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Derek Lowe The 2002 Model

Dbl%20new%20portrait%20B%26W.png After 10 years of blogging. . .

Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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July 1, 2004

So What's Wrong With A Little Money Changing Hands?

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Posted by Derek

The marketing practices mentioned in the last posting sound a lot like radio-station payola - paying to get a song on the air. There was an interesting defense of this practice mounted recently over at Marginal Revolution (see the first three postings here.

Is there a difference in this case? (I mean, short of the "we're-talking-about-people's-lives-here" argument, which can be valid but ends things before you have a chance to do any potentially useful thinking.) I think there is, and it has to do with market efficiency.

Whether a song becomes a hit or not is based on a relatively quick aesthetic call by a large audience: "I like that." The pro-payola argument (or at least the non-anti-payola one!) is that you can't force a song to be a hit by paying for airplay - all you can do is pay enough to give it a chance to become one. There are historical examples of songs and artists that likely wouldn't have had a chance without someone opening their wallets.

But paying doctors to prescribe certain drugs is a different sort of market perturbation. For one thing, there's not such a good feedback mechanism as there is with listener choice. It takes a while before you can tell if most medications are working or not, days or weeks. And even then, it may not be apparent to the patient. Blood pressure therapies don't make you feel much different at all, even when they're lowering life-threatening hypertension. And most chemotherapy (to pick an extreme case) makes you feel absolutely worse, immediately and continuously, even if it's managing to put your cancer into remission.

And songs are more clearly differentiable, making their market more efficient. Listeners can pick out a new song by an established artist quickly, and if it's someone they've never heard before, they'll notice that, too. But the differences between, say, the different statins are more subtle. You won't feel your HDL increasing a bit more with one of them versus the other - heck, unless they look at a large statistical sample, physicians won't notice that, either. And there's the large question, in this case and others, of whether that real difference is enough to have a real clinical effect. No one's in doubt for very long about whether a song has accomplished what it's trying to do.

In radio payola, you're trying to seed a large market and hope that something will then take off through the free choice of the consumers. But who are the consumers in the prescription drug market? There are areas where direct-to-patient marketing works, in which case it's clear that the patients are regarded as the real consumer. The hope is that they'll storm their doctors offices clamoring for the latest therapy (much to the irritation of the doctors involved, I think!)

But in many other fields, it's the physician that's clearly the consumer and the target of advertising. Schering-Plough appears to have been paying for their interferon to be prescribed for hepatitis patients, among other things, and there's never been much (any?) direct-to-patient advertising there. One physician can write for a large number of patients, so the temptation for well-targeted payola is strong. And wrong.

Comments (14) + TrackBacks (0) | Category: Drug Prices | The Dark Side | Why Everyone Loves Us


1. enowning on July 1, 2004 8:40 AM writes...

I have a relative who is a doctor in Europe, working for a government hospital and isn't paid much. Several times a year drug companies pay for her and her family to go to "conferences" a resorts around the world. The companies monitor what drugs she prescribes and reward her with more conference vacations. This is Europe where they get at least two months vacation to fill up. Of course she prescribes what they tell her to. Otherwise her family could never go on vacation on her official salary. And it's not just her, that's the way the system works there.

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2. MD on July 1, 2004 8:48 AM writes...

You know, in my med school, 'drug dinners or lunches' were not allowed. One day a week, the pharma representatives could set up for an hour or two in a specially designated area with their pamphlets and pens and not more than cookies or pop (we're talking about the midwest so it's not soda, ok?).

This is one of the biggest disagreements I have with other docs I know. I don't think these things influence most physicians but it looks bad and taints the rest of us. As a physician, I find it embarrassing.

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3. Scott Kirwin on July 1, 2004 9:00 AM writes...

As the husband of a physician I have had lengthy discussions with my wife about this practice. To her it seems a waste of money because the last thing she is going to do is prescribe something just because a pharm rep is pushing it.

Her first question is "What is best for the patient?"
Her second question is "Will the patient's insurance pay for this medication?"
"Payola" simply doesn't enter the equation for her. Nevertheless I point out that Big Pharma doesn't do the elaborate dinners for nothing; they are getting a payoff somewhere.

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4. Tartan69 on July 1, 2004 9:13 AM writes...

Pharma isn't as big of a culprit as you think...drug reps are typically younger (20's) and don't have large budgets. Just because a doc gets lunch doesn't mean he's going to write a particular script.

Higher-end products, however, is a different thing. Stents, pacemakers, defibrillators....the sales reps for those types of products make a lot more money, and have bigger budgets. I know one case in particular where a stent rep was paying the head of a hospital $1000 a month out of his own pocket just to use his stents.

Drug reps get all the press because there are more of them, but doctors generally are smart enough to realize they are a dime a dozen, and aren't the heavy hitters in the payola equation.

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5. Sydney Smith on July 1, 2004 10:19 AM writes...

Payola is just the worst symptom of the disease. The improprieties between drug companies and doctors are legion. Free lunches and dinners and educational conferences in exchange for a drug rep spiel may seem harmless, but after a while it's hard to remember what you heard from a reliable source and what you heard from a drug rep about any given drug. I used to think doctors weren't influenced by the sales pitch, but I've seen too many of my more drug-rep friendly colleagues prescribe new medicines eagerly just based on what the reps told them to believe that any longer. Their pitches are influential. That's why they continue.

