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Interesting article from Money magazine about how drug companies try to
influence doctors.
--
Bruce A. Hollenbeck
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For an enhanced HTML version of the Money Daily,
visit http://moneydaily.com.
Wednesday, May 14, 1997
Drugmakers pressuring medical pros to prescribe their
products
Money investigation finds sound medicine may take back
seat to bottom lines
by Ira Hellman
Major drug companies routinely pressure doctors,
pharmacists and insurers to push, restrict or even switch
prescriptions to benefit the companies' financial health,
and in some instances, Money magazine reports in its June
issue, the practice has even harmed patients.
A three-month Money investigation reveals that
drugmakers and bureaucratic middlemen called pharmacy
benefit managers are increasingly using discounts,
rebates and other pressures and inducements to wrest
control of prescriptions from the medical professionals
on whom patients have relied for generations. The
business stakes are high, reports Money writer Peter
Keating: Consumers and their insurers spent $78 billion in
the U.S. last year to fill 2.5 million separate
prescriptions. Yet, if anything, the human stakes are
higher.
Money relates chilling stories of patients forced to
suffer, or to pay stiff out-of-pocket expenses, because
drugs their doctors had prescribed were not on their
insurers' "approved" lists. Moreover, it notes that
switching prescriptions can increase patients' risk of
getting medications that may not work best for them.
Indeed, Dr. Philip Alper, a Burlingame, Calif. internist and
one of the few doctors who would speak with the
magazine on the record, calls the practice "massive,
underfunded human experimentation." Among Money's
findings:
* When managed-care plans decide which drugs they will
pay for, one of the first factors they consider is which
drugmaker offers the best rebate program. Virtually all
managed-care plans maintain lists of approved drugs
called formularies, allowing patients to buy certain drugs
cheaply at selected pharmacies. Trouble is, these once-
extensive lists are being whittled down--in one case, to
only 89 medications--by drugmakers who strike deals
with pharmacy benefit managers (PBMs). Drug companies
often offer rebates or discounts to get PBMs and
managed-care plans to push particular products. In other
cases, they have simply bought PBMs, which ironically
were created to help lower prescription costs--and did so
prior to the '90s. In fact, since 1993, drugmakers have
acquired the nation's three largest PBMs, at a total cost
of $12.9 billion. Money notes that most HMOs and PBMs
insist that they make sure their lists include a broad
range of medications.
* Drug companies exert pressure on doctors and
pharmacists to change your prescriptions. Pharmacists
and doctors are regularly bombarded will letters, calls
and faxes--many including offers of cash payments--
urging them to stop prescribing certain medications in
favor of others. Some of the approaches are routine
marketing ploys, Money reports. But others are over the
top. "I get phone calls asking me to switch my patients'
prescriptions about 10 or 12 times every day," says Dr.
Giacomo Buscaino, a Brooklyn cardiologist. "I've been
asked to switch specific patients to drugs that haven't
been proved to have the effects they need. I've been asked
to switch patients to drugs that were more expensive
than the ones they were on already."
* Drugs are being switched even when there is no evidence
that the change is always safe for patients--or cheaper.
Medical experts, including the American Medical
Association, are overwhelmingly opposed to restrictive
drug lists and to marketing programs that reward health
professionals for substituting one prescription for
another. Moreover, recent research indicates that reducing
access to prescription drugs could actually increase
overall long-term health-care costs. The reason: Patients
who don't get the prescriptions they need end up using
more drugs and going to doctors and hospitals more
frequently.
Money details ways prescription patients can get what
they need. Among the tips: Ask your insurer for a copy of
the procedures you would have to follow to request
reimbursement for drugs that are not covered. Question
any changes in your drugs. And support public policies that
will promote health, not profits, as the primary objective
of prescription benefit programs.
The full text of the story is accessible on the magazine's
World Wide Web site at http://money.com.
