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Recent Second Opinion:

Post-Election Predictions for Obamacare
November 11, 2010

Improving the FDA's REMS Program
August 05, 2010

Are Foreign Clinical Drug Trials Safe?
July 08, 2010

FDA's Bad Ad Program
June 03, 2010

Obesity and Public Health
May 05, 2010

The Route to Reconciliation
March 05, 2010

Conflict of Interest
January 28, 2010

Analyzing the Healthcare Bills
November 18, 2009

President Obama's Plan for Reform
August 24, 2009

The Healthcare Reform Debate
July 23, 2009

Priorities for the New FDA Commissioner
December 19, 2008

PhRMA's New Marketing Code
August 28, 2008

Personal Genetics Testing
July 29, 2008

Where health care policy experts have their say
June 13, 2008

Sources of Medical Research Funding
April 24, 2008

Off-Labeling Marketing
March 17, 2008

Second Opinion:
Where health care policy experts have their say

August 28, 2008: PhRMA's New Marketing Code

Critics have accused the pharmaceutical industry of inappropriate marketing practices that inflate health-costs through inappropriate physician detailing that promotes new, branded medicines to the detriment of cheaper generics. High profile articles and editorials at leading medical journals, including The New England Journal of Medicine, and some student medical societies have echoed these charges. In response, the Pharmaceutical Research and Manufacturers of America (PhRMA) has released a new marketing code targeting the distribution of promotional items and free meals by sales representatives.

PhRMA's press release states that the new code "is part of an ongoing effort to ensure that pharmaceutical marketing practices comply with the highest ethical standards." For this edition of the "Second Opinion" Expert Forum, we ask: do you agree that inappropriate detailing is a major cause of growing U.S. health care costs? Do you think that the new PhRMA code addresses legitimate ethical concerns about industry marketing practices? Is physician-marketing a legitimate practice for profit-driven medical product firms?

This edition of our expert panel includes:

  • Senator Herb Kohl is the Chairman of the Special Committee on Aging, the Senate's principal committee charged with examining the many issues affecting older Americans, like Medicare, retirement security and protection from fraud and abuse. Kohl has led efforts to improve the Medicare Prescription Drug Benefit, urging the Administration to negotiate lower drug prices for seniors and close the "donut hole" in coverage that is leaving many beneficiaries with unexpectedly high drug costs. Senator Kohl was elected to the Senate in 1988 and re-elected to a fourth six-year term in 2006. (Read Kohl's Second Opinion.)
  • Sally Pipes is president and chief executive officer of the Pacific Research Institute and author of Miracle Cure: How to Solve America's Health Care Crisis and Why Canada Isn't the Answer. She has written regular columns for Chief Executive, Investor's Business Daily, and the San Francisco Examiner. Ms. Pipes writes, speaks, and gives invited testimony at the national and state levels on key health-care issues facing America. (Read Pipes' Second Opinion.)
  • Stephen Curley and Chris Rael are the executive director and editorial director, respectively, of the CMS Global Group. Based in New York and Los Angeles, CMS Global Group is a communications, information and strategy company with extensive experience in the pharmaceutical arena. Executive Director Stephen Curley has worked in many facets of compound development, including program and project management, business analysis, and process engineering technology. He has developed extensive web-based workspace/information exchange systems for clinical trial sponsors and investigators. Editorial Director Chris Rael has worked for 20 years in professional education, clinical research reporting, and many other functions requiring editorial support within the industry. (Read Curley's and Rael's Second Opinion.)
  • Paul H. Rubin is Samuel Candler Dobbs Professor of Economics and Law at Emory University in Atlanta and editor in chief of Managerial and Decision Economics. Dr. Rubin has written or edited eleven books, and published over one hundred and fifty articles and chapters on economics, law, regulation, and evolution. He has consulted widely on litigation related matters and has been an advisor to the Congressional Budget Office on tort reform. (Read Rubin's Second Opinion.)
  • Thomas P. Stossel, MD, is a senior fellow at the Manhattan Institute's Center for Medical Progress. He is currently Director of the Division of Translational Medicine at Brigham & Women's Hospital and American Cancer Society Professor of Medicine at Harvard Medical School. He has been awarded honorary MD degrees from the Universities of Linköping (Sweden) and Geneva (Switzerland). (Read Stossel's Second Opinion.)

