Healthy Skepticism Library item: 1084

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Electronic Source

Dr Mercola.
Drug Companies Engage in Illegal Sales Practices: U.S. Issues Warning
Mercola.com 2003 Apr 28

Full text:

The government warned drug companies in a compliance guide for the drug industry that many of the techniques they use to sell their drugs risk violating federal fraud and abuse laws.

The guide tells drug manufacturers that they must not offer any financial incentives to doctors, hospitals, insurers or pharmacists to encourage or reward the prescribing of particular drugs, as these types of incentives have a high potential for fraud and abuse.

Additionally, federal officials oppose the practice of some drug companies of offering gifts and entertainment to doctors.

A federal law, known as the antikickback statute, prohibits such payments under Medicare or Medicaid, which combined spend more than $30 billion a year on prescription drugs. However, the practice remains a part of other industries.

Marketing practices that increase federal costs, interfere with clinical decisions and lead to the overuse or misuse of drugs were of particular concern, according to the guide.

Drug companies did not agree with many of the provisions of the compliance guide, which also states that that drug companies could face prosecution for making payments to health plans or benefit managers, the companies that manage drug benefits, to encourage the use of their drugs.

Many health plans and benefit managers compose lists of recommended drugs known as formularies, and sales of drugs on such lists often increase rapidly. Some drug manufacturers therefore offer payments to the people who make up the lists, a practice which may be unlawful.

Additionally, the guide warns drug companies that their research and education grants must be separate from their marketing.

For example, if a drug company has any influence over the content of a professional education program or the choice of speakers, “there is a risk that the program may be used for inappropriate marketing purposes,” according to the guide.

Another practice condemned by the guide is when drug companies pay doctors to listen to their sales pitches. This practice is also susceptible to fraud and abuse.

Moreover, according to the guide drug manufacturers that give their sales agents excessive bonuses and expense accounts may be intentionally motivating their sales employees to use entertainment or other rewards to promote drug sales.

Ny Times April 28, 2003

DR. MERCOLA’S COMMENT:

These are long-needed restrictions on the shenanigans that the drug companies have been pulling off for some time now.

Why is it that other industries are far more tightly regulated with respect to conflict of interest than the drug companies? Do you even think for half a moment that insurance companies, banks or brokerage firms would be able to get away with a fraction of what the drug companies have been getting away with over the years?

Drugs are big business. Next to software, they have the highest profit margins of any industry in the United States. There have been many hundreds of billions of dollars available to grease the legislative backlash that has hit the financial community.

However, it really does seem that the tide is starting to turn now, and we are headed in the direction of tighter restrictions on what the drug companies can get away with.

When I was part of the drug model I was a part of their research scams. They would solicit primary care physicians to participate in their clinical trials, but this research was a thinly disguised ploy to bribe doctors to use their drugs.

I was involved as a primary care “researcher,” and in the late 80s was paid $100 per patient that I enrolled to try Claritin (loradatine) before it was released on the market. It was an alternative to the then popular Seldane, which was removed from the market after its drug interaction side effects were responsible for killing large numbers of people.

If this same “research” were done today it would be caught as the marketing scam that it was and it would not be allowed.

This seems to be a giant step in the right direction.

Also, as I said last year:

Drug companies are spending about $15 billion a year on physician marketing.

Most physicians have no clue that the drug companies are spending (on average) $10,000 to influence each of their behaviors. They, of course, do not receive a check, but the perks are quite significant.

They also don’t realize that they actually lose that much income and more if they factor in the time they lose by sitting with the drug company reps and going to their “free” meals and lectures. They also don’t realize what a fiduciary responsibility is, that they need to carefully analyze the costs involved in recommending expensive drugs.

Clearly drugs are sometimes appropriate and can save a person’s life. But most of the time they are unnecessary, cause harm and cause the patient to divert much of their hard-earned income to the drug companies, which further perpetuates this indirect physician subsidy.

One thing these drug companies are not is stupid. There is no way they would spend $15 billion a year to do this type of marketing unless they received a significant return on their investment.

Did I say return on investment?

Yes, I did.

The fact of the matter is that the United States alone is spending nearly $1 trillion for drugs.

Folks, that is one thousand billion dollars.

The late Senator Everett Dirksen from Illinois was fond of talking about Defense Department spending by saying, “A billion dollars here and a billion dollars there, and before you know it you are talking about real money.”

You’d better believe that there is plenty of profit in that trillion dollars.