KRWG.ORG-The Region's Home Page
Shots - Health News
Tue March 4, 2014
Drugmakers Slash Spending On Doctors' Sales Talks
Originally published on Thu March 6, 2014 12:14 pm
Some of the nation's largest pharmaceutical companies have dramatically reduced payments to health professionals for promotional speeches amid heightened public scrutiny of such spending, a ProPublica analysis shows.
Eli Lilly & Co.'s payments to speakers dropped by 55 percent, from $47.9 million in 2011 to $21.6 million in 2012.
Pfizer's speaking payments fell 62 percent over the same period, from nearly $22 million to $8.3 million.
And Novartis, the largest drugmaker in the U.S. as measured by 2012 sales, spent 40 percent less on speakers that year than it did between October 2010 and September 2011, reducing payments from $24.8 million to $14.8 million.
The sharp declines coincide with increased attention from regulators, academic institutions and the public to pharmaceutical company marketing practices. A number of companies have settled federal whistleblower lawsuits in recent years that accused them of improperly marketing their drugs.
In addition, the Physician Payment Sunshine Act, a part of the 2010 health reform law, will soon require all pharmaceutical and medical device companies to publicly report payments to physicians. The first disclosures required under the act are expected in September and will cover the period of August to December 2013.
Within the industry, some companies are re-evaluating the role of physician speakers in their marketing repertoire. GlaxoSmithKline announced in December that it would stop paying doctors to speak on behalf of its drugs. Its speaking tab plummeted from $24 million in 2011 to $9.3 million in 2012.
Not all companies have cut speaker payments: Johnson & Johnson increased such spending by 17 percent from 2011 to 2012; AstraZeneca's payments stayed about flat in 2012 after a steep decline the previous year.
ProPublica has been tracking publicly reported payments by drug companies since 2010 as part of its Dollars for Docs project. Users can search for their doctors to see if they have received compensation from the 15 companies that make such information available online. (We've just updated our application to include payments made through the end of 2012, totaling $2.5 billion. Forest Labs, which only began reporting in 2012, reported speaking payments of $40 million, more than any other company in Dollars for Docs.)
Some companies in the database said their declines have less to do with the Sunshine Act and more to do with the loss of patent protection for key products. Lilly, for example, began facing generic competition to its blockbuster antipsychotic Zyprexa in late 2011. Its antidepressant Cymbalta lost its patent at the end of 2013.
"The value of educational programs tends to be higher when we're launching a new medicine or we have new clinical data/new indication," Lilly spokesman J. Scott MacGregor said in an email, adding that the drop in speaking payments also reflects the increased use of Web conferencing.
Pfizer's patent on Lipitor, its top-selling cholesterol drug, expired in 2011.
"Like any other company, our business practices must adapt to the changing nature of our product portfolio, based in part on products going off patent and new products being introduced into the market," company spokesman Dean Mastrojohn said in an email.
Novartis' patent for its breast cancer drug Femara expired in 2011, its hypertension drug Diovan in 2012 and its cancer drug Zometa in 2013. In a statement, Novartis said speaking payments dropped in 2012 in part because of a shift from big blockbuster drugs that many doctors prescribe toward specialty products prescribed by fewer physicians. Resources were also shifted "to support potential future product launches," a spokeswoman said in an email.
The industry's increased emphasis on expensive specialty medications for such conditions as multiple sclerosis or hepatitis C has been striking, said Aaron Kesselheim, an assistant professor of medicine at Harvard Medical School. A piece in the New England Journal of Medicine last week noted that half of the 139 drugs approved by the Food and Drug Administration since 2009 were for rare diseases and cancers.
"It's possible the number of physicians they need to support sales of these items is less, leading to lower payments overall," Kesselheim said.
In some cases, companies maintained or made smaller cuts to other forms of physician compensation while pulling back dramatically on speaking payments. Pfizer's spending on consultants dropped 9 percent from 2011 to 2012, far less than its payments to speakers. The company's spending on research stayed essentially the same.
Lilly increased spending on physician researchers by more than 20 percent, while reducing payments to consultants by more than two-thirds.
Many bioethicists and leaders of major academic medical centers frown upon physicians delivering promotional talks for drug companies, saying they turn doctors into sales representatives rather than leaders in research and patient care.
Officials with Pharmaceutical Research and Manufacturers of America, an industry trade group, dispute this characterization. They said they are working with their member companies to prepare for the Sunshine Act and have created a campaign to promote the value of drug company-doctor collaborations.
"Companies will make their own independent decisions about how to engage professionals," said Kendra Martello, PhRMA's deputy vice president of strategic operations.
