First, Pharma companies should not promote products for uses that are not approved by the FDA.  If a company is found guilty of “off-label” promotion, in addition to any corporate fines (which should equal total product revenues during the time of illegal promotion) , responsible individuals should be held legally accountable and convicted, with personal fines, disgorgement of incentive compensation during the time of illegal activities, and even incarceration if warranted.  No corporate settlements.  It is very likely that criminally charged front line employees directed or even trained to promote for off-label uses may be more than willing to offer up and provide evidence against culpable higher level executives who encouraged or approved of the promotion.  I’m pretty sure this would increase executive management oversight to ensure compliance.

To remove the financial incentives for “off-label” promotion, government programs (Centers for Medicare and Medicaid Services and states) should not reimburse for unapproved uses of prescription drugs.  If the patient wants to pay for the unapproved use of a prescription drug that a physicians has prescribed, that should be their choice.  At the same time, that choice carries the liability that if something should go wrong; the only legal recourse for the patient should be to hold the prescribing physician and perhaps their healthcare provider accountable.  Because “off-label“ use is an informed decision, neither the patient nor the physician (or healthcare provider system) could sue the pharmaceutical company for any negative consequences resulting from the unapproved use.  Physicians who prescribe for unapproved uses but post a diagnosis that aligns with approved uses just so the patient can get it reimbursed would face fraud charges and be held personally liable.  Similarly, there would be no need for federal or state litigation against pharmaceutical companies for False Claims that inappropriately causing taxpayers to fund unapproved uses.

If physicians and patients have made a choice to use a product “off-label” and private payers (insurance companies, employers, or PBMs) choose to pay for the unapproved use then they should assume the same liabilities as stated above.  They are making an informed decision and the payer is agreeing with that choice by reimbursing for the unapproved use.  The patient could sue the prescribing physician, healthcare system, and perhaps the payer, but they would have no legal recourse against the pharmaceutical company should a harmful event occur from the unapproved use.

But what about all the “medically established” unapproved uses in treating things like cancer?  The same rules and legal liabilities should apply.  Physicians have the choice to prescribe, patients have the choice to take, and payers have the choice to reimburse for the unapproved use if they want to assume the liabilities with the inability to sue the pharmaceutical company.  If the medical experts, patient advocacy groups, or government programs and insurance companies feel a prescription drug should be approved and reimbursable for a particular use, they should petition the FDA and submit their clinical proof of efficacy and safety to obtain an FDA approved label claim for the product.

While preserving physician, patient, and payer choice these recommendations remove a major financial incentive (reimbursement) for pharmaceutical companies and increase the legal consequences for individuals who inappropriately promote for off-label uses of prescription drugs.  More importantly, it appropriately shifts product liability for unapproved uses to healthcare providers and payers.   www.PharmaReform.com

The conference is the premiere healthcare conference in the industry and has become “old home week” for industry executives to reconnect, schmooze, and initiate discussions for potential deals.  Getting an invitation is near impossible if you are not among the presenting companies or on the JP Morgan A-list.  I am neither, so I spent last week listening to all the webcasts that are available for the Pharma and biotech company presentations.

Perhaps the single most stunning, yet less obvious (non- investor perspective) “take away” for me was how rapidly Big Pharma is moving away from Primary Care.  With almost 75% of prescriptions now being filled with generic drugs, the trend may not be that surprising.  What is surprising is that the pace of proactive strategic abandonment of Primary Care is far more dramatic than what I believe most people in the industry would want to admit or even realize.

This trend really got my attention when companies with traditional Primary Care portfolios blatantly stated or clearly outlined that they have strategically refocused their pipelines and commercialization efforts to target specialty markets.  With very few exceptions, company presentations were absent references to products or commercial strategies targeting the Primary Care market.  Oncology, neurology, psychiatry, rheumatology, and dermatology seem to be the focus of attention unless you had a Hepatitis C compound in your pipeline.

Again, the interest in specialty products is not surprising.  They command higher prices, yielding higher margins with less onerous managed market intervention into prescribing practices.   From a commercial perspective, specialists represent a smaller, more easily targeted and sales force friendly customer base.   Specialty market physicians and their patients also seek out and are more receptive to disease and treatment information making promotional education a viable and efficient tactic.

The implications of this trend away from Primary Care are clear.  Fewer sales reps needed for calling on Primary Care.  Less need for expensive Primary Care sales and marketing support activities such as purchasing mass market prescription data, coordinating the complexities of territory management and sales reporting, and dealing with sales force related employee relations issues.  It also means fewer industry sponsored educational programs for Primary Care.  Fewer Primary Care clinical trials.   And,  fewer new Primary Care products means Primary Care physicians and their patients will have to be satisfied and content with the treatment options currently available to them.

The real message here is that while Primary Care has been at the foundation of Big Pharma growth and financial success in the past and there may well be exceptions in the future, the importance and interest of Primary Care to Big Pharma is diminishing quickly.  If your expertise or responsibilities include pharmaceutical sales and marketing to the Primary Care market, I believe your days are numbered and you probably have fewer days than you might think.  Specialty products and markets are where the action is and where the industry is headed and it is moving fast.   mike@pharmareform.com

Historical precedent would suggest that pharmaceutical companies are more interested in getting products to the market than making sure their products are safe, effective, or even needed.  They tend to do the absolute minimum to get through the regulatory approval process (fastest, easiest indication first), hoping to argue there way through questionable safety data and relying on marketing to find expanded revenue opportunities in patients for whom they have little or no proof of efficacy or safety.   Some of the antics reported in the trade and lay press would suggest that pharmaceutical companies are continuously trying to find new ways to “game” the system.  If you need the details, there is a good review of the past forty years of industry missteps and flagrant disregard for regulatory expectations in the book Pharmaplasia™.   It is clear that the FDA has been put on high alert police mode by what historically has appeared to be an out-of-control, intentionally non-compliant, almost defiant pharmaceutical industry that can’t be trusted.

In this context, is it any wonder that the FDA is skeptically cautious, more demanding for proof of claims, and sometimes even slow and seemingly uncommitted when it comes to product approvals and issuance of guidance documents yet deliberate and critical, albeit intermittent and inconsistent in their enforcement?

Here are five steps the pharmaceutical industry could take to help improve the regulatory process and FDA efficiency.

