Mar 01, 2009 07:00 PM

HB 2376

Pharmaceutical Company Gifts

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Background:

• The pharmaceutical drug industry currently spends $58 billion each year on marketing aimed towards physicians, individual citizens, medical schools, and hospitals. In comparison, the pharmaceutical drug industry only spends $30 billion each year for research and development.
• $7.2 billion is spent on marketing directed specifically towards physicians.
• This translates to an estimated $8,000 to $11,000 per physician each year.
• Marketing techniques include meals at five-star restaurants, free trips to vacation resorts, promotional items such as pens and coffee mugs, and cash payments to physicians for either taking time to listen to a drug representative or for speaking at a seminar.

The Problem:

• The AMA and PhRMA (Pharmaceutical Research and Manufactures of America) currently have ethical guidelines regarding gifts. The guidelines are voluntary however, as they do not carry a penalty, and only the top manufacturers have supported it.
• These marketing techniques negatively influence physicians in their decision on what medication to prescribe having the following effects:
• Reduced lower cost generic prescribing
• Increased overall prescription prices
• Quick prescribing of the newest, most expensive drugs including those of only marginal benefit over existing options with established safety records.
• Prescription drugs are one of the fastest growing costs for Americans, climbing each year at double digit percentages. Total U.S. prescription drug spending has ballooned fivefold from $40.3 billion in 1990 to $200.7 billion in 2005.
• In 2007, 41% of working-age Americans, or 72 million people, had medical bill problems or were paying back medical debt.
• Between 1995 and 2005, the number of drug reps in the US increased from 38,000 to 100,000.
• Drug spending in America has increased on an average of 18% each year. Prescribing practices based on gifts unjustly cost patients and taxpayers more than they need to pay

Ethical Considerations:

• 85% of medical students feel it’s improper for politicians to accept corporate gifts, but only 46% believe it’s improper for physicians.
• Surveys show the majority of doctors feel pharmaceutical gifts compromise the industry’s integrity, yet none will admit to being personally affected.
• 52% of Americans believe that accepting gifts from the pharmaceutical industry influences how physicians make prescribing decisions.
• An analysis of 29 studies of physician-pharmaceutical company interactions showed doctors are more likely to prescribe a drug if the manufacturer sponsors a medical education program, a travel conference, or a meeting with a drug representative.

Case Example: Lipitor

• Lipitor, the nation’s second highest priced cholesterol drug and also the best selling drug in the history of the universe, was the most profitable drug in 2001, with sales of more than $4.5 billion
• However, the Oregon Health Resource Commission, comprised of doctors and pharmacists, concluded that Lipitor is not any more effective than Lovastatin, which sells for half the price of Lipitor.

Local Trends and Considerations:

• Providence Medical Centers has banned the acceptance of gifts from pharmaceutical companies, including free lunches. The organization of 100 physicians also has plans to soon ban meetings with drug representatives altogether.
• Kaiser Permanente has a policy which prohibits the acceptance of gifts from pharmaceutical companies for drugs not listed on their “low-cost drugs” list.

The Solution: HB 2376

• Requires pharmaceutical manufacturers to disclose the value, nature, and purpose of any gift or payment.
• The report must include gifts and payments to physicians, hospitals, nursing homes, pharmacists, health plan administrators, or anyone authorized to prescribe or dispense prescription drugs.
• This applies to gifts given by either the company or a pharmaceutical marketer on behalf of the manufacturer.
• Excludes free drug samples intended to be distributed to patients, reimbursement and reasonable compensation for a bona fide clinical trials, and scholarships.
• Makes standardization of practices and regulations possible.
• Makes it possible to track unethical practices between pharmaceutical manufacturers and those that have a direct influence on patients taking prescription drugs.
• This type of public disclosure allows patients to be better informed when making medical decisions.

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Questions, Comments, More information? Contact Sarah with Representative Tomei.

Sarah Allsbrooks – Tomei.Rep@state.or.us
Legislative Assistant
Representative Carolyn Tomei

Oregon House District 41

ph: 503.986.1441