The U.S. Supreme Court has decided to hear a lawsuit filed by two GlaxoSmithKline employees who argue that the Fair Labor Standards Act guarantees overtime pay to pharmaceutical sales reps. The Department of Labor has backed the sales reps, saying they never actually sell anything to physicians, instead they push doctors to prescribe pharmaceuticals, and are therefore outside the FLSA overtime pay exemption.
“Neither physicians nor patients can purchase or order pharmaceuticals” from a drug company sales representative, the lead class action plaintiffs wrote in their Supreme Court petition. “There is no direct link between a [pharmaceutical sales representative's] promotional efforts directed to a physician and the actual purchase of a pharmaceutical product.”
The Pharmaceutical Research and Manufacturers of America argued that reclassifying some 90,000 sales reps as hourly wage employees could cost the pharmaceutical industry billions. “The potential amount of retroactive liability from these cases is staggering,” PhRMA wrote in its brief. “The industry as a whole faces potential liability in the billions of dollars,” the International Business Times reported. One suit involving 2,500 pharmaceutical sales reps pegged damages as high as $100 million, PhRMA wrote in its Supreme Court brief.