Pharma Reform

While there are legitimate cases of last resort off-label prescribing (especially in oncology), many examples that have been brought to the attention of the courts that are not desperate attempts to find a viable treatment where nothing else has worked. To the contrary, the commercial success of off-label prescribing that has led to billions of dollars of incremental revenue for pharmaceutical companies should be an embarrassment for academics, healthcare providers, professional medical societies, and medical education providers.  Why should they be embarrassed?

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

Recent announcements and news coverage about health insurance company actual and anticipated rate increases may have gotten President Obama’s attention but more importantly, raises serious questions about how and if increasing costs will or can be controlled in the new world of healthcare reform.  Keep in mind that we are all paying for increasing healthcare costs regardless of whether we have private insurance, employer provided (your paycheck deduction increasing for your share ) or  government subsidized coverage (your taxes at work).

One of the near term beneficiaries of out of control healthcare costs is going to be the pharmaceutical industry.  Coverage and use of expensive branded prescription drugs will continue and while adoption and market acceptance may be slowed by higher introductory prices for new prescription drugs, they will most likely still get on formularies and be available for physicians to prescribe.  I believe, however,  this will be a short lived upside.  Without change and a focus on cost control, here is how I see it playing out.

In the near term, as long as insurance companies and pharmacy benefit providers can continue to raise their rates to cover their costs and maintain profitability, there is little incentive to get aggressive about coverage or costs.  If patients and physicians demand treatment, including expensive procedures or branded prescription drugs, insurers may assess the impact on profitability near-term and they may go through the motions of evaluating reasonableness long-term but in the end they know they have the ability to cover costs by squeezing providers and increasing rates.  So, it really doesn’t cost them anything to include coverage for example of expensive branded prescription drugs. Their only incentive to keep costs down is to remain competitive, but in reality there really isn’t that much competition (similar insurance premiums) amongst the few providers available in a particular geographic healthcare market.

Lack of competition and the ability to raise rates to cover increasing costs will eventually make healthcare insurance unaffordable for businesses to provide, for individuals to consider, and for government to adequately subsidize.  At that point healthcare reform will meet a crossroad of needing to legislate cost controls (e.g., limit insurance rate increases) or be forced to a single payer system. Both options will impose reductions in coverage and costs that will seem draconian by today’s standards of care.  Expensive procedure and branded prescription drugs for which there are less expensive therapeutic options or that can not demonstrate real cost benefit will be first on the hit list.

Unfortunately, a real opportunity for healthcare reform will have been missed as cost cutting becomes the quick fix method of choice for reestablishing sanity to healthcare coverage.  Incentives to dramatically reduce costs will be stronger than those to increase efficiency and leverage cost benefit.  Prospects for efficiencies driven by electronic medical records will stall out as funding is seen more as an expense rather than an investment. Wellness programs and personalized medicine will be wishful thinking as they flounder in development without a chance to mature and deliver the anticipated cost saving benefits.

Despite pleading from the president and state governors, current healthcare reform initiatives will not keep insurance premiums in check  or  moderate increasing costs and ensure long term healthcare affordability.  Pharmaceutical companies will definitely benefit from the  lack of  health insurance competition and a healthcare market with no incentives or serious mandates to reduce or control increasing costs but may be among the first and hardest hit when controlling healthcare costs becomes a priority.

mike@pharmareform.com

Imagine a future in which pharmaceutical companies with world-class research teams collaborating to advance the science of healthcare at a pace never before seen in the history of medicine and  finding the innovative new treatment options that have been promised for decades.   A future when years of competent leadership, culture driven corporate commitments to integrity, and responsible commercialization tactics have reestablished the public’s trust, mitigating the need for punitive litigation and earning pharmaceutical companies the reputation of being uncompromising credible and trusted sources of scientific and medical information.  Imagine a future in which pharmaceutical companies leverage expertise, core competencies, and strategic outsourcing to  provide operational efficiencies that generate healthy profits which are viewed by the market as necessary and well deserved.

Continuing with this train of thought, imagine a future in which pharmaceutical companies consistently put patient health and safety ahead of profits.  A future where pharmaceutical executives care more about their employees and customers than they do about their own career aspirations and personal wealth generation.  Imagine a future in which generous pharmaceutical industry philanthropy makes medicine affordable and available to all in need, regardless of their ability to pay or where they live.  A future in which the healthcare market is better informed of treatment options  and freely acknowledges the disease altering and life-saving value of prescription medications.