"For many years, I have been interested in examining ways to make health care more affordable. I have paid close attention to the rise in prescription drug costs and the burden this has placed on Americans across the country.

As Chairman of the U.S. Senate Special Committee on Aging, I have held a number of hearings on the sales and marketing practices of the pharmaceutical and device industries. Currently, drug companies spend far more on getting doctors to prescribe their drugs than they do on research to create the drugs in the first place. I was dismayed to learn that the drug industry's marketing strategy involves heavy lobbying of doctors through frequent office visits, a constant stream of freebies, and other payments, gifts, and fees of varying value. It is worth noting that all of these practices are quite similar to those that were recently banned in the U.S. Congress for ethical reasons.

Researchers have found that these payments influence the prescribing patterns of doctors and often cause considerable conflicts of interest for those conducting medical research. The result is that the quality of American health care is undermined, and the price tag is inflated. I trust that if drug companies reduced the $19 billion they spend every year on lobbying doctors, consumers would see a significant reduction in their costs at their local pharmacy.

At an appearance before the Aging Committee hearing just over a year ago, a PhRMA representative stated that their previous marketing code was sufficient to "demonstrate [PhRMA's] intention of interacting with healthcare professionals for the benefit of patients and to enhance the practice of medicine." I disagree.

As a businessman myself, I do not believe in interfering with legitimate business practices, which is why my legislation with Senator Chuck Grassley (IA-R) merely requires that drug company gifts and payments to doctors be disclosed, not banned. After all, if these financial transactions are above-board, there should be no problem with making them public. If they are not, the threat of disclosure will encourage drug companies to reconsider them.

I am encouraged to see that PhRMA has begun to address some of these concerns with its new code of ethics. The new code shows how far they have come, and I recognize that some of the changes are noteworthy. However, the new guidelines are only voluntary.

We will look forward to seeing how these guidelines are implemented and we will continue to pressure the industry to ensure that the industry-doctor relationship does not compromise the doctor-patient relationship."

Senator Herb Kohl is the Chairman of the Special Committee on Aging, the Senate's principal committee charged with examining the many issues affecting older Americans, like Medicare, retirement security and protection from fraud and abuse. Kohl has led efforts to improve the Medicare Prescription Drug Benefit, urging the Administration to negotiate lower drug prices for seniors and close the "donut hole" in coverage that is leaving many beneficiaries with unexpectedly high drug costs. Senator Kohl was elected to the Senate in 1988 and re-elected to a fourth six-year term in 2006.

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"When a doctor considers treatment options, free stationery or an Applebee's burger isn't likely to matter. Physicians are well paid and swear an oath to do what's best for patients.

But lawmakers nationwide are convinced that drug companies and physicians are in cahoots. So they're pushing for severe restrictions on drug company interactions with physicians. In response, PhRMA has issued a new voluntary code of conduct to deflect these lawmakers.

Under the old guidelines, salesmen were allowed to give gifts under $100 and occasionally purchase "modest" meals. Now, only educational gifts are allowed. Restaurant outings are banned.

But if doctors are so easily bribed, why stop at gifts and meals? Perhaps a third party should attend sales meetings to ensure personal relationships don't develop.

Politicians love paperwork. But any legislative move to create more red tape will simply drive up medical costs. One can only hope that PhRMA's new code will keep busybody lawmakers at bay."

Sally Pipes is president and chief executive officer of the Pacific Research Institute and author of Miracle Cure: How to Solve America's Health Care Crisis and Why Canada Isn't the Answer. She has written regular columns for Chief Executive, Investor's Business Daily, and the San Francisco Examiner. Ms. Pipes writes, speaks, and gives invited testimony at the national and state levels on key health-care issues facing America.

* * *

"Pharmaceutical salespeople are bound to describe only FDA-approved information. Potential inappropriate detailing would be an anomaly, not a cost factor. Branded pens do not drive prescriptions. Traditionally, physicians and medicine manufacturers dine while exchanging information on medical, scientific and patient issues. This practice is being curbed, due to concern about potential conflict of interest.

