Healthy Skepticism Library item: 1316

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: news

Anderson T.
Just what the doctor ordered: Reforms passed a year ago have changed the way drug reps deal with docs
Baltimore Business Journal 2003 Jun 27

Full text:

Jon Parry remembers watching his counterpart pharmaceutical sales representatives give hospital residents Palm Pilots as a perk for prescribing their company’s drug.

And if it wasn’t a Palm Pilot, maybe it was a complimentary trip to the spa, lavish dinner or tickets to a baseball game.

Now, such freebies are no-nos in the world of pharmaceutical sales and marketing.

A year ago this July, the Pharmaceutical Research and Manufacturers of America, a Washington, D.C.-based trade group known as PhRMA that represents drug makers, issued a set of guidelines for its members to follow when it comes to the relationship between drug reps and doctors.

The voluntary code redefined how drug reps interact with doctors — from restricting gifts to limiting consulting arrangements.

“You can’t just take anybody out for any reason,” said Parry, a pharmaceutical sales rep for Bristol-Myers Squibb in Baltimore. “The PhRMA code was something the companies did voluntarily but with a gun to their head.”

Never before has the relationship between pharmaceutical sales reps and doctors been so closely watched. A national movement led by industry groups and government officials is under way to clean up the big business of pharmaceutical sales, starting with how reps push their products and how doctors choose to prescribe them.

Americans spent $141 billion on prescription drugs in 2001, out of $1.4 trillion of the total health care bill that year, according to PhRMA (www.phrma.org). In 2002, drug companies invested an estimated $32 billion in discovering and developing new medicines.

Since PhRMA enacted its guidelines in July 2002, the Office of Inspector General for the U.S. Department of Health and Human Services issued guidelines this past April that are similar to PhRMA’s code, except with stricter consequences. Companies that fail to follow the department’s rules could face a federal investigation that could lead to civil penalties.

But even though PhRMA says most of its members have adopted its code on interactions with health care professionals, Maryland state lawmakers say it is not enough to stop inappropriate gifts between reps and doctors. Some Maryland legislators are fighting for a statewide law that would put monetary limits on the types of gifts given and force doctors to report gifts received.

State lawmakers believe the added level of reform could help to stymie the growth in drug costs. For example, annual Medicaid prescription drug costs grew about 20 percent from 1998 to 2000 and then jumped more than 28 percent in 2001, according to a report released June 13 by Express Scripts, the St. Louis-based pharmacy benefit manager.

Market confusion

Meanwhile, industry observers say both sets of guidelines — PhRMA’s and the Office of the Inspector General’s — have confused both sales reps and health care providers and have forced sales reps to change their pitch. A report released this month by Columbia MedCom Group, a Columbia-based firm supported by drug companies that develops educational programs for physicians, found that physicians are even limiting reps’ access to them.

“The PhRMA guidelines are one major factor contributing to a paradigm shift that directly impacts the way our industry conducts business,” Susan Torroella, CEO of Columbia MedCom Group, said in the recent report. “Because of this shift, pharmaceutical sales forces must learn new and more compelling ways to create and keep customers, or perish because physicians are no longer willing to listen to their usual approach.”

PhRMA has not studied how the marketing of prescription drugs has changed since it issued the new guidelines last July.

Companies such as Bayer, based in Germany, and Bristol-Myers Squibb Co., based in New York, say they have adopted the code, and sales reps acknowledge that things have changed, but there is no recorded proof.

And many doctors are apprehensive to discuss their relationships with drug reps.

But since the adoption of PhRMA’s new code, Bristol-Myers Squibb has hosted educational roundtables for doctors and pharmacists — a move that is permitted by the new PhRMA and Inspector General guidelines.

For example, Bristol-Myers Squibb paid pharmacists $250 each as a consultative fee to sit in on a roundtable discussion on infectious disease treatments. The PhRMA code says the fee is appropriate as long as it is going toward the education of a medical professional and doesn’t include entertainment at the roundtable.

Bayer officials declined to comment on the issue but did acknowledge that the company has adopted PhRMA’s code.

“I do think that the companies — because they’re members of PhRMA — are paying attention and trying to get that information to physicians,” said Julie Kass, an attorney with Baltimore-based Ober Kaler (www.ober.com), which represents various health care companies. “They’re also making sure that they’re not violating the law. It’s one thing for PhRMA to come out [with guidelines] and then another for the Inspector General to come out saying these things are suspect.”

Maryland’s prescription

Still, some Maryland lawmakers want to define even more clearly what drug reps can offer health care professionals.

A bill introduced by freshman Del. Eric M. Bromwell, a Baltimore Democrat, in the 2003 General Assembly session would have required doctors and drug reps to report any gifts valued at more than $25.

Another bill pushed by Del. Charles R. Boutin, R-Cecil, would have restricted all gifts valued at more than $50.

Both bills were tabled and are being studied in a summer session.

Bromwell and Boutin, each of whom is a member of the House Health and Government Operations Committee, plan to reintroduce legislation next year that will combine the two bills and offer a stronger argument.

“A lot of these companies can say they have regulations, but whether or not they adhere to them is a different story,” Bromwell said. “The point of the legislation wasn’t to go after the pharmaceutical companies but to lower the cost of pharmaceuticals in Maryland.”

Bromwell said that when pharmaceutical companies offer perks like vacations to doctors who write the most prescriptions for a certain drug, it drives up the cost of medication because there are fewer prescriptions being written for generic drugs.

No refills

PhRMA is opposed to state laws that regulate interaction between pharmaceutical sales reps and health care professionals. PhRMA officials said state regulations could create a patchwork of conflicting laws between the states that will do more to confuse sales reps and doctors than prevent excessive perks.

“We do have the comprehensive guidelines combined with the guidelines of the Office of Inspector General,” said Jeff Trewhitt, a spokesman for PhRMA. “Not only would state laws be a duplication, it could be nightmarish because you would have differing standards for different states.”

PhRMA was inspired to come up with the code after years of criticism from groups like Families USA and Public Citizen.

The organization had a set of guidelines addressing the issue but its board of directors, made up of pharmaceutical company executives, decided that one of the best ways to thwart the criticism and prevent any appearance of perks was to come up with a stricter code.

The board approved the new guidelines in April 2002 and by July 2002, PhRMA member companies had received a 42-page booklet detailing the new ethical code.

Trewhitt said the new code, which has nine guidelines, is more specific than any previous PhRMA regulations about certain restricted activities.

The booklet sent to members outlines 11 scenarios and explains how reps should handle them, such as the appropriateness of certain trips where doctors are learning about a company’s drug and the types of meals that are allowed.

“Clearly, companies are pulling back,” Trewhitt said. “And the critics are watching carefully.”