Imagine a future in which investors appreciate and understand the inherent challenges of the pharmaceutical industry but value its ability to consistently bring innovative new products to the market and are willing to accept the vagaries of short-term financial performance because of the more predictable long-term returns on their investments.

Is this future for pharmaceutical companies possible, or is it just so much wishful thinking?

mike@pharmareform.com

There has been considerable debate about the role of pharmaceutical sales representatives in the evolving new healthcare market.  Do they have any role, what is it, and are they worth keeping around at all? It is clear that the market has had enough of the sample dropping reps specializing in the social, relationship building, access gaining tactics like “lunch and learns” and “dine and dashes” that contribute little to physician education.  I believe that despite some of these questionable tactics of the past, pharmaceutical sales representatives have played a far bigger role in physician education about drug treatment options than most physicians, other healthcare professionals, and certainly academics would want to admit.   I’ve always wanted to do a package insert test of doctors who regularly see pharmaceutical sales reps verses those who do not.

This is more than a debate about what information is now available on the internet and the potential for distance learning.  It is about timely awareness and comprehension of treatment options and best practices.  It is about knowing how to use a drug correctly, in the right patients and knowing about potential side effects and adverse reactions that might occur.

It is nearly impossible to stay current merely by having access to the internet, despite what some websites might want you to believe.  Besides, how many hours per day can physicians commit to  staying current (remember it is not just drugs they have to be current about)?  CME requirements to maintain  a medical license vary by state but range from about 20 hours to 50 hours per year.  Not a lot of hours considering the pace of science, technology, and advances in medicine today.  Also, keep in mind that many physicians earn a good share of their CME credits by attending conventions and conferences (subsidized and often sponsored by the pharmaceutical industry).  So what’s my point?

Take the rep out of the picture.  How do physicians find out about new treatments?  The newspaper and television most likely. Who educates physicians about new drug treatments?  The local medical school? Most towns and cities don’t have one.  At the local hospital monthly grand rounds?  Which disease or product treatments are covered this month, by whom? In a year’s worth of grand rounds do they cover everything a physician needs to know about drug therapies? The physician waits to hear from an expert at the next conference? What if the topic isn’t covered?  The textbook on their shelf? When was that written and more importantly, when did it finally get published? How many medical journals are physicians skimming through to stay current? When were those articles actually written? Who is writing the articles?  People who have done work with the drug (hopefully they weren’t paid by the pharmaceutical company to do the clinical trial because they would be biased) or another “expert” who has merely read some articles and summarized a bunch of studies about the new drug?

While I agree that some of the sales tactics of the past contributed little to educating physicians, the collective drug education impact of the industry should not be completely dismissed.  There is a need and role that could and should be filled.  If the healthcare market feels there is no role for pharmaceutical sales representatives in physician education,  then the healthcare market and academics in particular, must be ready to accept the responsibility for providing better alternatives for physician education (there are more than 600,000 physicians in the US) than putting stuff on the web or just going to meetings and conferences to passively learn about new drug treatments. It will be especially challenging to reach the more rurally based physicians and those who can barely keep up with the minimums of CME credits because of their workloads or financial constraints of their practices.

Few societies, medical organizations, CME providers, or even medical schools have stepped up to do mass market education (especially about a particular drug).  Even those that are doing CME are not doing it on a mass market basis (ensuring that they get to most physicians) and few are doing CME without funding from the pharmaceutical industry.

So my point is, if there is a role for pharmaceutical sales representatives in the evolving new healthcare market it is to be a credible source of scientific and medical information that can help physicians stay current with best practice treatment options.  These are not traditional sales roles (you don’t get paid a bonus or commission) but more therapeutic area experts who know the literature, know all the drug treatment options for a disease, and can speak knowledgeably and objectively about competitive products as well as their own company’s products.

mike@pharmareform.com

The pharmaceutical industry has created market perceptions, right or wrong, that have been transformed into market expectations.   Like for any business meeting market expectations is a critical success factor for the pharmaceutical industry.  There are however, some expectations that are ill founded and meeting these unreasonable expectations could mean financial disaster to pharmaceutical companies.

Reasonable market expectations are best addressed by the consistent actions and behaviors of the company over time.  Unreasonable market expectations, on the other hand, require understanding of the source, empathy, patience, and clear consistent communications to help the market better understand why some of their expectations are not practical or not in the best interest of patients.

