 
implications of this regulatory action have been examined and it has 
been determined to be a significant regulatory action under Executive 
Order 12866.

Unfunded Mandates

    The Unfunded Mandates Reform Act of 1995 requires, at 2 U.S.C. 
1532, that agencies prepare an assessment of anticipated costs and 
benefits before issuing any rule that may result in expenditure by 
State, local, or tribal governments, in the aggregate, or by the 
private sector, of $100 million or more (adjusted annually for 
inflation) in any given year. This final rule has no such effect on 
State, local, or tribal governments, or on the private sector.

Paperwork Reduction Act

    This final rule does not contain any collections of information 
under the Paperwork Reduction Act (44 U.S.C. 3501-3520).

Regulatory Flexibility Act

    The Secretary hereby certifies that this final rule will not have a 
significant economic impact on a substantial number of small entities 
as they are defined in the Regulatory Flexibility Act, 5 U.S.C. 601-
612. This final rule will not cause a significant economic impact on 
health care providers, suppliers, or other small entities. The rule 
generally concerns the promotion of drugs by large pharmaceutical 
companies and only a small portion of the business of such entities 
concerns VA beneficiaries. Therefore, pursuant to 5 U.S.C. 605(b), this 
amendment is exempt from the initial and final regulatory flexibility 
analysis requirements of sections 603 and 604.

Catalog of Federal Domestic Assistance Numbers

    The Catalog of Federal Domestic Assistance numbers and titles are 
64.009 Veterans Medical Care Benefits, 64.010 Veterans Nursing Home 
Care and 64.011 Veterans Dental Care.

Signing Authority

    The Secretary of Veterans Affairs, or designee, approved this 
document and authorized the undersigned to sign and submit the document 
to the Office of the Federal Register for publication electronically as 
an official document of the Department of Veterans Affairs. John R. 
Gingrich, Chief of Staff, Department of Veterans Affairs, approved this 
document on October 4, 2011, for publication.

List of Subjects in 38 CFR Part 1

    Administrative practice and procedure, Archives and records, 
Cemeteries, Claims, Courts, Crime, Flags, Freedom of Information, 
Government employees, Government property, Infants and children, 
Inventions and patents, Parking, Penalties, Privacy, Reporting and 
recordkeeping requirements, Seals and insignia, Security measures, 
Wages.

    Dated: February 29, 2012.
Robert C. McFetridge,
Director of Regulation Policy and Management, Office of the General 
Counsel, Department of Veterans Affairs.

    For the reasons set forth in the preamble, the Department of 
Veterans Affairs amends 38 CFR part 1 as follows:

PART 1--GENERAL PROVISIONS

0
1. The authority citation for part 1 continues to read as follows:

    Authority:  38 U.S.C. 501(a), and as noted in specific sections.


0
2. Add Sec.  1.220 to read as follows:


Sec.  1.220  On-site activities by pharmaceutical company 
representatives at VA medical facilities.

