How Do Pharmaceutical Company Practices Impact

03/18/13
How do Pharmaceutical Company Practices Impact
What Medications We Take? These days there’s a pill for everything, even things that don’t really need to be fixed, or could be treated through other healthier means and with fewer side effects. The influences of the pharmaceutical industry are to a large degree dictating what medications we take and the cost of those medications. There are many things that may influence an individual’s decisions. There’s no doubt that the giving of gifts and socializing with sales representatives will have an effect on an individual’s decisions to try a product or not. How far will the pharmaceutical industries go in order to promote their own products and what kind of effect can pharmaceutical industry practices have on you? Pharmaceutical companies do what they can to keep a hold on the market. Advertising is designed to make people think they need what they are selling. Do you really need it, and if so, is there a better more affordable option? Exploring the pharmaceutical industries practices will lead to a better understanding of why we take the medications we take. Name brand pharmaceutical companies spend a lot of time and money on advertising. Name brand pharmaceutical companies use any loop holes they find in the current laws to that end. They also do what they can to prevent generic pharmaceutical companies from putting their products out where they may compete with theirs in the market. Pharmaceutical companies will do whatever it takes to keep a monopoly on the drug market. The pharmaceutical industries’ practices have a great impact on what medications we take and the cost of those medications. The pharmaceutical industry is a healthcare industry and should consider the health of those in need of their product not just the money to be made. The Food and Drug Administration (FDA) is responsible for regulating what medications are put on the market. The FDA must be cautious of how harmful the side effects of the drugs are compared to how helpful the drug is. The FDA has to take public perception into account. Henry Miller, MS, MD, points out there are two main types of mistakes made when deciding what medications are marketed. A bad medication can be put on the market or a good one can be prevented from going on the market (76). It is a delicate balance between making sure a medication is safe and not appearing to delay a potentially life saving drug. Miller goes on to say: “The first kind of error is highly visible, causing the regulators to be attacked by the media and patient groups and to be investigated by Congress. But the second kind of error — keeping a potentially important product out of consumers ' hands — is usually a nonevent and elicits little attention, let alone outrage” (76). When a bad medication is marketed people become ill or die, which is going to catch the attention of the media and create more of an outcry. A delay in approval is not as dramatic and therefore is not spread by the media. The FDA does not issue patents, that is done by the U.S. Patent Office. Christine S. Paine Attorney at law in New York and author of “Brand-Name: Drug Manufacturers Risk Antitrust Violations by Slowing Generic Production Through Patent Layering.” explains that patents provide great incentive for brand-name pharmaceutical companies to conduct research because patent rights eliminate competition during the patent period, enabling patent holders to charge a premium for their drugs (483). Name brand pharmaceutical companies have learned to use the patent process to their favor. Arti Rai J.D., Professor of Law at Duke University Law School, explains in her article, “Use Patents, Carve-Outs, and Incentives A New Battle in the Drug-Patent Wars” the FDA’s “orange book” is a list of “Approved Drug Products with Therapeutic Equivalence Evaluations” (491). In order to be put on this list pharmaceutical companies must submit patents detailing all uses they plan to market the drug for. If a medication fails to get on to the “orange book” that medication can not be put on the market. Many name brand pharmaceutical companies will try and say that their medication has a broader use just to prevent another company from obtaining a patent for a similar medication so there won’t be any chance for competition. “In April 2012. . . the Supreme Court issued a decision enabling generics firms to challenge the submission to the FDA of overly broad use claims” (Rai, 492). This enables other pharmaceutical companies to more easily patent their drugs, which in turn would lower overall prices. Having competition in the market will lose the name brand companies’ business from lower prices, forcing them to lower theirs. Christine Paine says that “a brand-name patent owner can automatically delay approval of the generic drug for thirty months simply by instituting an infringement action against the generic company” (488). By preventing generic companies from entering the market the name brand companies can charge almost anything they want. The price of medications often dictates what medications, if any, people take. If you do not have insurance or the insurance company won’t pay for a medication and you can’t afford it on your own you are left to suffer. The price of prescription medications like everything