Pharma Ethics Code Isn't Working!

By Verschoor, Curtis C. | Strategic Finance, February 2011 | Go to article overview

Pharma Ethics Code Isn't Working!


Verschoor, Curtis C., Strategic Finance


Research shows that pharmaceutical companies continue to practice deceptive marketing practices--particularly in paying medical practitioners to promote their products--despite the strengthening of the code of ethics of the Pharmaceutical Research and Manufacturers of America.

Responding to widespread criticism of some of the ways drug companies were marketing their products, the Pharmaceutical Research and Manufacturers of America (PhRMA) announced a revised PhRMA Code on Interactions with Healthcare Professionals. With an effective date of January 2009, the Code promised to "ensure that pharmaceutical marketing practices comply with the highest ethical standards."

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The revised voluntary PhRMA Code contains 17 pages of high-principled objectives as well as rules that prescribe specific behaviors. But many pharmaceutical companies don't comply with the Code, according to Dollars for Docs, an investigative initiative by ProPublica, an independent nonprofit organization producing investigative journalism in the public interest. The research resulted in a series of 18 stories.

The purpose of the PhRMA Code is "to reinforce our intention that interactions with healthcare professionals not be perceived as inappropriate by patients or the public at large." According to Billy Tauzin, president and CEO of PhRMA at the time the revised Code was announced, the Code "fortifies our companies' commitment to ensure their medicines are marketed in a manner that benefits patients and enhances the practice of medicine."

Details in the Code prohibit a number of marketing practices that were widely used by pharma companies for many years, including the provision of gifts with the corporate logo, such as pens, rulers, and sticky notes. Drug representatives wooed physicians with fancy dinners, resort vacations, and personalized medical equipment. The revised Code states that meals offered to healthcare professionals in connection with informational presentations should be limited to in-office or in-hospital settings and shouldn't include a spouse or other guest. "Dine and dash" programs (take-out or meals without a presentation) aren't appropriate. Companies also shouldn't provide healthcare professionals with tickets to theater or sporting events, sporting equipment, or leisure or vacation trips.

The Code also provides clear guidance for drug companies, forbidding support of costs of attending and control of the content of Continuing Medical Education (CME) programs. Specifically, "responsibility for the content, faculty, educational methods, materials, and venue belongs to the organizers of the conferences or meetings." This seems to conflict with a ProPublica article, "Drug Companies Retain Tight Control of Physician Presentations," which reports that settled whistleblower lawsuits amounting to nearly $7 billion in the past three years have accused pharmas of using prominent physician speakers to push their drugs for uses not approved by the U.S. Food and Drug Administration (FDA). The largest healthcare fraud settlement was the $2.3 billion Pfizer case ("We Need More Whistleblowers," Strategic Finance, May 2010).

The Dollars for Docs research by ProPublica has also created a database of fees paid to a large number of physicians and other healthcare professionals. The work is based on voluntary disclosures by seven drug manufacturers: Eli Lilly, Cephalon, AstraZeneca, GlaxoSmithKline, Johnson & Johnson, Merck, and Pfizer. A 2009 federal statute, The Physician Payments Sunshine Act, requires such disclosure in 2013. The latest total of such payments amounts to nearly $300 million. According to Dollars for Docs, these companies represent about 36% of the market, so the grand total of payments for marketing could be in the range of $800 million. A searchable database by physician name and state is available at http://projects.propublica.org/docdollars. …

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