The industry must effectively demonstrate that they are delivering on the reasonable expectations, before the market will be ready to accept explanations for why the unreasonable expectations can not or should not be met.  So what expectations are reasonable and which ones might be considered unreasonable?

Reasonable market expectations of pharmaceutical companies:

• To bring safe and effective innovative new drugs to the market at fair prices
• To not have to pay premium prices for products which can not be clinically differentiated in a meaningful way that matters (comparative value)
• To moderate pricing based on substantiation of the pricing rationale with data and clinical information that demonstrate the value of the drug treatment
• To make certain physicians and patients understand the risks associated with product use. Never putting patients at undue risk for the sake of selling more products.
• To assure regulatory compliance in development, manufacturing, and commercialization (marketing and sales). Respect that prescription drug regulations are intended to protect patients from undue harm.
• To act with integrity in support of legal and ethical business practices
• To be transparent in financial support of societies, patient advocacy groups, and other information sources so as to not secure deceptive implied endorsements for products
• To be forthcoming and take decisive action to protect patients when concerns for safety arise, even if it means a temporary negative impact on sales
• To hold executives accountable for their organizations actions and behaviors

Unreasonable market expectations:

• To sell innovative new products at generic drug prices
• To operate pharmaceutical companies as “non-profit” organizations
• To not advertise or promote products for appropriate uses
• To rely on medical school and professional society medical education programs to educate physicians about drug treatment, especially new products
• To execute clinical studies or access clinical expertise without paying investigators, advisors, and consultants reasonable fees (absolute “conflict- of- interest”  free)
• To develop treatments for small patient populations and not charge prices which allow for a profitable return of investment
• To blindly write checks for product liability claims when the risks have been clearly delineated in product information, advertising, and promotion.

Doing a good job of meeting the reasonable expectations will mitigate the importance of and insistence on many of the unreasonable expectations in the evolving new healthcare market.

mike@pharmareform.com

• High drug prices that seem unsubstantiated in the context of value
• Promoting new products as innovative when they are merely chemical modifications with modest improvements at best over products already available
• Questionable and sometimes illegal marketing and sales activities that unnecessarily put patient health at risk
• Annoying television advertising with warnings that make you wonder why you would want to take the drug in the first place
• Seeking help from a patient advocacy group only to find out it is more likely a Big Pharma front to access and influence patients
• Waiting in the doctors office while the drug sales reps see the doctor
• Hiding or downplaying safety issues, adverse effects, and potentially fatal drug related-events to increase or preserve sales
• Inappropriate payments and other perks going to physicians that suggest companies are buying prescribing influence
• Promotional infiltration of continuing medical education
• Abusive and deceptive use of medical journals for scientific promotion
• Waiting for years to receive nominal compensation for harm done as companies deny responsibility and drag out legal proceedings.
• Arrogant executives dismissing or denying any wrongdoing despite evidence, legal or congressional testimony, and even their own internal communications that suggest otherwise
• C-level executives being rewarded with generous compensation packages in the face of multi-million dollar and even billion dollar fines and settlements for regulatory non-compliance and alleged illegal activities

Did I miss a thing or two? Looks like a check list for Pharma to start reassessing what they can do to improve their image with the public and the healthcare system.  I think it is important to note that these are not fixable with multimillion dollar public relations campaigns or policy statements from PhRMA and no amount of life-saving products will make these go away.  Why?  Because these are the public’s reality based on actions and behaviors of the industry, not misperceptions.

Establishing, or in this case, reestablishing trust and credibility with your customers is critical for long-term success for any business.  Without trust and credibility, many yet to be discovered best treatment options may be slower to be accepted and unfortunately, may not get to the patients who need them, when they need them.

mike@pharmareform.com

Most Big Pharma development programs focus on regulatory requirements for FDA approval.  Makes sense.  There is no commercial value in a product that can’t get approved.  Healthcare reform and the evolving new market, however, are going to impose another level of expectations that go well beyond FDA product approval.

Big Pharma research teams often develop elaborate target product profiles that provide the reasons for developing drugs in the first place.  New mechanisms, less of this or more of that, better dosing schedule or something that makes the product worth developing.  These profiles often provide the theoretical rationale for why the product is better than what is out in the market.  These points are also highlighted every time a budget is reviewed to support continued investment in the product.  Unfortunately, few development plans reflect “proving” these points of differentiation.  Being able to demonstrate “better” for your product compared to other therapeutic options, including generic drug alternatives is rarely part of a regulatory path to approval.  In fact, being “as good as” or “not worse than” is the statistical goal of most programs.

