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Rein in Abusive Drug Industry Marketing Practices

Rx Model Bill to Limit Drug Industry Marketing Enacted in Vermont

Vermont lawmakers enacted the nation's strongest measure limiting the drug industry's marketing influence over physicians.  The bill, S 48, bans gifts from the industry to physicians, including meals and travel, and requires unprecedented disclosure and transparency of relations between the industry and providers.  Said Sharon Treat, Director of the National Legislative Association on Prescription Drug Prices (NLARx) and Maine State Representative, "Vermont now joins Minnesota and Massachusetts in tackling head-on the pervasive influence of payments and gifts on medical practitioners through a ban on many gifts.

Health Care for All: Policy Options for 2009

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OVERVIEW

Of the $30 billion spent each year on marketing, the drug industry directs $7 billion towards physicians -- an average of $8,800 towards each of the 817,000 physicians in the US.  94% of doctors have received gifts from drug companies, including catered lunches and "educational" conferences at upscale resorts.  Studies show that even small gifts create an unconscious "demand for reciprocity."  The 90,000 drug company sales reps exert tremendous influence over which drugs physicians prescribe, encouraging doctors to prescribe more expensive drugs instead of less costly - but  often equally or more effective - medications.  To counter the undue influence of drug industry marketing, states can:

  • Ban Gifts & Require Disclosure of Financial Relationships:  Minnesota, in 1993, became the first state to limit gifts from the drug industry to physicians.  It bans gifts of more than $50 and requires companies to disclose payments to physicians in excess of $100.  Several other states have enacted disclosure laws, exposing millions of dollars spent on payments to physicians and conflicts of interest.  In 2008, Massachusetts lawmakers are considering an outright ban on gifts as part of a broad cost and quality health care reform bill (S.2526).  
  • Ban "Data-Mining" -- Protecting Prescription Privacy:  In 2006, New Hampshire became the first state to enact a ban on "data-mining" (HB 1346) - the process by which the drug industry uses, or mines, the prescribing habits of providers to inform direct-to-provider sales.  Maine and Vermont soon passed similar laws.  As expected, PhRMA, the drug industry's massive lobby, is holding these laws up in court, but states like Washington and the District of Columbia continue to press forward.

Resources:

Center for Public Integrity - Drug Lobby Second to None: How the pharmaceutical industry gets its way in Washington
The Prescription Project - Regulating Industry Payments to Physicians: Identifying and Minimizing Conflicts of Interest
National Legislative Association on Prescription Drug Prices (NLARx) - Model Legislation
The Prescription Project - Control Pharmaceutical Marketing to Improve Health Care Quality and Cost
NLARx - Minnesota Gift Ban and Disclosure Laws
New Hampshire - 2006 HB 1346, Ban on Data Mining
The Prescription Project and NLARx - Model Drug and Medical Device Marketing Restrictions and Disclosure Act.
The Prescription Project - Data Mining: Myths and Rebuttals
The Prescription Project - The Constitutional Battle Over State Regulation of Data Mining

Focus on Prescription Drug Reform

$287 billion -- that is how much the U.S. spent on pharmaceuticals in 2007, representing a significant driver of health care costs.  While spending on hospital and physician care surpass spending on prescriptions, drugs still account for 14% of all health care expenditures. Combine this with polls that show 70% of Americans believe the drug industry puts profits ahead of people, and it's no wonder that in 2008, at least 540 bills and resolutions are being considered by states across the country to reduce prescription drug prices, ensure the quality of medications covered by public and private health plans, and reduce the undue influence of pharmaceutical industry marketing - which itself tops out at $30 billion each year.

Health-Care-for-All On the Installment Plan

Incremental steps to improve the health care system can lay the foundation for comprehensive reform that provides health care for all. Comprehensive reforms enacted in Massachusetts, Vermont, Maine and San Francisco were, in large part, the result of pragmatic incremental steps those states had already taken. For example, a Families USA report discusses the many reforms Massachusetts put in place over the years that led to its comprehensive 2006 reform. Not every state is as far along in moving comprehensive health care reform, but each state does have numerous options for increasing access to coverage, reducing the growth of health care costs, and improving the quality of care.

Amid Court Challenges, Legislators Work to Protect Prescription Privacy

Despite ongoing court challenges, states are moving ahead to protect the privacy of physicians' drug prescribing-history. Most recently, the Washington State Senate passed SB 6241, which prohibits the sale or use, for marketing purposes, of data detailing which drugs a physician prescribes and how often -- a practice called data-mining. In 2006, New Hampshire became the first state to ban data-mining for marketing purposes.