1. Focus on Innovation
2. Makes safety issues easy for the FDA to understand
3. Make manufacturing quality an organizational priority
4. Commit to ethical and regulatory compliant marketing and sales
5. Establish a base of credibility

Focus on Innovation

Despite the sunk costs of discovering and developing a product that companies hoped would turn out better than it did, don’t bog down the FDA review process with products that have little or no clinical benefits over what is already available on the market.  If you feel compelled to bring a comparable product to market, don’t try to make it sound better than it really is to substantiate a higher price.  Again, trying to angle for a labeling claim advantage that doesn’t really exist consumes FDA time and resources.

Make safety issues easy for the FDA to understand

It is mind-blowing to me that pharmaceutical companies can get to a final advisory board meeting prior to an expected approval and find out there is a concern and unanswered questions about an animal toxicology study or clinical finding?  Well, maybe the company was hoping it would just slip by and nobody would notice the data or they thought they could argue their way through the questionable or disturbing data.  Why not be proactive, anticipate the concern and just get the data to prove it’s not an issue?  Well, maybe companies still believe in the “don’t look for it unless it is a regulatory requirement” theory because they might find something they don’t like or can’t explain.  I appreciate the need for speed in development but you have at least 3 to 5 years after a product starts clinical studies to sort out any safety issues.  That is, if you really want to take the risk to understand the basic sciences of the concern or potential problem.

Make manufacturing quality an organizational priority

First, the answer to industry manufacturing issues is not lower quality standards, fewer FDA inspections, or less rigorous, less critical inspections.  In fact, I am a proponent of maintaining high quality standards,  more frequent and more rigorous inspections, including of foreign facilities.

As challenging as pharmaceutical manufacturing can be, I don’t see why pharmaceutical companies should expect anything other than a clean slate, no 483′s,  when the FDA inspects their facilities.  With appropriate management manufacturing expertise and robust quality systems in place, avoiding 483’s should not be a matter of chance or wishful thinking but rather a matter of fact.  Clean, high quality, cGMP – compliant manufacturing would make FDA inspections (and follow-up) easier, less laborious, and less time consuming.

Commit to ethical and regulatory compliant marketing and sales

“Pushing the regulatory envelop” and “off-label” promotion can drive revenues and increase your market opportunity but also puts tremendous additional workload on the FDA.   So much so that it is clear that pharmaceutical companies have taken advantage of this burden by trying to be clever in their advertising and promotions knowing full well the FDA can’t police everything and the chances of being caught are remote.  Even if caught, the consequences are minimal (a “slap on the hand” in the form of a letter) unless the Department of Justice pushes for some financial penalty.  And then,  it just becomes a cost of doing business.  Unfortunately, pharmaceutical companies may feel they will be at a significant commercial disadvantage if they don’t “push the regulatory envelop” because “everybody is doing it.”

An industry-wide commitment to ethical and regulatory compliant marketing and selling would make non-compliant outliers more obvious and allow FDA to focus resources  on the more egregious and potentially harmful marketing and sales activities.

Establish a base of credibility

If the pharmaceutical industry were trusted, credible, and committed to regulatory compliance the FDA would not have to spend as much time, effort, and resources trying to sort out the “gamers” from bona fide efforts to bring safe and effective innovative new products to market, to maintain high quality manufacturing standards, and to market products in compliance with the approved label claims.  Yes, I believe there are companies and their CEOs who profess this to be their intent, but the historical record suggests there are few who have been able to deliver or credibly live up to this commitment.

mike@pharmareform.com

For example, pharmacists for years have claimed that they can help patients avoid medication errors and improve patient care through patient counseling and follow up.  They are often the only healthcare provider with that opportunity once a prescription is written, especially for chronic conditions.  Seems logical that pharmacists obviously play an important role here.  But then you read the recent study that suggests that mail order pharmacies may do a better job of lowering costs while improving clinical outcomes than local pharmacies.  Whether or not this study can be replicated or validated remains to be seen but it represents how it is going to be better to have data to support your position than to rely on implication.  Think about pharmacists who now are trying to make their case for improved clinical outcomes with counseling at the local pharmacy.  What data do they present to refute this mail order study?

Similarly, Express Scripts® recently reported on several research studies that demonstrate the ability of Pharmacy Benefits Managers to lower costs and improve clinical outcomes.  Again, even as part of the “managed market,” Express Scripts® felt compelled to support their benefits claims with data.

Why is this important?  Because pharmaceutical companies who still feel they can use traditional marketing and sales advertising and promotion to imply being able to lower costs while improving clinical outcomes  without actually having the data are going to have a much more difficult time convincing decision makers and selling their products.  More importantly, pharmaceutical companies that develop the real world data to support their claims for improving clinical outcomes and lowering overall healthcare costs (and not just shifting costs to another part of the healthcare system), will find a more receptive audience and create a significant competitive advantage.

We are entering a time where the healthcare market will expect you to prove (“show me the data”) that you (as a healthcare provider) or your products or services are delivering demonstrated (data driven) real world clinical outcomes that reduce overall healthcare costs.   mike@pharmareform.com

A recent featured article in Health Benefit News highlights the success WellPoint has experienced in a pilot program to enlist and pay pharmacists for more attentive “medication therapy management.”  They were able to demonstrate increases in adherence which not surprisingly translated to better control of disease symptoms for hypertension,  hyperlipidemia, and diabetes mellitus.   While pharmacy costs went up they also “saw a great reduction in hospitalizations.”  Overall, in the one year study, they saw cost neutral results, but concluded “it’s going to take more than a one-year time frame to see dramatic changes in cost.”

The healthcare market (with pressure from government, payers and insurers) is getting more aggressive about delivering better clinical outcomes as one way to help increase quality and lower the cost of care.  So whether it is through Accountable Care Organizations, Integrated Healthcare Systems, or just enhancing outcomes from solo or group practice settings, I believe pharmacists will play an increasingly important role in medication therapy management, especially adherence-enhancing programs.   Pharmaceutical marketers who view the retail or hospital pharmacist as merely a dispenser of medications and cursory counseling will be putting their products at risk of competitive erosion and never meeting their full commercial potential in the evolving new healthcare market.

So what’s a pharmaceutical marketer to do?

Well, how many pharmaceutical marketers have assessed (not just mentally speculated) how their product might perform in this type of a trial or study?  How many have commissioned similar types of studies?  How many marketers have partnered with healthcare provider systems to determine the adherence value (clinical outcome differences) between adherent and non-adherent patients and what the value proposition could be?  How many marketers have actually met with pharmacists about their evolving role? How many have started to work with pharmacists on developing educational programs and materials for their products?  How many have pharmacist training programs for their patient education programs?  More importantly, how many pharmacists are considered high priority calls for your sales representatives?

