The dermatologist, the gift, PhRMA

March 1, 2007

Some pharmaceutical companies feel the need to provide such incentives to be able to approach certain physicians in private practice.

At a recent statewide dermatology meeting, Dr. Drug boasted that he had prescribed so many prescriptions for his favorite acne medication that the local salesperson had given him a free ticket to the Super Bowl. A fellow dermatologist finds this behavior despicable and asks that the state dermatology society revoke Dr. Drug's membership. Will the society feel compelled to do so?

Although the U.S. government clearly regulates other industries, pharmaceutical industry interaction with physicians remains unregulated. Some states have considered becoming involved in regulating the interaction between doctors and drug companies, but it is uncertain what effect that has had on this issue. Although many speculate that there will be increasing government involvement in the relationship between pharmaceutical companies and physicians, because of the rise in drug prices, and the government's desire to save money through its involvement in the Medicare program, it is unclear the extent to which this intervention will take place, and what effect it might have.

It should be noted that almost 90 percent of the $21 billion marketing budget of the pharmaceutical industry is exclusively directed at doctors.

Physicians continue to have near complete control over the purchase of drugs. Even with the now popular direct-to-consumer advertising, patients still usually must go through their physicians to obtain prescription acne medications. Thus, it is quite easy to understand why pharmaceutical companies spend so much money trying to convince doctors to prescribe their products.

Giving incentives to doctors has proven to be a very effective method for pharmaceutical companies. Even with the growing concern over industry-physician relationships, current estimates are that each year, $12 billion is spent by the pharmaceutical industry on gifts for physicians. The average drug company can spend anywhere from $8,000 to $13,000 per doctor each year. There is approximately one drug representative for every four to seven physicians in the United States.

Unfortunately, some pharmaceutical companies feel the need to provide such incentives to be able to approach certain physicians in private practice. When a physician has multiple reps coming to visit a busy office on any given day and is simply not interested in talking to most of them, a representative who comes bearing gifts is more likely to catch the doctor's attention over one who comes empty-handed.

Curbing relationship

State and federal government agencies are fully aware of the cozy relationship between physicians and the pharmaceutical industry.

This relationship between physicians and drug companies has now come under legal scrutiny, especially since the Medicare program's adoption of prescription drug benefits. The anti-kickback statute was passed by Congress in an attempt to control the costs of federal healthcare programs, while, at the same time, maintaining their integrity. However, it should be noted that this statute only applies to federally or state-funded programs, and does not cover prescription drugs in general.

In 1989, the state of Massachusetts put a stop to a drug company program that offered airline frequent flyer points and provided any doctor who wrote 50 prescriptions with a free round-trip ticket to anywhere in the United States. The state of Massachusetts sued the company, which resulted in a settlement for $195,000. In 2004, Maine, Vermont, Nevada and New Mexico began to require that companies report the amount they spent on the marketing of their products to physicians who practiced in those states. Vermont, for instance, requires the disclosure of any marketing expenditure costing more than $25.

The American Medical Association, the American College of Physicians and the Accreditation Council for Continuing Medical Education adopted guidelines in 2002 on physicians' interactions with pharmaceutical companies. That same year, the Pharmaceutical Research and Manufacturers of America (PhRMA) issued a "Code on Interactions with Healthcare Professionals." This code is a set of guidelines for appropriate interaction with physicians. The guidelines state: