The pharmaceutical industry has come under marked scrutiny in recent years, with critiques of payments directly to physicians and direct marketing to consumers while spending relatively little of their funds toward the actual drug research. I addressed some of this in a previous post, John Oliver brought out a pointed critique in the Season 2 opener of Last Week Tonight, and most recently Congress has introduced legislation to impose a ban on direct-to-consumer (DTC) drug ads (though it is not clear how likely it is to pass). Concerns regard DTC ads are not new, though to be sure the increased availability of data at such places as https://openpaymentsdata.cms.gov and https://projects.propublica.org/checkup/ have promoted more transparency and open discussion as to the merits of increasing checks on their influence over consumers’ medical care. And to be clear, the use of DTC bands would not address the concerns as to influence over physicians, though it would theoretically help to curb what might be seen as an over-encouragement of taking certain drugs, particularly those that are brand name. (DTC advertising has been heavily criticized also by the American Medical Association, which called for its outright ban, and by consumer groups and physicians viewing such advertising as encouraging patients to unnecessarily seek out medications).
When we think about our medical care, there is a certain normative desirability that many of us have that it be based solely on medical judgment and not the business aspects of who is influencing whom or the politics (as opposed to evidence-based health benefits or potential benefits) of prescribing X rather than Y, and hearing about the potentially undue power of pharmaceutical companies, for lack of better description, rubs us the wrong way. We would expect that if pharmaceutical companies are continuing to spend money on such marketing, they are getting a payoff in return, but we still need to look carefully at the nature and extent of this industry’s influence on care provision. So let’s begin…
Journalists at ProPublica revealed recently that doctors taking money from pharmaceutical companies are markedly more likely to prescribe brand-name drugs as opposed to the generic versions. The financial impact for consumers of brand-name versus generic prescriptions is marked, given that on average, generic versions of drugs are 80-85% lower cost than their brand-name equivalents, which adds up considerably given that 34% of American adults take at least one prescription drug and over 11% take 3 more more. In Washington, for example, brand-name prescription rates were 18% among those who had not received any payments from pharma, 20% among those who had received at least one payment, but 27% among those who had received $5,000 or more. Thus, from these data it does not appear to be the initial treatment effect of interacting with pharma, but receiving some threshold level of support from them that is associated with brand-name prescription rates. The concern is that those who are receiving larger sums of money may be more inclined to be responsive to the drug companies by prescribing brand-name drugs, even though generic versions typically work as well and pose less of a financial burden to consumers. (To be clear, these data show only correlation – we do not know from this the rate at which doctors were prescribing brand-name drugs pre- and post-treatment of the contribution(s), and thus cannot rule out that pharmaceutical companies are selecting into certain contributions, that is, rewarding doctors who are already prescribing their brand and hoping to ensure continued loyalty).
Within the ProPublica database, one can look at state-level data on total claims, brand name drug claims, low income subsidy claims, percentage of claims that are brand name drugs, and the percentage that are low income subsidy, for primary-care specialties among doctors writing 50 or more prescriptions for at least one medication in Medicare Part D in 2013. The top ten states for rates of brand-name prescribing are New Jersey (28%), New York (27%), Washington DC (25%), Connecticut (25%), and Texas (24%), Hawaii (24%), Delaware (24%), Alaska (24%), and North Carolina (23%) is tied with Maryland (23%), Louisiana (23%), and California (23%). Those at the bottom are Washington (19%), Rhode Island (19%), Oregon (19%), Nevada (19%), Massachusetts (19%), Alabama (19%), Puerto Rico (18%), and Minnesota (18%). So, while there appears to be a particular influence in the tri-state area and the DC metro (little surprise on either front given the amount of political influence in both regions), and somewhat less influence in the western states, we do see representation here in states of varied size, region, and partisan bent.
Receipt of payments from pharmaceutical companies is very commonplace – 9 in 10 cardiologists who wrote at least 1,000 prescriptions for Medicare patients received such contributions in 2014, as did 7 in 10 internal medicine and family physicians. What gets interesting is when you dig in to the state data and can see the number of providers in the database and their claims data by specialty and physician name, along with the top drugs by state. For example, following family medicine and internal medicine, the third most common type of prescriber in California is psychiatrists, and one can see that among psychiatrists, as many as 70% of prescriptions are brand, though with an average of 19% and thus a huge variance. The top three specialties are the same in New York, with similar rates of brand-name prescriptions. The number one prescribed drug in California is Hydrocodone-Acetaminophen (otherwise known as Vicodin), manufactured by Abbott Laboratories, followed by the cholesterol-lowering drug Simvastatin, manufactured by Merck, followed by the blood pressure drug Amlodipine Besylate (manufactured by Pfizer). The number one prescribed drug in New York is Simvastatin, followed by Amlodipine Besylate and the heartburn medication Omeprazole (manufactured by Novartis). These medications, Amlodipine Besylate, Simvastatin, and Omeprazole in particular, occupy top spots in many of the states, and similar patterns persist with respect to the specialties prescribing at the highest rates according to this database (some other commonly prescribed drugs were the Abbott Laboratories-manufactured Levothyroxide Sodium, the Merck-manufactured Lisinopril, and the Pfizer-manufactured Atorvastatin Calcium). So we see some trends in the common prescriptions, though these are also associated with common medical conditions and represent a number of different companies. Individual doctors may be dominated a given company, which raises normative concerns for many, but there does appear to be market diversity among the top sellers.