    (a) Scope. This rule governs on-site, in-person promotional 
activities, including educational activities, by pharmaceutical company 
representatives at VA medical facilities. It does not apply to the 
distribution of information and materials through other means.
    (b) Definitions. For the purposes of this section:
    Criteria-for-use means clinical criteria developed by the 
Department of Veterans Affairs (VA) at a National level that describe 
how certain drugs may be used. VA's criteria-for-use are available to 
the public at www.pbm.va.gov. Exceptions may be applied at the local 
level for operational reasons.
    Drug or drugs means:
    (1) Articles recognized in the official United States 
Pharmacopoeia, official Homeopathic Pharmacopoeia of the United States, 
official National Formulary, or any supplement to any of them;
    (2) Articles intended for use in the diagnosis, cure, mitigation, 
treatment, or prevention of disease in man or other animals;
    (3) Articles (other than food) intended to affect the structure or 
any function of the body of man or other animals; and
    (4) Articles intended for use as a component of any article 
specified in paragraphs (1), (2), or (3) of this definition.
    Drug-related supplies means supplies related to the use of a drug, 
such as test strips or testing devices, inhalers, spacers, insulin 
syringes, and tablet splitters.
    New molecular entity refers to a drug product containing an active 
ingredient that has never before received U.S. Food and Drug 
Administration approval.
    Non-promotable drugs are drugs designated by VA as non-promotable 
on http://www.pbm.va.gov. A list of the drugs or drug-related supplies 
classified by VA as non-promotable may be requested by contacting the 
VA medical facility's Chief of Pharmacy Services.
    Non-VANF drugs or drug-related supplies means drugs or drug-related 
supplies that do not appear on the VANF.
    Pharmaceutical company representative means any individual employed 
by or contracted to represent a pharmaceutical manufacturer or 
retailer.
    VA medical facility means any property under the charge and control 
of VA used to provide medical benefits, including Community-Based 
Outpatient Clinics and similar facilities.
    VA National Formulary (VANF) drugs and/or drug-related supplies 
means any drug or drug-related supply that appears on the VA National 
Formulary (VANF). The VANF is available at www.pbm.va.gov, or may be 
requested by contacting the VA medical facility's Chief of Pharmacy 
Services.
    Veterans Integrated Service Network (VISN) means one of the 
networks of VA medical facilities located in a particular region as 
designated by VA.
    (c) Promotion of drugs and drug-related supplies. Notwithstanding 
Sec.  1.218(a)(8), VA will allow promotion of VANF drugs and drug-
related supplies, and non-VANF drugs and drug-related supplies with 
criteria-for-use, on-site and in-person at VA medical facilities if all 
of the following are true:
    (1) Drugs or drug-related supplies are discussed, displayed and 
represented accurately;
    (2) The promotion has significant educational value and does not 
inappropriately divert VA staff from other activities that VA staff 
would otherwise perform during duty hours, including patient care and 
other educational activities; and

[[Page 13008]]

