Healthy Skepticism Library item: 15676

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Publication type: news

Benesh P.
Pharma Eyes PR Lift From Assistance Plans
Yahoo Finance 2009 May 22
http://www.zimbio.com/Investor's+Business+Daily/articles/3804/Pharma+Eyes+PR+Lift+Assistance+Plans

Full text:

Public service or public relations ploy? Altruism or aggrandizement?

Since 2005, many drugmakers, especially the largest brand-name manufacturers, have provided prescriptions at modest or no cost to low-income Americans.

The Pharmaceutical Research and Manufacturers of America (PhRMA), the leading industry trade group, publicizes the plans under the Partnership for Prescription Assistance and leads consumers to the many company plans through a Web site.

The industry has spent tens of millions of dollars on advertising and on two information buses crisscrossing the U.S. PhRMA spokesman Ken Johnson says member companies have donated $14 billion worth of meds, based on wholesale prices.

The newest program comes from Pfizer, which will provide free drugs for some people who lose their jobs.

Pfizer calls the scheme MAINTAIN (Medicines Access for Those who Are in Need). It lists 70 drugs, including top brands Lipitor, Celebrex, Lyrica and Viagra.

It’s a good political and public relations strategy, says Joel Hay, professor of pharmaceutical economics at the University of Southern California.

Pfizer and other drug firms are in the cross-hairs of Congress, which aims to reduce drug costs. Helping the unemployed is a “particularly brilliant way to go,” Hay said.

And thanks to the rules, it won’t cost much. To get free drugs from Pfizer, you must have lost your job after Jan. 1 and must have been on a Pfizer prescription for at least three months before getting fired.

You also must show you have no drug insurance and prove you’re in financial distress.

The program opens for enrollment on July 1 and closes on Dec. 31. Free prescriptions are limited to one year.

Soul Searching At Pfizer

Pfizer, which was not available to talk, should reap a couple of benefits from the program, watchers say. Among other things, it will build good will while reinforcing its brands, says Tom Gable, whose firm, Gable PR, recently worked for Pfizer.

“Pfizer wants to show that it’s a corporation with a soul,” Gable said.

Indeed, Pfizer said in a press release that the idea for MAINTAIN came from the soul, inspired by employees whose friends and family members have lost their jobs.

But the company could also use a financial shot in the arm — and good PR might help on that end.

Pfizer unveiled the giveaway plan less than three weeks after reporting an 11% drop in first-quarter earnings. Thomson Reuters analysts see profit declining each of the next three quarters as well.

It’s not news that key Pfizer drugs are losing customers to generics. Lipitor, a cholesterol-fighting statin that accounts for about 25% of sales, loses patent protection in 2011. But consumers are already defecting to generic statins, including a knockoff of Merck’s Zocor. Sales of Lipitor fell 13% in the first quarter.

That’s why building brand loyalty matters. By helping the unemployed, Pfizer might earn enough good will to keep some of its customers on its branded products.

Pfizer wants patients to stick with their current drugs because, once they get new jobs, they’ll become paying customers again.

The company is known for trying new marketing tactics as conditions change, says Mick Kolassa, chief executive of Medical Marketing Economics. “They’re the best drug company when it comes to testing the wind.”

Look for other big pharma firms to launch similar plans, not least because the industry is renowned for playing follow the leader.

“I bet the people at GlaxoSmithKline, Merck and Eli Lilly are kicking themselves,” Kolassa said.

Too Many Complications?

But while the industry is busy congratulating itself for the prescription assistance program, it also has drawn fire. Critics include researchers writing in the current issue of the journal “Health Affairs.”

All five researchers came from Brigham and Women’s Hospital in Boston, led by Niteesh Choudhry, an associate physician at BWH and an assistant professor at Harvard Medical School.

The team surveyed drug company assistance plans and found them falling short of their claims. The major problems: confusing application forms and lack of transparency.

The forms are above the level of many people with “low health literacy,” the researchers said. Patients need a 10th-grade reading level to understand the main passages, while the small print requires 11th-grade skill.

Meanwhile, the lack of transparency means the outcomes of these plans are unclear, the researchers said.

Only six of the 165 assistance programs run by the 82 companies surveyed told the researchers how many people received benefits.

More than half refused to disclose their income eligibility criteria. The report calls for more information on these programs as a public policy priority.

The report raises the question whether charity is better than insurance coverage. The U.S. is the only market in which drug assistance programs are needed, Kolassa says.

At the same time, no other industry would be criticized for giving its product away, he says. “The problem with pharma is not the cost — it’s the coverage.”

Would the industry prefer a universal health system to cover pharmaceuticals? The answer is a bit opaque.

“As an industry we believe every single person in America should have access to medicine with reasonable co-pays,” Johnson said.