New Work Rules for Pharmaceutical Sales Representatives

Several courts have now determined that pharmaceutical sales representatives should be considered “non-exempt” hourly employees and therefore are entitled to overtime pay.  In coming to this conclusion the courts agreed with the pharmaceutical sales representatives who filed the suits claiming they were not sales people or professionals exercising discretion or independent judgment as defined by provisions of the Fail Labor Act for “exempt” employees.  If the courts continue to hold these findings to be true, here are some new work rules “non-exempt” pharmaceutical representatives can expect to see:

  •  Your work day is expected to be 8 hours per day Monday through Friday between 7am and 6pm.  You must not work more than 8 hours per day or more than 40 hours per week without prior written approval from your District Manager.
  • Working weekends (Saturday or Sunday) or holidays is prohibited unless you have prior written approval from your District Manager for a particular weekend or holiday requiring your presence for work related activities.
  • You are expected to “clock in” using your iPad when you leave your home for work and “clock out” when you have completed your 8 hour work day.  You must plan to complete your 8 hour work day with arrival back at your home.  You can chose to complete your 8 hour work day in your territory but that will be your choice and you will be on personal time after the point you “clock out.”   Use of the company car from that point to the return to your home must be recorded as personal miles .
  • If you receive emergency customer calls (you are not to make customer calls except in response to their call) outside your work day hours, you are to record those (caller name, time of call, purpose of call) in your weekly activity report and include the time in your time log.  You will have to adjust your subsequent work time so as not to exceed the 40 hours per week maximum.
  • Failure to “clock in and out” may result in loss of pay for that period of time.  Repeatedly “forgetting to clock in or out” may result in disciplinary action including the possibility of termination.
  • You may take personal time during the work day as long as you put in your 8 hours between the hours of 7am and 6pm.  You must clock out and back in for all personal time taken during the work day.  Other than clocking out and back in, you do not have to provide any information regarding personal time activities.
  • If you plan to take more than 2 hours of personal time during work day hours (7am to 6pm) on any one day you must get prior approval for a vacation day.
  • You will be gps tracked to verify time and location for all work related time during your work day.  This will also be used to verify mileage for business versus personal use of the company car.
  • You are required to clock out and back in for your mandatory 15 minute breaks, once in the morning and once in the afternoon.  You can not skip breaks or combine break times. You are not to do work related activities during your breaks.
  • You must clock out and back in for your mandatory 1 hour lunch break during which you are not to do work related activities.  You can not skip your lunch break and your lunch break must be taken daily between 10am and 1pm.   If you do a work related food activity with physicians or office staff during lunch time, this can not be your lunch break.
  • Nobody, not even your District or Region Manager or the VP of Sales, can require you or request that you do work related activities when you are clocked out, including for breaks and lunches.
  • Because all work related travel time counts against your 8 hours per day and 40 hours per week, all territories will be reevaluated and realigned where necessary to minimize travel requirements.
  • Where possible, all company required meetings will now be by teleconference or video conference to avoid travel.
  • You will not be expected or allowed to travel outside your territory to attend any medical or scientific meetings or conferences, if it means you will exceed your 8 hours per day of work.
  • District meetings will be kept to a minimum and centrally located to minimize travel for all attendees.  District meetings will be structured to an 8 hour work day with the mandatory “non-business-related” breaks and lunch for which you must “clock out and back in”.  You will be required to take your lunch break and can not do any work related activities during your District meeting lunch break.   So as to not encourage work related activity during District meeting lunch breaks, you will be expected to determine where you would like to have your lunch and pay for your own lunch.  There will be no District meetings requiring overnight stays.
  • Any travel outside your territory, except for District Meetings, will require prior written approval from your District Manager.  If travel time requires you to take more than 8 hours per day to attend and return home from a District meeting, you must have prior written approval from your District manager with the anticipated “Overtime” required to make the meeting.
  • Only company provided training programs will be considered “work related” required training for which work day time will be allotted.   Any additional training, reading, or research you choose to do with regards to your job or career development will be your choice and done on your personal time.  These “extra” activities will not be required and are therefore “on your own personal time.”
  • You will be allotted 2 hours of “work time” every week to take care of any company required administrative tasks (e.g., expense reports, weekly activity reports, or planning) or training. You must be clocked in during this time.
  • Your biweekly pay will be automatically calculated from your time sheets captured from your “clock in and clock out” data.
  • Any exceptions to these work rules must be identified upfront with the anticipated number of “work hours” involved, any anticipated overtime hours identified, and must have prior written approval from your District Manager.
  • Failure to comply with any of these new work rules will result in disciplinary action including the potential for termination.

I am not espousing these rules and I have probably missed a few.  I’m not an attorney but I tried to look at what pharmaceutical companies might have to do to avoid further Fair Labor Act liabilities by establishing work day expectations and accurately tracking and recording work hours for pharmaceutical representatives who are considered “non-exempt” hourly employees.

Of course, the company will have the choice to just pay the overtime when they want to make the exceptions for business reasons.  But, to manage overtime pay and not have it be abused or extended beyond financial feasibility and to avoid litigation, these types of work rules will almost certainly be required.  One could also argue that these work rules are necessary to protect the “non-exempt” pharmaceutical representative from being taken advantage of by management.

While I’m sure some reps may be applauding the overtime pay rulings, I see this as an unfortunate situation, fostering a distrustful work environment with a demoralizing outcome for “professional pharmaceutical representatives.”  How disappointing that it has come to this.

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More Money Alone will not Increase Pharmaceutical Research Innovation?

While it is hard to argue that you don’t need money to discover innovative new treatments for all the complex diseases that continue to cause illness, disability, and even threaten life.  At the same time, Big Pharma has shown that merely throwing money at discovery research won’t necessarily deliver the results you might expect.

As evidenced by many academic researchers and their teams, it is possible to discovered relevant disease targets and disease altering compounds with far fewer research dollars than Big Pharma has been spending over the past three decades.  Big Pharma R & D budgets, however,  are a misleading indicator of investment in innovation.   In other words, when Pharma holds out the total amount they are spending on R & D ($68 billion), you have to know that only about 30% of that is for discovery and preclinical research.  Still billions of dollars for a disappointing drug discovery return on investment.

Here is another way to look at pharmaceutical innovation productivity.  Let’s say the average Big Pharma has a $1 billion per year to spend on drug discovery and preclinical research.  How do you think that compares to what academic labs (or start up biotechs for that matter) have to spend on discovery research?  Maybe a couple million dollars they have secured in government grants?  Yet, dollar for dollar, who’s delivering the innovation? And why?  An increasing number and percentage of innovative new drugs are being discovered in government or government funded public laboratories.

While they may have less money to work with, academic labs have three essential ingredients that increase the probability for innovative drug discoveries;  expertise, time, and a passionate focus for a comprehensive understanding of the science behind their work (e.g., disease, pathophysiology, biochemistry, and molecular biology).

This is not to say that all Big Pharma researchers lack these essential ingredients.  But even if they do have them, these attributes are mitigated by the distractions of organizational expectations, bureaucracy,  and time pressures to deliver compounds rather than understanding the science.  Perhaps most importantly, expertise in Big Pharma is often rewarded with more work (projects, administrative duties, or increased management responsibilities) that removes (mitigates) the expertise, or at least the focus of the expertise, from the day to day work of discovery research.

Sure, more money can facilitates innovative drug discovery but without expertise, time, and a passionate focus on the science, don’t expect to fill your pipeline.