And then there's the relationship between drug makers and professional associations - endocrinologists, internists, family physicians, gastroenterologists, cardiologists - you name the field and their professional society will have drug companies as corporate sponsors. This, too, may seem innocent, but it definitely has an influence on some of those practice guidelines that come out from these professional societies. They often favor over-treatment or over-diagnosis of a disease or promotion of expensive vaccines with marginal benefit. No doubt about it, the medical profession has completely prostituted itself to drug company interests.

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6. Pat on July 1, 2004 11:00 AM writes...

On the other hand, overworked physicians who are forced to see many more patients in a given day than they used to in order to make a good living don't have the time to study up on new drugs produced by the pharmaceutical industry. Pharm reps provide a valuable service by taking lunch into an office and using the opportunity to educate doctors and nurses on the benefits of new, better drugs. The physician "payola" issue is vastly overstated-the AMA itself passed guidelines several years ago severely limiting many of the "perks" that the pharmaceutical industry used to ply doctors with, and the pharmaceutical industry adopted these guidelines.

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7. Cliff Styles on July 1, 2004 11:40 AM writes...

The patient can ask: "Are you getting money for prescribing this drug for me?", and respond appropriately to the answer. Private medical licencing organizations could certify doctors on the basis of either answer, and advertise accordingly.

I can see that there are potential benefits and costs to both sides. Let the free choices of doctors, pharma producers, and patients decide.
What is really needed is an incentive to be honest by all parties.

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8. Scott Kirwin on July 1, 2004 12:42 PM writes...

I couldn't disagree more with the assertion that the medical profession has prostituted itself. Associations? Perhaps. Administrators? Maybe. But in the doctor-patient relationship where health care occurs - no way.
I have yet to meet a physician who will prescribe one medicine over another based on profit-motive. It goes completely against the code that the vast majority of doctors (naively? idealistically?) believe in.

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9. just a visitor on July 1, 2004 1:25 PM writes...

When I first took my daughter to our her pediatrician, there wasn't a hint of anything about Attention Deficit Disorder (ADD) in that office. When she was 2, the 4-physician practice was suddenly buried under Adderall notepads, pens, all the pamplet boxes were filled with notices to raise concerns that my children have ADD--the stuff was in magazines in the exam rooms, the waiting rooms, everywhere. I called him on it, all he would say is that such treatments have really turned around the lives of some children. I had to say that from then on I was leery of his judgement, although he was smart enough not to peddle that stuff to my children. Sorry, but I should never have to ask a doctor if he was getting paid to prescribe a product from the manufacturer. In the case of this physician, I don't know if I could believe him after seeing the way his practice was turned into a branch advertising office for Adderall.

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10. JB on July 1, 2004 7:47 PM writes...

I worked for a pharmaceutical company as a contractor in the Clinical Affairs division a couple of years ago. Tough Pharma laws stopped most of the wining and dining that was taking place. These days a program must be educational and doesn't take place in an exotic locale. No more amusement park trips for the docs and their families. Gifts cannot cost more than $25. Educational grants are closely monitored. Docs do continue to be paid to be representatives of the drug company by giving lectures to their collegues.
I found during my 3 years with this company that most doctors insisted on good clinical evidence that showed the drug had clinical efficacy, had fewer side effects, and was more economical to the patient than its competitor. This meant prospective,randomized clinical trials, and a well written review of the material.
The drug reps do make an outstanding amount of money, but as a person on the sidelines working with them, I found they are limitless in their energy and devotion to what they do. I would never want their job - stress unlimited to make those numbers.

Look at the AMA's guidelines for Gifts to Physicians from Industry.

These guidelines have been in place since 2002. There are also strict guidelines for the company I worked for with multiple training sessions on compliance.

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11. MeTooThen on July 2, 2004 1:49 AM writes...

It is not only againt every medical associations' guidelines to accept money or non-monetary rewards for writing prescriptions, it is also illegal.

And yes, field sales representatives do "detail" physicians, pharmacists, nurses, and others on products, but here too all information transmitted from the sales representatives must fall within FDA prescribing information. To do otherwise risks serious and costly federal sanction.

The access to the latest clinical and post-marketing data is often made available to busy physicians via the sales representatives. Very often the sales representatives know more about their products that do the prescribing physicians.

Do dinner lectures, pens, coffee mugs, and note pads influence prescribing habits? Maybe. Is it significant? It depends on what you're measuring. Is it unsavory? There were examples of abuse, but those days are long gone.

It is easy to demonize "Big Pharma", but who else is willing to pony-up $700 million dollars to bring a single new drug into the marketplace?

Efficacious and safe products succeed. Period. It is outcome that ultimately drives prescription habits.

And if you don't like your doctor's prescribing habits, get a new doctor.

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12. MD on July 2, 2004 8:16 AM writes...

Hmmm, I don't think Pharma is to 'blame' and I am not interested in demonizing people who are just trying to do their job, however, had docs policed themselves a little better we wouldn't be saddled with all these guidelines and restrictions. I was talking more about physician behavior and responsibility than behaviors of the pharmaceutical industry.

Many a time I would get asked to a 'drug' dinner by medicine residents who were friends of mine. Yes, there was a lecture, and yes there is no way anyone I know would let poor data at those meetings slip by them, but let me tell you one thing. This is how I would get asked: "Wanna come to (insert trendy restaurant name her)? They have great appetizers and we get all the courses." Literally. The conversation verbatim. Please. How cheesy (and this was just last year).

And yes, I know this represents a selected sample of the people I know, which may or may not represent the people at large, so feel free to disagree :)

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13. MD on July 2, 2004 8:18 AM writes...

Er, "insert trendy restaurant name here."

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14. BRIAN on September 21, 2004 4:51 PM writes...


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