Pharmaceutical Marketing – Time for Change

EJBO Electronic Journal of Business Ethics and Organization Studies Vol. 9, No. 2 Pharmaceutical Marketing – Time for Change By: Joan Buckley Introduction therapeutic options and achieve a more [email protected] equal relationship with their physicians. This paper reviews current marketing On the other hand action groups such as Abstract practices in the pharmaceutical sector, the U.S. Public Citizen’s Health Research This paper reviews current market- examining both consumer and doctor- Group oppose this practice as they con- oriented promotion. It presents examples tend that there is no evidence that such ing practices in the pharmaceutical of marketing practices and their impact advertising improves health care. sector, and their impact on consumer on consumer and doctor behaviour. It For marketers it is perhaps a difficult and doctor behaviour. It identifies identifies negative impacts of these prac- area to engage with, given that Big Phar- negative impacts which include tices which include misleading advertis- ma is in many ways the ultimate market- misleading advertising, disease ing, disease mongering and escalating ing example. They engage in multi-mil- mongering and escalating costs. It costs. It goes on to argue the need for an lion dollar marketing campaigns, use all independently-monitored code of prac- methods of promotion from mass media argues the need to move from indus- tice for marketers in the pharmaceutical advertising, to below the line spend on try self-regulation to an independ- sector and a greater degree of consumer measures such as the engagement of key ently monitored code of practice for education for both end-users and those opinion leaders. Many billions of dollars pharmaceutical marketing. prescribing drugs. have been spent on developing and pro- tecting not alone their branded products but also their component drugs interna- The context tionally. Keywords Pharmaceutical marketing methods, In May 2003 the British Medi- cal Journal devoted a special edi- How are drugs promoted? Direct to Consumer Advertising tion to the relationship between doctors and pharmaceutical companies The average cost to bring to market entitled“time to untangle doctors from a so-called block-buster drug is current- drug companies”(Moynihan 2003). The ly estimated at $895 million (EFPIA, theme was relationship between the 2002). Obviously firms who spend that medical profession and the pharmaceu- kind of money need to recoup their costs. tical industry (Big Pharma). The medi- Furthermore industry analysts point out cal profession in Europe, in conjunction that Big Pharma under pressure. It needs with many social movements, has begun to expand sales of blockbuster drugs to consider seriously the appropriate- since there are fewer drugs in pipeline. In ness of current relationships between order to sustain current levels of growth, Big Pharma and the health sector. This firms would need to introduce one new is occurring in the context of legal actions product each year that would sell $4.9 around corrupt sales practices in Europe million for each 1 to 1.5 per cent it has such as those against GlaxoSmithKline of the world pharmaceutical market. “A (GSK) in Germany (Gopal 2002) and It- company the size of the newly merged aly (Turone 2003), and the major action Glaxo Wellcome/Smith KlineBeecham against TAP Pharmaceutical Products, needs three to seven products each year, Inc in the United States which resulted in while one the size of Astra Zeneca needs a $875 million dollar settlement in 2001 two to four products each year. The prob- (Riccardi 2002). lem is that research productivity is fail- This debate is already very strong in ing. None of the major companies is close the United States where it has further to the target.” (Horrobin 2000) extended to encompass the relationships Depending on the category of drug between Big Pharma and consumers. the nature of the marketing mission is This is in part because of US practice of different. There are essentially two cat- allowing direct- to-consumer advertising egories of drugs: self-medication or over (DTCA) of prescription drugs. Industry the counter (OTC) drugs, and prescrip- organs such as PhRMA the umbrella or- tion drugs - sometimes referred to as eth- ganization of the American pharmaceu- ical drugs (de Mortanges and Rietbrock tical industry argue that such advertising 1997). OTC drugs are promoted directly (properly regulated) allows consumers to consumers as well as physicians and to inform and educate themselves about other healthcare professionals and range 4 http://ejbo.jyu.fi/ EJBO Electronic Journal of Business Ethics and Organization Studies Vol. 9, No. 2 from analgesics such as paracetamol to anti-histamines. What broadcast DTCA of these drugs has resulted in increased “pull” is categorized as OTC varies from country to country and is de- from consumers. In both the United States and New Zealand pendent on the local legislative framework – usually a national DTCA of prescription drugs occurs with considerable effect, as medicines authority, so for example