else keep going up, but they seem to be going up more than other things. Dr. Thomas A. Hemphill is an associate professor at the University of Michigan-Flint writes about how much the prices of prescription medication have gone up. In Dr. Hemphill’s research he found that “. . . the most commonly purchased brand name drugs experienced price increases averaging 7.4% from 2006 to 2007, with the rate of general inflation during this time period (as measured by the Consumer Price Index for all items) 2.9%” (225). The fact that the cost of prescription medications have increased at a rate more than twice that of general inflation is disturbing. Something that is supposed to aid in ones health and wellbeing shouldn’t be priced so high they can’t afford it. An example of a major “. . . drug price increase is Cosmegon, manufactured by Ovation Pharmaceuticals, Inc. for a small group of patients afflicted with Wilms’ tumor. Ovation originally priced Cosmegon at $16.79 per dose, but subsequently raised the price per dose to $593.75, a 3,436% per drug dose increase” (Hemphill 225,226). Just because a medication is not used for as many people does not mean they should have to pay such outrageous amounts of money for them. How many people are dying of these kinds of diseases because they can no longer afford their medications? Price should not be a factor in healthcare. The goal of a healthcare industry should be to promote good health and care to the anyone in need of healthcare products and/or services. Anyone in the business world knows the power of advertising, and how to use it to influence potential customers. The pharmaceutical industry is a for profit business, and as such does what it can to protect its profits. They know that to make money often you have to spend it. In her article “Brand-Name: Drug Manufacturers Risk Antitrust Violations by Slowing Generic Production Through Patent Layering,” Christine Paine observes “For the past twenty years, the pharmaceutical industry has been the most lucrative industry in the United States, due in part to its power to control prices derived from intellectual property protection” (482). If the pharmaceutical industry is so profitable, one would think they could afford to lower prices and make it easier for more people with limited funds to afford their medications. Instead they choose to spend money on advertising in order to make even more money. Many pharmaceutical companies spend millions of dollars a year on advertising and promotion. Marc-André Gagnon is an Assistant Professor at the School of Public Policy and Administration at Carleton University and Joel Lexchin is a Professor in the School of Health Policy and Management at York University and an Associate Professor in the Department of Family and Community Medicine at the University of Toronto. In their article, “The cost of pushing pills: a new estimate of pharmaceutical promotion expenditures in the United States” they concluded that “. . .promotion predominates over R&D [research and development] in the pharmaceutical industry, contrary to the industry’s claim” (32). In other words the pharmaceutical company can charge almost any amount they want. There are many ways to do the calculations and they can manipulate the math to fit their claims. Exactly how much pharmaceutical companies spend on advertising and promotion is not as easily determined. Gagnon and Lexchin illustrated the need for a new more accurate “estimate of promotional expenditures” (29). They compared two of the most consulted research companies IMS and CAM. Gagnon and Lexchin found that in “2004, CAM reported total promotional spending in the US of US$33.5 billion , while IMS gave the figure of US$27.7 billion. . .” (31). Although there may not be an entirely accurate way of calculating pharmaceutical companies expenditures, it is clear that they spend far more on advertising than on research and development. Many pharmaceutical companies choose to spend the majority of their money on advertising rather than research and development; what money the pharmaceutical companies do spend on research and development is spent to create the most profitable product they can. Valerie Gutmann Koch an Assistant Professor at Chicago Kent College of Law and Consultant to New York State Task Force on Life and the Law points out “Income estimates for smaller, targeted patient markets run 300 to 500 million dollars rather than the one billion dollars generally associated with blockbuster drugs” (273). Pharmaceutical companies don’t want to spend money on more targeted drugs like pharmacogenomic medications because there is a limited market for them and therefore less of a profit. Pharmacogenomic medications have the potential to be more effective since they are targeted to a specific person’s genetic makeup. Koch remarked that it has been estimated that incorporating pharmacogenomics into drug development could lower cost and the time it takes to develop new medications, which would save about 45% of the development costs (275). Pharmaceutical companies seem not to care about those in need of medication they just want money. If it takes less time to develop a medication and prices were down wouldn’t more people be able to use the medication; therefore, not have that much of an effect on the pharmaceutical companies profits. Pharmaceutical