I think I just heard somebody say…”of course we are doing all this.”

Great.  Now, are you doing it as  just another marketing tactic?

I might suggest that if you are doing it to genuinely help patients, pharmacists, and healthcare provider systems achieve their goals, you will find a much more receptive audience, ready to embrace your efforts and make meaningful contributions to your product success without feeling compromised.      mike@pharmareform.com

Healthcare failure statistics (e.g., hospital related infections, treated but uncontrolled diseases, lack of responsiveness to treatment, complications of multi-drug treatment, and patient non-adherence to treatment) while disconcerting, have often been ignored or just taken for granted.  But, these types of numbers can give clues as to where prescription drug treatment could help healthcare providers in ACOs (or other healthcare provider systems) improve the quality of care and clinical outcomes in cost effective ways.

Across healthcare, the list of failure statistics seems never ending from clinically inappropriate drugs or dosing being prescribed to adherence related issues, outright medication errors, and patient disappointment with the explanation about discharge medications.  Even a cursory internet search of product relevant disease states will yield a wealth of failure statistics that could potentially be improved, many simply with the appropriate use of  prescription drugs.

Don’t be discouraged by the variability of the statistics for any given problem.  The precision of specific numbers is not important because at this stage you are looking for clues for where you might be able to make an improvement.  You’ll get real world hard numbers from the healthcare provider sites you work with to develop your baseline data.

You should be able to put together a disease and treatment statistical profile for each of your products.  What I am suggesting is going beyond the global numbers of patients and market shares traditionally used for determining opportunities and driving forecasts.  You need to dig deeper to find the performance improvement opportunities, the types of patients or situations that represent less than satisfactory healthcare performance.   Here are a couple of examples:

Hypertension:

There are plenty of safe and effective prescription drug treatments available, including generic drugs.  When you take a quick look at the overall average numbers there might not seem to be much of an opportunity for significant performance improvement.  After all, 68% of adult hypertensive patients are being treated with anti-hypertensives and 64% are achieving blood pressures less than 140/90mm Hg (controlled).   But a closer look reveals that the percentage of treated patients is much low in younger patients (age 18-59), especially men (47%) and Mexican Americans (50%).  The percentage of controlled hypertension is also lower in older patients (58%) than in younger patients (72%), in general.  Insurance coverage has also been identified as a factor with 71% of uninsured hypertensive non-elderly adults uncontrolled.  More striking is that 52% of those with private and 45% with public insurance remain uncontrolled.

Pneumonia:

Again, at first glance one might find it hard to suggest there is an opportunity for performance improvement when you read that over 60% of elderly patients receive pneumococcal vaccine.  But a closer look reveals that the percentage of adults aged 65 years and over who had ever received a pneumococcal vaccination was 39.8% for Hispanic persons, 64.9% for non-Hispanic white persons, and 44.5% for non-Hispanic black persons.  More importantly, despite vaccinations and effective antibiotics there are still 52,000 deaths related to pneumonia in the US every year.

Depression:

While there may be considerable opportunities realized by encouraging more patients with signs and symptoms of depression to seek treatment, here are some statistics that would suggest there are even opportunities within the treated patient population.  Only 24% of depression patients recover following 16 weeks of drug or psychotherapy and remained well during 18 months of follow-up and  50% of depressed patients treated by medication relapse within two-years.

My intent here was not to provide an exhaustive statistical profile for these diseases but rather to demonstrate that previously ignored or taken for granted healthcare failure statistics, especially those related to treatment  failure may represent new ways to help healthcare providers achieve their quality and clinical outcome performance metrics.  It may take some investigation into the reasons behind some of these numbers but if they are patient selection, dosing, or adherence related, you could be onto something.

Developing a useful value proposition and supportive data will require identifying the specific failure-based  statistic opportunities and then determining with provider systems which improvements will make a difference for them and what data could be developed to demonstrate meaningful improvements.  Keep in mind, healthcare provider systems will now have electronic medical records to help track and follow interventions (e.g., education and adherence programs) and patient responses to treatment.

Again, this goes beyond marketing your regulatory claims for safety and efficacy.  It also takes some research beyond traditional market profiling in a marketing plan.  It will require creativity to interpret the ACO performance metrics in the context of how your products will be assessed and how your product might be able to improve some of the relevant healthcare failure statistics.  These healthcare system improvements in quality or clinical outcome performance metrics not only benefit patients but could have significant financial implications for healthcare providers.  mike@pharmareform.com

Some pharmaceutical industry executives, healthcare providers, and even patients may view these performance metrics as a biased, bureaucratic process for defining medical practice and imposing the “cheapest, least expensive” treatment options.

Whether or not the ACO concept survives in its current form is not important, but rather, I believe it represents the next level of managing healthcare delivery that can not be ignored.   I believe the draft ACO concept also represents an important new context for how pharmaceutical companies need to be looking at developing, marketing, and selling their prescription drugs.  Here’s why…

For decades the pharmaceutical industry has boasted about cost savings, cost-effectiveness, and the pharmacoeconomic value of prescription drug treatment.  Professing that prescription drugs can reduce overall healthcare costs by avoiding the ancillary costs associated with chronic diseases, reducing office visits, keeping people out of the hospital, and most importantly, preventing and curing diseases.  And despite the industry’s best efforts, these claims and propositions have seemed to nebulous, lacking in credible data, and therefore mostly fell on deaf ears within traditional healthcare provider systems.

In an ACO-type healthcare delivery system, these value propositions have real meaning, especially as they relate to the defined performance metrics.  With electronic medical records, insurers, payors, and providers will now have more robust information systems to track and report performance of prescription drugs and validate the value propositions in their own healthcare system.  That means marketing and research must be aware of how their products will now be assessed against these performance metrics and design clinical trials that go well beyond establishing regulatory claims for efficacy and safety.

Getting your product identified as a “treatment of choice” in a performance metric would be the ideal and almost assure commercial success for a prescription drug in that healthcare system.  In fact, pharmaceutical companies who align their products and deliver data driven proof for improving healthcare delivery performance metrics as defined by ACOs will find healthcare provider systems more than willing to encourage the use of their products over other, less performance impacting therapeutic options.  Rather than trying to find ways to limit the use of seemingly expensive new products, this new perspective provides rationale for healthcare provider systems to proactively promote the use of prescription drugs that can help them meet or exceed their performance goals in a cost-effective way.