But let’s now take a look at the companies that appear more than once on those lists: Merck, Pfizer, and Abbott Laboratories. In 2014, Merck made $26,620,095.98 in general payments across 316,707 general transactions, averaging just over $84 per general transaction (which could be education, food and beverage, consulting, etc.). It additionally made $98,674,829.90 in research payments from 6,541 research transactions, averaging $15,086 per research transaction. Not exactly a trivial sum of money. But the numbers get even bigger when we turn to Pfizer, which made $53,486,322.64 in general payments from 562,178 general transactions (average of just over $95 per general transaction) and $234,173,044.01 in research payments from 134,792 research transactions (average of just over $1,737 per research transaction). So here we see a greater aggregate financial influence, with modestly higher average general payments though smaller-scale research payments. Abbott Laboratories gave the comparatively lower $11,882,832.80 in general payments from 39,814 general transactions and $9,902,201.57 in research payments from 1,588 research transactions, though the average payments from them are higher at $298.46 and $6,235.64 respectively.
Having looked at the aggregate level, let’s take a look at some individual-level data, omitting individual doctors’ names so as not to single people out (though it is all public information that can be checked among the databases cited here). Doctor A (Cardiology) in New York City received in 2014 approximately $1,050 in general payments and over $9,000 in research funding. A large share of the general payments received by the doctor are from E.R. Squibb & Sons, LLC, which manufactures one of the three most common medications that Doctor A prescribes (Clopidogrel). Doctor B (Internal Medicine) in Saint Louis received in 2014 over $8,000 in general payments, with a number of such payments coming from Pfizer, which manufactures the drug that they prescribe the second most often. To be clear, such trends are far from universal, though they are not anomalous either. And granted, most doctors receiving payments are receiving many small contributions (often in the form of the notorious “food and beverage” gifts) and are receiving such contributions from a number of different companies, which might at least give some comfort that there is not necessarily (from this glance, at least) systematic evidence in favor of many doctors being in the pocket of just one company to which it maintains loyalty. However, the influence itself – particularly in the aggregate – might reasonably make one feel ill at ease (but don’t worry, there are pills for that too).
There’s little denying that this collectively indicates an immense amount of money to be allocating toward marketing to (or at least interacting with) doctors in a given fiscal year. It is also clear that the most commonly-prescribed drugs, though in part commonly-prescribed due to the frequency of the conditions that they work to treat (e.g., high blood pressure, high cholesterol, heartburn, pain), are manufactured by those who are spending lots of money toward such marketing. The thing is, they’re also (not surprisingly) also among the top political spenders (already in an industry know for marked political contributions. In the 2015-16 election cycle alone, Pfizer has contributed $928,256 (#1 among pharmaceutical companies), with Merck also in the top 5 at $503,772, and Abbott Laboratories coming in 8th at $484,924. In the 2010, 2012, and 2014 election cycles, these three companies also all came in the top 6 pharmaceutical company contributors. Thus, what we find here is consistently high levels of financial investment in both the political and the private spheres over several election cycles, with the deregulation of campaign spending only further empowering such spending to continue.
So is there a solution? The catch with respect to legislative solutions is that those on whom we would rely to monitor the influence of these companies are also stakeholders themselves. Not only do these companies make contributions to candidates and parties themselves, but many members are also shareholders. For example, 40 members of Congress owned Pfizer, Inc. shares, 26 own Merck & Co. shares, 27 hold Abbott Laboratories shares, 23 hold Bristol-Meyers Squibb shares, and so on and so forth. If there’s a theme to this admittedly too-long piece, it’s probably the obvious point that there appears to be, not surprisingly, a marked degree of conflict of interest across many domains – from physicians to pharmaceutical companies to the government itself. We do not know the counterfactuals that we would need to make clean causal claims about industry influence on medical practices – that is, we don’t know that they wouldn’t prescribe those medications anyway based on their professional opinion – but there is at minimum suggestive evidence that pharmaceutical companies are strategically targeting doctors in making financial contributions and that there is some responsiveness with respect to prescribing in ways that impose higher costs on consumers and financial gains for the corporations.