companies carefully design their advertisements to make you think you need that drug even when the side effects are often worse than what the drug is suppose to cure. Pharmaceutical companies just want to sell you their product. Direct-to-consumer advertising of prescription drugs, particularly on television, has become more prevalent in the past few years. In their article "Advertising and the Pharmaceutical Industry" Pamela Korsmeyer and Henry R. Kranzler report that in 1997 the FDA relaxed their rules on direct-to-consumer advertising (46). This in turn makes direct-to-consumer advertising a powerful tool for the pharmaceutical industry. How many people notice the list of potential side effects as they run through them as fast as possible at the end of the television commercial, or read the microscopic print at the bottom of a print ad. There really is no need for direct-to-consumer advertising of prescription drugs. If you are not a medical professional you do not have the training to decide what, if any, medications you should be taking. Since the FDA relaxed their rules on advertising the amount spent by the pharmaceutical industry on direct-to-consumer advertising has gone from “$791 million in 1996 to $4.7 billion in 2006” (Korsmeyer and Kranzler 46). This is a huge jump in cost which in turn raises the cost of prescription medications. Dhaval Dave is a Associate Professor in the Department of Economics at Bentley University, and Henry Saffer, a researcher for the National Bureau of Economic Research noted “The National Institute for Health Care Management” claim “that increases in sales for the 50 most heavily advertised drugs caused 47.8% of the increase in expenditures on prescription drugs” (98). It would be better to let physicians decide what medications people need rather than having advertising influence how people are medicated. I often wonder how many people are taking a medication they don’t need just because they saw an ad or read an article and the symptoms matched so they went and asked their doctor for that medication. Many conditions have similar symptoms that’s why tests should be run to see if that medication is right for you. Direct-to-consumer advertising is only one portion of the pharmaceutical industries advertising. Pharmaceutical company sales representatives make frequent trips to medical facilities, visiting with personnel and often leaving gifts like pens, coffee mugs, and clipboards with product logos on them. These may be small gifts but they can have a big psychological effect. Seeing the product logo over and over again makes that name easily accessible in one’s mind. It stands to reason that when a physician goes to prescribe medication to a patient, that the most seen logo would be the brand of medication the physician prescribes. The psychological effects of branding items is a powerful tool that pharmaceutical companies have learned to use with great success. Adriane Fugh-Berman MD, Anthony Scialli MD, and Alicia Bell MS wanted to know if there were ways to fight the influences of the pharmaceutical industry. In their study they found “[e]xposing manipulative industry methods is an effective way to teach physicians and trainees to understand the possible negative ramifications of seeing drug representatives, accepting gifts, and other industry entanglements (Fugh-Berman, Scialli, and Bell 203). Medical clinics and hospitals should have short presentations to help keep their physicians aware of the potential consequences of socializing with pharmaceutical representatives. Pharmaceutical industry influences can effect the prescribing habits of physicians with any number of years experience. Aanand D. Naik, MD, Aaron L. Woofter, MD, Jessica M. Skinner, BA, and Neena S. Abraham, MD, MSc writers of “Pharmaceutical Company Influence on Non-Steroidal Anti-inflammatory Drug Prescribing Behaviors” tell that many physicians were influenced greatly while still in formative training (4). Integrating pharmaceutical company influences in to the training process would help prepare new physicians for how to handle their dealings with pharmaceutical representatives. Having informative seminars and meetings on the subject of pharmaceutical company influences on prescribing habits physicians would be more aware and may not be as easily influenced. The only things a physician should consider when prescribing medication to a patient is how well it will work for that individual and sadly whether they will be able to afford it. The reliance on pharmaceutical representatives for information can effect the prescribing decisions of any physician. An important tool of the pharmaceutical industry is to have their representatives leave free samples of their product for physicians to give to their patients. The participants in the study done by Naik, Woofter, Skinner, and Abraham were allowed to make comments at the end of the questionnaires. One participant wrote:
…when [pharmaceutical companies] provide samples, [doctors], instead of following guidelines, they usually end up writing a prescription they were provided a sample, and once they give the patient a sample and the medication works, then they tend to continue prescribing the same medication. So whatever is available from some pharmaceutical company with free drugs, that’s what they would use (4).