    (3) The drug or drug-related supply has not been classified by VA 
as non-promotable.
    (d) Promotion of non-VANF drugs and drug-related supplies without 
criteria-for-use. Non-VANF drugs and drug-related supplies without 
criteria-for-use may be promoted only if the requirements of paragraphs 
(c)(1) through (3) of this section are met and the promotion is 
specifically permitted by the VISN Pharmacist Executive, or Chief of 
Pharmacy Services, or designee.
    (e) Promotion of a new molecular entity. A new molecular entity may 
be promoted only if the requirements of paragraphs (c)(1) through (3) 
of this section are met and the promotion is specifically permitted by 
the VISN Pharmacist Executive, or Chief of Pharmacy Services, or 
designee. Such permission will be automatically revoked if the new 
molecular entity is subsequently designated non-promotable. Such 
permission must be reconsidered if the new molecular entity is denied 
VANF status.
    (f) Educational programs and associated materials. For purposes of 
this section, an educational program is a pre-scheduled event or 
meeting during which a pharmaceutical company representative provides 
information about a drug or drug-related supply. All educational 
programs and associated materials must receive prior approval from the 
person at the VA medical facility to whom such approval authority has 
been delegated under local policy, usually the Chief of Pharmacy 
Services. All materials associated with a proposed educational program 
must be provided at least 60 days before the proposed date of the 
educational program or distribution of associated materials, unless VA 
agrees in an individual case to a different date, so that a 
determination of their suitability can be made. The approval authority 
will deem suitable any educational program and associated materials if 
it is part of a risk evaluation and mitigation strategy or other duty 
imposed by the Food and Drug Administration. Otherwise, educational 
programs and associated materials will be deemed suitable if the 
approval authority determines that they conform to the following 
requirements:
    (1) Industry sponsorship must be disclosed in the introductory 
remarks and in the announcement brochure. Sponsorship includes any 
contribution, whether in the form of staple goods, personnel, or 
financing, intended to support the educational program.
    (2) If industry-sponsored and non-sponsored sources of data or 
other analytical information exist for FDA-approved uses of a 
particular drug, a direct comparison between the two sources must be 
disclosed in the introductory remarks and in the announcement brochure.
    (3) The educational program does not solicit protected health 
information or patient participation in pharmaceutical company-
sponsored programs, except as may be required by Federal laws and 
regulations such as an educational program that is part of a risk 
evaluation and mitigation strategy required by the Food and Drug 
Administration.
    (4) Patient educational materials must not contain the name or logo 
of the pharmaceutical manufacturer or be used for promotion of a 
specific medication, unless the VA Pharmacy Benefits Management Service 
determines that the logo or name is inconspicuous and legal 
requirements (e.g., trademark requirements) make their removal 
impractical. However, this requirement does not apply to labeling 
required by the Food and Drug Administration.
    (5) Educational programs and associated materials regarding a drug, 
drug-related supply, or a new therapeutic indication for a drug that is 
already on the VANF but has not yet been reviewed by VA, must be 
submitted by the pharmaceutical company or pharmaceutical company 
representative to the VA medical facility's Chief of Pharmacy Services 
or designee.
    (6) Educational programs and associated materials focusing 
primarily on non-VANF drugs or drug-related supplies without criteria-
for-use are permitted only if those drugs or drug-related supplies may 
be promoted under paragraph (d) of this section.
    (g) Providing gifts, drugs or other promotional items to VA 
employees or facilities.
    (1) General. No pharmaceutical company representative may give, and 
no VA employee may receive, any item (including but not limited to 
promotional materials, continuing education materials, textbooks, 
entertainment, and gratuities) that exceeds the value permissible for 
acceptance under government ethical rules (5 CFR 2635.204(a)). However, 
such items may be donated to a medical center library or individual 
department for use by all employees, in accordance with medical center 
policy. Gifts in support of VA staff official travel may be accepted by 
the Department subject to advance legal review in accordance with 31 
U.S.C. 1353, 41 CFR part 304, and VA policy regarding such gifts.
    (2) Samples of drugs and drug-related supplies. Pharmaceutical 
company representatives must submit samples of drugs and drug-related 
supplies for approval to the person at the medical facility to whom 
such responsibility is delegated under local policy, usually the 
Director. All usage information pertaining to these drugs or drug-
related supplies must be forwarded to the VISN Pharmacist Executive or 
VISN Formulary Committee. All samples of drugs or drug-related supplies 
must be delivered to the Office of the Chief of Pharmacy Services for 
proper storage, documentation and dispensing. Drug or drug-related 
supply samples may not be provided to VA staff for their personal use.
    (3) Donations of food. Pharmaceutical company representatives may 
not provide food items of any type or any value to VA staff (including 
volunteers and without compensation employees) or bring food items into 
VA medical facilities for use by non-VA staff (e.g., employees of 
affiliates).
    (h) Conduct of pharmaceutical company representatives. In addition 
to the other provisions in this section, pharmaceutical company 
representatives must conform to the following:
    (1) Contacts must be by appointment only. In order to minimize the 
potential for disruption of patient care activities, a pharmaceutical 
company representative must schedule an appointment before each visit. 
Access to VA medical facilities by a pharmaceutical company 
representative without an appointment is not permitted under any 
circumstances. VA medical facilities may develop a list of individuals 
or departments that may not be called-on by pharmaceutical company 
representatives. A pharmaceutical company representative must not 
attempt to make appointments with, or leave any materials for, 
individuals or departments on the list. The list may be obtained at the 
VA medical facility office of the Chief of Pharmacy Services. A 
pharmaceutical company representative visiting a VA medical facility 
for a scheduled appointment may not leave promotional materials for, or 
initiate requests for meetings with, other VA staff; however, 
pharmaceutical company representatives may respond to requests 
initiated by VA staff during the visit.
    (2) Paging VA employees. A pharmaceutical company representative 
may not use the public address (paging) system to locate any VA 
employee. Contacts using the electronic paging system (beepers) are 
permissible only if specifically requested by the VA employee.
    (3) Marketing to students. Pharmaceutical company