In the next post we’ll explore how healthcare statistics can provide an interesting platform for driving prescription drugs in this new performance metric, ACO-type healthcare provider market.   mike@pharmareform.com

Included in this proposal are 65 performance metrics (Table 1, pages 174-194); specific quality and clinical outcome measures of care delivery.  Healthcare providers in an ACO will be required to track, record, and report their performance against these metrics to qualify for what’s called “Shared Savings” …  financial rewards … or essentially bonuses for meeting or exceeding these performance metrics, but they’ll also be subject to financial penalties for delivering expensive care or under-performance against these metrics.

What kinds of metrics are we talking about?

Well … some are more general … like the use of survey results to capture for example;

• The  level of satisfaction with physician – patient communications
• patient feedback about their provider experiences
• And whether or not the healthcare system has best practice processes in place like patient education, the extent of electronic medical records, and the use of e-prescibing

Other performance metrics are clinically oriented and much more quantitative, for example;

• The number of readmissions following hospitalization
• Healthcare acquired conditions (e.g., surgical or catheter related infections, pressure ulcers)
• The percentage of patients vaccinated or being treated with specifically identified treatments of choice ( e.g., beta-blockers, ACE- inhibitors, or ARB therapy for heart failure patients with Left Ventricular Systolic Dysfunction, warfarin for patients with atrial fibrillation)
• or the percentage of patients controlling their hypertension, blood glucose if they’re diabetics, or controlling their cholesterol levels

The ACO performance metrics go well beyond the tracking and reporting requirements hospitals now capture in their quality systems.   More importantly, these performance metrics are more likely to get the attention of healthcare system administrators and individual healthcare providers because they will be held financially accountable for delivering against these metrics.

While there is considerable debate about, and even resistance to,  the details of the draft proposal and uncertainty as to whether or not CMS can actually implement the ACO concept, this should not create a “wait and see” mentality for pharmaceutical marketing and sales.  The ACO draft proposal should be viewed as a feasible strawman proposal which will foster pilot programs at a few healthcare provider systems and will certainly elicit commentary and alternative proposals as to how to hold healthcare providers accountable for delivering higher quality care at lower cost.

In an earlier post we discussed the pharmaceutical sales and marketing challenges created by the complexity of ACO organizational structures and decision making processes. In our next post we’ll explore how this ACO concept and the 65 performance metrics could actually provide a platform to help drive revenues for pharmaceutical companies in this evolving new healthcare market.   mike@pharmareform.com

Pharmaceutical marketers who lack sophistication and try to merely enroll clinical pharmacists as their sales advocates will be woefully disappointed.  Clinical pharmacists are well educated, well informed, and very analytical when it comes to evaluating therapeutic treatment options.  They have an insatiable need for clinical data to support not only efficacy and safety but also the value proposition for a product.

Pharmaceutical marketers should spend some time understanding the different roles clinical pharmacists might play in the evolving healthcare system and better determine the information needs and evaluation criteria used for assessing products in therapeutic categories that pertain to their marketed products.  More importantly, pharmaceutical marketers should understand the best ways for packaging and presenting their product information so as to assist clinical pharmacists with their product evaluations, presentations, and fulfilling their clinical responsibilities.

Assuming you have a high demand product that fills a significant unmet medical need, clinical pharmacists can play a critical role in making sure your product is available in their healthcare system, is a part of treatment guidelines and highlighted in any e-prescribing support systems they use to encourage appropriate use.  They can facilitate educational programs for physicians and patients to ensure that the right patients are considered for your product, are aware of any potential safety issues, and reinforce the value of your product relative to other therapeutic options.  Clinical pharmacists are also well qualified to be clinical care coordinators in Accountable Care Organizations, and are organizationally well positioned to ensure patient compliance and adherence while monitoring and tracking the financial benefits derived from appropriate use of the product.

So tactically, what does this mean for pharmaceutical marketers?  Here are some things to consider.  Who will be making your product presentations to ensure product inclusion on formularies and securing reimbursement?  Do they have the credibility and training necessary to discuss the clinical data and value proposition (e.g., outcomes and quality metric implications) without having to refer questions to the company Medical Affairs department?  Do you have a user-friendly, comprehensive product dossiers with any efficacy, safety, or value claims (including outcomes and quality metric implications) supported by published clinical data?  Can you provide clinical trial designs and templates for doing comparative efficacy trials for your product?   Can you customized your healthcare provider and patient education materials  for specific healthcare systems?  Are you ready with electronic medical records integration technology and patient care support apps for mobile devices (think e-prescribing and adherence support)?  Can you help with customized electronic models for tracking and analyzing improvement in outcomes and quality metrics consistent with the healthcare provider system goals and objectives?

Reception of these tactics will depend on the healthcare provider system and the clinical pharmacists but also the quality and value of the products and tactics being made available.  The key is for pharmaceutical marketing to align with and embrace the needs of clinical pharmacists and find ways to help healthcare provider systems accomplish their goals and objectives in this evolving new healthcare market.  Pharmaceutical marketers who figure this out can create a significant competitive advantage and enhance revenue growth, assuming they have the innovative products, the data to support their claims, and tactics that are supportive and embraced by healthcare provider systems.

mike@pharmareform.com

I’m talking about the clinical pharmacists who evaluate and make formulary recommendations for treatment options within large healthcare systems, managed care, Pharmacy Benefits Managers, government agencies (think CMS), and at healthcare insurance companies.  I’m talking about clinical pharmacists who are rounding in the hospital with attending physicians; monitoring, evaluating, and consulting on drug treatment. And, I’m talking about clinical pharmacists who are delivering and managing chemotherapy and other intravenous drug treatments in the outpatient or home health settings.

Clinical Pharmacy’s power comes from the ability to influence formularies and reimbursement decisions, draft treatment guidelines, and recommend treatment choices.  They are frequently involved in clinical trials and may find themselves increasingly involved in designing, executing, and evaluating “comparative effectiveness” studies.

More importantly, clinical pharmacists could be in the best position of healthcare providers to monitor and manage patient compliance and adherence to treatment, ensuring that treatment outcomes and quality metrics improve, and patients realize the full benefit of drug treatment after the prescription has been written.