Absent monetary or political incentive to impose greater constraints on the revolving door between the pharmaceutical industry and the government, it is unclear how realistic it is to expect major changes. However, with greater transparency through these public data, and hopefully an honest conversation about pharmaceutical marketing with the consideration of Rosa DeLauro’s (D-CT) proposed Responsibility in Drug Advertising Act (whether or not it passes), we can continue this conversation and work toward reducing their degree of influence.
When we think about our medical care, there is a certain normative desirability that many of us have that it be based solely on medical judgment and not the business aspects of who is influencing whom or the politics (as opposed to evidence-based health benefits or potential benefits) of prescribing X rather than Y, and hearing about the potentially undue power of pharmaceutical companies, for lack of better description, rubs us the wrong way. We would expect that if pharmaceutical companies are continuing to spend money on such marketing, they are getting a payoff in return, but we still need to look carefully at the nature and extent of this industry’s influence on care provision. So let’s begin…
Journalists at ProPublica revealed recently that doctors taking money from pharmaceutical companies are markedly more likely to prescribe brand-name drugs as opposed to the generic versions. The financial impact for consumers of brand-name versus generic prescriptions is marked, given that on average, generic versions of drugs are 80-85% lower cost than their brand-name equivalents, which adds up considerably given that 34% of American adults take at least one prescription drug and over 11% take 3 more more. In Washington, for example, brand-name prescription rates were 18% among those who had not received any payments from pharma, 20% among those who had received at least one payment, but 27% among those who had received $5,000 or more. Thus, from these data it does not appear to be the initial treatment effect of interacting with pharma, but receiving some threshold level of support from them that is associated with brand-name prescription rates. The concern is that those who are receiving larger sums of money may be more inclined to be responsive to the drug companies by prescribing brand-name drugs, even though generic versions typically work as well and pose less of a financial burden to consumers. (To be clear, these data show only correlation – we do not know from this the rate at which doctors were prescribing brand-name drugs pre- and post-treatment of the contribution(s), and thus cannot rule out that pharmaceutical companies are selecting into certain contributions, that is, rewarding doctors who are already prescribing their brand and hoping to ensure continued loyalty).
Within the ProPublica database, one can look at state-level data on total claims, brand name drug claims, low income subsidy claims, percentage of claims that are brand name drugs, and the percentage that are low income subsidy, for primary-care specialties among doctors writing 50 or more prescriptions for at least one medication in Medicare Part D in 2013. The top ten states for rates of brand-name prescribing are New Jersey (28%), New York (27%), Washington DC (25%), Connecticut (25%), and Texas (24%), Hawaii (24%), Delaware (24%), Alaska (24%), and North Carolina (23%) is tied with Maryland (23%), Louisiana (23%), and California (23%). Those at the bottom are Washington (19%), Rhode Island (19%), Oregon (19%), Nevada (19%), Massachusetts (19%), Alabama (19%), Puerto Rico (18%), and Minnesota (18%). So, while there appears to be a particular influence in the tri-state area and the DC metro (little surprise on either front given the amount of political influence in both regions), and somewhat less influence in the western states, we do see representation here in states of varied size, region, and partisan bent.
Receipt of payments from pharmaceutical companies is very commonplace – 9 in 10 cardiologists who wrote at least 1,000 prescriptions for Medicare patients received such contributions in 2014, as did 7 in 10 internal medicine and family physicians. What gets interesting is when you dig in to the state data and can see the number of providers in the database and their claims data by specialty and physician name, along with the top drugs by state. For example, following family medicine and internal medicine, the third most common type of prescriber in California is psychiatrists, and one can see that among psychiatrists, as many as 70% of prescriptions are brand, though with an average of 19% and thus a huge variance. The top three specialties are the same in New York, with similar rates of brand-name prescriptions. The number one prescribed drug in California is Hydrocodone-Acetaminophen (otherwise known as Vicodin), manufactured by Abbott Laboratories, followed by the cholesterol-lowering drug Simvastatin, manufactured by Merck, followed by the blood pressure drug Amlodipine Besylate (manufactured by Pfizer). The number one prescribed drug in New York is Simvastatin, followed by Amlodipine Besylate and the heartburn medication Omeprazole (manufactured by Novartis). These medications, Amlodipine Besylate, Simvastatin, and Omeprazole in particular, occupy top spots in many of the states, and similar patterns persist with respect to the specialties prescribing at the highest rates according to this database (some other commonly prescribed drugs were the Abbott Laboratories-manufactured Levothyroxide Sodium, the Merck-manufactured Lisinopril, and the Pfizer-manufactured Atorvastatin Calcium). So we see some trends in the common prescriptions, though these are also associated with common medical conditions and represent a number of different companies. Individual doctors may be dominated a given company, which raises normative concerns for many, but there does appear to be market diversity among the top sellers.
