Pharmaceutical Procurement in 50 States: To Register or Not to Register

Current and potential state contractors can have a difficult time determining whether they need to register as a lobbyist in a state in which they do business. The patchwork of laws across the country makes determining when a lobbying registration is required for state procurement efforts tricky. 

Pharmaceutical companies may have the toughest time of all as they seek to include their drugs in insurance formularies in multiple states. When deciding whether to seek business in a jurisdiction, it’s important to know the lobbying registration requirements if interacting with state Medicaid agencies, drug utilization review committees, and pharmacy and therapeutic committees. 

Landscape of Requirements

We have broken down the requirements for pharmaceutical companies seeking to procure state business into three categories: (1) registration required, (2) conditional registration, and (3) registration not required. The breakdown among these three categories is displayed in the chart below.

States Requiring Registration

In states that require registration (25), the state lobbying statutes require anyone attempting to influence rule-making (which would include Medicaid coverage or other agency declarations on drug coverage in a state-sponsored insurance plan) to register as a lobbyist. Depending on the jurisdiction, this may be a separate registration from legislative lobbying or it may be a combined legislative/executive registration.

States with Conditional Registration

In states with conditional registration (4), the statutes are a little less cut and dry. For example, Arkansas requires the lobbyist to reach a certain expenditure threshold before being required to register. If your lobbying activity does not exceed the $400 per calendar quarter threshold, you do not need to register in Arkansas. If expenditures exceed $400 in lobbying expenses, registration as a lobbyist would be required in Arkansas.

States Not Requiring Registration

In states that do not require registration (22), the lobbying statutes do not extend to executive branch procurement activities or specifically exempt actions regarding procurement. Some states, like Maine, have very specific definitions of lobbying and lobbying communications as attempts to influence a covered government official regarding legislative action. Therefore, in Maine, meeting with an executive branch agency regarding pharmaceutical procurement would not be considered lobbying activity under Maine’s lobbying definition. If the company were to approach a legislator or executive branch official in an attempt to get a legislative mandate for coverage of a drug, this would trigger a reporting/registration requirement in Maine.

It’s important for a pharmaceutical company to understand what its registration and reporting requirements are in a given jurisdiction prior to engaging in procurement discussions. Some states require registration prior to lobbying while others, like Arkansas and Maine, do not require registration until a monetary or time threshold is met. Do not step foot into a meeting or jump on a video or phone call with a policymaker until you know what your compliance obligations are.

Need More Help?

Are you planning a multi-jurisdictional market pharmaceuticals to a new state and its executive agencies? We can help. Don’t miss out on state business because you don’t know the rules. Let MultiState lobbying compliance services help — reach out to our team with questions.