John Buntin is a GOVERNING staff writer. He covers health care, public safety and urban affairs.E-mail: email@example.com
Drug companies spend $23 billion a year marketing pharmaceuticals to America's doctors. More and more states are challenging them.
It's a gray Friday morning in Allentown, Pennsylvania. Kristin Nocco is in the parking lot of Primary Care Associates, putting on her game face. She's about to call on one of the biggest independent medical practices in the Lehigh Valley. The half-dozen clinicians who work there write thousands of drug prescriptions a year. That makes them prized clients among the region's drug reps, such as the well-dressed young man with the burgeoning suitcase headed out as Nocco walks in.
Today, Nocco has gotten permission to make a lunchtime pitch to the practice. She's ordered pizza and chicken salad. Her hope is that Dr. David Stein, the practice's founding partner, and his brother Scott, a physician assistant, will grab a slice of pie and listen to her talk for a few minutes about how to treat geriatric depression. With her quick, throaty laugh and outgoing personality, Nocco has all the moves of a salesperson who's spent years winning over doctors. And she has. Only now she's not promoting the latest blockbuster drug. Instead, she's working to counter the hype of drug-company marketing, for the state of Pennsylvania.
Last year, Pennsylvania spent $2.5 billion -- about 10 percent of the total state budget -- filling more than 40 million prescriptions for roughly 2 million residents. To drug reps, every prescription written represents a sale. Every day, thousands of drug reps -- known in the business as "detailers" -- are out hustling, dropping by practices large and small with coffee or donuts, handling out samples, bringing in lunch, making friends -- friends that will hopefully translate into greater sales. Nocco used to be a drug rep herself -- she started out at Eli Lilly back in 1992, fresh out of pharmacy school. Now, she has a different mission. Instead of pushing specific brand-name drugs, Nocco provides something that doctors don't get enough of these days: independent, evidence-based information on how best to treat complex medical conditions.
Nocco is what's called an "academic detailer." Pennsylvania has hired 10 other people like her -- a sales team that seeks to balance Big Pharma's marketing blitz with more balanced information. The strategy, the state hopes, will improve health outcomes for patients and save the taxpayers money by encouraging doctors to avoid untested, expensive new medications. The small program is one part of a broad and controversial battle that a growing number of states are waging against drug marketing practices. Massachusetts, South Carolina and Washington, D.C., all have followed Pennsylvania's lead and hired academic detailers of their own. Minnesota and Vermont have passed laws requiring drug companies to disclose gifts they give to doctors. Meanwhile, Maine, New Hampshire and Vermont are embroiled in litigation over laws banning for-profit "health information organizations" from using data-mining tools to case individual physicians' prescribing habits for drug-company sales reps.
The offensive, ironically, comes at a time when drug-price inflation is slowing. Yet drugs continue to attract policymakers' attention, for a variety of reasons. Drug prices are highly visible, particularly to people without insurance. Drug companies also consistently boast some of the highest rates of return on capital of any industry. Critics say those profits are based in part on high-pressure sales tactics that lead doctors to prescribe expensive brand-name medications when similar, generic alternatives would be safer and less expensive. The evidence of distorted prescribing patterns "is very clear cut," says Dr. Jerry Avorn, a professor at Harvard University's medical school who studies the use and effectiveness of prescription drugs. He blames the practice of detailing for much of the problem.
Are all those good-looking perky drug reps really so harmful? Nocco doesn't have time to reflect on that just now. She's worried about lunch.
"Has the pizza arrived?" she asks the woman behind the front desk.
It has. The receptionist waves her in, through the door marked "employees only." She greets Scott Stein, who's waiting for her in the kitchen, with a big smile.
The pharmaceutical industry spends about $23 billion a year marketing its products to America's doctors. The largest portion of that -- about $15 billion -- is spent on samples. About $7 billion goes to what are known as "direct-to-physicians" strategies, which include fielding a sales force of 90,000-odd drug reps. That works out to about one detailer for every five office-based physicians.