in the United States some will be discussed below. A further source of ‘indirect’ pull has anti-histamines are prescription-only. been the impact of the Internet on pharmaceutical promotion, Corstjens (1991) identifies four main buying parties for pre- which will also be discussed below. scription drugs: 1. Prescriber – prescribing rights vary internationally and this category may include doctors, dentists, pharmacists, nurses Direct to consumer promotion – and optometrists creating direct pull 2. Influencer – hospitals, nurses, professors, reimburse- ment agencies In August 1997 the US FDA made significant changes in the 3. Consumer – patient regulations for broadcast DTCA of prescription drugs. Prior to 4. Financier – partly patient, partly government or third 1997 DTCA had to include the entire brief prescribing infor- party (varies by country), managed health care organization mation which meant that about 30 seconds out of a 60 second (hospitals, Health Maintenance Organisations etc.) advertisement would consist of fine print scrolling across the The majority of Big Pharma’s marketing budget is targeted screen. In 1997 the FDA dropped this requirement and said that at doctors and others with prescribing power, who are effective- DTCA had to mention the major side-effects, and also provide ly the gatekeepers to drug sales. In 2002 the Canadian Medi- other ways that consumers could get more information about cal Association Journal estimated some US$19 billion is spent the drug (e.g. give a web site, a 1-800 number or refer to a print by Big Pharma annually in promoting drugs to doctors in the ad for the same product which contained the same information) United States alone. The methods used will be discussed later and tell consumers to consult their doctors/pharmacists. In the in this paper. four-year period from 1996 to 2000 promotional spend direct In the European Union only OTC drugs are promoted di- to consumer within the United States tripled (from $791 mil- rectly to consumers. Examples include analgesic preparations lion dollars to $2.5 billion dollars, New England Medical Jour- and some ailment-specific drugs such as the Schering Plough nal 14/2/02). New Zealand is the only other developed coun- blockbuster Clarityn - a hayfever remedy. In 1998 Schering try that allows DTCA of prescription drugs. Burton (2003) Plough spent $186 million promoting Clarityn, and as a result details a report by academics from all of New Zealand’s medical saw a half a billion dollar increase in sales year on year to achieve schools which recommended that the practice be discontinued. annual sales of $1.9 billion, (Maguire 1999). This report, based on a survey of all general practitioner doctors In the United States all drugs may be promoted to consum- in New Zealand, found that seventy five per cent of respondents ers, but in practice direct to consumer advertising focuses on believed DTCA to be negative with patients frequently request- OTC and common-ailment targeted prescription drugs. There ing drugs that were inappropriate to them. On the other hand are other more limited application drugs for less common dis- in New Zealand drug advertising is not monitored by a state eases that are only promoted to health care professionals, and agency (whereas it is in the United States). The pharmaceu- hospital and organizational formulary committees (such as tical and advertising industries are self-regulating. This leads HMO formulary committees). The drug marketing process to a less than ideal situation where only a small percentage of can be described by the model below in Figure 1, which shows the televised pharmaceutical advertisements are compliant with the information flow from drug companies, both to consumers the New Zealand Medicines Act regulations, which ostensibly and doctors. It also shows the power that consumers, informed control for information on contra-indications, and safety and by DTCA and the Internet, have in “pulling” prescription drugs quality of medicines (pharmacovigilance). from doctors. Effects of DTCA on consumers Flynn (1999) argues that DTCA makes consumers better informed and more sophisticated. In his view consumers are enabled, through DTCA, to better understand the market for drugs and the therapeutic options available to them. This view is also shared by Calfee (2002), who argues that consumers can engage in more equitable relationships with health care provid- ers and become partners in their own health care as a result of DTCA. Mintzes et al (2002) found that consumers pulled Figure 1. Pharmaceutical marketing process. prescription drugs through the system, going to physicians with requests for medications that they had learnt of through advertisements. Their research showed that patients normally got Creating the Pull – Directly and Indirectly: positive responses to requests for prescriptions. Their research also showed that physicians were influenced in their choice of Historically promotion for prescription drugs occurred only drugs and might otherwise have prescribed different drugs.

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