MOHW imposes 'CSO Reporting & Training' duty to copromoters

CSO representatives and MRs must complete 24 hours of new training before reporting to local governments

15-day business suspension imposed when first caught using untrained employees

False reports, closure of sales offices... if the company does not report changes, 1st offense – 3-day business suspension; 4thoffense – 1-month business suspension

The government announced on the 18th an amendment to the Enforcement Rules of the Pharmaceutical Affairs Act that imposes the same level of local government reporting and employee training obligations on pharmaceutical companies that have signed co-promotion agreements with drug companies that have obtained the official marketing authorization.

 

Initially, the government considered adjusting the reporting and training obligations for co-marketing pharmaceutical companies to a reasonable level in the amendment to the Enforcement Rules, but ultimately decided it would be difficult to exempt co-marketing pharmaceutical companies from the CSO reporting and education obligations in a subordinate law without changing the parent law, the Pharmaceutical Affairs Act.

 

In order for CSOs to register their business with local governments and perform the contract pharmaceutical sales and promotion services for pharmaceutical companies, the CSO company’s representatives and employees must complete 24 hours of new training.

 

In addition, the employees need to receive 8 hours of refresher training every year from the date of completing the initial training.

 

The training covers order in the distribution of medicines, writing economic benefits and expenditure reports, and CSO compliance.

 

If CSOs file false or fraudulent business reports to the local governments, they will be subject to closure, and if they fail to file a change report or file a false or fraudulent change report, they will be subject to a 3-day business suspension for the first offense, 7 days for the second offense, 15 days for the third offense, and 1 month for the fourth offense.

 

If a CSO engages in drug sales promotion activities using employees who have not received mandatory training, the CSO will be suspended for 15 days for the first offense, 1 month for the second offense, 3 months for the third offense, and 6 months for the fourth offense.

 

On the same day, the Ministry of Health and Welfare made a pre-announcement of legislation on the partial amendments to the Enforcement Rules of the Pharmaceutical Affairs Act and will collect opinions until the 27th.

 

The amendment to the enforcement rules is being promoted to set detailed regulations for the revised Pharmaceutical Affairs Act, which will introduce a CSO reporting system and impose training obligations.

 

The revised Pharmaceutical Affairs Act is scheduled to take effect on October 19th.

 

First, a procedure for reporting new, changes, closure, suspension, and succession of CSO status has been established.

 

CSOs are required to complete 24 hours of new training when registering with local governments to fulfill the notification criteria.

 

Requirements for CSO training and standards for administrative penalties were also established.

 

CSOs are required to receive 24 hours of initial training on the order of drug sales order and 8 hours of refresher training every year starting from the year following the date of initial training completion.

 

The contents of the CSO consignment contract and notification of re-consignment were also stipulated.

 

The amended rule specifies the contents that should be included in the CSO contract, such as the name of the consigned drug, the commission rate for each item, and the matters that require compliance of the consignee and requires written notification to the CSO supplier within 30 days of re-consigning its sales promotion business.

 

The scope of allowable economic benefits has also been clarified.

 

The amended regulation clarified the scope of business activities allowed by drug promoters, such as product presentations, and improved some deficiencies such as by specifying the food and beverage standards that can be provided at product presentations conducted by CSOs at individual nursing institutions.

 

Specifically, in the product presentation category, CSOs are allowed to provide economic benefits within the scope of the law.

 

The previous food and beverage standards at individual care organizations that allowed "food and beverages of KRW 100,000 or less per day (limited to 4 times per month)" were clarified to "food and beverages (excluding taxes and service charges) of KRW 100,000 or less per day, limited to 4 times per month.

 

Meanwhile, from this year, CSOs will also be subject to submit and disclose economic benefit expenditure reports.

 

Active CSOs are required to submit last year's expenditure report to the Health Insurance Review and Assessment Service by the 20th of this month.

 

The implementation of this reporting system is expected to be an opportunity to identify the current status of CSOs in Korea.