According to critics such as Avorn, the drug industry's reliance on detailers has several negative side effects. It encourages doctors to prescribe costly, patented drugs when a generic would work equally well. Detailing also encourages physicians to write scripts for new medications that "don't have the track record for effectiveness and safety that some of the old drugs have." The result, says Avorn, is higher prices and worse outcomes.
Not surprisingly, the drug industry rejects this critique. Marjorie Powell, senior assistant general counsel to the trade association PhRMA, argues that drug reps play a valuable role in educating doctors on the most up-to-date information about new treatments. She sees no evidence for the claim espoused by "at least some state legislators" who "seem to think their doctors can't be trusted to get information from pharmaceutical representatives without being sort of hoodwinked into prescribing a drug that's not appropriate."
Doctors themselves have a more ambiguous view of the situation. Surveys show that most physicians give themselves high marks for personal integrity. One study of medical residents found that 61 percent believed they were not influenced by free lunches, handouts and other forms of pharmaceutical company marketing. However, doctors weren't so confident about the morals of their colleagues. Only 16 percent believed that other doctors were immune to drug-company blandishments.
Researchers who have studied gift-giving say there are good reasons to be concerned. Arthur Caplan, who directs the Center for Bioethics at the University of Pennsylvania, says that even small gifts, regularly given, can influence behavior. When it comes to doctors, he says, that's problematic. "You expect doctors to make objective decisions based on the evidence," notes Caplan. "If I bring you a box of donuts every week, you start feeling positive."
It's costly, too. In 2004, the prestigious Journal of the American Medical Association published a study by Avorn that examined how doctors were prescribing hypertension drugs for the elderly. It found that doctors could have reduced total spending on hypertension drugs by $1 billion, or 10 percent, by adhering more closely to evidence-based guidelines. Given the fact that Americans spend more than $200 billion per year on prescription drugs, it's clear that even small reductions in unnecessary prescribing would generate huge savings. That's prompted a growing number of states to take aim at direct-to-physician marketing. And it's led them into some interesting fights.
In mid-2005, New Hampshire state Representative Cindy Rosenwald began to explore a strange phenomenon that her husband, a cardiologist, had brought to her attention. When drug reps came to his office, he told her, they seemed to know a lot about what he was prescribing. Once, a drug rep told Dr. Rosenwald that he was "one of my targets." Dr. Rosenwald was disturbed. When he related the conversation to his wife, she remembered reading a newspaper article about the practice of "physician profiling." She decided to look into the matter.
At first, Rosenwald found only wisps of information about how drug reps profiled doctors for their marketing efforts. However, conversations she had with a hospital pharmacist and the head of the state pharmacy board led her to believe that drug companies were engaging in data mining that allowed them to see what drugs individual physicians were prescribing. The more she looked into it, the more convinced she became that drug companies were "manipulating prescribing" by using practices that were "not in the best interest of the public." The New Hampshire Medical Society agreed. So Rosenwald introduced legislation that would bar pharmacies from selling prescribing information to outside vendors. She admits that she had no idea how her bill would be received.
"There was so little information available that I didn't know what would happen at the public hearing," Rosenwald says. "I didn't know if the pharmaceutical companies or anybody would come in and basically say, 'She's imagined the whole thing. We really don't do this.'"
That's not what happened. Instead, a Connecticut-based company called IMS showed up at the legislature to testify against the proposal. "I had never really heard of it," Rosenwald says of IMS. The company, she learned, had $2 billion a year in revenue, 80 percent of which came from the drug industry. By aggregating prescription data purchased from pharmacies with physician masterfile data purchased from the American Medical Association, IMS was able to identify and track the prescribing patterns of individual doctors. Pharmaceutical companies, in turn, paid IMS for that information in order to put it in the hands of their detailers, allowing them to hone their pitches to doctors. One recent study estimated that physician profiling adds about 3 percent to drug-company profit margins.
