Does Aggressive and Sometimes Illegal Pharmaceutical Marketing Pay Off?

marketing.jpgEarly in the last decade the federal government began paying substantial attention to the marketing of drugs by manufacturers. Investigations and eventual settlements with Tap Pharmaceuticals ($875 million) and AstraZeneca ($350 million) paved the way for compliance guidance by CMS Office of Inspector General (OIG) published in 2003.
The guidance addressed potentially illegal marketing practices and the connection between marketing practices, kickbacks and false claims. The fraud related to the reporting of pricing by manufacturers to the government as well as the enabling of providers to charge for drugs given to them for free. The kickback issues related to all manner of gifts, grants, research monies paid to physicians to induce them to prescribe particular drugs as well as rebates, unreported discounts on drug products administered by physicians. The investigations and guidance led to a number of changes in the marketing practices of manufacturers to attempt to avoid kickback prosecutions. At the core, bribing doctors, in various ways to write prescriptions for your drugs became dangerous.
pharmacy.jpgApparently, the message did not get through all the way. Recently there have been a number of settlements and even guilty pleas by pharmaceutical manufacturers, including AstraZeneca ($550 million), Pfizer ($2.3 billion) and Eli Lilly ($1.4 billion) related to other unlawful marketing practices. However, these cases involved the promotion of so called “off label” uses for their drugs, with some allegations kickbacks as well. The Pfizer settlement stems from an investigation instigated by six whistleblowers, who received $102 million from the settlements. The complaint charged that Pfizer sent doctors on all-expense-paid trips to resorts, gave out free massages, and paid kickbacks to doctors, to provide incentives to the doctors for them to prescribe drugs for off-label uses.
There is a question of how effective current marketing efforts are without resorting to outright bribing of physicians to prescribe drugs. In an interesting article, available here, suggests that the current marketing by manufacturers worldwide is not particularly effective, even with increased marketing budgets. Also, the drug industry as a whole is headed for financial trouble with price controls which are likely inevitable. Therefore, it leads to the question of whether some of the discarded and potentially unlawful methods will be finding their way back into use with fines and settlements merely being the cost of doing business.
“Pharmaceuticals Out Of Balance – Reaching the tipping point” is available for download, click here.