Law targets drug marketing practices - Westfair Communications

The steep increase in prescription drug prices is squeezing businesses”™ ability to afford health care insurance for their employees. Brand-name drugs have soared 40 percent over the past eight years. The average price for a brand-name drug is now $72, compared with $17 for the generic version, according to the AARP.

The high prices are causing some consumer groups to question the amount of money the pharmaceutical companies spend on marketing their drugs directly to doctors, a practice that consumer advocates say undermines physicians”™ responsibility to their patients, since the sole goal is enhanced sales for the drug firms. According to Consumers Union, the nonprofit publisher of Consumer Reports, in 2003 the drug companies spent more than $7 billion in the U.S. on one-on-one marketing to doctors, a 78 percent increase over 1999 levels. An editorial published last month in the American College of Physicians”™ Annals of Internal Medicine claimed the amount spent on direct marketing to doctors surpassed $23 billion in the past year.

One issue is the ethics of spending so much money on marketing, given the exorbitant price of the drugs and Americans”™ difficulty in being able to afford them. Another is whether the pharmaceutical companies”™ sales tactics serve the public interest. Armed with extensive, detailed data about all the prescriptions a doctor has filled, as well as other specific information about his or her professional affiliations and history with competitors”™ products, sales reps from the drug firms routinely descend on physicians”™ offices with offers of expensive dinners, tickets to sporting events, and other perks.

Now, two bills introduced by New York state legislators seek to curtail these marketing ploys. Assemblyman Kevin Cahill, D-Kingston, and Sen. John A. DeFrancisco, R-Syracuse, have introduced a bill (A. 07645 and S. 2056) that would ban the sale of physician prescription records by data-mining intermediaries to pharmaceutical companies for use in marketing prescription drugs to doctors.

A second bill (A. 7468 and S. 2971) would require drug manufacturers and wholesalers to disclose publicly to the state Department of Health all gifts valued at $75 or more made to health-care providers who prescribe drugs.

About a dozen states have passed or are considering some type of gift-disclosure legislation. Last year, a gift-disclosure bill in New York was passed by the Assembly, only to die in the Senate. The citizens”™ watchdog organization, Common Cause/NY, based in New York City, reported that stepped-up lobbying efforts by the pharmaceutical industry played a role in the defeat of that bill as well as one that would have created a system of bulk purchasing for pharmaceuticals.

It notes that industry lobbying in the state amounted to $971,526 as of April 2006, significantly more than the $646,834 spent by the drug companies in 2003. The group noted that Senate Republicans have been the favored recipients of this money, accounting for a third of campaign contributions made since 1999.

The Cahill-sponsored bill addresses a more complicated issue. Unbeknownst to many physicians, identifying information, such as their medical license number, name or U.S. Drug Enforcement Agency number, on all the prescriptions they have written is sold by retail pharmacies to data-mining companies. (Patient identifying information is encrypted.)

The health-care data miners match the identifiers with the physician MasterFile of the American Medical Association (AMA), a comprehensive database containing the name, address, and specialty of every physician in the nation (including non-AMA members). The data companies are then able to compile detailed information on every prescription, including the type of drug, date, dosage and authorized refills, made by individual doctors. That information is then sold to the pharmaceutical companies, which distribute the data to their sales reps, enabling them to tailor their sales pitches to specific doctors and track the results.

While drug companies have been collecting prescription-level data for decades, the advent of electronic technology has vastly increased their reach and precision. “It”™s gotten a lot more sophisticated,” said Dr. David Grande, who is conducing research on social health policy at the University of Pennsylvania. “Until recently, it was not feasible to have prescribing data on every doctor in the country. The drug companies can also obtain the data on a real-time basis, in just a few weeks.”

According to a Gallup poll commissioned by the AMA, 77 percent of doctors are aware of the practice and 66 percent disapprove of it. However, the AMA opposes the proposed legislation banning the practice. One reason may be that it makes a hefty profit from licensing the information from its MasterFile to data miners. In 2005, it earned $44.5 million from use of the MasterFile.

Without addressing that issue, the AMA argues that the data collection serves a number of constructive purposes ”“ and that doctors themselves are appreciative once they become aware of this. “Legislative bans threaten beneficial efforts to integrate physician prescribing data into clinical decision making,” wrote AMA president Dr. William G. Plested in an e-mail.

The Medical Society of the State of New York (MSSNY) sides with the AMA, also arguing that the proposed bill compromises legitimate use of the data for educational purposes. “The reality is, we think anything that would limit the kind of data available to physicians for purposes of enhancing the quality of their care is something we should look very carefully at. It smacks of book burning,” said Gerard L. Conway, senior vice president at the government affairs division of the MSSNY, based in Albany.

The Cahill bill, however, would not prohibit the use of prescription level data for health research, clinical trials, drug safety evaluations, product recalls or any purpose other than the sale of the data for marketing purposes, so the point would seem moot.

But Conway said it was difficult to differentiate the purposes of the data. “We should be very careful if we start to limit what physicians can access. That is a slippery slope. It ends inevitably in inferior patient care.”

For doctors who are concerned about the practice, the AMA enables them to opt out of having their prescription-level data made available to drug-company sales reps. So far, just more than 8,000 doctors (out of a total of 700,00 patient-care physicians) have taken this option, with about 100 opting out every week, according to an AMA source. However, physicians have to renew the opt-out after three years.

Furthermore, the AMA”™s commitment to publicizing the opt-out is questionable to critics, given that it makes a hefty profit from the sale of data to the data-mining companies. (The data companies themselves are very profitable. IMS Health, one of the largest health-care data miners, based in Fairfield, Conn., had sales of $2 billion and net income of $300 million in 2006, according to Business Week.)

While more than a dozen states are considering similar bills, so far only New Hampshire has been successful in passing legislative banning the mining of prescription-level data for marketing practices. However, last month a federal district judge struck down the law, ruling it was unconstitutional after it was challenged by IMS Health and another data-mining company as infringing on their right to freedom ofÂ commercial speech.

Supporters of the Cahill bill are currently working with his staff to amend the language so that it can avoid the fate of the New Hampshire legislation. It”™s likely the bill will have a better chance of passing next year, according to Bill Ferris, the AARP legislative representative for New York. AARP is hopeful that the gift-disclosure bill will pass this year.

The National Physicians Alliance (NPA), a Reston, Va.,-based group of 10,000 doctors dedicated to preserving their independence from the drug companies”™ influence, has come out in support of the Cahill legislation. It is concerned that pressure from pharmaceutical company sales reps undermines the physician-patient relationship. “Physicians are entrusted by society to act in their patients”™ best interests, yet physicians are demonstrably influenced by the marketing strategies of drug detailers,” the alliance noted.

Dr. Joseph Ross, a member of NPA who practices at Mount Sinai Hospital in New York City, said he for one is “happy that New York is addressing this.” He noted, “I suspect doctors don”™t understand the extent of the data mining. (The drug companies) know what they”™re doing; they”™re watching and putting pressure on people to prescribe their drugs. The AMA isn”™t standing up and protecting physicians. It”™s really a farce because the pharmaceutical companies make a tremendous amount of money.”

Ross added that under the current system, it”™s difficult for physicians to get unbiased information about new drugs. “They get most of the new information from pharmaceutical reps or by attending continuing educational dinners sponsored by pharmaceutical companies. These could be sponsored by state medical societies. The problem remains, how do you educate and provide new knowledge to practicing busy physicians?”