The intensifying cost consciousness of the managed healthcare market being driven by healthcare reform and the opportunity for financial incentives from Accountable Care Organizations will further elevate the relevance, importance, and value of the drug treatment expertise of the clinical pharmacist.

It is important for pharmaceutical marketers to understand and appreciate the increasingly influential role of the clinical pharmacist in the evolving new healthcare market.  See why in the next post.  mike@pharmareform.com

But …  what would happen if the branded product manufacturers (Big Pharma) started to “match generic drug prices” once their product patents expired?   As generic drugs of the branded product come to market, the branded product matches their price or even prices slightly lower than the generic drug to preserve their market share.    Surely, nobody could be a lower cost manufacturer than the innovator, brand manufacturer.

Let’s think about this. The branded company development costs are well behind them.  Manufacturing facilities, equipment, and staff are already in place.  Training, quality systems, and regulatory compliance requirements are also in place.  Operational efficiencies have been honed over years of production.  Branded manufacturers can certainly negotiate at least as good a terms on API (active pharmaceutical ingredients), packaging, and supplies as the generic drug companies.  And while branded manufacturers may have higher “overhead expenses” that’s an accounting allocation issue.  Building a patient base, marketing, sales, and supply chain logistics are already in place for the branded product.

The generic drug company on the other hand has to develop the generic product (formulation and establishing bioequivalence can be challenging), purchase and set up manufacturing capabilities (or retool what they have), source API, packaging, and supplies, put in place new manufacturing SOPs (standard operating procedures) and regulatory required quality processes.  They have to hire and train new personnel (or at least retrain current staff), develop their regulatory filing, and secure FDA approval.  They may even have to challenge the patent validity of the innovator product.  And once approved, they have to market to and negotiate with the supply chain and the managed market.  In the end, these are all new costs for generic drug companies that have to be covered in the price of their new product entry.

In the past, branded products matching generic drug prices would have meant leaving money on the table and forfeiting profits as generic drugs gradually made their way into the market over a period of years.  Today, however, it only takes a matter of months before a majority of branded prescriptions drugs can be converted to generics.

I’m sure somebody has already done the math on this from a Big Pharma profitability perspective but I still believe that “matching generic drug prices” could have value for patients and Big Pharma.   Matching generic drug prices would preserve a large patient base of lifetime revenue (albeit at lower margins) for the branded product.  It also rewards loyal patients with lower prices for the same drugs they may have been taking for years. It would certainly make it easier and more efficient for healthcare providers, patients, and the managed market in that there would be no reason to worry about changing patient prescriptions.   And, while Big Pharma might view this as “throwing in the towel” ,  this approach would be a challenging “game changer” for the generic drug industry.  mike@pharmareform.com

It has to be very tempting for pharmaceutical executives to just:

• Eliminate the traditional sales rep positions entirely

• Hire contract sales (or MSLs) for product launches

• Find non-traditional ways to get product information to key customers

• Increase investment in medical and scientific communications activities

• Provide each customer with a personal customer service rep (phone/internet contact)

• Pay customer service reps hourly with bonus based on customer satisfaction ratings

So why should pharmaceutical companies continuing to deploy sales representatives in the face of such an expensive and daunting selling environment?

Not to be disrespectful but if you peel back all the activity based stuff that pharmaceutical sales representatives do or have done (sample delivery, lunch and learns, distribution of product brochures, etc.) it really boils down to keeping physicians informed about the company’s products, creating and maintaining a positive brand image, and understanding what individual physicians think about the products and how they fit into their practice.

Marketing has tools and tactics to accomplish many of these same objectives for the mass market.  None of them however, is as effective as sales representatives can be when it comes to intervention with individual physicians.  Making sure individual physicians are aware of products, stay current with their appropriate use and correcting misinformation or misperceptions require personal interactions and feedback.

Unfortunately, if you justify the sales representative role as a way “to drive sales” you may have discovered the reason pharmaceutical sales representatives are less welcome in a lot of offices today and why, when you do get in, you don’t get much time.  When you focus on “driving sales” you have a different call.  Your mindset and presentations change and the dynamics of the interaction change as well.    mike@pharmareform.com

I’m guessing most representatives see scripted presentations as demeaning, belittling of their competence, and unprofessional.

Let’s think about this.  Do stage performers such as for Broadway shows or comedians, feel this way?  Do musicians (think of your favorite singer or band) feel this way?  Do great orators and professional speakers feel this way?  Do even the best of news anchors feel this way?  When the president or another politician delivers a speech, do they feel this way?

Hardly.   So why do pharmaceutical sales representatives feel this way?

I believe there are several reasons why pharmaceutical sales representatives hate scripted sales presentations.  Here are just a few:

• The scripts are poorly written and not honed to perfection through an iterative process using real sales representatives with real customer feedback
• The scripts don’t accommodate different practice settings, physician personalities, patient types, or treatment alternatives
• The scripts are not conversational, sound scripted, and often intentionally avoid opportunities for customer engagement (lack interaction)
• The scripts are more focused on delivering message than they are about how they affect (“land on”) the customer (think emotionally and intellectually)
• The scripts (including answers to questions) are not practiced (rehearsed) to perfection with incorporation of natural voice modulations and corresponding supportive intonations
• The scripts don’t anticipate the questions that are likely to be asked (or reps don’t practice the answers) so it looks like the rep only knows the product message script.

Yes, there are legitimate reasons why pharmaceutical sales representatives don’t like and even despise scripted sales presentations.  In the context of the above issues, scripted sales presentations can seem demeaning, belittling of a person’s competence, and come across as unprofessional.  That doesn’t mean they have to be.

I believe it is actually unprofessional to think you are so good at sales that you feel you can “wing it” without a scripted, well rehearsed presentation on sales calls.

Like many sales professionals in other industries, professional pharmaceutical representatives should embrace and arm themselves with carefully crafted, engaging, information packed, rehearsed to perfection presentations.  And, answers to customer questions they have encouraged should just become a natural part of their well prepared presentations.

It is hard work to get the scripts right in the first place and then it takes more hard work and practice (to perfection, not just random impromptu “role plays” with your District Manger) to deliver impactful scripted sales presentations professionally.  mike@pharmareform.com

So what keeps representatives from having more engaging, more informative, and more credible discussions with physicians?  One of the most frequent reasons, or excuses, I hear about is the regulatory constraints placed on representatives.  Regulatory restrictions get in the way of being more effective as a sales representative when opportunities for product use exceed the label claims or where representatives could drive more sales by implying or even making comparative claims they can’t support with label claims or “substantial evidence.”