Rosenwald's legislation was designed to disrupt that business. Less effective marketing, she believed, would reduce the pressure on physicians to write inappropriate or unnecessary scripts. The New Hamsphire legislature passed the bill easily, despite heavy lobbying against it. Legislatures in Vermont and Maine promptly followed suit, passing their own bans on prescription data mining.
To IMS, New Hampshire's law represented an existential threat. The company filed suit, asking federal courts in both Maine and New Hampshire to overturn those states' laws as violations of the company's First Amendment free speech rights. IMS won both cases, prompting the attorney general in Vermont to suspend enforcement of its law, too. New Hampshire appealed. In November, the First Circuit Court of Appeals reversed course and upheld the prohibition on prescription data mining. The door now seems open for other states to pursue similar bans, should they so choose.
Opponents of data-mining bans include the American Medical Association, which earns $44 million a year -- 16 percent of its annual budget -- by selling companies like IMS access to its database. The AMA argues that legislation such as Rosenwald's is no longer necessary. In 2006, the AMA created a voluntary program that allows doctors who are uncomfortable with physician profiling to opt out of having their data sold. Since then, only 18,000 physicians (out of roughly 750,000 licensed physicians nationwide) have taken advantage of that opportunity. The AMA sees this lackluster response as evidence that doctors aren't very worried about having their prescribing habits revealed.
Supporters of the bans read the low opt-out number differently. They see it as nothing more than a sign that the average doctor is too busy to bother filling out the paperwork. That's ironic, in a way, because the fact that doctors are so busy is precisely the reason why drug companies spend so much money trying to get face-to-face with them through detailers. And it's why states such as Pennsylvania have decided to push back with detailers of their own.
Several years ago, Tom Snedden, the head of Pennsylvania's prescription-assistance program, or PACE, started to talk with Harvard's Avorn about an unusual idea. For years, Avorn had done epidemiological research using PACE data. But Snedden also knew that Avorn had a longstanding interest in pharmaceutical marketing. In the early 1980s, Avorn had proposed that governments try a new way of communicating with physicians that borrowed a page from the drug industry.
The idea was to hire informed, independent consultants who could visit physicians and provide them with academic research about how best to treat complex conditions. Avorn called the idea "academic detailing." Since then, countries such as Australia and Canada had followed through on the idea. Studies in those countries had shown that every dollar spent on academic detailing yielded savings of as much as two dollars in avoided expense. But the idea had never been tried on a large scale in the United States. Snedden and Avorn thought that PACE should try it in Pennsylvania. Governor Ed Rendell quickly agreed, and Harvard set out to train 11 detailers to work for the state.
PACE's claims data gave the state its own trove of information about how doctors were prescribing. Insurance companies and the firms who manage their pharmacy benefits routinely mine similar data in order to determine which doctors might be misprescribing drugs or writing expensive scripts in what they deem as excessive numbers. However, Snedden and Avorn decided early on not to simply target "bad" doctors.
"The first questions a doctor asks when our people come in, besides 'Who really sent you?' and, 'Is this a drug company front?' is, 'Why me?'" says Avorn. "It's a lot better to be able to say, 'Because you see a lot of PACE patients,' rather than, 'I know you're using too much Crestor.'"
Snedden and Avorn also decided against focusing merely on cutting costs and pushing generics.
"Doctors don't want the cost-cutting message," says Michelle Spetman, who runs the nonprofit that trains Pennsylvania's detailers. "They're not so concerned about what the state is paying as they are about Patient JonesÉ If we had started purely with a message about saving money, they'd say, 'I know why you're here, I'm not interested.'"