Marketwatch for Tuesday, May 13, 1997
Dow Jones Industrial Average: down 18.54 (0.25%) to
7274.21
The Money 30 Index: down 7.54 (0.51%) to 1469.50
New York Stock Exchange
Advances: 1126
Declines: 1369
Volume: 494 million shares
NASDAQ Composite: down 10.60 (0.79%) to 133.59
S&P 500 Index: down 4.53 (0.54%) to 833.13
30-year Treasury bond yield: up 3 basis points to 6.92%
London gold (afternoon fix): up $0.70 to $348.90
The Money Daily Business Report for Tuesday, May 13,
1997
DEC sues Intel
by Tripp Reynolds
A weakening bond market ignited a new bout with
inflation worries on Wall Street today, sending the
market broadly down as investors began to rethink their
stance on the possibility of an interest rate hike. The Dow
Jones Industrial Average slipped 18.54 to 7274.21. The
S&P 500 fell 4.53 to 833.13. The tech-rich Nasdaq -- hit
slightly harder as prices on computer companies retreated
-- shed 10.60 to 1333.59.
Bond prices fell, putting downward pressure on equities,
after a news report quoted an unnamed Federal Reserve
official saying the Fed was likely to raise rates next
Tuesday. The yield on the Treasury's 30-year issue rose to
6.92%.
The impact of the Fed rate hike speculation was lessened
by April's retail sales data, which fell to a seasonally
adjusted 0.3%, according to the Commerce Department.
It's the biggest drop in the figure in 10 months. While
analysts still think another rate raise is inevitable some
time this year, the news, coupled with other recent
economic reports showing the economy slowing, could
stave off the hike until July.
>From bug spray to legal fees for Intel Corp. Digital
Equipment Corp. is suing Intel for supposedly stealing
DEC's patented technology to make the Pentium, Pentium
Pro and Pentium II microprocessor. Earlier in the week,
Intel confirmed reports of a bug in its newly released
Pentium II chip, but said no recall was needed. Intel
dropped $6.75 to $152.38. DEC gained $2.25 to $35.38.
Digital was one of the few computer makers to finish the
day on the upside. Compaq Computer dropped $2.50 to
$93.50. Dell slipped $2.88 to $91.88, and Gateway 2000
lost $3.25 to $60.50.
Other big losers in the tech sector include Ascend
Communications, falling $2.19 to $46.66; 3Com, dropping
$1.13 to $36.88; and Micron Electronics, tumbling $5.38 to
$18.63 after a canceled meeting with Smith Barney
sparked rumors that the company was doing poorly.
Is the third time the charm for General Motors? 8,200
workers at an electrical system assembly plant in Ohio
went on strike today, making it the third walkout in about
a month for the nation's largest automaker. The word
among analysts is that the strike shows GM is serious
about reducing its labor costs. GM closed 88 cents higher
at $60.75.
Two strong gainers on the Nasdaq: Inbrand surged $10.88
to $26.88 after Tyco International said it was acquiring
the maker of incontinence products for $320 million. And
Regeneron Pharmaceuticals got a big bump -- up $4.03 to
$11.90 -- after it inked a 10-year development deal with
Proctor and Gamble. P&G lost $1.25 to $132.50.
Two announcements from Apple Computer that investors
seem to think will offset themselves. The computer maker
said in an SEC document filed today that it will take
longer than expected to get the company back in the black.
Separately, Apple said its new operating system,
Rhapsody, will allow software developers to create
software for the Mac and PC in one fell swoop. Once a
program is written for a Macintosh, it will run on a PC
without additional programming, says Apple's CEO Gil
Amelio. Apple remained unchanged at $17.56.
The Manhattan District Attorney filed a slew of charges
against the former brokerage service of A.R. Baron & Co.
and 13 of its employees for allegedly conspiring to bilk
customers out of $75 million. Customers lost anywhere
from $1,000 to $2 million, according to the D.A.
And finally, yes it's true. The Dodgers are for sale and the
buyer is expected to be Rupert Murdoch's News Corp.
Rumors have been rampant over the past several days
about the sale. Today, News Corp. confirmed that it was
talking with the O'Malley family, which has owned 'Da
Bums since 1950. A formal announcement is expected by
the end of next week.
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