Ethics: End of the hard sell? Pharmaceutical groups are finding their marketing and sales tactics under increasing scrutiny

December 26, 2013 6:20 pm

Ethics: End of the hard sell?

By Andrew Jack

Pharmaceutical groups are finding their marketing and sales tactics under increasing scrutiny

When Johnson & Johnson wanted to boost prescriptions of Natrecor, a heart medicine, it channelled more than $100,000 through a subsidiary company to a sympathetic nurse. In exchange, she spoke favourably about the drug in talks, trained colleagues on how to use it, and put her name on an article in a medical journal to boost sales.This ruse, part of an aggressive marketing campaign, was not carried out in the developing world but the US, where J&J paid a $2.2bn fine last month for practices stretching back over a decade. It was only the latest in an escalating series of penalties against the pharmaceutical industry for the way it markets its products.

Western drug groups have rapidly expanded their sales – and sales tactics – in emerging markets over the past 10 years. Now regulatory scrutiny is catching up, not just in the US but around the world, including in China, where GlaxoSmithKline has been accused of paying up to $500m in bribes to local doctors.

 

Such cases have provided fuel for industry critics who argue for much tougher controls on industry practices. Tim Reed, head of Health Action International, a Brussels watchdog, argues that the pharmaceutical industry needs far tougher restrictions.

“The further you get from the core [countries] into the emerging markets, the more promotion is rampant,” he says. “We don’t think there should be industry marketing of medicines at all, although that’s a utopian vision.”

In the US alone, cumulative fines from whistleblower and government prosecutions against the industry reached $20bn in the period 1991-2010, suggesting something is wrong with the system. In less than three years since then, companies have been hit with further penalties totalling more than $13bn.

From China to South Korea, local regulators are stepping up scrutiny of practices in their own countries. At the same time, probes are coming from outside their borders from the US with the Foreign Corrupt Practices Act and the UK with its Bribery Act.

Last year, Eli Lilly paid $29m to the US Securities and Exchange Commission after evidence showed it offered discounts to fund bribes to win business in Brazil and Kazakhstan. Pfizer was fined $60m for activities including “incentive trips” to Greece for Bulgarian doctors who agreed to meet prescription targets for its drugs.

Vikas Saini, president of Harvard University’s Lown Institute, likens the shift of“seamier” practices in drug companies into developing countries to the tactics of the tobacco industry after tougher laws were introduced in industrialised nations.

“When you feel you have made some progress in your own country, you are not paying attention elsewhere,” he says.

Despite the recent scandals, drug company marketing has sharply improved since the patent medicine and “snake oil salesmen” of the Victorian era. Today, the industry is among the most regulated in the world, with ever tighter scrutiny of and controls over medicines testing, authorisation, and the claims made about products to doctors.

Companies make the distinction between legal marketing activities they regard as justified to promote their products and illegal bribery. But the former head of one western drug company long active in emerging markets argues marketing practices can be difficult to control once in the hands of local customers, such as medicine distributors. “Now you are supposed to monitor your partners. How easy is that to do?” he says. “Anyone who says it’s easy is lying.”

The industry’s marketing spending has spiralled into billions of dollars a year, suggesting that it still pays dividends to push medicines rather than simply develop them and let the evidence speak for itself. That has sparked calls for greater supervision.

The marketing process begins even before new drugs are approved by regulators. Articles in medical journals describing the efficacy and safety of experimental products are assessed by reviewers and editors, but there has been growing concern in recent years that the results are excessively favourable to new drugs.

There can be bias in the way data are collected, analysed and written up by “ghostwriters” employed by companies – such relationships are not always disclosed. Last month, the US Department of Justice demanded information from AstraZeneca on a clinical trial for Brilinta, an anti-clotting drug, after concerns about wide variations in the results between countries where it was tested. The company says it stands by the study.

After the launch, the focus shifts to building relationships with prescribers. This is done by the industry’s tens of thousands of sales representatives, who make presentations to doctors, often over food and drink. A study last summer showed that, on average, US doctors who received payments from companies were more than twice as likely as their peers to prescribe their products.

Other money is spent on bringing doctors to conferences for “continuing medical education”, often in luxury international hotels. GSK last year settled a record $3bn fine in the US for paying prescribers to attend conferences in luxury resorts in Hawaii, among other activities.

“Key opinion leaders” among physicians are paid as consultants to give speeches and presentations to their peers. They often sit on professional bodies that draft treatment guidelines. They may also be paid to advise on and recruit patients into lightly regulated “post-marketing” trials for drugs that are already approved.

Sometimes, there is encouragement for prescribers to exercise their professional discretion to give drugs to patients “off label”, or beyond the uses for which regulators have approved them. That was the basis of the most recent $2.2bn fine against J&J, as well as $491m levied in July concerning sales by Wyeth (since acquired by Pfizer) of Rapamune, a drug to prevent rejection of transplanted organs.

Companies have also offered doctors discounts or donations of their medicines to wean them off rival products. This is sweetened by encouragement that they claim reimbursement at the full price from health insurers – an approach that contributed toAmgen’s $762m US fine late last year.

While distancing himself from such abuses, Trevor Jones, a pharmaceutical industry adviser and non-executive director, argues they reflect past practices. He says boardrooms are now much more focused on compliance – a focus that intensified after regulatory fines and “corporate integrity agreements” monitored by court-appointed officials.

