Tuesday, March 27, 2007

Dead DTC Golden Goose and Other Pharma Fears

Yesterday, I participated in a panel discussion at the iiBIG Pharmaceutical Sales & Marketing Executive Congress now going on at Caesars Hotel & Casino in Atlantic City, NJ. The panel's title was "The Changing Landscape in Washington."

Unfortunately for attendees, the two scheduled panel members -- Bill Greenwood, president and ceo of BIO, and Frank Pallone (D-NJ), Chairman Health Subcommittee on Energy & Commerce -- cancelled at the last minute. In desperation, Don Buford, the conference producer, called me on Sunday to fill in.

Full disclosure: iiBIG paid for one night's stay and I ate the lunch. I had to provide my own transportation, and pay for my "gaming," Internet connection, and parking.

It was up to me and Katherine Binns, President, Healthcare Division, HARRIS INTERACTIVE, to pitch hit for these sluggers. I hope we did a good job -- at least a few people thought we did well.

Anyway, enough about me. I want to talk about what I learned from attendees and other speakers about what Pharma fears the most, how it plans to react, and how I suggest it react instead.

Guns, Butter, Drugs
Those are the issues in contention for top of mind among voters in 2008.

Binns, in her presentation on "Public Opinion Regarding Upcoming Healthcare Debates in the 110th Congress," highlighted survey data that suggested that healthcare (drugs et al) is not an election issue right now, but that it is a growing concern.

In the 2006 mid-term elections, healthcare was #3 behind Iraq (guns) and the economy (butter) as an issue affecting voters. The voting public, says Binns, tends to vote on one or two issues at a time. Thus, if the Iraq war were eliminated as a major issue among voters, healthcare could become the number 1 issue.

Presumably, if the Iraq war remains the #1 issue among voters in 2008, even more Democrats will be elected to Congress and, God forbid, even a Democratic president, who will sign anti-drug industry legislation into law, may be elected. That's pharma's #1 fear.

Re-importation Issue

One of these possible laws concerns re-importation of drugs from Canada (and other countries). I discussed this issue last week in a podcast interview with Cary Byrd of eDrugSearch.com (see "Can You Find Reputable Canadian Drugs Online?").

A pharma member of the audience asked who can help the industry speak to patients about how they should be worried about counterfeit and ineffective drugs ordered online. Binns suggested recruiting physicians to tell their patients that although they can order drugs more cheaply online, they should really order from the local pharmacy. Yeah, that will happen.

I pointed out two things:
  1. The problem of counterfeit, adulterated, and ineffectual drugs is not just something we have to worry about when ordering online, but also when we get drugs through our neighborhood pharmacies, hospitals, or doctors. The industry should do more to focus on this home-grown problem with our drug supply.
  2. Why does the industry always employ negative, scare tactics? PhRMA already tried this when it attempted to fund a novel linking terrorists to ordering drugs online (see "PhRMA's Terrorist Plot"). Stop scaring Americans! Aren't we too afraid already?
As Binn pointed out, even if new laws were enacted to allow drug re-importation from Canada, it is unclear if that would have any major impact on the market. Note also that Internet drug sales to the U.S. is down sharply in 2006. In light of that, I suggested the industry should support programs like eDrugSearch.com, which works with pharmacies accredited in the US and Canada to sell drugs online (eg, VIPPS program in the US).

A B&L executive in the audience asked a question that astounded me. She wondered how pharma could get the message out there that if it weren't for the pharmaceutical industry, generics wouldn't be as readily available and as cheap in the US.

I guess what she meant was, the industry develops these great drugs in the first place and then they go off patent and that benefits Americans. Never mind that patented drugs are priced much higher in the US than elsewhere and the industry is currently fighting tooth and nail to prevent generic manufacturers from competing with brand drugs.

State Laws Limiting Physician Access
A big concern, especially among specialty pharmaceutical companies with small sales forces, is the 1600 bills related to regulation of pharma marketing and sales that are wending their way through state legislatures. Some states have already passed legislation that affects marketing to physicians -- eg, New Hampshire (see "Whose Data Is It Anyway?").

