Feeling exposed

Few professional relationships are as close as the one between doctors and pharma companies. Physicians not only prescribe drugs, they are also central to their clinical testing and to how they are perceived by patients, other doctors and payers. Getting doctors on board, in short, has always been critical to any successful marketing campaign.

But the relationship is as controversial as it is close and, if recent experience in the US is anything to go by, companies should be seeking new ways to engage with doctors as a matter of urgency. In the US, the horse has already bolted, so to speak. After years of transparency laws being introduced in piecemeal fashion by various states, full transparency of what pharma pays doctors will be mandatory from 2013 as part of the recent healthcare reform bill.

UK implications
A clause to this effect is also currently under consideration by a member-led taskforce of the UK industry association, the Association of the British Pharmaceutical Industry (ABPI), for inclusion in its Code of Practice. Andy Powrie-Smith of the ABPI points out that members will have a chance to vote on the issue at the half-yearly ABPI meeting in November.

"We recognise the importance of transparency has risen globally, not only in our industry, but across business and public life," he says. "Addressing the issue is of equal importance to both the medical community and the healthcare industry, as it is the dynamic relationship between the two that has come under such scrutiny. It is crucial we tackle the issue together."

Whatever transpires from the November meeting, events in the US tell a cautionary tale for marketing executives in the UK who, because of the recent MPs' expenses scandal, know the damage transparency can wreak more than their counterparts in any other country. This damage is arguably felt more keenly by doctors than industry because, just as UK politicians didn't take kindly to their expenses being made public, so doctors in the US are realising how their reputations can suffer if their pharma earnings are posted on public websites. Nevertheless, companies are also impacted as they have little choice but to find new, transparent, ways of working with doctors.

According to Jordan Stone, a researcher with Cutting Edge Information, which produces surveys on remuneration paid to doctors by pharma companies, there is now a growing reticence among the medical profession in the US to engage with industry.

"It is getting harder to get doctors on board, especially the newer ones and those working at community level," he says. "They don't want people to wonder about their integrity. It is paradoxical because disclosure was supposed to make it easier for them, but there is a real fear of scrutiny."

And who can blame them, especially when payments are often reported in the absence of any context or, worse, pertain to doctors whose prescribing patterns are so high they are forced into the open by the courts. The public, including BBC Radio 4 listeners in the UK, recently learned that AstraZeneca paid Chicago psychiatrist Dr Michael Reinstein $490,000 between 1997 and 2007, when such payments were filed as exhibits in a federal lawsuit into the promotion of the company's antipsychotic Seroquel.

The payments were perfectly legitimate, but when the same doctor is also accused of over-prescribing the drug in Chicago nursing homes, the impression the public is left with can taint all cash flows between pharma and physicians.

Where reputation is concerned, perception is the only thing that matters. It doesn't matter whether pharma's spend is justified or if doctors act with integrity or are paid a fair market value for their time. Jonathon Kellerman of the California office of consultants PricewaterhouseCoopers says the US experience of transparency is leading to a painfully ironic dilemma. "There is going to be a mass of data that will be made available to the public via various state and federal web sites, all in the spirit of transparency and improving public trust," he says. "However, this data will be mostly presented without the context of the actual business activities.

"Taken out of context of business justification and the real value of collaboration between these companies and healthcare providers, access to and analysis of this mass of data could ultimately serve to further damage the reputation of pharma companies and the healthcare professionals more than serve it."

On the bright side
The silver lining in all of this is that it forces companies to do what they have been talking about for months: that is, to move from simply selling drugs to managing their value in the context of overall healthcare outcomes. A recent report from the consultancy Oliver Wyman entitled A Prescription for Change points out that 85 per cent of marketing spend by pharma companies is still concentrated on initial prescriptions, getting patients on to their drugs via detailing, taking doctors to conferences, organising speaker programmes and funding continuing medical education: all strategies that risk being exposed in this new era of transparency.