But let’s now take a look at the companies that appear more than once on those lists: Merck, Pfizer, and Abbott Laboratories. In 2014, Merck made $26,620,095.98 in general payments across 316,707 general transactions, averaging just over $84 per general transaction (which could be education, food and beverage, consulting, etc.). It additionally made $98,674,829.90 in research payments from 6,541 research transactions, averaging $15,086 per research transaction. Not exactly a trivial sum of money. But the numbers get even bigger when we turn to Pfizer, which made $53,486,322.64 in general payments from 562,178 general transactions (average of just over $95 per general transaction) and $234,173,044.01 in research payments from 134,792 research transactions (average of just over $1,737 per research transaction). So here we see a greater aggregate financial influence, with modestly higher average general payments though smaller-scale research payments. Abbott Laboratories gave the comparatively lower $11,882,832.80 in general payments from 39,814 general transactions and $9,902,201.57 in research payments from 1,588 research transactions, though the average payments from them are higher at $298.46 and $6,235.64 respectively.
Having looked at the aggregate level, let’s take a look at some individual-level data, omitting individual doctors’ names so as not to single people out (though it is all public information that can be checked among the databases cited here). Doctor A (Cardiology) in New York City received in 2014 approximately $1,050 in general payments and over $9,000 in research funding. A large share of the general payments received by the doctor are from E.R. Squibb & Sons, LLC, which manufactures one of the three most common medications that Doctor A prescribes (Clopidogrel). Doctor B (Internal Medicine) in Saint Louis received in 2014 over $8,000 in general payments, with a number of such payments coming from Pfizer, which manufactures the drug that they prescribe the second most often. To be clear, such trends are far from universal, though they are not anomalous either. And granted, most doctors receiving payments are receiving many small contributions (often in the form of the notorious “food and beverage” gifts) and are receiving such contributions from a number of different companies, which might at least give some comfort that there is not necessarily (from this glance, at least) systematic evidence in favor of many doctors being in the pocket of just one company to which it maintains loyalty. However, the influence itself – particularly in the aggregate – might reasonably make one feel ill at ease (but don’t worry, there are pills for that too).
There’s little denying that this collectively indicates an immense amount of money to be allocating toward marketing to (or at least interacting with) doctors in a given fiscal year. It is also clear that the most commonly-prescribed drugs, though in part commonly-prescribed due to the frequency of the conditions that they work to treat (e.g., high blood pressure, high cholesterol, heartburn, pain), are manufactured by those who are spending lots of money toward such marketing. The thing is, they’re also (not surprisingly) also among the top political spenders (already in an industry know for marked political contributions. In the 2015-16 election cycle alone, Pfizer has contributed $928,256 (#1 among pharmaceutical companies), with Merck also in the top 5 at $503,772, and Abbott Laboratories coming in 8th at $484,924. In the 2010, 2012, and 2014 election cycles, these three companies also all came in the top 6 pharmaceutical company contributors. Thus, what we find here is consistently high levels of financial investment in both the political and the private spheres over several election cycles, with the deregulation of campaign spending only further empowering such spending to continue.
So is there a solution? The catch with respect to legislative solutions is that those on whom we would rely to monitor the influence of these companies are also stakeholders themselves. Not only do these companies make contributions to candidates and parties themselves, but many members are also shareholders. For example, 40 members of Congress owned Pfizer, Inc. shares, 26 own Merck & Co. shares, 27 hold Abbott Laboratories shares, 23 hold Bristol-Meyers Squibb shares, and so on and so forth. If there’s a theme to this admittedly too-long piece, it’s probably the obvious point that there appears to be, not surprisingly, a marked degree of conflict of interest across many domains – from physicians to pharmaceutical companies to the government itself. We do not know the counterfactuals that we would need to make clean causal claims about industry influence on medical practices – that is, we don’t know that they wouldn’t prescribe those medications anyway based on their professional opinion – but there is at minimum suggestive evidence that pharmaceutical companies are strategically targeting doctors in making financial contributions and that there is some responsiveness with respect to prescribing in ways that impose higher costs on consumers and financial gains for the corporations.
Absent monetary or political incentive to impose greater constraints on the revolving door between the pharmaceutical industry and the government, it is unclear how realistic it is to expect major changes. However, with greater transparency through these public data, and hopefully an honest conversation about pharmaceutical marketing with the consideration of Rosa DeLauro’s (D-CT) proposed Responsibility in Drug Advertising Act (whether or not it passes), we can continue this conversation and work toward reducing their degree of influence.
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