Evelyn Pringle December 20, 2006
In the debate over whether Big Pharma’s perks lead doctors to prescribe high priced brand-name drugs over equally effective generics, the question to ask is whether an industry would direct 90% of a $20 billion marketing budget at doctors if it did not work.
As lawmakers enact measures to limit the drug company’s influence over the medical profession, the profiteers within the industry are beginning to fight to reverse the policies in court. The New Hampshire, “Prescription Confidential Act,” was passed to stop the disclosure of information on doctors prescribing habits to drug companies. The law is now being challenged in court by two data mining firms that profit from selling the information.
IMS Health and Verispan LLC, say the Act violates the First Amendment right to free speech. A trial is scheduled in January 2007, to determine whether the law will stand. Judge Paul Barbadoro, of the US District Court for New Hampshire, refused a request to issue an injunction to temporarily overturn the law until the trial.
The outcome of the case may have an impact in other areas of the country. Congress and several other states are considering similar laws, and the ruling in the New Hampshire is expected to influence their decisions of whether to go forward on the matter.
The Act bars the sale of prescription information on both patients and doctors for commercial purposes. New Hampshire State Representative, Cindy Rosenwald, a sponsor the bill, said the Act is designed to reduce health care costs and protect the privacy of doctors.
She told the Concord Monitor on November 20, 2006, that selling the prescribing information drives up the cost of health care by making it easier for drug companies to push expensive drugs on prescribing doctors.
Medicaid for example, she said, together with the higher cost of drugs for prisoners and state employees adds up to a lot of taxpayer money.
Data on the prescribing habits of doctors has long been used by drug company sales representatives to target their customers. Former sales rep, Kathleen Slattery-Moschkau, told the San Francisco Chronicle, on August 6, 2006, that she received reports on every physician within her sales territory broken down by drug class, as well as “numerous other reports, such as the ‘Heavy Hitter List,’” she said, which would include the top doctors her company was trying to “convert.”
Ms Slattery-Moschkau says the reports helped her determine which doctors “were worthy of spending my monthly budgets on for lunches, dinners, days at the spa, etc.”
Overall, she said, the reports “were a great tool for determining which marketing tactics worked best.”
Drug companies pay enormous amounts of money each year to obtain these records that enable them to provide the reports to their sales reps. According to the Chronicle, IMS Health, one of the main data mining companies, generated revenues in 2005, of $847 million from its “Sales Force Effectiveness Offerings.”
Experts say the use of these profiles increases other health care costs. Dr Sharon Levine, an executive director with the HMO, Kaiser Permanente, told the Chronicle that the high cost of obtaining the records is not only reflected in higher drug prices, but the data itself is used to persuade doctors to prescribe expensive brand-name drugs when cheaper generics would work, causing a rise in patient co-payments and insurance premiums.
According to health care analysts, providing doctors with free drug samples also drives up the prices on prescription drugs in the long run. Studies have shown that supplying doctors with free samples of costly brand-name drugs greatly increases the rate of prescribing of those same drugs and the cost of the samples has to be factored in with increased drug prices. In 2005 alone, doctors were given free drug samples valued at about $16 billion, according to IMS Health.
And then there is the matter of the free meals provided to influence the doctor’s prescribing habits for specific drugs, and not only for doctors – in some instances for their entire staff.
After examining the interaction between doctor’s offices and sales reps, Dr John Scott, an assistant professor at the University of Medicine and Dentistry of New Jersey-Robert Wood Johnson Medical School, told the New York Times, “We found that some offices get breakfast and lunch every day.”
According to the July 28, 2006 Times article, “The cost of the lunches is ultimately factored in to drug company marketing expenses working its way into the price of prescription drugs.”
Ms Slattery-Moschkau says free lunches were “incredibly effective” in boosting sales for Bristol-Meyers Squibb and Johnson & Johnson, the companies where she formerly worked.
She said sales reps could gauge the success of a free lunch immediately because they had the numbers from the prescribing records to show what drugs the doctor was prescribing. “If I brought in lunch one week,” she stated, “I could see the following week if that lunch had an impact.”