The report states: "The current go-to-market model focuses almost exclusively on initial prescription writing, largely ignoring other drivers of the market. To grow in the new healthcare environment, as product differentiation becomes harder to sustain, pharmaceutical companies need to go beyond promoting for first prescriptions (and banking on maximising price in payer negotiations) toward expanding the total size of the market and the resulting revenue potential."

Joint working
Peter Claude, also of PricewaterhouseCoopers, agrees this period of change is an opportunity to unravel the conflicting expectations that exist in the healthcare market and seek new ways of working together. "Companies are recognising that payers, providers and pharma have different and conflicting value drivers," he says. "These conflicts drive great mistrust in the market because everyone thinks everyone else is making a buck out of them. But there are just as many ways to find good solutions from what they have in common. Companies are seeking to find points of common interest and designing programmes with shared risk, greater information sharing, services wrapped around medicines, and so on, with the aim of producing an outcome that is desirable for everyone involved."

This is, of course, what the ABPI and the NHS are trying to achieve through their joint-working programmes that essentially deploy 'find and treat' strategies where everyone, in theory, is a winner. As Martin Anderson, who heads up the ABPI's effort in collaborative working, says: "The challenge was how to work with the NHS without money from pharma companies being seen as an inducement to prescribe. We had to move beyond sponsorship to create a proper business-to-business relationship model and emphasise things pharma is good at, such as influencing people and project management skills."

Despite encouraging success in this area, companies still need to compete and that, in the past, has always meant working with doctors to promote their products. As Powrie-Smith points out, there is a global momentum behind the drive for greater transparency. In the UK, the Code of Practice affords the industry and healthcare professionals the chance to meet the growing demand for transparency through self-regulation.

The US example
The main lesson to be learned from the US is not that doctors are sensitive to these payments being made public, but that transparency is a dynamic concept that leads inexorably to greater demands for disclosure both geographically and in what should be made public.

Under the original transparency laws in the state of Vermont, for example, the names of individual doctors who received money were not disclosed. In June 2009, however, a new law banning gifts and free lunches was introduced: the law also mandated that a searchable online database be established for patients to find out what their doctor had earned. The state now also forbids data-mining, whereby companies use doctors' prescribing records to inform marketing messages. Moreover, in February 2010, Vermont was making moves to become the first state to require pharma companies to report how much they spend on providing free drug samples to physicians.

Transparent faculty relations
Similarly, medical schools have been falling over themselves to disentangle the web of conflicted interests that have built up over the years. The Cleveland Clinic was one of the first to announce, in December 2008, that pharma payments to its faculty would be posted online, showing which companies they had collaborated with and whether they had equity, rights to royalties, a fiduciary position or a consulting relationship that paid $5,000 or more a year.

In April 2009, Stanford University School of Medicine followed suit, announcing it was planning to identify faculty members who received more than $5,000 a year in payments, royalties, stock grants and other compensation from industry.

That same month Johns Hopkins University announced a ban on doctors giving talks on behalf of industry. In December 2009, the Northwestern University School of Medicine announced it would reveal whether staff members served on company boards, had investment interests, received royalties, were consultants, gave lectures or sat on scientific advisory boards on behalf of industry.

More recently, in January 2010, Partners HealthCare, a non-profit health system that includes research hospitals affiliated with Harvard Medical School, restricted what senior officials can earn from sitting on the boards of biopharma companies to no more than $5000 per day. It also banned its staff, including nearly 8,000 on the Harvard faculty, from accepting speaking fees from pharma.

The writing's on the wall
Many large pharma companies are already reporting payments, some because they are obliged to under Corporate Integrity Agreements entered into for past misdemeanours; others such as GlaxoSmithKline (GSK) and Merck & Co because they had seen the writing on the wall. UK affiliates have been warned.

The Author
Jacky Law is a freelance healthcare journalist, specialising in pharmaceuticals.

To comment on this article, email pm@pmlive.com