Requiring Drug Companies to Disclose Marketing Expenditures to Physicians
Jan. 27, 2005
Drug companies spent more than $7 billion (not including drug samples) in 2003 on one-on-one marketing to doctors. This works out to about $8,400 to $15,400 per doctor per year. Studies show that such marketing works: interaction with drug company representatives were associated with changes in doctor’s prescribing patterns. There are several problems with this type of marketing. First, drug marketing emphasizes the latest and most expensive drugs even though these drugs may not be the best in their category according to the medical evidence. When marketing rather than objective and unbiased information shape prescribing patterns, the cost of prescription drugs for consumers, government and health insurers will continue to rise far faster than the general rate of inflation. Second, gifts to doctors also undermine the doctor-patient relationship by creating the appearance of impropriety.
We propose legislation requiring drug companies to disclose to a state agency the amount of their marketing and gifts to doctors in the state, and make that information available for public review. Maine and Vermont enacted similar legislation; at least 15 other states have considered similar bills.
The $7 billion drug companies spent in 2003 on one-on-one marketing to doctors represents a 78% increase over 1999 levels. This amount includes direct gifts to doctors, such as expensive meals, entertainment, tickets to sporting events and travel, as well as the practice of “detailing.” “Detailing” refers to the practice of pharmaceutical companies sending representatives – essentially lobbyists for their drugs – into doctors’ offices. In 2001, the industry employed 90,000 drug company detailers – a ratio of 1 salesperson for every 4.7 office-based physicians. The purpose of detailing is to influence prescribing behavior. Companies often buy data about the prescribing patterns of individual physicians, and then use detailers to shift those patterns.
A former detailer explained that gifts:
“buy you time with a doc, time that might change his mind. . . .Money is the big resource. The pads and pens are great for access, but the dinners and what costs money—CDs, handheld computers, everything given in the name of research—this is what’s thrown at docs to get them to change their minds.”
A New York Times article reported that gifts can include five- and six-figure checks that arrive unsolicited in doctor’s offices.
These marketing efforts do influence behavior. In an analysis of several studies, drug company marketing efforts were associated with changes in prescribing patterns and requests to include particular medications on formularies, sometimes counter to existing efficacy evidence. In a study of residents, 84% thought that their colleagues were influenced by drug company detailing. In a June 2003 report, Forrester Research provided results from its survey of physicians who have expressed an interest in online detailing. Of respondents indicating they had participated in some kind of e-detailing, 67% had ordered samples and 58% prescribed more of the featured drug – all as a result of direct-to-physician marketing.
Drug detailing raises important problems:
- Increasing public- and private-sector expenditures on prescription drugs: Drug detailers usually promote newer brand-name drugs which are often much more expensive than existing alternatives. Yet the newer drugs may not be any more effective than older drugs. A Pennsylvania study found that 40% of patients in a state program received hypertension medication different those recommended in medical guidelines. The state would have saved $11.6 million, or about 24% of the total cost of the hypertension drugs, if doctors adhered to the guidelines. The study suggested drug company marketing was partly responsible for the variance from medical guidelines.
- Undermining the doctor-patient relationship: Patients are concerned about drug company gift-giving. One study found that as many as 70% of patients believe gifts to doctors significantly impact prescribing. The American Medical Association editorialized that: “The price to be paid for extravagant gifts isn’t measured by the size of a drug company’s marketing budget, but in the erosion of trust in the medical profession.”
What the Model Bill Does
Physicians, consumers and policymakers have little hard data on the amount of pharmaceutical marketing expenditures to physicians. To shed some light on this problem, Maine and Vermont have enacted, and 15 other states have considered, laws requiring pharmaceutical companies to disclose to a state agency the value of their marketing efforts to doctors, including gifts, detailing and other activities. Just as state law requires disclosure of campaign contributions and lobbying expenditures, a similar requirement should be enacted for drug companies attempting to influence physician prescribing decisions. The Model Bill is based on the Maine and Vermont laws and shines needed light on the extent of drug company marketing to influence physician decisions.
1 Lawrence, Mary Beth & Anna-Maria Zaugg. “Bruised but Triumphant.” Medical Marketing & Media. May 2004, and Friedman, Katherine, Katrina Kulp, and Mary Berryann. “Business Watch: 1999 in Review.” Medical Marketing & Media. May 2000.
2 Blumenthal, David MD. “Doctors and Drug Companies.” New England Journal of Medicine. October 28, 2004.
3 Capaldi, Ralph as quoted in “Visits from Pharmaceutical Reps,” by Elizabeth Ellen. Psychiatric Times, Vol. VIII, Issue 1, January 2001. Available at http://www.psychiatrictimes.com/p010121.html.
4 Harris, Gardiner. “As Doctors Write Prescriptions, Drug Companies Write Checks,” New York Times, June 27, 2004.
5 Blumenthal. October 28, 2004.
6 Blumenthal. October 28, 2004.
7 Boehm, Elizabeth W. “Pharma eDetails Work: Doctors Prescribe More.” Wholeview TechStrategy Research. Forrester Research. June 24, 2003.
8 Fidler, Eric. “Study: Doctors Prescribe Expensive Drugs Instead of Those Preferred Under Medical Guidelines.” Associated Press, April 20, 2004.
9 Steinman, Michael. “Gifts to Physicians in the Consumer Marketing Era.” JAMA. 2000; 284:2243. Available at http://jama.ama-assn.org/cgi/content/full/284/17/2243.
10 Editorial Staff. “Pharmaceutical Marketing to Physicians: Free Gifts Carry a High Price.” American Medical News, June 10, 2002. Available at http://www.ama-assn.org/amednews/2002/06/10/edsa0610.htm