The Prescription Drug Marketing Act
The Prescription Drug Marketing Act ("PDMA") was enacted in
address certain prescription drug marketing practices that have
contributed to the diversion of large quantities of such drugs into
secondary grey market. These marketing practices -- including the
distribution of free samples, the use of coupons redeemable for
no cost or low cost, and the sale of deeply discounted drugs to
hospitals and health care entities -- have helped fuel a
dollar drug diversion market that provides a portal through which
mislabeled, subpotent, adulterated, expired, and counterfeit drugs
able to enter the nation's drug distribution system. |
The PDMA is incorporated into the FDCA, and proscribes a
conduct set forth in the FDCA's "prohibited acts" section at 21
§ 331(t). The penalties for these offenses are set forth at 21
U.S.C. §§ 333(a) & (b).
The most simple and straightforward of the acts prohibited by
PDMA is knowingly selling, purchasing, or trading, or offering to
purchase, or trade a prescription drug sample. See 21 U.S.C.
§ 353(c)(1). This offense is punishable by up to ten years
imprisonment. See 21 U.S.C. § 333(b)(1)(B). Sample
documents are included in this manual at 114 Civil
Resource Manual at 114 and 115 Civil
Manual at 115.
Many of the other PDMA provisions are somewhat more complex.
instance, the statute prohibits the resale of any prescription drug
was previously purchased by a hospital or other "health care
See 21 U.S.C. § 353(c)(3)(A). This provision was
eliminate a major source of drugs in the diversion market --
drugs that were originally purchased by health care institutions or
providers at substantially discounted prices. Congress believed
resale of such drugs constituted an unfair form of competition that
an adverse impact upon scrupulous drug wholesalers and retailers
provided a steady stream of inventory for the diversion market.
The provision, however, contains a host of exemptions, and
defines "health care entity" to exclude "a wholesale distributor of
drugs or a retail pharmacy licensed under State law." See 21
U.S.C. § 353(c)(3)(A). Due to the statute's complexity and
loopholes, prosecution of institutional diversion cases under the
has been rare. More commonly, such cases are brought as mail or
fraud prosecutions under Title 18. See, e.g., United
Costanzo, 4 F.3d 658 (8th Cir. 1993). Nevertheless, a sample
Information charging the PDMA offense is included in this manual at
116 Civil Resource Manual at 116.
Another key provision of the PDMA requires that drug
prior to distributing any prescription drug, provide the purchaser
a statement of origin identifying all prior sales of the drug,
the dates of the transactions and all parties thereto. See
U.S.C. § 353(e)(1). This provision, which does not apply to the
drug's manufacturer and its authorized distributors, is intended to
insure that all prescription drugs in commercial channels are
accompanied by a paper trail and can be traced, if need be, in the
of a recall or for any other reason. Violation of this requirement
misdemeanor. See 21 U.S.C. § 333(a)(1). However, if the
offense is committed with the intent to defraud or mislead
the intent to defraud or mislead the FDA) the offense is a felony.
See 21 U.S.C. § 333(a)(2). A sample Information charging
offense is included in this manual at 117 Civil
Resource Manual at 117.
Other proscribed practices under the PDMA include: (a) the
purchase, trade, or counterfeiting of prescription drug coupons
coupons redeemable for free or low-cost prescription drugs),
21 U.S.C. § 353(c)(2); (b) the wholesale distribution of
prescription drugs in interstate commerce without a state license,
see 21 U.S.C. § 353(e)(2); and (c) the reimportation of
exported prescription drugs by anyone other than the drug's
manufacturer, see 21 U.S.C. § 381(d)(1).
[cited in USAM 4-8.230]