To ensure regulatory compliance, many companies, especially those with Department of Justice Corporate Integrity Agreements, now require representatives to stick to verbatim scripted presentations that mostly do not resonate well with physicians.  This “regurgitation of the company message” is an immediate turnoff for physicians, lacks credibility, and makes for awkward representative – physician interactions.

Now, keep in mind the premise of our discussion here. You are a professional representative and your mindset and focus is on making sure patients in your territory are getting the best treatment possible.  You are not just “driving sales” by doing and saying whatever it takes to get physicians to prescribe your product as much as possible.   Professional representatives don’t need to be reminded of fair balance or to stick to label claims and approved literature, they just do.  The challenge for them is whether or not they have the claims and sufficient regulatory compliant data and literature to meet the information needs of their customers.

Some sales representatives might suggest that they have all they need in terms of claims and published data and regulatory is just getting in the way.  If that is the case, then why would there be a regulatory compliance issue?  Why is regulatory review such a big deal?  Why would companies and representatives feel a need to promote off-label to make their sales? Why would companies feel compelled to script boring marketing messages to ensure sales representative compliance? More importantly, why is the market still clamoring for more comparative trials and better data to help them identify best treatment options for patients?

In this competitive market and knowing that products we now have were developed with a “get it to market “ mentality and indication – driven clinical trials to satisfy regulatory requirements for safety and efficacy, I’m going to suggest you do not have the claims or data you need.  How many of your products have two well controlled comparative efficacy trials to support claims of differentiation that you can use in sales presentations?  Can you claim superiority?  If not, how can you discuss why your product is better than another for a particular patient type? Can you do this and be compliant with regulatory requirements or are you expected to just cleverly implying a difference?

Here is the problem.   Even today, research gets the indications and it is up to marketing and sales to differentiate the product in the market.  When a physician or managed plan decision-maker asks why they should use your product rather than a competitive product, how do you answer?  Blatant claims of superiority or implied differentiation are the only way to convince them why your product should be used over another product.

What’s interesting is that when research and management talk about products to investors or in company presentations, especially before launch, they talk about and always answer questions about how the product is better than anything else out there, often using historical data from competitive products compared to their just released clinical data.  They highlight all the wonderful features and benefits that your product has over the competition, even quote data that imply superiority.

But, when marketing and sales wants to take those same messages to the market they have this regulatory issue.  While the research and management statements may be true,  they don’t necessarily come with the label claims or “substantial evidence” to support those same claims in advertising and promotion.  Yet, revenue forecasts are driven off those claims and expectations for differentiation.   And besides, who ever launched a product that wasn’t considered by their research team and management to be better than anything out there?

Pharmaceutical companies can no longer expect, pharmaceutical representatives to fill the label claim and “substantial evidence” data void for products.  The disconnect between product differentiation assumptions used for revenue forecasts and the regulatory constrained messaging puts the representative in an unfair position of having to deliver sales expectations beyond that which would be or ever could be achievable given a compliant presentation.

To be effective, even professional representatives need regulatory compliant information, comprehensive label claims, and more importantly, “substantial evidence” documented in peer-reviewed published literature.  This is the responsibility of management and the research team.  It is then marketing’s responsibility to develop forecasts that are aligned with the label claims and regulatory compliant information available for presentations and discussions by representatives.   mike@pharmareform.com

This organizational transformation will require that commercial management step up their game and the level of their own professionalism.  Expertise in traditional marketing and sales tactics is not going to help much in this evolving new healthcare market. There are no slick technology quick fixes or gimmicky tactics that will substitute for meeting product and data needs of the market.  It is critical that marketing and sales management understand and accept that tactics that worked in the past and the bad behaviors that drove revenues in the past, are no longer going to be tolerated and will not work in the evolving new healthcare market.  It means marketing and sales management must reformulate their strategies and acquire new skills and expertise that are better aligned with the needs and expectations of the evolving new healthcare market.  This includes being able to effectively deploy a  sophisticated team of professional representatives and arm them with products and support resources that address the evolving healthcare market needs and expectations.

Unfortunately, most executives and the people running commercial teams today are grounded in a traditional mentality about pharmaceutical marketing and sales.  This is where I predict most organizational transformations will fall short and stall out.  Those who can make the changes and should be championing the changes will feel threatened by a move away from their own expertise, experience base, and comfort zone.

Here is something to think about.  Let’s assume the company decides to embrace the organizational changes we have discussed and it is ready to embrace the new professional representative profile. Where do you find marketing and sales management with the new skills, expertise, and mindset needed to formulate and implement the new commercial strategy?  For example, will sales managers understand and appreciate the differences between sales reps and professional representatives?  Will marketing managers understand that they need to spend more time comprehending the complexities of the evolving decision-maker processes and nuances of customer expectations (not just market research) rather than worrying about the copy and graphics for their next TV commercial?

Again, don’t underestimate the need for executives and commercial management to really understanding the market at the customer level and having the right mindset about how to approach this new commercial model.  Some sales representatives and some commercial management may be close to the desired profile and mindset needed for these changes but they also need corporate executives who can create an environment in which these individuals can champion these changes and flourish.   Unfortunately, there are probably more who don’t get it, won’t get it, and will probably fight it, if not actively, passively by doing nothing.

mike@pharmareform.com

There is a lot of blame to go around for why pharmaceutical sales is struggling for survival.  There is a rarely talked about and hidden reason but first here are a few of the more obvious and frequently complained about reasons for why pharmaceutical sales representatives find themselves either unemployed or wondering if they will still have a job at the end of the year:

Some have also postulated that the advent of electronic communications and internet availability of medical and drug information have made sales representative obsolete.  I believe electronic communications should not be seen as a threat or replacement for pharmaceutical sales but rather could be a future necessity for handling the large volume of data available and to explain the complexities of new treatment options.

Some have suggested sales and sales management brought it upon themselves with questionable sales tactics and the hiring of less than professionally or scientifically qualified sales personnel.  While these may have ultimately contributed to the continuing demise of this important position, I believe you have to dig deeper to uncover the genesis of this unfortunate evolution.

