Prescription Drug Marketing Act

The Prescription Drug Marketing Act (PDMA), which was incorporated into the FDCA, was enacted to address certain prescription drug–marketing practices that have contributed to the diversion of large quantities of such drugs into a secondary gray market. These marketing practices—including the distribution of free samples and the sale of deeply discounted drugs to hospitals and health care entities—have helped fuel a multi million dollar drug diversion market that provides a portal through which mislabeled, subpotent, adulterated, expired, and counterfeit drugs are able to enter the nation's drug distribution system.

The most simple and straightforward of the acts which severely impacts pharmacy and is prohibited by the PDMA is the act or offer of knowingly selling, purchasing, or trading a prescription drug sample. This offense is punishable by a fine of up to $250,000 and up to 10 years' imprisonment. What many pharmacists do not realize is that there is a "finder's fee" of up to $125,000 for individuals who provide information leading to the conviction of a violator of this portion of the PDMA.

Another important portion of this extensive law that affects pharmacists prohibits the resale of any prescription drug that was previously purchased by a hospital or other "health care entity." This provision was intended to eliminate a major source of drugs in the diversion market-namely, drugs that were originally purchased by hospitals or health care entities at substantially discounted prices, as allowed by the Nonprofit Institutions Act of 1938, and then resold to the retail class of trade. Congress believed that the resale of such drugs constituted an unfair form of competition. Unfortunately, due to the host of exemptions found in the PDMA and the complexity and potential loopholes, prosecution of institutional diversion cases has been rare.