Breakup of Physician, Drug Company Relationship Could Improve Health Care, Cut Cost
May 20, 2013 — A new report suggests that improved health care and significant reductions in drug costs might be attained by breaking up the age-old relationship between physicians and drug company representatives who promote the newest, more costly and often unnecessary prescription drugs.
This system, which has been in place for decades, at one time benefited doctors by keeping them up to date on new medications, and always provided generous amounts of “free” samples to get patients started on the newest drugs, as well as other supplies and gifts.
But it’s actually a powerful marketing process into which the pharmaceutical industry pours tens of billions of dollars a year, with more than 90,000 drug representatives providing gifts and advice. There is one drug representative for every eight doctors in the United States. This doesn’t necessarily serve the best interests of the patient in terms of economy, efficacy, safety or accuracy of information, experts say.
In one of the first reports of its type — titled “Breaking Up is Hard to Do” — researchers from Oregon State University, Oregon Health & Science University and the University of Washington outlined the deliberate process that one central Oregon medical clinic went through to remove drug company representatives from their practice. It explored the obstacles they faced and the ultimate, successful result. The findings were just published in the Journal of the American Board of Family Medicine.
The study found that avoiding conflicts of interest and becoming “pharma-free” is possible, but not easy.
“This is a culture change, one that’s already happening but still has a ways to go, especially in smaller private practices,” said Dr. David Evans, now with the Department of Family Medicine at the University of Washington, and previously a physician at the Madras, Ore., clinic featured in the article.
“The relationship between physicians and drug company representatives goes back generations, and it took a methodical, deliberate campaign to change it,” Evans said. “We ultimately decided something had to be done when our medical clinic was visited by drug reps 199 times in six months. That number was just staggering.”
Part of what allows the change, the researchers said, is that information on new medications is now available in many other forums. These may have less bias and be more evidence-based than the material traditionally provided by the pharmaceutical industry, which wanted to sell the latest product. In the Madras clinic, the physicians replaced information previously supplied by drug reps with monthly meetings to stay current on new medications, based on peer-reviewed, rather than promotional literature.
“In the past 5-10 years there’s been more of a move toward what we call ‘academic detailing,’ in which universities and other impartial sources of information can provide accurate information without bias,” said Daniel Hartung, assistant professor in the OSU College of Pharmacy. “This is being supported by some states and the federal government, and it’s a move in the right direction.”
Moves to separate the drug industry from the practice of medicine have been more aggressive in large medical teaching hospitals, Hartung said, but much less so in smaller private practice. Of the 800,000 physicians in the U.S., only 22 percent practice in academic settings, the study noted, and 84 percent of primary care physicians still have close relationships with the pharmaceutical industry.
The stakes can be high, the researchers said. In the study example, the “sample cabinet” of medications at the Madras clinic, provided for free by the pharmaceutical representatives, had an average price of $90 for a month’s supply of the medications. Less expensive, generic medications were identified for 38 of the 46 sample drugs, which would have cost $22 a month.
The new analysis explored the necessary steps that a private clinic can take to help address this concern, including quantifying the clinic-industry relationship, anticipating clinician and staff concerns, finding new ways to provide up-to-date information, and educating patients and the public
So let’s do a quick analysis using facts from this study, shall we?
For a “sample cabinet” of drugs”:
# Drugs x Cost = Total
Pharma Drugs 46 x $90 = $4140
Generics 38 x $22 = $836
Pharma Drugs with no generic substitute 8 x $90 = $720
So the total cost of the “sample cabinet” filled with Pharma Drugs is $4140
And the total cost of the “sample cabinet” filled with Generics plus Pharma drugs that can’t be replaced by Generics is $836 $720 = $1556.
So the percentage increase in the cost of the drugs in the “sample cabinet” due to Pharma Sales efforts is ($4140 - $1556) / $4140 = 62%
Then, let’s calculate what it costs the US Healthcare System to pay for these Pharma Sales Reps:
The study says that there are 90,000 Pharma Reps in the US. And if we estimate that the costs are $300,000 / yr (that includes salary, bene’s, travel, sales promos, gifts, speaker programs etc) then the total cost is 90,000 x $300,000 = $27B / yr.
So the US Health Care System spends $27 B / yr so that we pay 62% more for our drugs.
Nice business model if you’ve got the money to pay the lobbyists to keep the govt from interfering. Oops, I forgot, we pay for that too!
PS - When Categorizing this, I was going to choose “Health” but since this has nothing to do with that I chose “Business” instead.