Skip to Content

Share

Pharmaceutical Sales 101: Inside Information

By
April 30, 2006

jw3.jpg

When Dr. David Mitchell was a third-year medical student at Southern Illinois University School of Medicine, in Springfield, he attended a lunch thrown by a group of Aventis pharmaceutical representatives. Mitchell was short on money, and went along solely for the free food. But the purpose of the lunch, he soon found out, was to discuss Aventis’s high blood pressure medication, Cardizem CD.

About halfway through the lunch, one of the representatives turned to a family practitioner-friend of Mitchell’s who had accompanied him, and asked her why she wasn’t prescribing much of their drug. The doctor reassured her hosts by telling them they had nothing to worry about, that she was indeed prescribing Cardizem. The inquiring Aventis representative then pulled out a “palmtop computer” and confronted the physician with exactly how little Cardizem CD she had prescribed the previous month compared with competing high blood pressure medications. The data on the computer screen, Mitchell noted, included the names and quantities of every drug Mitchell’s physician friend had prescribed in the previous three months.

"It was," Mitchell said, "my first exposure to the tracking."

The AMA leases its Physicians Masterfile to research firms and pharmaceutical companies.

Drug companies have been buying prescription records since the early 1990s, yet the practice is still not widely known among the public. (According to a Kaiser Family Foundation survey taken in 2001, even many physicians still aren’t aware of it–34 percent of doctors surveyed did not know that drug companies had access to their prescription-writing history.) These records are purchased from health research companies who get the information from various sources, primarily pharmacy chains. When pharmacies sell these prescription records, they do not include patient names and, in some cases, the doctors who wrote them. So drug companies turn to another source to complete the profiles: the American Medical Association (AMA).

The AMA leases its Physicians Masterfile to research firms and pharmaceutical companies. This file contains personal and professional information, including the Drug Enforcement Agency (DEA) number, on all doctors practicing in the United States. Drug companies then use the AMA Masterfile to match doctors to prescription records using DEA numbers (every prescription written in the United States must include the prescribing physician’s DEA number). Once the information taken from the various sources has been consolidated into detailed profiles, drug companies then use them for marketing purposes–to target doctors they want to prescribe more of their drugs, as in the case of Dr. Mitchell’s friend.

The practice of buying and selling prescription records among the major drug companies and pharmacy chains is so widespread that it has become a routine part of doing business (a New York Times article from 2000 was one of the first to document its pervasiveness), yet it remains a topic that neither the pharmacies nor the drug companies, nor most anyone involved, for that matter, like to discuss. Out of a dozen companies questioned, including three drug manufacturers, five pharmacy chains, and four research firms, only one admitted to it: IMS Health, a global healthcare research agency headquartered in Fairfield, Connecticut. Another company, ImpactRX, a research firm with offices in Mount Laurel, New Jersey, admitted to a similar practice.

Caroline Lappetito, a spokeswoman for IMS Health, said that IMS acquires prescription records from 70,000 entities across the globe, including pharmacies, hospitals, nursing homes and insurance companies. IMS Health’s clients, according to its website, include “just about every major pharmaceutical and biotech company in the world.” When asked from which pharmacy chains IMS Health buys its prescription records, Lappetito mentioned CVS, then declined to name any others, but added, “several of the large chains.” (CVS did not return calls for comment). When asked specifically about Wal-Mart, Lappetito said that IMS does not purchase records from Wal-Mart because “they sell to a competitor.” (A spokeswoman for Wal-Mart denied that her company sells prescription records.)

Over the years, these “prescriber profiles” have become increasingly detailed and timely. Jamie Reidy, a former pharmaceutical representative who worked for Pfizer from 1995 until 1999 and for Eli Lilly from 2000 until earlier this year, said that the prescriber information he received in the mid-to-late ’90s was about a month old; by 2005, however, it was only a week or two old. But even this pales in comparison to the speed with which ImpactRX provides information to its clients.

ImpactRX, founded in 2000 by two former Merck executives, has outfitted over 3,000 U.S. physicians with palm pilots. Two days a week, these physicians, who were chosen because of their high-volume prescription writing, record every aspect of every patient’s visit, including diagnoses, medications prescribed, and samples distributed (patient names are omitted). This information is transmitted via the palm pilots back to ImpactRX, and on to its drug company clients, almost instantly–the physicians enter the information into the palm pilots immediately after patients leave their offices.

It is not only the speed with which the information is transmitted that differentiates ImpactRx from its competitors, but also the type of information gathered. Unlike companies such as IMS Health, which provide data about prescriptions dispensed by pharmacies, ImpactRX supplies information about prescriptions written. (Occasionally pharmacists, either at the request of patients or to avoid dangerous drug interactions, will change a prescription before it is dispensed.) This information is useful to drug companies in that it allows them to see the prescribing physicians’ intentions, as well as–perhaps the most important piece of the puzzle–to what extent marketing efforts played a role in shaping those intentions. This last bit of information is why ImpactRX calls itself the first “PRO” (Promotion Research Organization).