Some have blamed management for just about everything and in this case, you don’t have to be very specific, from C-level to front line managers.  Unreasonable expectations and “stretch” sales forecasts drove a lot of sales organizations and individuals to do “whatever it took” to meet those sales goals.  Sales management complied with these expectations and was bound and determined to make their incentive bonuses and ensure their place at the annual sales incentive trip.  Again, “whatever it takes” to make or exceed your numbers.

Marketing often built those sales forecasts out of hubris and pushed the sales organization to deliver while also provided the marketing message and resources to do “whatever it took” to  deliver the sales.  Think of the virtually uncontrolled, unlimited (by standards for most other industries) funding for tchotches, lunch and learns, speaker programs, and of course, samples and literature (marketing materials).  Of course reps were encouraged to fully deploy and leverage all their resources.

Some people like to blame the regulatory environment (constraints on what reps can say and do) while others point to a less tolerant healthcare market (increasingly difficult physician access and institutional limitations on promotion).  These, however, while real, were more a response to increasingly aggressive and sometimes questionable (unethical or illegal?) activities rather than being inherent in the market.

No doubt, pressure on sales representatives to make their numbers was and is intense and often requires incredible selling skills and creativity to compensate for the realities of marginal product profiles given the market expectations and sometimes even harmful side effects of the products they were selling.

This leads us to one of the less obvious sources for why I believe the sales representative position has become threatened with extinction.  And that is,  the lack of credible clinical data and appropriate regulatory labeling to support the commercial claims needed to deliver the forecast sales numbers.  Sometimes the clinical data and marketing messages provided to the sales organizations have even been inaccurate, intentionally misleading, or even concocted.

Solid credible clinical data and regulatory approved labeling to support commercial claims mitigates the need for overly aggressive and questionable sales activities and reduces the regulatory constraints that bar sales representatives from having meaningful clinical discussions with physicians.  It is hard to imagine the level of sales that might have been achieved had the talented, skilled sales representatives been armed with better clinical data and stronger, more definitive regulatory label claims.

Research teams pushed (and senior management was pushing even harder) for approval rather than building comprehensive product profiles to support the commercial expectations.  The get-it-to-market drive for approval to attain indication- based label claims without differentiation or consideration for what sales representatives will be able to say or use in promotion unfairly puts sales representatives in an awkward, boring, professionally compromised, and near impossible selling situation.

So before you blame or criticize sales and sales management for jeopardizing the pharmaceutical sales position, look at the clinical data they had to work with.  You might find that they did a better job than might have been expected and you might find the reasons they felt compelled to go to such extremes in some cases to make their sales numbers.

mike@pharmareform.com

(Four of Five Stars)

ForeWord CLARION Reviews

Unlike other books written about the pharmaceutical industry, Mike Wokasch, a 30 year industry veteran, delves into the causes of the industry’s current state of dysfunction.  He provides practical solutions for a prosperous future, even in light of the increasing regulatory constraints, restrictions on marketing and sales, and the demands of an increasingly cost conscious market with its own challenges imposed by healthcare reform.

The author provides an insider’s perspective with unique insights into the unintended consequences of the industry’s rapid growth and explores why some Big Pharma companies may be too big for the complexities of the science, the business, and the market.  Much like his blog PharmaReform.com, this 180 page book is not an exposé but rather a hard hitting discussion of how the industry’s mistakes and poor decisions have led to serious questions about its outdated business model, its long-term commercial viability, and the imbalance between corporate priorities for “profits and patients” that have driven product sales but often put patient health and safety at risk.

Pharmaplasia™, which is available in hard and soft cover at  www.Pharmaplasia.com,  addresses important management, organizational, functional, and philosophical questions such as:

• How will Healthcare Reform affect the pharmaceutical industry?
• What do pharmaceutical companies need to do to better align with the expectations of the market and to adapt to Healthcare Reform?
• What factors, actions, and decisions led to the current state of industry dysfunction?
• Why can’t $65 billion in annual R & D spending produce more innovative products?
• What did organizational growth do to pharmaceutical companies and the industry?
• Is the role of the pharmaceutical sales representative obsolete?
• What do pharmaceutical companies need to do to reestablish trust and credibility in the market?
• What should pharmaceutical executives focus on as they reconfigure their business models?

Industry executives and employees will relate to the historical insider perspective but more importantly, take away practical recommendations for increasing R & D productivity, preserving profitability in the face of healthcare reform, and reestablishing public trust and credibility.

Pharmaceutical industry service providers and vendors will better understand their customers and comprehend the transformative challenges the industry faces; ultimately they will be in a better position to align their products and services to the address the changing needs of the industry.

Healthcare providers will relate to how the industry needs to evolve, appreciate the need for and value of “conflict of interest-free” relationships with the industry, and gain further understanding of the important role they play in ensuring that their patients receive the best available treatment options.

Patients and the general public will enjoy the insider perspective about Big Pharma while learning what they should be able to expect from an industry we all depend upon for innovative new drug treatments that can relieve pain and suffering and save lives.

Preview Table of Contents

Preview Chapter 1

Go to www.Pharmaplasia.com

Think about it.  At what point are consulting assignments and advisory payments to physicians a bribe or kickback?  Could providing lunch for the office staff really be a bribe or kickback?  Is any comment about product efficacy or safety that is not verbatim out of the package insert possibly “off-label” promotion?  When are graphic interpretations or implications from an advertisement “off-label” promotion?  At what point do random side effects and adverse reactions become “hidden” if not publicly broadcast to the media?  Are systematic miscalculations of pricing always an indication of fraud?  When is competitive pricing considered price fixing?  At what point does editorial assistance become “ghostwriting?”

I am not an attorney and this is not a legal discussion.  Rather, this is about past history of proven and alleged pharmaceutical industry misbehavior including illegal activities.  Perhaps most disappointing has been the fact that as prosecutors pieced together their better informed perspective of alleged illegal activities they often found both willful intent and additional even more egregious activities to support the initial allegations.   The seemingly endless offenses have tainted the perception of prosecutors, legislators, healthcare professionals, regulators, industry critics, and of course, patients.  Virtually everything the industry does is now suspect and often transformed into allegations of unethical if not illegal activities.  Even normal course of doing business activities (e.g., presenting a favorable product profile, trying to influence prescribing, and providing samples) are now being viewed as inappropriate and possibly illegal.

It all boils down to a lack of trust and credibility.  The industry can’t even credibly defend itself to maintain normal business practices because there are just too many cases that demonstrate companies are willing to betray this trust and take advantage of the market for financial gain.  Unfortunately, the pharmaceutical industry doesn’t seem to be too concerned or you would have seen a dramatic change in behavior.