The pharmaceutical industry is a major force in Pennsylvania. No other state has more drug-industry jobs. So Snedden was careful about how he introduced the academic detailing initiative. Instead of presenting it as a way to counter drug-company marketing, he described it as a way to promote better medical care by disseminating evidence-based best practices -- nothing more, nothing less. Harvard Medical School would be responsible for developing "modules," or presentations summarizing the latest research on how to treat conditions such as diabetes in elderly patients. In hiring academic detailers to present the modules, Avorn and Snedden decided to hire only nurses or pharmacists. That used to be the norm in the pharmaceutical field, too, until the mid-1990s, when drug companies realized that hiring attractive, extroverted young people, many with backgrounds in athletics or cheerleading, made for more effective marketing. The state soon learned just how deeply entrenched these hiring practices had become. Some of the resumes submitted for the academic detailing positions came with headshots -- glossy photos that emphasized the candidates' good looks.
Kristin Nocco was one of the people who applied. She'd started her career at Eli Lilly, first as a general drug rep, later as a detailer for specialized cancer drugs. She loved the firm and the work. Eventually, however, she decided to get her MBA. She then moved on to a job at an ad company, many of whose clients were drug companies. But she missed sales (and the flexible hours). So when an opportunity arose to work as a detailer for the state, she leapt at it. "I liked the idea of evidence-based information that was non-commercial," says Nocco.
As an academic detailer, Nocco occupies an interesting space in the marketplace. Like traditional drug reps, she depends on her people skills. Office managers must be wooed, doctors chatted up. Physicians initially seemed wary of her requests for appointments with them. They warmed up when they realized she was pushing knowledge, not products. Nocco's colleagues have experienced the same thing. "There's been about 1,100 unique doctor visits," says Snedden. "I don't think there's been one who didn't like it. And it's not because we're taking them to Broadway plays."
At Primary Care Associates in Allentown, Nocco is talking with Dr. David Stein, his brother Scott and a few other staff members about treating depression in the elderly. The conversation is fast-paced and highly technical. It covers Paxil's withdrawal effects; problems with Pristiq; and the 15-point geriatric depression scale versus the five-point scale. Asked afterward if this is typical of most drug reps' presentations, one of the physicians in the room just laughs. "Usually, they talk about home life, what's going on at school," he says. Most conversations, he adds, end with the reps asking, "Is there anything I can do for you?"
Every doctor in the room knows that the gifts and minor-key friendships that develop are all geared toward selling drugs. But Dr. Stein and his brother don't really have a problem with that.
"It was stupid to send people to ball games and things like that," says Dr. Stein. But he and his colleagues believe that recent attempts to crack down on handouts such as drug samples and gifts go too far. Drug companies donate lavishly to politicians, he notes. They also donate lavishly to academic medical centers, which set guidelines for the profession as a whole. Why are trinkets for doctors such as him the problem?
"The government is saying that you can have a license to prescribe narcotics, but we can't trust you with gifts of pens and paper," says Stein, shaking his head. "That's the way we're being treatedÉ The best term I can use is we're being treated like whores."
"Pharmacy companies are not the tobacco companies," he continues. "They are not evil. They are not bad people. The reps are not trying to offer me sexual favors, cars, money, cash. They come in, they do their job, we're professional with each other. I appreciate the fact that the samples they leave me make a difference in the lives of my patients."
As for being profiled, Dr. Stein doesn't particularly like it. But he hasn't taken up the AMA on its opt-out offer, either. A visit to the practice's drug sample pantry suggests why. Along one wall, bins stacked from the floor to the ceiling form picturesque towers of multi-colored drug samples. When a physician needs a sample to give to a patient, it's right there. And the drug companies always seem to know just what they need.
As Nocco checks out the sample room, a raven-haired, rosy-cheeked rep from Schering-Plough pokes her head in.
"Restocking!" she says brightly, as she shovels a handful of samples into a bin and then ducks out. Moments later, Dr. Stein hauls her back in.
"This Christmas," he tells her with a heavy dose of sarcasm, "I would definitely like the new Mercedes, please."
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