[[Page 13009]]

representatives are prohibited from marketing to medical, pharmacy, 
nursing and other health profession students, including residents. 
Exceptions may be permitted when approved by, and conducted in the 
presence of, the staff member providing clinical supervision.
    (4) Attendance at conferences. A pharmaceutical company 
representative may not attend a medical center conference where 
information regarding individual patients is discussed or presented.
    (5) Patient care areas. Pharmaceutical company representatives 
generally may not wait for scheduled appointments or make presentations 
in patient-care areas, but may briefly travel through them, when 
necessary, to meet in a staff member's office. Patient-care areas 
include, but are not limited to:
    (i) Patient rooms and ward areas where patients may be encountered;
    (ii) Clinic examination rooms;
    (iii) Nurses stations;
    (iv) Intensive care units;
    (v) Operating room suites;
    (vi) Urgent care centers;
    (vii) Emergency rooms (but not staff offices that may be located in 
them); or
    (viii) Ambulatory treatment centers.
    (6) Distribution of materials. Pharmaceutical company 
representatives may only distribute materials on-site at the time and 
location of a scheduled appointment or educational program. In no 
circumstances may materials be left in patient care areas.
    (i) Non-compliance.
    (1) General. The visiting privileges of a pharmaceutical company 
representative or multiple representatives may be limited, suspended, 
or revoked by the written order of the Director of the VA medical 
center of jurisdiction if the Director determines the pharmaceutical 
company representative(s) failed to comply with the requirements of 
this section.
    (2) Notice of interim action. The Director will notify the 
pharmaceutical company representative of the noncompliance and of the 
Director's interim action under paragraph (i)(4) of this section. The 
Director will also notify the supervisor of the pharmaceutical company 
representative(s) if there have been multiple instances of misconduct. 
The notice will offer 30 days to provide a response; however, the 
interim action will be enforced effective the date of the notice.
    (3) Final written order. At the end of the 30-day period for a 
response, or after the Director receives a timely response, the 
Director will issue to the pharmaceutical company representative and 
supervisor a final written order either confirming the action taken as 
indicated in the notice, or specifying another action to be taken under 
paragraph (i)(4) of this section. The written order may also state that 
the Director has determined that no further action is required. Any 
final written order issued by the Director shall include a summary of 
the circumstances of the violation, a listing of the specific 
provisions of this section that the pharmaceutical company 
representative(s) violated, and the bases for the Director's 
determination regarding the appropriate action. Notice concerning a 
final written order suspending or permanently revoking the visiting 
privileges of multiple pharmaceutical company representatives shall 
include specific notice concerning the right to review of the 
Director's order by the Under Secretary for Health.
    (4) Actions. Actions that may be imposed under this section include 
limitation, suspension, or permanent revocation of visiting privileges 
at one or more VA medical facilities. In determining the appropriate 
action, the Director shall consider the requirements of this section, 
the circumstances of the improper conduct, any prior acts of misconduct 
by the same pharmaceutical company representative, any response 
submitted by the pharmaceutical company representative or their 
supervisor under paragraph (i)(2) of this section, and any prior 
written orders issued or other actions taken with respect to similar 
acts of misconduct.
    (5) Review. The pharmaceutical company may request the Under 
Secretary's review within 30 days of the date of the Director's final 
written order by submitting a written request to the Director. The 
Director shall forward the initial notice, any response, the final 
written order, and the request for review to the Under Secretary for a 
final VA decision. VA will enforce the Director's final written order 
while it is under review by the Under Secretary. The Director will 
provide the individual who made the request written notice of the Under 
Secretary's decision.

(Authority: 38 U.S.C. 501)


[FR Doc. 2012-5279 Filed 3-2-12; 8:45 am]
BILLING CODE 8320-01-P