The animosity against certain states by pharma was highlighted by Thomas Chen, VP Marketing at Oscient Pharmaceuticals, who referred to the good state of Massachusetts as "The People's Republic of Massachusetts." I believe his gripe with MA was the requirement that pharma companies limit spending on lunches, etc. for physicians to $50 per year. This is a big headache for the industry, which must audit where this money is being spent and report it.

But states' bark may be worse than their bite, as reported in JAMA (see "State Oversight of Industry Gifts to Physicians All Bark"). Either that or the industry has exploited loopholes that allow it to hide lunch money under within the trade secret database, which isn't easily accessible. JAMA author Joseph S. Ross, M.D., M.H.S., of Mount Sinai Medical School, contended the "trade secret" claim was often so broad that it "covered money spent for food brought into lunch meetings with detail men."

Chen and others revealed pharma's current strategy to deal with these state laws: Stop marketing to physicians in errant states. I wonder how long that strategy will work. It's all good for a company with limited resources, but sooner or later, as more states join the "People's Republic," there won't be any states left to marjet in.

This is an effective scare topic, however. Physicians depend on free samples, especially to help patients in need. When pharma threatens to boycott states with physician gift laws or boycott individual physicians that opt out of having their Rx data made available to pharma reps, that also means samples are cut off. This policy counteracts the industry's claim that it helps patients who can't afford medicines by giving away billions of dollars worth of free samples every year.

The DTC Golden Goose May Be Dead in the Water
A question was put to me from a member of the audience on how the world will change for pharma people making decisions about how to market directly to consumers. I answered first by quoting others who suggest that the golden era of DTC is over. DTC, I said, has suffered two much criticism from both sides of the aisle in Congress (see, for example, "Deconstructing Frist on DTC") to stand as it is.

TV DTC is very visible as a "poster boy" for what is bad about pharma marketing. Even the industry recognizes this. Some companies, including J&J, are pulling back from TV advertising. And whenever a product gets bad press as did Gardasil over the mandatory inoculation issue, its ads on TV are halted at least until the storm blows over.

I said that the industry always seems to push the envelope one step too far and as time goes on the envelope will rip. We may have reached that point when Takeda claims no responsibility for a TV ad cited as violative in an FDA letter (see "Back to School for Takeda, Rozerem, and Abe Lincoln!").

Add to that the lack of accountability of the industry for violation of its own PhRMA guidelines on DTC advertising; violations that I have documented numerous times in this blog. Perhaps if PhRMA were to reprimand violators by naming them in public, fining them, and suspending their membership for a time (all of which is done by ABPI, the UK equivalent of PhRMA), then we could say the industry is serious about policing itself.

Without that kind of self-regulation, pharma has no one but itself to blame, if Congress passes mandatory moratoriums on DTC advertising.

Unfortunately, it may be too late for the industry to reform. The only thing that will save it is the presidential veto, but that's not a strategy for the long-term. Which is another well-recognized problem of the industry: short-term thinking reigns supreme!


  1. Anonymous11:29 AM

    Im glad you shed some light on the subject of importation of Canadian drugs. I particularly like the point you made that "The problem of counterfeit, adulterated, and ineffectual drugs is not just something we have to worry about when ordering online, but also when we get drugs through our neighborhood pharmacies, hospitals, or doctors."

    You may be interested in a interview I just did with David Janeson who owns Jandrugs, a leading Canadian online pharmacy that is part of the eDrugSearch.com database. I interviewed David recently about his business and some of the common misperceptions about Canadian pharmacies.

    Heres a link http://edrugsearch.com/edsblog/an-interview-with-david-janeson-of-jandrugs/

  2. Anonymous9:20 AM

    I wouldn't pay too much attention to questions from pharmaceutical industry folks who attend these meetings. The ones who understand the critical issues affecting the industry are rarely at these meetings. Those who do attend tend to ask inane questions that create a misperception as to the seriousness that industry takes most of these issues.

  3. Thanks for your comment.

    I guess you are right about the attendees of these conferences. However, about 20% of the audience are also the "expert" speakers.

    Besides, in so far as the audience represents the rank and file of the industry, it is a valid barometer of what worries these folks as opposed to what worries CEOs and VPs (who have golden parachutes and need not worry at all!).


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