Chicago to propose restrictive licensing for pharmaceutical reps

A proposal to license pharmaceutical reps amounts to costly fees and red tape that will do little to promote public health and safety.

One in 4 – 1.6 million – Illinois workers need a license to do their jobs. Yet the city of Chicago is proposing to add even more requirements to the list of occupational licensing rules.

Mayor Rahm Emanuel is supporting an ordinance that would require pharmaceutical representatives to carry a special license to work, according to a report by the Chicago Tribune. Ostensibly intended to combat opioid abuse, the ordinance would impose a $750 annual licensing fee per person and would also mandate onerous record keeping that reps would have to make available upon the city’s request. Pharmaceutical reps would have to: track the number – and possibly even provide the names – of health care professionals they contact, note whether the pharmaceutical company pays health care professionals for their time, describe the pharmaceuticals promoted, and disclose whether the reps leave samples with health care providers. Pharmaceutical reps would also have to undergo training regarding prescription abuse and ethics and marketing through programs certified by the city. The ordinance is expected to be introduced in November.

Illinois policymakers should take appropriate and effective measures to confront the opioid epidemic, but government licensing for pharmaceutical reps would likely do little to minimize opioid addiction. The proposed licensing scheme would, however, saddle pharmaceutical reps with expensive and onerous burdens that could edge lower-income people and part-time workers out of the pharmaceutical sales industry.

Washington, D.C., implemented licensing for pharmaceutical reps in 2008, and increased costs of doing business there have reportedly driven out some drug companies and their pharmaceutical reps. And this is despite the fact that Washington’s $175 licensing fee is much lower than that proposed in Chicago’s ordinance.

Occupational licensing compromises jobs growth, particularly for lower-income people and part-time workers. Licensing schemes introduce a number of government-imposed hurdles that workers must clear before they can legally work in a licensed occupation. These hurdles include fees, training, education and minimum age requirements that restrict employment in licensed occupations and shelter from competition those who are already established in the licensed fields. These restrictions disproportionately affect lower-income people, who often cannot afford to spend the time or cash to complete mandated training and pay for licensing fees. It also hurts part-time workers, who may not find it worthwhile to enter an occupation on a part-time basis if they have to obtain or maintain an expensive license to do so.

To be sure, many professions necessitate some degree of training or education, but policymakers are not necessarily well-equipped to determine those qualifications. Indeed in many cases, consumer preferences alone can determine whether an individual is qualified to serve in a given occupation. Jobs in some fields – medicine and law, for example – may warrant training and education; however, occupational licensing often imposes needlessly burdensome and arbitrary requirements that shut lower-income people and part-time workers out of industries that do not significantly affect public safety or health or people’s legal rights.

Illinois’ state and local governments can protect public health and safety without imposing excessive regulations. Government and private certification are less restrictive and burdensome alternatives to licensing that still demand a certain level of professionalism. For instance, the National Association of Pharmaceutical Sales Reps administers the Certified National Pharmaceutical Representative Pharmaceutical Sales Training Program, which educates individuals and trains candidates for careers in pharmaceutical sales.

If Illinois policymakers want to combat opioid addiction, they should start by addressing the workers’ compensation system’s bad incentives, which encourage the overprescription of drugs. Chicago’s proposed ordinance, by contrast, amounts to costly fees and red tape that will do little to promote public health and safety.