States ask drug firms to report gifts to individual physicians

Drug company marketing gets more scrutiny as states seek ways to lower the cost of prescription drugs.

By Andis Robeznieks — Posted March 1, 2004

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At the latest medical meeting sponsored by a drug company that Sidney Gold, MD, attended, spouses were not invited.

"I think there's been a big change," the Woodland Hills, Calif., psychiatrist said. "The focus was much more on education and less on the trinkets and freebies that they had in the past."

The nature of pharmaceutical marketing to doctors may have changed, but old stories of lavish meals and gifts linger. So much so that state legislators across the country are putting the doctor-detailer relationship under the microscope in hopes that this scrutiny will eventually lower prescription drug costs.

The first step state lawmakers are taking is requiring companies to report how much sales representatives are spending and what they're spending it on. Sponsors of these bills acknowledge that they may not immediately lower costs, but new laws could cause a budget shift with less spent on marketing and more spent on samples, medical education support and research and development.

In 2002, Vermont enacted the nation's first legislation of this type. It requires drug company representatives to report to the state pharmacy board any gifts that they give to doctors that are valued at more than $25 (free samples are excluded). The pharmacy board then forwards the information to the state attorney general.

Nevada, New Mexico and Maine followed suit, and 10 states have similar bills active in their legislatures.

"We don't have any leadership at all in the federal government when it comes to reducing prescription drug prices," said Illinois Rep. Jack Franks, who has introduced a bill into that state's Legislature. "It's obvious Washington has sold out, so it's up to the states to protect our citizens from being gouged."

Franks said his bill is based on model legislation crafted by the Washington, D.C.-based Center for Policy Alternatives, where Policy Director Bernie Horn maintains that industry reforms have not significantly altered industry practices. "Detailing has a tremendous impact on what prescriptions are written," Horn said. "There's plenty of scholarly research on this. We're not making it up."

Guidelines in place

The drug industry and medical profession have responded to these concerns by establishing codes of conduct that help clarify what gifts are appropriate and which ones are unethical.

Michael Fleming, MD, president of the American Academy of Family Physicians, said most gifts to doctors today are insignificant items such as pencils and notepads. So if legislators want to know about that, he said, that's fine with him. But he predicted reporting wouldn't lead to a noticeable change in behavior or cost.

"I don't think most physicians would have any problem with it all, but I think there are a group who would find it more disturbing because they take more substantial gifts," the Shreveport, La.-based family physician said. "The vast majority of companies are living by the code very well, but some reps ignore it and, if anybody in the management of their companies knew what was going on, they'd turn green."

Dr. Fleming suggests that physicians "need to fix our own house" and behave more professionally and to not accept any gifts that they would be ashamed to have publicly reported.

Michael Goldrich, MD, chair of the AMA Council on Ethical and Judicial Affairs, essentially agreed. He said "Physicians have the ethical obligation to do the right thing" and so educating physicians on the ethical boundaries is the key issue here.

The AMA guidelines on industry gifts were approved in 1990 and state that physicians should accept only gifts that have some benefit to patients, are of modest value and come with no strings attached. In 2001, an educational campaign was launched to remind doctors of these guidelines.

The Pharmaceutical Research and Manufacturers of America, which represents about 80 drug and biotechnology companies, also believes the issue has been effectively addressed.

PhRMA spokeswoman Wanda Mobius said the bills, which the organization opposes, are unnecessary because of PhRMA's Code on Interactions with Healthcare Professionals, a set of voluntary standards put in place in July 2002.

Under this code, meals that are "modest by local standards" are allowed as long as they are accompanied by an educational presentation or discussion. Meals in which sales representatives provide food but are not present are no longer considered acceptable.

"Anytime an industry self-regulates ... it's better than government regulations that can vary from state to state and can cost more in the long run, and that's money that could go into research and development," she said.

One lawmaker said his bill is meant to ensure that everyone abides by the rules PhRMA established.

Maryland state Delegate Chuck Boutin, an attorney and former mayor of the city of Aberdeen, said the purpose of his bill is to ensure that pharmaceutical detailers who behave ethically won't be put at a disadvantage.

"All we're doing is codifying the ethics rules that already exist," Boutin said. "What's the matter with codifying it in order to catch a few bad apples?"

Money at the root

Other supporters of reporting bills say ethical behavior is challenged by the money involved in drug marketing.

Drug companies spent $21 billion on marketing in 2003, Mobius said, compared with $32 billion on research and development. Of the marketing portion, $2.6 billion was spent on advertising, leaving "18 point something" billion dollars, of which 80% to 90% was spent on free samples.

Horn, meanwhile, cited a U.S. General Accounting Office study that showed $16 billion was spent on direct marketing to physicians in 2001.