Analysts say the various methods of courting doctors adds up to mega-bucks over a year’s time. In 2003 alone, the industry spent about $5.3 billion on “detailing,” a term used for the face-to-face promotion activities by sales reps directed at doctors, according to IMS Health.
Early this year, a panel of medical experts called for the adoption of new conflict-of-interest regulations, saying the financial influence of Big Pharma was distorting treatment decisions and scientific findings.
In a paper published in the January 25, 2006, Journal of the American Medical Association, the group said that voluntary efforts to limit industry influence had failed, resulting in the overprescribing of some medications and the withholding of negative findings on others.
Cases like Vioxx, SSRIs for children and spinal implants by Medtronic, which all occurred with voluntary guidelines in place, they said, highlight the need for stricter measures.
The panel, made up of officials from medical schools and the Institute on Medicine as a Profession, called on the 400 teaching hospitals in the US to impose strict new rules, including a ban on all gifts and meals along with tighter restrictions on outside income.
The group also said medical schools and affiliated hospitals should refuse free drug samples and create a voucher system or distribution bank for indigent patients instead. “The availability of free samples is a powerful inducement for physicians and patients to rely on medications that are expensive but not more effective,” the JAMA article noted.
On January 25, 2006, Jordan Cohen, president of the Association of American Medical Colleges, and a co-author of the proposal, told the Washington Post, “We’ve become overly dependent on these kinds of blandishments to support our core activities, and that is jeopardizing public trust and scientific integrity.”
The relationships, he said, can prompt doctors to order unnecessary tests, prescribe more expensive drugs or advocate adding certain medications to a hospital’s list of preferred drugs.
“The problem has gotten worse and worse and worse,” Dr Cohen told the Post.
“Drug companies spend $13,000 per physician annually,” said another co-author, Dr David Rothman, a professor of social medicine at Columbia University Medical Center.
“Those marketing tactics,” he told the Post, “are very, very effective at getting physicians to do what each drug company wants — to prescribe their product.”
Other supporters of the proposal include Dr Jerome Kassirer, former editor-in-chief of the New England Journal of Medicine, and Dr David Blumenthal, director of the Institute for Health Policy at Massachusetts General Hospital.
The call for reform is apparently taking hold. On September 12, 2006, the New York Times reported that as of October 1, 2006, “Stanford University Medical Center will prohibit its physicians from accepting even small gifts like pens and mugs from pharmaceutical sales representatives under a new policy intended to limit industry influence on patient care and doctor education.”
The new policy is part of a small but growing movement among academic medical centers, the Times said, noting that the University of Pennsylvania and Yale have also announced similar rules.
In light of the FDA’s recent failure to protect consumers against the dangers of new drugs like Vioxx and the SSRIs, many medical experts now recommend that patients avoid taking a new drug if there is an alternative, saying preapproval studies do not allow for enough time, or include enough patients, to show all the potential side effects.
In her book, “The Truth about Drug Companies: How They Deceive Us and What to Do About It,” Dr Marcia Angell, former editor of the New England Journal of Medicine, tells patients to ask the following questions before accepting a prescription for a new brand-name drug:
(1) What is the evidence that this drug is better than an alternative drug or treatment approach?
(2) Has it been published in a peer-reviewed medical journal, or are you relying on information from drug company representatives?
(3) Is this drug better only because it’s given at a higher dose?
(4) Would a cheaper drug be as effective if it were given at an equivalent dose?
(5) Are the benefits worth the side effects, the expense and the risk of interactions with other drugs I take?
If its a free sample, Dr Angell says to ask the doctor whether there is a generic drug or other less-expensive equivalent to take when the free sample runs out.
Other segments of the health care field are also finding ways to drive down high prescription drugs costs. On November 21, 2006, BlueCross BlueShield of North Carolina announced plans to set up ATM-like machines in doctors’ offices to make it easy for physicians to pass out free samples.
However, the plan has Big Pharma crying foul because these free samples will no longer be the high-priced name-brand drugs, they will be generics.