July 10th, 2008

Pharma Group Issues Guidelines

By Jim Edwards
BrandWeek

New rules could shift the balance of influence within drug companies away from sales forces toward marketing chiefs

Those free promotional drug company pens that litter the desk of your doctor’s office could possibly become rare collectibles.

PhRMA, the drug industry’s trade and lobbying group, today unveiled a set of guidelines that restrict sales reps from giving gifts—such as food, pens, coffee mugs and trips to fancy resorts—to doctors.

More importantly, the new rules, which strip certain weapons from sales reps’ promotional armory, could shift the balance of influence within drug companies away from sales forces toward marketing chiefs. (The influence of sales reps already is in long-term decline, as marketers increasingly look to the Web and consumer advertising for clout with doctors and patients.)

And—like PhRMA’s previous rules for both drug reps and drug advertisers—the new guidelines come laden with loopholes, vague standards and “get-out” clauses.

The new rules seek to end a problem that has bedeviled pharmaceutical marketers for years: The negative image of the drug rep, armed with pizza and restaurant gift certificates, inviting a prescribing physician out for a golf game. Critics have bemoaned the gifts as bribes that sway doctors from the interest of their patients.

“There have been huge concerns about gifts,” said PhRMA CEO Billy Tauzin. “We’ve eliminated them.”

The 36-page document has 15 main rules, which go into effect in January 2009. The main changes are:

-- A complete ban on free meals for doctors when the meals have no educational value.
-- A complete ban on taking doctors to entertainment or recreational events, such as golf and baseball games.
-- A complete ban on noneducational gifts, such as pens and coffee mugs.
-- But companies may continue paying cash to doctors as speakers or “consultants.”

Companies that sign on to the guidelines must promise that their CEOs will certify annually that employees abide by the code, and that their sales reps’ practices will be audited at least once every three years.

Eli Lilly, Johnson & Johnson, AstraZeneca and Pfizer all said they backed the code.

Still, the code has loopholes. Reps will continue to be free to walk into physician offices, carrying pizza and sandwiches, as they hope for brief chats with doctors. “It is appropriate for occasional meals to be offered as a business courtesy to the healthcare professionals as well as members of their staff attending presentations,” the rules say.

Companies can still provide funding for continuing medical education (CME) events, which are sponsored by companies promoting drugs that treat the diseases being discussed. The rules state the companies must not pay for meals directly. However, “a CME provider at its own discretion may apply the financial support provided by a company for a CME event to provide meals for all participants”—a gap in the system that companies will be tempted to test.

The rules also purport the ban on “token” consulting arrangements, in which doctors sign on as paid “consultants” in exchange for promises to write a certain number of prescriptions as part of a post-marketing evaluation. But the rules also say, “It is appropriate for consultants who provide advisory services to be offered reasonable compensation for those services and reimbursement for reasonable travel, lodging and meal expenses incurred as part of providing those services. Any compensation or reimbursement made in conjunction with a consulting arrangement should be reasonable and based on fair market value.” Again, that leaves companies with wide latitude for interpretation.

The rules lay down similar strictures for speakers and state their fees should be capped. However, they don’t specify the cap.

The new rules likely will receive a mixed reaction from those who have to deal with them. Brian Hurley, president of the American Medical Student Association, which has a policy of banning drug reps from teaching hospitals, said, “We think it’s stronger, but it’s lacking in some respects.” He praised the restrictions on gifts, but noted, “The weakest part is enforcement. It’s up to the companies to decide whether they want to follow it. Who’s looking over that? No one is.”

One drug marketer, who asked not to be named, said the ban on tchotchkes is beside the point: It is the consultants and speakers’ fees that are in need of reform. “This is the area where reps have a slush fund for prescribers . . . none of that is off the table. These were the areas that were much more abusable than pens and mugs.”

Overall, however, individual drug reps can look forward to lugging around less junk in their cars and spending fewer evenings entertaining doctors at expensive venues. That privilege may come at the expense of their influence within drug companies, however, as almost none of the rules—particularly those regarding fees and restaurant visits-apply to senior pharma executives higher up the marketing food chain.

The rules come as Congress considers legislation, sponsored by Sen. Herb Kohl, D-Wis., intended to force drug companies to disclose the money they give to doctors.

Also coming down the pike: PhRMA is revising its three-year-old set of voluntary guidelines for consumer advertising. Those rules most famously abolished “reminder” ads. Tauzin said that review is currently taking place and the new rules will be published in a few months.

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