So holding research teams accountable to deliver the “differentiation” proof and data would be one place to start, especially in the face of market expectations for “comparative effectiveness” studies.  But here is the real kicker.  Even if they can demonstrate some clinically meaningful superiority to an available alternative treatment that doesn’t ensure market acceptance with widespread adoption or that the product will become the “treatment of choice.”   I’m not talking about product launch failures or poor commercial execution issues here.

Once the company has demonstrated (solid clinical data) a clinically meaningful difference it will have to have data to show that the difference is worth paying for.  This will be especially challenging when the alternatives are less expensive generic drugs.  I can hear the formulary verdict already.  “We have determined that your product is clinically better than the treatment options available to us but the price difference doesn’t’ justify including your product on our formulary.”  What the market will really be asking for is “comparative value” data.

We’ll discuss what companies should be doing to deal with this in the next post.

mike@pharmareform.com

I have long been a proponent of the need for change and cleaning up the bad behaviors of the pharmaceutical industry to reestablish trust and credibility. At the same time, with the challenges and constraints the industry now face one has to wonder if Big Pharma will be as attractive a place to invest or as attractive a place to work as it has been in the past.  Investors willing to make huge investments that carry high risk and talented research scientists with expertise are two essential ingredients to Big Pharma success.  If these go away,  it is scary to think of a world without Big Pharma (imagine no Big Pharma in the past or future):

• Fewer treatments that have contributed to the health and well-being of society and in many cases, saved lives (contributing significantly to increasing life expectancy)
• Many physicians would be less well educated about drug treatment options, especially any new products, without the advertising and promotion efforts of Big Pharma
• Fewer patients would be aware of or have access to information about their diseases and treatment options
• Medical schools, professional medical societies, scientific meetings and conferences would be financially challenged with severely constrained medical education programming without Big Pharma support
• Medical journals would have far fewer well controlled clinical trials of sufficient size to reach clinical significance to publish
• Many medical journals would not exist without Pharma advertising support
• Millions more patients would not be able to afford their medicines without assistance from pharmaceutical companies
• Start-up biotech companies would find it nearly impossible to find investors who are looking at Pharma as development partners (to help fund expensive development trials) and possible acquisitions as an exit strategy for their biotech investments
• Hundreds of thousands of well paying jobs would not exist and along with those jobs would go the money that those people put back into their local communities (not to mention the corporate taxes and philanthropy).
• There would be a smaller generic drug market (no generics without proprietary products to copy)
• There would be little hope for developing and commercializing (making products readily available to patients in need) the yet to be discovered new treatments

While some may take exception to these points and might suggest there are better alternatives to Big Pharma, and others may also feel I have missed a few points,  it is still hard to imagine a world without Big Pharma and I don’t believe it would be good for the healthcare market or for patients.

Unfortunately, the good the pharmaceutical industry does is often overshadowed by sensational misbehavior, the seemingly endless number of product liability cases, and the nagging reinforcement of perceived high prices every time patients get their prescriptions filled.  It is time for the industry to change.

“Get the dirt and fog off the windows so the sun can shine in.”

With all the good the pharmaceutical industry has to offer, it should be an industry the market and patients embrace and appreciate, not despise.

Thanks to Dick Bergman comment for getting me thinking about this.

mike@pharmareform.com

Most survival guides provide useful hints and tips for increasing your chances but don’t necessarily guarantee your survival.  Survival may also result in you surviving but not necessarily in the same shape as you were before the life threatening ordeal (e.g., appendages lost to frostbite or post traumatic stress from the ravages of war).  For pharmaceutical sales reps, one of the most likely outcomes of your survival will probably be that it will not be in the context of your current job function as a “detailing” sales person.

Survival also requires that you do things differently than you otherwise might. For example, you might be thinking some of the suggestions below are the responsibility of the managed care executives and not yours.  Also, these suggestions are probably not going to be condoned or approved by the District Sales Manager who wants you to focus on delivering the 3 message points per product to your targeted high volume prescribers.

With those caveats, the suggestions that follow may provide you an opportunity to survive (in the pharmaceutical industry) where others might not.