If physicians stop or at least limit the amount of free samples they accept it would in turn help cut back on the potential influence on their prescribing. Pharmaceutical representatives can be a good source of information on new drugs, but it is important to remember they are there to sell you (the physician) a product. In the Encyclopedia of Bioethics Leonard J. Weber, PhD. Professor of Ethics at the University of Detroit Mercy writes, “. . .healthcare professionals, healthcare organizations, the pharmaceutical industry, and the federal government have begun major efforts to reform the interactions of company representatives with physicians. . .” (2023). Making changes to these policies shows an understanding of the seriousness of how these interactions can sway ones decisions. Trying to influence the prescribing habits of physicians just to make more money should be looked at as an unethical act. Pharmaceutical representatives frequently take medical personnel out for a meal to present them with information on a new drug they are selling. In their article “Why Lunch Matters: Assessing Physicians’ Perceptions About Industry Relationships“, Fugh-Berman, Scialli, and Bell remarked that providing a meal can put people in a more receptive state of mind (202). Socializing outside of a professional setting can easily sway ones decision and should be prohibited. When you deal in any healthcare industry there is a higher expectation of ethics. There needs to be a focus on how effective the medication is and that it won’t cause other problems. Rather than the focus being on high profits. The pharmaceutical industry has many tactics to influence what medications we take and how much those medications cost. Many pharmaceutical companies just seem to want to monopolize the drug market. This desire has led the pharmaceutical industry into being the most profitable industry in the United States if not the world. Through the use of advertisements, sales representatives, and through the manipulation of laws and guidelines the pharmaceutical industry has done a very good job of monopolizing the drug market. Steps must be taken to ensure that those in need of medication can get it. No one should have to do without their medication just because they can’t afford it. With the name brand pharmaceutical companies holding a monopoly on the drug market it is hard for cheaper, generic pharmaceutical companies to market their drugs. There are many ailments that could be helped by proper diet and exercise, and you should start there rather than just getting a pill. But there are many ailments that require medication. In 2008, “[t]he FDA reports that there are more than 25 million Americans who currently suffer from some 7,000 rare diseases or conditions (Hemphill 228). Just imagine how many people are out there suffering or even dying just because they can’t afford their medication. Or those who need a more targeted drug that the pharmaceutical industry can’t be bothered to develop because there won’t be as broad a market for it. By allowing competition in the market place, the prices of prescription medications’ will inevitably go down.

Works Cited
Dave, Dhaval M., and Henry Saffer. "Impact of Direct-to-Consumer Advertising on Pharmaceutical Prices and Demand." Southern Economic Journal 79.1 (2012): 97-126. ProQuest Research Library. Web. 26 Jan. 2013
Fugh-Berman, Adriane J., Anthony R. Scialli, and Alicia M. Bell. "Why Lunch Matters: Assessing Physicians ' Perceptions About Industry Relationships." Journal Of Continuing Education In The Health Professions 30.3 (2010): 197-204. Academic Search Premier. Web. 26 Jan. 2013.
Gagnon, Marc-André, Joel Lexchin. "The cost of pushing pills: a new estimate of pharmaceutical promotion expenditures in the United States." PLoS Medicine 5.1(2008): e1. Google scholar.