"That's outrageous by any measure," he said, adding that the study also revealed that direct marketing expenses rose 74% between 1997 and 2001 and that the number of drug company detailers rose from 42,000 to 88,000 (110%) during that same period.

Horn said this indicates that the industry's self-regulation efforts in 1990 failed, and he doesn't expect reforms instituted in 2002 to do better.

Art Kuebel, a former detailer from Washington state, agrees. He is supporting the effort to get a gift-reporting law passed there.

"How many attempts are we going to be making in self-regulation?" said Kuebel, who said he worked in the industry almost 16 years. "There is a do-what-it-takes-and-beg-for-forgiveness-afterward attitude which shows there is little interest [in self-regulation]."

Kuebel said the impact of the PhRMA code is fading. "There was a brief period when there was a decrease in activity, but physicians I talk to say there is a shifting back to the status quo."

John Fogarty, MD, said there has been no backward trend in Vermont, though he is not sure if it's because of the state's reporting law or because of a general shift among the parties involved. "The days of the free trips with no medical education associated with them are pretty much gone, I haven't seen those in years," said Dr. Fogarty, chair of the department of family medicine at the University of Vermont in Burlington.

He said there have been changes as a result of doctors consciously choosing to avoid gifts or activities that may increase costs or affect prescribing.

This included a decision by the Vermont Academy of Family Physicians to not have a drug company sponsor its last annual meeting. Also, Dr. Fogarty said the university has a "counter-detailing" program where a pharmacist joins in on drug company visits with residents.

Dr. Gold said he thinks legislators should focus more on regulating direct-to-consumer advertising, which he said causes him to spend substantial time giving patients the scientific explanation for why he's not prescribing the drug they saw on TV.

Horn, however, said reporting bills are needed because of the unique way prescription drugs are purchased -- a consumer takes the drug that another person has chosen and another entity usually pays for.

"It's an artificial system that inflates the price of drugs, and it's been pretty well accepted that this is a driver of high prices," Horn said. "It's not really about consumers finding the information, it's about disclosure discouraging improper gifts, which tend to result in prescriptions written for the wrong reasons."

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Seeking details from the detailers

To contain prescription prices, four states require drug representatives to report how much they spend marketing products to physicians. Six considered and rejected the idea, but 10 more states are still debating.

Require reporting: Maine, Nevada, New Mexico, Vermont

Defeated reporting bills: California, Connecticut, Idaho, New Jersey, Oregon, Pennsylvania

Considering reporting bills: Hawaii, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New York, Ohio, Washington

Sources: National Conference of State Legislatures, PhRMA, Associated Press, Cecil Whig, Duluth News Tribune, Nashua Telegraph, St. Louis Post-Dispatch

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Massachusetts ties gift self-reporting to licensure

Of the 20 states where bills have been introduced requiring the reporting of drug company gifts to physicians, only two have called for doctors to be responsible for the reporting: Connecticut and Massachusetts.

The Connecticut bill was defeated, but the Massachusetts bill is still active and is being actively opposed by the Massachusetts Medical Society.

A previous reporting bill, introduced in the state House of Representatives, called on drug companies to file the reports and was supported by the MMS.

But that bill was superseded by a Senate version that requires physicians to report gifts they receive from pharmaceutical makers and threatens them with $5,000 fines and suspension of their licenses if they fail to do so.

Massachusetts Medical Society Media Relations Manager Richard P. Gulla said the House bill was "more efficient and appropriate."

"We agree and recognize that this is an appropriate issue to be examined, but we do not feel it is appropriate to place the burden of administrative filings on the physician," he said. "Nor do we feel it is appropriate to tie the filing to licensure."

Helen Flaherty, health policy analyst for Senate bill sponsor Richard T. Moore, said there's a good reason to pass a bill doctors oppose instead of one they support -- especially if it's linked to the license-renewal process.

"I think it's a matter of trust," she said. "The Legislature doesn't trust the pharmaceutical companies, and they think physicians take their licensing seriously and felt they could get more accurate information that way."

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External links

PhRMA Code on Interactions with Healthcare Professionals, in pdf (link)

AMA Ethical Guidelines for Gifts to Physicians From Industry (link)

"Physicians and the Pharmaceutical Industry: Is a Gift Ever Just a Gift?" abstract, Journal of the American Medical Association, Jan. 19, 2000 (link)

"Interactions Between Physicians and the Health Care Technology Industry," JAMA, Jan. 19, 2000 (link)

Prescription drug marketing overview, Center for Policy Alternatives (link)

"Marketing and Direct-to-Consumer Advertising (DTCA) of Pharmaceuticals," National Conference of State Legislatures report (link)

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