The Bitter Pill

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Pharma Pays Shrinks Top Dollar In Vermont

Evelyn Pringle May 6, 2009

During the period July 1, 2007, through June 30, 2008, drug makers spent close to $3 million on consulting and speaker fees, travel expenses, gifts, and other payments to or for physicians, hospitals, universities and others authorized to prescribe or dispense pharmaceutical products in Vermont, according to the annual report, “Pharmaceutical Marketing Disclosures,” by the state’s Attorney General, William Sorrell.

“The greatest amount of expenditures went to psychiatrists as a group, totaling nearly half a million dollars; one psychiatrist received over $112,000, the greatest amount of pharmaceutical marketing dollars spent on any single person,” the report states.

“The monies came from four pharmaceutical companies, with nearly 92% from one company, nearly 93% in the form of cash or check, and over 90% for speaker fees or payments,” according to the report.

Eleven shrinks made the top 100 recipient list with an average payment total of $43,473. Shrinks also received the highest pay in 2007. Eleven earned a total of $626,379, or about 20% of the total payments made, according to last year’s report.

Keep in mind that Vermont has a population of less than 609,000, according to the US Census Bureau and the disclosures in the report do not include the money spent by drug makers on advertising in TV, radio, or print media.

The top five spenders were Eli Lilly, Pfizer, Novartis, Merck and Forest Pharmaceuticals. Lilly has held the top spender position for 3 years. The report shows that $242,730 was spent on promoting drugs for depression and $217,983 on drugs used for ADHD.

Under current law, the specific amount spent on individual drugs cannot be listed unless the drug maker agrees. But a list in the report shows the top marketing dollars went for Lilly’s ADHD drug Strattera and its antidepressant Cymbalta second. Forest’s Lexapro ranked fifth and Pfizer’s atypical antipsychotic Geodon held the thirteenth position.

The current prices of these drugs at a middle dose on are $427 for 100 capsules of Strattera, Cymbalta costs $391 for ninety capsules, Lexapro runs $258 for 90 tablets, and Geodon costs $787 per hundred capsules.

These days, psych drugs are almost always doled out in 2- or 3- drug cocktails under the guise of treating “co-occurring” disorders like maybe ADHD and “treatment resistant” depression, for which antipsychotics are being promoted as an add-on to antidepressants.

A patient diagnosed with ADHD and treatment resistant depression might easily end up taking Strattera, Cymbalta and Geodon. The grand total for a year of these three drugs would bring Lilly and Pfizer roughly $19,260 per patient.

More than 80% of the expenditures analyzed for the Vermont report were designated “trade secret” by the drug companies, making it illegal to release the specific information to the public, according to a press release by the Attorney General.

Thirty-seven of the 78 drug companies making disclosures requested that some or all of their data be listed as “trade secret”. The total of payments made by these companies is $2,427,594.00, which represents 83% of the total payments made during this reporting period,” the report points out.

The Vermont legislature is considering a bill that would eliminate the practice of drug makers claiming payments to or on behalf of specific doctors, or for specific drugs, are protected from disclosure through the “trade secret” loophole.

“Our report could be so much more useful if legislative changes are made,” Attorney General Sorrell said in the press release. “It makes sense that Vermonters be able to see how much, if any, individual doctors are receiving in cash payments and from the manufacturers of which particular drugs.”

If the law is passed, consumers would be able to look up their doctors and find out what kind of benefits they are receiving and to what extent a drug maker is promoting a certain drug to prescribers. Analysts would also have access to information to help assess whether marketing expenditures are influencing prescribing habits, the press release points out.

The law would ban most gifts to doctors and other health care professionals. Free drug samples, certain scholarships, and payments for academic or scientific articles and journals would not be banned under the bill.

Whether a ban on food will be included is still being debated. In the year covered in the 2008 report, more than 11% of the recipients received over $1000 in free food with one recipient receiving more than $15,000 in free food.

On another front, in April 2009, a federal court upheld Vermont’s Pharmaceutical Data Mining Law as constitutional, against a challenge by data miners IMS Health Inc, Verispan, LLC, and Source Healthcare Analytics, Inc, and the pharmaceutical industry’s trade association, PhRMA.

The lawsuit alleged that the new law violated the right of free speech. The law in part prohibits “regulated entities from selling or using prescriber-identifiable data for marketing or promoting prescription drugs unless the prescriber consents”.

The prescriber-identifiable data (PI) obtained from pharmacies contains details about physicians’ prescribing patterns in terms of the number of prescriptions written and the tendency to prescribe certain drugs. Once the data is compiled by data mining firms, the information is sold to drug companies so that sales representatives can use it as a marketing tool to target individual doctors in promoting new drugs.

“Pharmaceutical manufacturers are essentially the only paying customers of the
data vendor industry,” the court states in its opinion. “Put simply, if PI data did not help sell new drugs, pharmaceutical companies would not buy it.”

The Vermont Legislature found that, coincident with the phenomenon of data mining, spending on direct marketing to doctors by the pharmaceutical industry increased by over 275%, the court pointed out.

“Pharmaceutical manufacturers collectively spend close to $8 billion a year to market drugs directly to prescribers, employing thousands of sales representatives,” the opinion notes. The estimated total cost of marketing to “Vermont prescribers approximates $10 million, not including samples or direct-to-consumer advertising,” the court states.

Vermont’s goal in enacting the new law was to contain prescription costs by ensuring that doctors focused on generic alternatives when appropriate. “The Vermont Legislature determined that targeted marketing by sales representatives armed with PI data leads to increased prescriptions for new drugs despite the availability of safe and effective cheaper alternatives,” the opinion notes.

“The Legislature seeks to limit the overprescription of new drugs to lower prescription drug costs and protect patients from unknown risks and side effects,” the court wrote. The Attorney General’s arguments cited in the opinion were that:

“(1) new drugs are not necessarily better than older drugs but are usually more expensive and may pose unknown risks and side effects; (2) detailing is only done for new drugs; (3) PI data is a marketing tool used to make detailing more effective and leads to the over-prescription of costly new drugs; and (4) the law’s restriction on the use of PI data will reduce the influence of marketing leading to reduced prescriptions for new drugs, thereby trimming spending on prescription drugs and promoting public health.”

Dr Meredith Rosenthal testified that “a 1% decrease in prescriptions of new patented drugs that do not yet have a generic bioequivalent, but that do have an adequate generic alternative, would lead to a $2 million cost savings to Vermont,” the court points out.

Filed under: 2009, KOL, prices, shrinks, Vermont

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