PhRMA code compliance is voluntary, but we see an industry vigorously policing itself on matters of detailing and increasing transparency. Industry commits significant effort and resources to comply with AMA guidance, the PhRMA code, and self-imposed policies.

The purpose of pharma outreach is to provide the latest safety/efficacy information. Doctors compare and choose on the basis of available information. It is legitimate and responsible for manufacturers to report such data. Industry has traditionally invested in creating opportunities to communicate with busy professionals. The new code reflects industry's responsiveness to concern about how these activities are conducted."

Stephen Curley and Chris Rael are the executive director and editorial director, respectively, of the CMS Global Group. Based in New York and Los Angeles, CMS Global Group is a communications, information and strategy company with extensive experience in the pharmaceutical arena. Executive Director Stephen Curley has worked in many facets of compound development, including program and project management, business analysis, and process engineering technology. Editorial Director Chris Rael has worked for 20 years in professional education, clinical research reporting, and many other functions requiring editorial support within the industry.

* * *

"The Pharmaceutical Research and Manufacturers of America (PHRMA), the trade association for the pharmaceutical companies, has (partially) caved in and agreed in to a new code limiting interactions with doctors. No more free pens or mugs, fewer free lunches. This code (like the 2002 code which also limited interactions) is a response to claims that the prescribing behavior or doctors is unduly influenced by industry representatives ("Detailers") and that this interaction harms patients.

It is important to carefully examine the research literature on which this claim is based. If it were true that patients were harmed, then research would show that doctors changed their behavior after interactions with drug reps and that patients were harmed by this change.

But there is no evidence at all that any of the alleged interactions between doctors and detailers has had any harmful effect on any patient. Here is a direct quote from one of the leading articles on the issue (by Ashley Wazana, who surveyed most of the existing literature on the topic): "No study used patient outcome measures."

In other words, no one has actually looked at the effect of detailing or of pharmaceutical marketing on the welfare of patients. Indeed, some of the researchers writing in this area profess not to care about patient outcomes. In an interchange I had with two authors in this tradition (in the Journal of the American Medical Association) they said that "this fact [that pharmaceutical promotion influenced physicians' drug choices] rather than the possible merits of the choices themselves, should concern us as physicians."

So we have a set of policies based on an unproven assumption. Moreover, Frank Lichtenberg, a health economist at Columbia University, has shown that newer drugs tend to reduce total health care costs and improve patient outcomes better than older drugs. The policies at issue here may reduce the use of newer drugs because they will make it more difficult for physicians to learn about newer drugs. If this happens, patients will suffer—a perverse outcome for a policy ostensibly designed to improve patient care."

Paul H. Rubin is Samuel Candler Dobbs Professor of Economics and Law at Emory University in Atlanta and editor in chief of Managerial and Decision Economics. Dr. Rubin has written or edited eleven books, and published over one hundred and fifty articles and chapters on economics, law, regulation, and evolution. He has consulted widely on litigation related matters and has been an advisor to the Congressional Budget Office on tort reform.

* * *


"Trade associations have codes of conduct to raise consciousness regarding decent behavior, to codify mechanisms for compliance and to convey a desire to serve the public. The updated PhRMA Code has these unobjectionable attributes. Unfortunately, it also represents a maladaptive reaction to empirically unsupported and unbalanced accusations that marketing causes health care professionals to act inappropriately and the conceit that product information must be completely unbiased. Academic health centers have lent prestige to these ideas by banning standard business practices: small gifts and meals. Rather than rebut the false claims effectively, PhRMA makes the same recommendations, disingenuously, since compliance will lower company expenses at no competitive disadvantage, and it implicitly admits that these trivial activities are bribes. Worse, the Code preamble conveys concern that interactions with professionals "not be perceived as inappropriate." Anti-market activists base their criticisms on appearances; it is science, however, not public relations or politics that advances medicine."

Thomas P. Stossel, MD, is a senior fellow at the Manhattan Institute's Center for Medical Progress. He is currently Director of the Division of Translational Medicine at Brigham & Women's Hospital and American Cancer Society Professor of Medicine at Harvard Medical School. He has been awarded honorary MD degrees from the Universities of Linköping (Sweden) and Geneva (Switzerland).

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