Healthy Skepticism Library item: 17963

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

Ingram M
Biovail says research and others say conflict
The Globe and Mail 2003 July 22

Full text:

Should doctors be paid to prescribe certain drugs? Most patients and specialists in medical ethics would probably argue they should not, because doing so might pose a conflict of interest, and cause them to prescribe drugs that might not be as effective. But what if the doctor in question is involved in a research trial? Shouldn’t he or she be compensated for collecting data on the drug? Canadian drug giant Biovail, which seems to have a knack for attracting controversy, has landed smack in the middle of the grey area between those two questions with its drug Cardizem.

According to a recent report in both The Wall Street Journal and Barron’s magazine, the Canadian drug maker has been paying U.S. doctors up to $1,000 (U.S.) for prescribing the heart drug to their patients, provided at least 11 patients stay on the drug beyond a trial period. Doctors are also required to fill out a form that notes the patient’s blood pressure and a few other details at the time the drug is prescribed, and the doctor’s assistant is eligible to receive up to $150 for helping to fill out the forms.

Those forms are the key to how the Cardizem program is perceived. Biovail says that because the doctors in question have to provide information about their patients and their response to the drug, it makes it a kind of research trial, similar to the class IV trials that drug companies do, in which drugs are supplied to patients who meet the criteria, and then information is collected from physicians whose patients use the drug. The payments, the argument goes, are a way of reimbursing the doctor and his or her assistant for their time and effort.

The only problem with that argument, however, is that the Cardizem program doesn’t appear to have been designed as a research trial and doesn’t seem to have been conducted like one. When Biovail revealed the idea at an analysts’ meeting in March, it was described as a marketing campaign aimed at getting doctors to prescribe more Cardizem, a campaign that was going to be handled by the company’s sales force. Is it common for salespeople to engage in research trials? In the pharmaceutical industry, the answer would be yes. In fact, such behaviour seems almost tame compared with some of the kickbacks and giveaways used in the past.

The U.S. government is clearly concerned about blurring the lines between marketing and research — so concerned that, in April, the U.S. Department of Health released new guidelines that stated, among other things, that drug research programs should not be carried out by a company’s sales force. There is also a U.S. federal anti-kickback law, which makes it illegal for companies to offer inducements to doctors in return for using a product. Biovail says its program was designed by consulting firm Quintiles Transnational, which guaranteed that it would meet U.S. federal criteria.

Biovail has a reputation for being aggressive in pursuit of higher sales. In 2001, the company was accused by the U.S. Federal Trade Commission of using fraudulent methods to try to keep a competitor from releasing a generic version of Biovail drug Tiazac. According to the FTC, Biovail illegally acquired a patent and then listed it in a U.S. Food and Drug Administration list of protected drugs as a way of delaying the launch of the competing drug. Biovail agreed to settle the case without admitting any wrongdoing, but it was ordered to divest a portion of its exclusive rights to Tiazac.

That case led to the controversial resignation of a leading Wall Street pharmaceutical analyst. Jerry Treppel of Banc of America Securities lost his job last year after issuing a “sell” report on the stock and making certain comments about the company’s behaviour. Mr. Treppel was later reported to have an ownership stake in a competing drug company, although he maintained that this was held in a brokerage account over which the analyst said he had no direct influence. In April, Mr. Treppel launched a $100-million lawsuit against Biovail for defamation of character.

The news about Biovail’s marketing program appeared to weigh on the stock yesterday, when it fell by about 4 per cent. Still, the company’s shares are up by close to 100 per cent in the past year, as a result of optimism about sales of its new antidepressant, Wellbutrin XL, which Biovail is selling through a co-marketing deal with GlaxoSmithKline PLC. Some analysts — such as those at Merrill Lynch and J.P. Morgan — continue to recommend the stock as a “buy,” despite the controversy over the company’s payments to doctors, saying Biovail is undervalued compared with competitors.

Research Capital analyst Andre Uddin disagrees, however. He recently issued a research report rating Biovail as a “sell,” citing “weaker-than-anticipated growth due to looming generic competition,” as well as the fact that Biovail’s revenue growth is driven primarily by acquisitions rather than being internally generated. The analyst also cited “ongoing aggressive accounting that we feel is distorting the true nature of the company’s business,” including a number of one-time items that have boosted revenue and profit while minimizing costs.