Policy Background

In addition to massive direct-to-consumer advertising campaigns, including Internet advertising aimed at teenagers, drug manufacturers use sophisticated techniques including data mining to target their marketing efforts to specific subsets of doctors who are most likely to be receptive to their sales pitches. Pharmaceutical companies use salespersons or “detailers,” and data collection and analysis of doctors’ prescribing to effect what it calls a “targeted promotional intervention” to get doctors to switch from prescribing one drug to another. Patients are also directly targeted as a result of these techniques with coupons and other promotions. These practices raise questions of drug safety and appropriate prescribing, patient and medical provider privacy, and the appropriateness of massive spending primarily to boost prescribing of the most expensive drugs.

Many states are looking closely at these activities and acting to expose marketing techniques and spending and regulate problematic practices. For example, New Hampshire has enacted a law prohibiting the use of doctors’ prescription information for commercial purposes. This law is currently under attack in the courts and is being vigorously defended by the New Hampshire Attorney General. NLARx is an amicus in the case. Vermont, Maine and West Virginia require reports disclosing spending on advertising and marketing activities. Maine has adopted federal misleading advertising standards and given its Attorney General explicit authority to go after violators. These laws have not been challenged in the courts, and the West Virginia Attorney General has issued a legal opinion that the state has broad powers in the area of disclosure of marketing activity. Other states are looking at drug detailer registration and training and considering regulating gifts and perks distributed to the medical community by the drug industry.

Marketing is linked to drug spending increases. There is a strong link between the pharmaceutical industry’s sophisticated and expensive marketing of prescription drugs and the double-digit increases in pharmacy expenditures over the past decade. As the New Hampshire Attorney General stated in a legal brief defending state policies regulating commercial use of prescription information, “Both prescription use and shifts to higher-priced drugs are affected by advertising. Manufacturers spent $11.9 billion for advertising in 2004 (excluding the $15.9 billion in retail value of drug samples), with $7.8 billion (66%) directed toward physicians and $4.0 billion (34%) directed toward consumers. Spending for direct-to-consumer advertising – typically to advertise newer, higher-priced drugs – was 15 times greater in 2004 than in 1994.”

Advertising and marketing activities also affect drug safety and provider prescribing patterns. As pointed out in the New Hampshire brief, Congressional hearings in 2005 on marketing the drug Vioxx found for that drug alone, “the company assigned over 3,000 company representatives across the country to engage in face-to-face discussions with physicians about Vioxx.” The documents Congress reviewed suggest that Merck’s sales representatives “did not appropriately educate physicians about research that demonstrated Vioxx’s cardiovascular risks. To the contrary, it appears that Merck’s highly trained sales force was instructed not to address the new research findings, but to emphasize outdated and misleading data that indicated Vioxx was safer than alternatives.” Such activities are widespread. A 2005 study found that more than half of the drug makers participating in the 2002 America Psychiatric Association convention violated either the Association’s own drug marketing guidelines or FDA rules. Researchers found 16 violations of the Association’s exhibit rules - eight companies had one violation and two companies (Eli Lilly and Pfizer) had four violations each. Four companies were in violation of FDA off-label marketing rules, either mentioning products for uses not approved by the FDA or discussing drug use at doses higher than what is recommended.

Federal enforcement of marketing and confidentiality rules is lax. A 2005 report issued by Congressman Henry Waxman of the House Committee on Government Reform found that “there has been a marked decline in enforcement actions taken against drug manufacturers for illegally promoting their products” since December 2001. From 1999 to 2001, The FDA issued 250 “Notice of Violation” or “Warning” letters to drug companies, but from 2002 through 2004, the FDA sent only 70 letters. This is a reduction of more than two-thirds, despite a sharp increase in the number of drug ads and the money spent on them. There have also been long delays in the FDA taking action against false or misleading advertisements. In 2003, the average delay between when a drug ad appeared and when the FDA took action was 177 days, or nearly 6 months. In 2004, delays remained long, averaging over four months. The FDA does not have adequate resources to adequately police drug advertising. For example, in 2003, the FDA had only 18 staff assigned to review the roughly 37,000 ads and promotional pieces submitted by drug companies that year. Even if the FDA did have enough resources, it’s unclear it would make a difference: the FDA does not require drug companies to submit ads before they are distributed, but only after the fact. This means that the FDA can’t even take action until ads have already run and been seen by millions of people.

Nor is enforcement of federal privacy laws adequate. The federal health information privacy law known as HIPAA is supposed to protect patient medical information, but it doesn’t always work in the case of prescriptions. HIPAA is not intended to address the privacy of the prescriber, and the result of data mining is that doctors and other medical providers lose their privacy involuntarily. Moreover, there is little enforcement of HIPAA rules, period. In June 2006 the Washington Post reported that nationally, 19,420 HIPAA grievances have been filed with the government in the past three years. Allegations included unlawfully disclosing personal medical details to unauthorized parties, poorly protecting the data and releasing more details than necessary. Yet the federal Department of Human Services' Office of Civil Rights hasn't imposed a single civil fine and has prosecuted only two criminal cases since the confidentiality law went into effect.

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