1. Be aware of your environment and the changes taking place.  You’ve probably been told someplace in your past that you are responsible for the “business” in your territory.  Your survival tip is that you have to take this to another level of market understanding and forge relationships beyond your call list.
   • What insurance companies are operating in your territory? Who are your contact people for that insurance company?
   • Which PBMs are driving the most business in your territory? Who are your contacts?
   • Do you know the people making the formulary committee decisions that affect your territory?
   • Do you have a good understanding of what they are looking for, what they are expecting from the pharmaceutical industry, and how you might be able to accommodate those expectations?
   • If you were managing this managed market for the company, what would you be doing?  What would you be doing differently?
2. Are you making calls or developing field intelligence?  Your ultimate survival depends more on the field intelligence you gather and assimilate than the number of calls you make.  It provides you a knowledge base and level of expertise beyond your current job function. Most importantly, your field intelligence can help you anticipate changes and the impact of those changes on you and your company.
3. Do you have enough local support, contacts, and relationships to help you do your field intelligence gathering effectively and efficiently? Do you have a good relationship with company managed care executives in your area? How valuable is your rolodex in the context of the evolving new healthcare market?  Managed market contacts and relationships will be worth a lot more than your collective physician database.  Even if you have to go to another pharmaceutical company, your managed market relationships, knowledge, and expertise have far greater value in the evolving new healthcare market.
4. Are you developing and strengthening your technical expertise across therapeutic categories?  This goes beyond just knowing your product but also knowing competitive and pipeline products as well.  Do you have disease as well as product expertise?  Do you know the literature? Like in most survival situations where physical strength and endurance are often tested, in pharmaceutical sales, the strength of your relevant technical expertise increases your chances for survival.
5. Based on survival tips 1 through 4, have you drafted a plan?  Putting it in writing makes it real and will help you identify any shortcomings and gaps that you need to attend to.  As with any survival situation, one slip up or oversight can be disastrous while one right move at the right time can mean the difference between life and death.

Good field intelligence, strong managed market relationships, relevant technical expertise, and a well thought out plan will increase your chances for survival.  Again, your survival may be in a different context, but at least you have a better chance of surviving.

For all those dedicated pharmaceutical sales reps out there today, you have a difficult job in an increasingly challenging market and I genuinely wish you the best of success and hope this helps you at least to start thinking about developing your own personal survival plan.

mike@pharmareform.com

Pharma must continuously adapt to the changing market and align resources including its people assets, to accomplish corporate objectives and satisfy market expectations.   While much of the downsizing over the past couple of years is understandable given Pharma’s rapid growth over the past couple of decades, the recent mass layoffs are not just an adjustment to the weak economy.  For Pharma, these layoffs and downsizings are more a reflection of poor long term planning and mismanagement of valuable people assets.

For those who still have a job in the industry it is critical to understand where the market is headed and make certain that you have the expertise, skills and competencies that are going to deliver value in the evolving new healthcare market.  For example, getting better at traditional sales and marketing tactics might be a good thing for now but in the evolving new market you better have some experience and expertise working in a managed environment.  Making product presentations to HMO physicians doesn’t count.  If you are in research, you need to be looking at your expertise and determine whether or not it is being applied to truly innovative products or companion diagnostics in a therapeutic area that has a critical unmet medical need.

Executives may feel comfortable in your personal position but you have people in your organizations that need your guidance and development support to assure they are not becoming obsolete and destined to be a casualty of the changing market.  If you have people without the skills that you are going to need you should be preparing them to be let go (not telling them at the last minute, when it is too late) or getting them training so they can acquire the skills or expertise they will need to continue to be successful in the evolving new healthcare market.  It would be interesting to know how many people with good performance reviews were stunned with the “pink slip” and unexpectedly let go over the past couple of years.

In the end it is the individual’s responsibility to make certain they have the expertise and skills to continue to add value in the evolving new healthcare market.  It is executive management‘s responsibility to make certain the organization is developing its people assets and preparing them for the organizational changes necessary to align with the realities of the evolving healthcare market.  With effective long-term planning, diligent organizational development focused on expertise and skills needed in the future and done as an ongoing process  you wouldn’t see the major restructurings, disruptive reductions in force, and the unnecessary personal and financial pain suffered by employees and their families.

The implications of healthcare reform and the impact on the pharmaceutical industry require a reassessment of individual expertise,  skills, and competencies.  Do you have what it will take?

mike@pharmareform.com