Hemphill, Thomas A. "Extraordinary Pricing of Orphan Drugs: Is it a Socially Responsible Strategy for the U.S. Pharmaceutical Industry?" Journal of Business Ethics 94.2 (2010): 225-42. ProQuest Research Library. Web. 6 Mar. 2013.
Koch, Valerie Gutmann . "Incentivizing the Utilization of Pharmacogenomics in Drug Development." J. Health Care L. & Pol 'y 15 (2012): 263-401. Google scholar
Korsmeyer, Pamela, and Henry R. Kranzler Advertising and the Pharmaceutical Industry. Encyclopedia of Drugs, Alcohol & Addictive Behavior. Ed. . Vol. 1. 3rd ed. Gale Virtual Reference Library Detroit: Macmillan Reference USA, 2009. p45-49.
Miller, Henry I. "The FDA 's Imprudent Caution." Policy Review 161 (2010): 73-85. EBSCOhost. Web. 26 Jan. 2013.
Naik, Aanand D. MD, Aaron L. Woofter, MD, Jessica M. Skinner, BA, and Neena S. Abraham, MD, MSc., et al. "Pharmaceutical Company Influence on Non-Steroidal Anti-inflammatory Drug Prescribing Behaviors." The American journal of managed care 15.4 (2009): e9. Google scholar.
Paine, Christine S. "Brand-Name: Drug Manufacturers Risk Antitrust Violations by Slowing Generic Production Through Patent Layering." Seton Hall Law Review 33.2 (2011): 6. Google scholar.
Rai, Arti J.D. "Use Patents, Carve-Outs, and Incentives—A New Battle in the Drug- Patent Wars." New England Journal of Medicine 367.6 (2012): 491-493.Google scholar.
Weber, Leonard J. Pharmaceutical Industry. Encyclopedia of Bioethics. Ed. Stephen G. Post. Vol. 4. 3rd ed. New York: Macmillan Reference USA, 2004. p2022-2026. Word Count: 2880.Gale Virtual Reference Library

Cited: Dave, Dhaval M., and Henry Saffer. "Impact of Direct-to-Consumer Advertising on Pharmaceutical Prices and Demand." Southern Economic Journal 79.1 (2012): 97-126. ProQuest Research Library. Web. 26 Jan. 2013 Fugh-Berman, Adriane J., Anthony R Gagnon, Marc-André, Joel Lexchin. "The cost of pushing pills: a new estimate of pharmaceutical promotion expenditures in the United States." PLoS Medicine 5.1(2008): e1. Google scholar. Hemphill, Thomas A. "Extraordinary Pricing of Orphan Drugs: Is it a Socially Responsible Strategy for the U.S. Pharmaceutical Industry?" Journal of Business Ethics 94.2 (2010): 225-42. ProQuest Research Library. Web. 6 Mar. 2013. Koch, Valerie Gutmann Korsmeyer, Pamela, and Henry R. Kranzler Advertising and the Pharmaceutical Industry. Encyclopedia of Drugs, Alcohol & Addictive Behavior. Ed. . Vol. 1. 3rd ed. Gale Virtual Reference Library Detroit: Macmillan Reference USA, 2009. p45-49. Miller, Henry I. "The FDA 's Imprudent Caution." Policy Review 161 (2010): 73-85. EBSCOhost. Web. 26 Jan. 2013. Abraham, MD, MSc., et al. "Pharmaceutical Company Influence on Non-Steroidal Anti-inflammatory Drug Prescribing Behaviors." The American journal of managed care 15.4 (2009): e9. Google scholar. Paine, Christine S. "Brand-Name: Drug Manufacturers Risk Antitrust Violations by Slowing Generic Production Through Patent Layering." Seton Hall Law Review 33.2 (2011): 6. Google scholar. Rai, Arti J.D Weber, Leonard J. Pharmaceutical Industry. Encyclopedia of Bioethics. Ed. Stephen G. Post. Vol. 4. 3rd ed. New York: Macmillan Reference USA, 2004. p2022-2026. Word Count: 2880.Gale Virtual Reference Library