Before trust and credibility can be reestablished the industry and company executives must be on their best behavior.  Once again, actions and consistent behavior will speak louder than words or intermittent gratuitous gestures.  Trust and credibility are much harder to reestablish than to maintain.

mike@pharmareform.com

They should be embarrassed because many of these cases demonstrate that the medical profession has no effective way to educate physicians about prescription drugs.  More importantly, it demonstrates that the evaluation process used by physicians to select treatments for their patients is less than rigorous and not necessarily based on package insert information, a critical evaluation of clinical data, or the literature.  Simple “show me the data” requests with a diligent comparative evaluation should have revealed the data gaps and more importantly, exposed the marketing hype and sales slight of hand for many of these campaigns.  How embarrassing for the medical establishment to have to face suggestions from litigation that pharmaceutical sale representatives and paid physician advocates have the skill and ability to influence prescribing practice without even having legitimate clinical proof of efficacy.

Rather than reveling in the success of winning billions of dollars in fines and settlements levied against the pharmaceutical industry, the plaintiffs and the medical profession should see this as a disturbing scorecard of medical education ineffectiveness and the inability of practicing physicians to critically evaluate prescription drugs for use in their practice.

It is also ironic and very disconcerting that states, private insurance companies, and even the federal government (CMS), all of whom espouse rigorous expert formulary evaluation processes, willingly encourage this prescribing by paying for these off-label uses without approved label claims or even supportive clinical data.  These very same organizations however, find it lucrative to sue pharmaceutical companies for what is actually their own lack of due diligence (no clinical proof of efficacy or safety required), ineffective medical education processes, and lax prescribing oversight (more than just a few cases needing this product off-label might have raise concerns).

There are five simple solutions for preventing pharmaceutical companies from enhancing their sales from off-label promotion. These five actions would make it less attractive, less tempting, and less profitable for pharmaceutical companies to even consider off-label promotion.

• If the government, insurers, or plan mangers don’t approve of off-label prescribing, they shouldn’t pay for off-label uses.  If they decide to pay, they should not be allowed to sue the pharmaceutical companies for their own negligence in product assessments, inability to control prescribing, or ineffectiveness of their medical education processes.
• Physicians should be required by law to inform patients that they are being prescribed a product off-label for their condition.  If the patient agrees to the treatment, they should not be allowed to sue the pharmaceutical company for any reason related to the use of that product.
• Physicians merely have to be more demanding for data and rigorous in their evaluation of off-label claims made by sales people and paid physician advocates.  If they agree to use the product off-label, they should assume all liabilities related to its use.
• Academia and medical education providers should be doing a much better job of teaching physicians about treatment options and challenging, even debunking off-label claims being made by pharmaceutical companies.
• Academics and practicing physicians should be writing articles in medical journals that challenge the off-label claims being promoted by pharmaceutical companies.

If the market feels it is inappropriate to use prescription drugs off-label, that it results in the inappropriate overuse of higher priced prescription products, and therefore contributes to inflated healthcare costs, then the market should do its part and take responsibility for better educating the physician population and better manage the off-label use of prescription drugs.

mike@pharmareform.com

Are we getting to a point where the level of ethical and conflict of interest concerns about pharmaceutical industry influence will be moderated more by the level of financial impact than the convictions of those imposing the restrictions?

Here is one way to keep people honest about their ethical and conflict of interest considerations when restricting pharmaceutical industry activities.

It is the right of these groups and organizations to regulate and even ban pharmaceutical industry activities.  But,  if industry influence on prescribing and concerns for conflict of interest are seen to be detrimental to patients and are the basis for these decisions to preclude the industry from participation, then the restrictions and the need to avoid these influences should apply in principle to all members of that group or organization as well.   There are now a sufficient number of cases which demonstrate physicians and scientists are not immune to breaches of integrity and have been equally responsible for creating these concerns for biasing information about prescription drugs and participating in the creation of conflicts of interest.  Therefore the restrictions should apply to both sides of the activities of concern.   Here are some examples of how they should apply to Massachusetts or for any other organization with pharmaceutical industry restrictions:

• No physicians in the state of Massachusetts (faculty member of Stanford or AHA member, for example) should be allowed to accept any fees from industry, even for legitimate advisory, consulting services, or Board of Directors participation.  These individuals are selected for their expertise and they could be influenced by these payments (more so than a free lunch or pen).  More importantly, these individuals, because of their expertise and influence, have the capacity to influence (pass along biased information) far more physicians in private conversations and even in non-industry sponsored programs.
• Massachusetts licensed physicians and other healthcare providers (or from other restricting groups) should not be allowed to participate in any industry sponsored meetings or conferences.  This includes any national society meetings or conferences or scientific meetings sponsored by industry.  A pharmaceutical company merely being seen as a sponsor could favorably influence a physician about their views of the company and their products. Not to mention the exhibit area influences they would be subjected to.
• No medical meetings or events sponsored by the pharmaceutical industry should be allowed to be held in Massachusetts as this would be encouraging the very behavior (inappropriately influencing physician prescribing) and activities they are trying to curtail with their restrictions.
• Clinical studies are powerful ways to influence prescribing, especially for new products.  Therefore, clinical studies should not be done in Massachusetts (or other restricting institutions).  If they are done they should be done for no fees with only nominal, non-compensation related administrative expenses being reimbursed.
• Research grants and funding have the potential to favorably influence prescribing practice, especially if the data are published under the reputable name of the institution.  Therefore, no industry sponsored research should be conducted at or in institutions other than drug, life science, or biotech companies within Massachusetts.  No industry sponsored research should be allowed at any state facilities or their affiliates.

While these may have significant negative financial implications for individuals, businesses, and organizations, this mutual implementation of restrictions would preserve the integrity of decisions made to avoid conflicts of interest and limit the perks and financial influence of the pharmaceutical industry on prescribing practices.  In fact, these restrictions would have a far greater impact on assuring the elimination of industry influence than taking away pens, pads, and free lunches.

I suspect the negative financial impact will probably be far too great to allow ethics and decision making integrity to prevail in most situations .  As long as it makes financial sense for Massachusetts or other organizations,   the restrictions and expectations for compliance will be one way (only the industry must be controlled and comply) and will not really be driven by the ethical and integrity convictions of those imposing the restrictions.

mike@pharmareform.com