Feature: Cracking Down on Pharma Sales

By Kaitlyn Wallace

On October 11, 2018, a bill was introduced into the Philadelphian City Council, preceded by several clauses stating the following: “WHEREAS, the opioid crisis has reached epidemic proportions in Philadelphia… WHEREAS, four out of five new heroin users nationally started with prescription opioids, and WHEREAS, rates of sales of prescription opioids more than doubled between 2001 and 2011 in Philadelphia…” The purpose of the legislation? Regulating the relationship between doctors and sales representatives of pharmaceutical and medical device companies.

Seems a bit extreme, doesn’t it? Introducing legislation that places pharmaceutical reps at the center of the opioid crisis?

As the text of the proposed legislation continues, however, its line of reasoning becomes clear. According to the bill, there is compelling evidence suggesting that the behavior of pharmaceutical representatives to include in-person visits and free gifts to health care providers (HCPs), significantly “influence[s] providers’ prescribing behavior,” causing over-prescription, especially of opioids– a factor which has heavily shaped today’s opioid crisis.

This is not the only problem surrounding the relationship between pharmaceutical sales reps and doctors. According to Proby Publica’s 2016 analysis, as well as studies published by the Journal of the American Medical Association (JAMA), gifts from pharmaceutical sales reps (even gifts as small as office supplies or meals) significantly increase prescription of specific, branded drugs rather than lower-cost generic versions with virtually the same effect. This raises concerns especially for low-income patients, who, in cases of over-prescription of unnecessarily expensive medication, can lose access to necessary medication and medical devices.

There is evidence, too, that pharmaceutical and medical device companies are aware of the effects of their advertising. According to Breaking the Code to Healthcare Compliance, pharmaceutical companies in 2012 spent $24 billion on marketing to HCPs, eight times the $3 billion spent marketing to patients. Why would the industry spend so much time marketing to HCPs, except to affect their prescribing behavior?

And yet, little regulation exists to monitor these relationships on a Federal level. The National Physician Payment Transparency Program: Open Payments, formerly known as Physician Payment Sunshine Act of 2010, requires disclosure of payments exceeding $10 from pharmaceutical and medical device companies to compile them in the publicly accessible CMS Open Pay ments database. While this provides some transparency, there is currently no ban on gifts or other compensation to doctors.

There are, however, continual efforts from state legislatures to restrict the influence of these kinds of relationships. Beginning in 1993 with Minnesota, through 2018 with the most recent legislation from Philadelphia, states and cities have been working to curb the influence of pharmaceutical sales reps on prescription practices. Generally, these pieces of legislation can be divided into three categories: bans/limitations on gifts, regulation of compensation, and transparency.

Though the types of gifts enumerated in this legislation may seem small– including, but not limited to, office supplies, meals, and in some cases, entertainment– studies have shown that even benefits such as meals averaging under $20 can significantly influence prescribing practices. In reaction to this, some states have taken to limiting or banning any gifts from pharmaceutical reps to HCPs.

Regulation gets more tricky, however, when it is moved into the area of compensation. What is there to do, for example, if a physician is being paid by a pharmaceutical company for a service, such as speaking at an event, doing research, or consulting?

Take, for example, an HCP who is paid by a company to speak at an educational medical conference. Their travel must be reimbursed, as well as the work involved in speaking, including taking time away from work and family, preparing a presentation, and educating their peers. Though compensation in this
case seems fair, many worry that it creates a conflict of interest. If a pharmaceutical company is paying extravagant travel costs and speaking fees to an HCP, it’s easy to see how they might be influenced, implicitly or explicitly, to favor the product of their sponsor, regardless of its effectiveness in treatment. Especially in
a medical education setting, this conflict of interest could have direct effects on the quality of care that patients receive from attending HCPs.

States have gone about regulating this conflict of interest in several different ways. California, for example, severely restricts travel, speaking fees, consulting payments, and sponsorship of educational conferences. Philadelphia and Massachusetts, on the other hand, excuse from restriction a mix of consulting payments,compensation for “genuine” research and speaking fees,due not only to their more complex nature, but also to the perceived necessity of pharmaceutical funding for these activities (especially research and education), which benefit the public health. States may also mandate disclosure (as in the case of the 2009 Vermont legislation), which does not prohibit these payments, but simply requires them to be disclosed and, in most cases, to be open for the public to view.

The final point generally addressed in this legislation is transparency. The new Philadelphia legislation is perhaps the most comprehensive on this point, requiring registration of sales reps by the Health Department, compelling identification by badge of sales representative status when engaged in sales and marketing, and obligating the Health Department to review all printed materials used to aid pharmaceutical sales. Most legislative precautions, however, come in the form of disclosure of payments of any kind (such as those taken up by Vermont and Maine, among others).

There has been some pushback against this type of legislation. Opposition to the 2017 California legislation cited concerns of unintended effects, such as deterring doctors from participating in legitimate research and limiting the public’s access to experimental drugs. With increasing distrust of the medical profession, especially in connection with the opioid crisis, there is concern that in order to ensure the trust of their patients, doctors will refuse even legitimate payments from pharmaceutical companies. To its extreme, this could have the effect of slowing medical innovation by discouraging HCPs to participate in its development. Another point of opposition sympathizes more strongly with pharmaceutical companies. Proponents of this view argue that pharmaceutical companies deserve the right to market their products like any other company, and that perhaps the government shouldn’t be involved at all.

However, for the majority of legislators, the facts speak for themselves. Gifts and compensation of any kind influence doctors to prescribe differently; often in a manner which is detrimental to patient health. Though great strides have been made both federally, in transparency and disclosure, and on the state level, restricting and in some cases banning gifts to HCPs altogether, as well as beginning to regulate compensation for services such as consulting, speaking and research, and the benefits which come with them, there is a long way to go before patient health can be ensured to be safe from overreach of pharmaceutical companies wishing only to sell their product. There is still no federal regulation on HCP compensation, and many states are either lagging behind the example set most recently by California and Pennsylvania, or have no legislation on the matter whatsoever.

It’s true that this is an issue that flies largely under the radar in many political circles. But at some point, we have to ask ourselves: Who do we want making the decisions about our healthcare? Doctors, who, in most cases, merely have our best interests in mind? Or pharmaceutical companies– who want to sell their product at any cost?

MM&E

Kaitlyn Wallace is a contributing writer from St. Louis, MO

For more information, see:
Breaking the Code to Healthcare Compliance, by Pat Schaumann

About the author

Joe Clote

Joseph W. Clote is owner of Publishing Concepts, LLC a communications and marketing firm based in Saint Louis, Missouri. Mr. Clote is Group Publisher of MeetMed™ and Missouri Meetings & Events™ (MM&E) magazine, a quarterly publication read by thousands of meeting and event professionals, and producer of the St. Louis and Kansas City trade shows under the MM&E name. Mr. Clote has extensive sales and marketing expertise in the travel, tourism, fine art, insurance, and software development industries.