Not only do its network physicians record patient and prescribing information, but they also supply data to drug companies about the very effectiveness of their–and their competitors’–marketing efforts. Every encounter with a sales representative is recorded, for example, as well as any participation in pharmaceutical-sponsored meetings and events. During sales calls, ImpactRX’s network of physicians note the company represented and the products discussed, the nature of the promotional message and its effectiveness, whether literature was used, and the length and location of the visit.

Drug companies have been buying prescription records since the early 1990s, yet the practice is still not widely known among the public

“We don’t have any true competitors,” said Fred Nelson, ImpactRX’s vice president of sales and marketing. “The information we provide is unique in that it is far more sensitive, can detect smaller changes in physician behavior, and is focused within the walls of the physician’s office.” Nelson had no comment when asked how ImpactRX recruited or retained its physicians, but according to an article on its website, ImpactRX pays them an “honorarium.” As to the price, in 2002 then-CEO Tim Margraf declined to give an amount, but said, “it is commensurate to [the physicians'] time and commitment to this ongoing program.”

As to the AMA‘s stance on all of this, after initially telling me they were against the buying and selling of prescription records (I was told this in an interview last year with an AMA spokesman) a representative from the organization told me recently that, as a general rule, they find nothing wrong with it.

In fact, the AMA is somewhat of an advocate of the practice, and has opposed efforts to ban or restrict it by various state legislatures. “[The AMA] recognizes the legitimate use of these data by pharmaceutical companies,” states a posting on its website. Another says, “The American Medical Association is troubled by pending legislation that would prohibit or severely restrict the collection and disclosure of prescribing information that identifies a specific physician prescriber.”

Asked to clarify the AMA‘s position, Robert Musacchio, the AMA‘s senior vice president of publishing and business services, said, “Essentially, we are against the inappropriate use (of the data).” He added that the AMA‘s interpretation of inappropriate use “is for anyone to overtly influence the physician/patient relationship.”

As to why drug companies would want the information at all, if not to “overtly influence” physicians’ prescribing habits, I was told that the data can be beneficial to drug companies in that it allows them to locate appropriate doctors for participation in clinical trials, and assist in distributing drug samples and alerting doctors to a drug recall. Musacchio said that many younger physicians like the data because they use it to measure their “performance.” When asked what he meant by “performance,” Musacchio said, “how many scripts they write; they find that information of interest to them.”

Musacchio also told me about a new “opt out” program the AMA will be implementing as part of its Masterfile lease agreement. Beginning in July, physicians will have the right to request that their individual prescribing data be kept secret from pharmaceutical companies–although drug companies would continue to have access to aggregated prescription data (including the data of the physician who has opted out). So, instead of supporting the outright banning of the release of physician-specific prescription records, the AMA‘s “opt out” program would give physicians the right to choose whether or not they wish to keep their records private. One problem with this solution, however, is that many physicians still aren’t aware that their records are being sold in the first place, so it would be difficult for them to “opt out.”

Musacchio admitted that there are logistics to be worked out. For example, he said he is still not sure what type of punishment the AMA would levy on a company that ignored a physician’s request to keep his individual data private. “What we will do is investigate how the rep got the data,” he said, adding that at the very least the AMA would demand an apology. "What we’re still working on is what we do then. Do we suspend their contract [to the AMA Masterfile]? Do we give them another chance? It depends. We’re working those things out.”

Despite the new “opt out” program, however, the practice of buying and selling prescription records will persist. And aside from the very serious questions it brings up regarding doctors’ privacy–after all, shouldn’t doctors’ prescribing records be kept secret from everyone but their patients, insurance companies and pharmacists?–what it means is that drug companies are constantly learning how to better market physicians and how to better influence their prescribing habits.

Through the purchasing of prescription records, pharmaceutical companies can target the doctors they want to prescribe more of their drugs; and through the information a company like ImpactRX supplies, they can learn the most effective ways to influence them. But in a just healthcare system, drug companies would not be examining better ways to market and influence doctors, but rather examining better ways to objectively educate them, so that doctors, and not the drug companies, can make the best decisions for patients.

“I can think of no patient benefit that follows from this practice,” Dr. Howard Brody, professor of family practice at the University of Michigan, said of the buying and selling of prescription records. “On the other hand, I cannot share some of my colleagues’ sense of outrage. The anger physicians demonstrate when they first learn of this practice tends to take the form, ‘But I thought this guy was my friend, and now I find out he’s been sneaking around behind my back,’ or some such. To which the obvious reply is, ‘And what part of “salesman” don’t you understand?’”

G

To comment on this piece: editors@guernicamag.com


jw2.jpg

Readers like you make Guernica possible. Please show your support.

Tagged with:

Share on FacebookShare on TwitterAdd to BufferShare on LinkedInShare on TumblrSubmit to StumbleUpon
Submit to redditShare on App.netShare via email

You might also like

Leave a comment




Anti-Spam Quiz:

Subscribe without commenting