Scott Liebman, an attorney who advises pharmaceutical companies on the Sunshine Act, said it's too early to know how much the law's requirements are affecting company practices, in part because it's so new. The fact that some companies are cutting back on speaking while preserving their spending on research and consulting suggests that other business forces could be at play, he added.
"It's very hard to pinpoint exactly why that's happening," Liebman said. "I think there's a lot of potential answers to that. I just don't know which is the right one."
LINDA WERTHEIMER, HOST:
Some of the nation's largest pharmaceutical companies have slashed the payments they give to doctors and other health professionals for promoting their products. That's the finding of a new investigation by the nonprofit newsroom ProPublica. The decline in spending comes as more companies have voluntarily posted what they pay doctors who promote their drugs. And it's happening as a deadline approaches for mandatory disclosure.
Charles Ornstein of ProPublica led the investigation and he joins us now. He's in our studio in New York. Good morning.
CHARLES ORNSTEIN: Thanks for having me.
WERTHEIMER: Now, first of all, could you just kind of step back a bit and tell us the background here? How do these payments work? What do the companies want these doctors to do for them? What do they think they're getting?
ORNSTEIN: Well, for many decades, we've known almost nothing about this, but pharmaceutical companies have long worked with physicians and other health professionals to educate their peers about drugs and to help promote sales of their products. Some doctors can earn hundreds of thousands of dollars a year for speaking engagements.
Pharmaceutical companies hope this increases the, you know, sales of their products and gets them into new markets and new physician hands.
WERTHEIMER: Should the fact that docs are flogging drugs for cash make us suspicious or should we assume that they're just simply spreading the word about some good drug they routinely prescribe?
ORNSTEIN: Well, in recent years, this has been incredibly controversial. A number of pharmaceutical companies have paid huge sums, billions of dollars in some cases, to settle whistleblower lawsuits alleging that they improperly marketed their products and paid kickbacks to physicians in exchange for them prescribing their products. So I think that this has been looked upon less favorably in recent years in a number of major universities, and academic medical centers have gone so far as to prohibit their faculty members from giving these paid talks for drug companies.
WERTHEIMER: Now, you're new analysis shows that the payments have started to slack off. In one case, Eli Lilly, which is a very big manufacturer of psychiatric drugs, Lilly cut spending in half from 2011 to 2012. Could you tell us more about the kind of thing you found?
ORNSTEIN: Well, Lilly was just one example. The drug company Pfizer, which is another huge company, dropped by more than 60 percent and the world's biggest drug company in terms of U.S. sales, Novartis, they cut their payments by 40 percent. So I think that there's a couple things that are going on here. One, is these companies have some big blockbuster drugs that are losing their patents and so they're facing generic competition.
And when that happens, the companies tend to pare back spending on promoting those drugs because they're not going to be prescribed anymore. So that's going on. But on the other hand, we're also seeing this wave of transparency and as patients are able to look up and see how much money their physicians earn by working with the pharmaceutical industry, we're seeing, certainly, that the payments are going down.
WERTHEIMER: I understand the Affordable Care Act requires companies to disclose all such payments and that will start in September. Do you imagine that just shining a little light on the subject will cause these kinds of payments to drop still more?
ORNSTEIN: Well, most people think about Obamacare in terms of the health exchanges or Medicaid expansion and that's where the real focus has been, but I think this provision within the act called the Sunshine Act, has the potential to really change things up quite a bit because when all patients are able to look up their physicians and see their interactions with the pharmaceutical industry, I expect there to be a lot more give and take and questions that patients ask of their physicians.
And that could have the effect of a physician saying, you know what, it's not worth it. I don't want to have a relationship if I'm going to on a website and my patient's going to come in and instead of asking me about their health condition, they're going to be asking me about my financial relationship.
WERTHEIMER: It's been our experience in commerce of all kinds that if you find that something stops working for you, then you do something else. So if paying docs to pump up the reputation of drugs, if that's dwindling, what's next for these big drug companies? What are they going to do?
ORNSTEIN: Well, that's an excellent question. Drug companies have a lot of ways of working with physicians and other health professionals. So there are research funds. They pay them to serve on advisory boards. But also the Affordable Care Act, the Sunshine Act, does not require drug companies to disclose how much they provide to, say, physician assistants or nurse practitioners, and there's a number of folks who think that some of the funding will shift to those practitioners because it doesn't have to be disclosed.
WERTHEIMER: Charles Ornstein is a senior reporter for ProPublica. He joined us from our studios in New York City. Thank you very much.
ORNSTEIN: Thanks for having me.
(SOUNDBITE OF MUSIC)
WERTHEIMER: You're listening to MORNING EDITION from NPR News. Transcript provided by NPR, Copyright NPR.