While GlaxoSmithKline recently decided to stop paying doctors to advocate its drugs, it's possible that drug groups could be tempted to reproduce those murky practices in vulnerable emerging markets.
Source: Financial Times
What is a doctor’s job? Is it: a) to diagnose illness; b) to treat patients; or c) to persuade other doctors to prescribe a brand-name pill? To those answering c), here is an additional question: do you work for a pharmaceuticals company?
GlaxoSmithKline’s decision to stop paying doctors to advocate its drugs to others, and to stop giving its sales representatives individual bonuses based on how often doctors prescribe the pills, is the latest step in the industry’s slow process of reform. Spurred by scandals and legislation, it is starting to behave — in some countries — as it should.
Nobody minds if Tupperware rewards chosen customers to sell its products to their friends at parties, or if Procter & Gamble employs sales people to pitch its wares to retail outlets. The equivalent practices at pharma companies, however, are fraught with conflicts and pitfalls. They risk transforming the advice given by a doctor into the pitch given by a marketer.
Prodded by legislation such as the Sunshine Acts in the U.S. and France, which force companies to disclose payments to doctors, some of them are curbing abuses. The danger is that, rather than eliminating them entirely, they export them to less regulated emerging markets. GSK is already in trouble in China for allegedly bribing doctors.
Aside from ethics, there are self-interested reasons to change. The companies increasingly rely on research links with doctors and academics, rather than doing all drug discovery and development in-house. They cannot afford to poison this research well by abusing their industry connections.
A second motive is patent protection. As long as companies’ raison d’être is to develop innovative medicines and serve the public good, they deserve it. If too much of their energy goes into pushing doctors to prescribe their brand-name drugs rather than generics that would be equally good for patients and cost less, they do not.
For some critics, the very notion of marketing drugs is inherently suspect. “It is a business model and companies have a right to do it but the end result is that patients pay more for drugs and may not get any better treatment,” says Tim Reed, executive director of Health Action International.
That strikes me as excessive. Informing doctors and hospitals about a new drug that can save lives and reduce other treatment costs is a legitimate, indeed a potentially useful, activity. The difficulty comes when doctors turn from prescribing to promoting.
This has evidently happened in the U.S. and other developed markets. Not only have companies including GSK and Johnson & Johnson been fined billions of dollars for illegal marketing, such as promoting drugs for non-approved uses, but their legal marketing activities are disturbing.
One recent study found that U.S. doctors are more likely to prescribe a brand-name drug than a generic equivalent if they are paid by the company that makes it. It is illegal to bribe doctors but many companies pay them expenses to attend conferences (often in sunny places during the winter) or to advocate drugs to others.
The latter is an especially murky practice. Doctors take fees to address a conference, or to speak to a small group of fellow professionals, about a drug. Their remarks often need to be vetted in order not to breach drug marketing rules and, as a result, parts are directly scripted or approved by the company.
Naturally, doctors do not believe they are corrupt but the study found that those in “corrupt” U.S. states — those such as Louisiana and Mississippi with a higher rate of convictions for corruption-related crime — were more swayed by such payments. (Male doctors were also more biddable than female doctors.)
Some companies argue that paying expenses for conference attendees is a legitimate way to educate or inform time-pressed doctors, and the lavish golf trips and long lunches of the 1990s are long gone. “This idea of an evil alliance is outdated and wrong,” says one executive.
But the industry has moved very slowly. GSK’s initiative follows AstraZeneca’s move in 2011 to stop paying for doctors to attend international conferences, but they remain the exceptions. Payment transparency has often been forced upon companies by regulatory settlements and laws.
The companies have prevaricated for so long that the issue is becoming less relevant in some markets. As nations and insurers limit increases in costs, they have set up panels and clinical bodies — such as the National Institute for Health and Care Excellence in the U.K. — to decide on which drugs are prescribed. That leads to diminishing returns to paying doctors directly.
While trimming sales forces in mature markets, drugs groups are in danger of reproducing the practices abroad. The 10 biggest companies employed 6,000 sales representatives in China in 2006 but that number had risen to 25,000 by 2011, according to McKinsey. Some of those employed by GSK and others are accused of paying for doctors’ trips and passing “red envelopes” of cash.
If these companies want to break with the past, they ought to commit to two reforms. One is to ensure that the marketing of brand-name drugs to doctors ceases when a generic is produced. This would limit some of the most cost-inflating forms of pharma marketing.
The second change is, as GSK has promised, to reform globally rather than changing piecemeal by region. In the scheme of things, cleaning up your act at home while taking the old one on tour around the world is not really progress.
(c) 2013 The Financial Times Limited