A recent article in BusinessWeek discussed how “drug companies spent almost $2.6 million on marketing their products to Vermont doctors and hospitals in the 12 months ending July 1, 2009.” According to a report issued by the Vermont Attorney General William H. Sorrell, the new Vermont law, which took effect during this time frame, is “expected to sharply reduce this kind of spending.”
The report was the seventh one from Mr. Sorrell regarding Pharmaceutical marketing disclosures and is based on disclosures of payments made during the period July 1, 2008, through June 30, 2009, in adherence to Vermont’s Pharmaceutical Marketing Disclosure Law, 18 V.S.A. § 4632. The report notes how this law was “amended substantially in 2009 to prohibit most gifts, to require reporting by manufacturers of biologics and medical devices, and to eliminate the trade secrets exception to public disclosure.”
All together, 85 pharmaceutical companies reported $2,599,589 was spent on fees, meals, travel expenses, and other direct payments to Vermont physicians, hospitals, universities, and others authorized to prescribe or dispense pharmaceutical products. This amount was about $400,000 less than in the previous year. This significant difference should reflect the drug industry’s response to new regulations and tightened restrictions on marketing and disclosure but, this is also significant because less doctors and patients will be informed.
Of the 2769 physicians and nurses with active Vermont licenses to prescribe, 1289 physicians and nurses, or 47% had $2,137,509 in drug marketing expenditures associated with them—that’s less than $1,700 per physician or nurse, hardly a source for outside income. Total, the average paid to all prescribes was less than $1,000!
The report also noted that since 2004, there has been an increase of over 54% in the number of manufactures who have reported marketing expenditures, a decrease of over 35% in the amount of expenditures, and a 12% increase in the number of expenditures reported.
The biggest spenders were Eli Lilly, Pfizer, Forest Pharmaceuticals, Merck and GlaxoSmithKline. The report noted that over the last three years, the percentage of payments reported by these companies dropped 56% to 52% to 47% in FY09. Almost 75% of expenditures went directly to physicians. Of these physicians, 102 received $3,000 or more, mostly psychiatrists groups, and other specialties such as internal medicine, neurology, family practice, and ionizing radiation privileges.
Of the 50 drugs with the greatest expenditures, over 17%, or $350,000 went for marketing drugs used for treating depression. With a total of 326 drugs marketed for FY09, nearly 77% of the total expenditures for FY09 were spent on the top 15% of all drugs marketed.
With regards to food, more than 20% had over $500 spent on them, including more than 12% who had over $1,000. Approximately 37% of all recipients of food received food valued at less than $100.
Approximately 42% of marketing, or $1.1 million was spent on speaker fees, which were down from 48% or $1.4 million in 2008. Almost 25% were for payments for marketing products, while only 12% were for continuing medical education (CME) grants.
Conclusion
While people in Vermont like Ken Libertoff, director of the Vermont Association for Mental Health, which has lobbied for stiffer disclosure requirements, believe that such changes are good, there is not enough evidence on either side to show how patients will benefit from disclosure.
Although increasing transparency is important, reducing doctors access to information about drugs, whether through CME or marketing, is likely to limit the options doctors can give to their patients.
Consequently, the marketing expenses drug companies use are ensuring “prescribers know how and when to prescribe medications,” and when representatives meet with doctors and nurses, they get their feedback about the drugs work. This is a critical exchange of information between the drug industry and physicians that will ultimately benefit patients in creating useable data about the effectiveness of treatments.
Marjorie Powell, senior assistant general counsel for the Pharmaceutical Research and Manufacturers of America (PhRMA) acknowledged this important interaction between representatives and physicians, and noted that sometimes “the most convenient way to do that is through lunchtime sit-downs, when they're not seeing patients.” She even added that “pharmaceutical representatives will frequently bring doughnuts or sandwiches" because they know the only free time physicians have is during lunch, when they are not seeing patients.
With Mr. Sorrell noting that next year the public will be able to look up the name of a doctor or a drug or device and find out how many dollars from manufacturers was associated with each, patients and physician’s access to information could be restricted. As many physicians know, drug company representatives are “vital tools for keeping doctors and prescribers up to date on the latest information about drug interactions, new drugs on the market and patient feedback.”
As a result, since "most physicians are well-enough educated to recognize that they need to have information about how to use medicines,” there should be no cause for concern that a physician would prescribe a medicine because somebody bought them a sandwich."
With newly enacted payment bans, the state of Vermont should stop regulating as if all health care providers cannot be trusted. They should consider returning to follow their state motto of “Freedom and Unity”.