Partly in response, industry associations such as Efpia, the body covering Europe, have introduced tougher self-regulatory codes, albeit mostly designed to name and shame rather than impose financial penalties.

Some companies have gone further. AstraZeneca no longer pays for physicians to attend international medical conferences. GSK last week announced similar moves, as well as plans to sever any bonuses to its marketing staff linked to individual sales targets. It wants them to be judged by the quality of medical advice they provide doctors rather than the crude volume of prescriptions.

Adriane Fugh-Berman from Georgetown University Medical Centre in Washington, who has acted as an expert witness in trials against drug companies, remains sceptical about reform. “When you catch them with their hand in the cookie jar, the pharma companies always say we don’t do that any more. But I’ve read the internal documents, a lot of which don’t get into the public domain, and some activities are pretty recent.”

Sidney Wolfe, founder of the health research group at Public Citizen, a US watchdog, agrees. He points to escalating fines, including against companies that are repeat offenders. “It’s a way of doing business,” he says, arguing improvements will only occur if penalties are much higher, executives are jailed for abuses or companies banned from supplying products to federal medical programmes.

If some critics would like to end all industry-funded medical education, others are more cautious. Ulf Wiinberg, chief executive of Lundbeck, says: “The industry has played a major role in medical education, mostly in a responsible way in my view. Not having industry participate would limit the education of physicians.”

Paul Rubin, professor of economics at Emory University, Atlanta, who has advised some drug companies, cautions against the “nirvana fallacy” by comparing an imperfect actual world with a perfect ideal one. “Even though the drug-promotion process may be flawed, it is difficult to think of a feasible alternative,” he says. “In the world in which we live, the best source of information about pharmaceuticals for many physicians is often the industry itself.”

An outright ban on drug company marketing seems unlikely. Yet a structural change that offers hope for industry critics is the rise of “health technology assessment”, or the use of third-party review of the evidence of the value of treatments to guide doctors’ prescribing habits.

Bodies such as the National Institute for Health and Care Excellence (Nice) in the UK, the transparency commission in France or Amnog in Germany already conduct such assessments of new medicines. Similar efforts are increasing in the US with the rise of “accountable care organisations”, and a shift towards paying based on improved patient outcomes rather than inputs such as (inappropriate) medicine use.

Another way to curb abuses would be for doctors and healthcare systems to pay for continuing medical education, reducing the influence of industry funding. Some universities and hospitals already ban visits by sales representatives or consulting payments to doctors.

Reuben Guttman, director of Grant & Eisenhofer, a US law firm, argues there should be wider release of the details of industry marketing scandals, akin to those released after airline or rail crashes. Today, most cases are settled with scant disclosure of the details.

For now, “sunshine” legislation in the US has triggered similar initiatives in Europe, revealing more about industry payments to physicians. US and European regulators are also pushing for greater publication of clinical trial data, opening the possibility of third-party analysis of drug safety and efficacy.

Daniel Carlat, head of the Pew Prescription Project, a US watchdog, says: “The industry will always find ways to advertise its products. The hope is they will be more concerned about perceptions of their business practices. I think with the Sunshine Act we are on the cusp of something that will have a really significant effect on industry practices.”

Such reforms will never prevent abuses in the industrialised world, let alone emerging markets such as China. But the growing regulatory clampdown on corruption seems set to push the larger pharmaceutical groups to accelerate reforms around the world.

Economists’ advice comes under fire

As healthcare systems clamp down on doctors’ discretion to prescribe new medicines, pharmaceutical companies are adjusting their marketing message. While the emphasis used to be on highlighting positive clinical data, today they are pushing the supposed economic benefits of their drugs.

Reports in influential medical journals on the results of clinical trials will always be important – though they sometimes have been guilty of selective design and presentation of the evidence, as well as publication of flattering safety data.

But now healthcare organisations are centralising decisions on the choice of drugs through “formularies” of preferred products and co-ordinated advice on the products they recommend. Their aim is to gain the fullest picture of safety and efficacy of medicines – and cost effectiveness.

Pharmaceutical companies are relying more on health economists to advise on the prices they should charge for their new products and generate data to support the case for adoption.

Yet a study conducted a few years ago showed that health economic analyses submitted by industry to the UK’s National Institute for Health and Care Excellence (Nice), which advises the National Health Service on the use of drugs, were “significantly more favourable” than those on the same drugs produced by academic specialists.

“Economic analysis is even more open to subjective judgment than clinical trials,” says an academic health economist. “There are lots of lots of places where a slight change in the numbers can make a big difference of orders of magnitude. An economic model is a thought experiment greatly influenced by the calculator.”

He says tricks include the choice of an “existing and not very good” drug as a comparator to a new product; extrapolating claims of health benefits over many years from the results of trials that typically only last a few months; and exploiting poor data for individual diseases in health scoring systems economists use, such as Quality Adjusted Life Years and Disability Adjusted Life Years.

Critics of health technology bodies such as Nice argue they have an agenda driven by rationing, which plays down the benefits of new drugs. But as a clinician, who is also a health economist, argues: “We see it all. How effective a drug is is God-given. The price of a drug is the choice of the manufacturer.”