Saturday, July 12, 2008

New PhRMA Code, II: The Larger Context

In the previous post I addressed the content of the newly announced PhRMA Code on Interactions with Healthcare Professionals:

In that post I took the code at its word and assumed that it would be faithfully implemented. But that of course is one of the questions, as previously there has been precious little evidence that the industry generally has been following its own stated "voluntary" code of ethics. Just recently the Vermont attorney general has released the state's annual survey of required disclosures of payments from drug companies to physicians, and these statistics continue to suggest that the rules are being broken on a fairly widespread basis. (See for example the Prescription Project statement on the new PhRMA code, Specifically, if anecdotal evidence had been correct as to the lavish nature of drug rep payola prior to 2002, and if drug rep behavior had changed since then as a result of the code introduced in that year, we'd have expected to see some dropoff in the total marketing budgets of the companies at least in the short term; but instead those figures have steadily grown each year.

As I reported in the other post, this new code contains a couple of statements not seen previously, suggesting the appearance of more effort being put into policing compliance. But that in turn raises the next question--can the industry expect compliance with this code, in light of its present marketing business model?

In one way, compliance can be easily assured. If the companies decide to lose the reminder items like coffee mugs and notepads, they're toast. The reps get these dang things shipped to them in huge cartons from the company. Company doesn't ship, reps don't give them away--that simple. Reps are not going to go buy generic ballpoints from Office Max and then hand-paint drug logos on them.

Once we get past that, I see a huge problem. When I wrote HOOKED, I had to rely mostly on a few interviews with anonymous former drug reps, plus a scattering of published papers. Now, several reps have published tell-all memoirs and articles. So I think I can say with confidence that we know how this system works.

The critical decisions are made at two levels of company organization--the individual drug reps, and the local district managers that oversee the reps. The reps go into the doc's office to talk, the door closes, and only two people know what is said or not said. Drug reps regularly report that the whole tone of their activity is set by the district manager. Get a new district manager, and everything changes. One district manager might be strict on following the PhRMA code, the guy in the next district over treats averything in the code with a wink and a smile. The district manager, for the most part, signs off on the drug rep's expense account. If the drug rep puts in a $1000 bill for taking a bunch of docs out golfing one Saturday (or puts in a bill for $1000 for buying them textbooks, when in truth what happened was the golf game), it's the district manager who decides whether or not to sign off on that expense.

The point here is simple. The reps get paid their bonuses based on one thing only--how much of the drug they sell. The district managers get their bonuses, and do not get fired, based on one thing only--how much of the drug they sell. If you write a code of ethics that restricts their freedom to get docs to prescribe more of their drugs, you are asking these people to forgo their bonuses and to risk getting fired. And these are the people in the trenches whose behavior has a lot more to do with "the industry" than the directives of the suits sitting in higher corporate offices.

As soon as I hear of a drug rep getting paid a bonus based on degree of adherence to the PhRMA code of ethics, instead of sales quantity, then I will start to believe that this industry leopard intends to change its spots. Until then, don't call me.

Finally, what is up when PhRMA just happens to decide to issue a new code of ethics? When the drug industry folks start to behave oddly, you can usually bet the rent that you can look over Washington way, and find what has stirred them up. (The same is true of when the AMA decides to revise its code of ethics, by the way, as is now happening around industry influence over medical education.) And just what is happening over Washington way? Well, as you may have noticed, Chuck Grassley and the Sunshine Kids are laying waste to the countryside. You would never know that the good Sen. Grassley of Iowa hailed from the GOP side the the aisle, for the vigor with which he has been attacking the drug company payola machine and especially the academic physicians and medical centers that have been feeding at the trough. Assuming that the degree of company pushback signals what the industry is most scared of, you can safely assume that the industry is somewhat petrified of a Federal sunshine act that would require the disclosure of all drug company payments to physicians.

So far so good for PhRMA. Sen. Herb Kohl (D-WI and co-leader with Grassley of the Sunshine Kids gang) immediately praised the new code, as reported by Gardiner Harris in the New York Times ( We'll have to wait and see whether this recent move by PhRMA (supplemented, if past practices are any indication, with hefty campaign contributions to key Congresspeople) has succeeded in dampening or heading off legislative action.

1 comment:

Jim Edwards said...

In terms of whether there are loopholes in PhRMA's new code of ethics for drug reps, the answer is yes.

Lilly itself pointed out one:

And the rest of the code has several other get-out clauses: