Doctors, pharma and cost management

Bob Carter | November 23, 2011

Besides the compelling love story between its two attractive stars, the movie Love and Other Drugs presents a rather enlightening glimpse into the relationship between doctors and the pharmaceutical sales community. It turns out that this complex relationship is no different than any other in the world of sales, and doctors rely on sales reps for information, training and support.

Who can blame them? Pharma reps are among the most highly trained, personable and professional people in sales. They present themselves—and are accepted—as being completely credible. According to Success magazine, 20% fewer pharma reps are employed today as were 10 years ago. This attrition has served to ensure only the best and brightest are retained in a highly competitive space.

The competitive space pharma reps reside in, where they’re required to position their products against others jockeying for the same shelf space and consideration, exists well beyond Hollywood movies. The lengths to which they go, such as building relationships with doctors, calls into question the influence exercised by the sales rep. If such an influence is present, to what degree does it affect the final selection of products being prescribed?

Given the tremendous demands on a doctor’s time in the daily management of his or her caseload, office dynamics and the never-ending paper work required by the provincial ministries of health, the doctors we trust, in turn, must depend on others—at least to some extent.

According to an article by Dr. James Aw in the Nov. 22, 2011 edition of The National Post, a recent article in the Canadian Medical Association Journal points out the lack of comprehensive, ongoing, formal evaluation for general practitioners in Canada. This might indicate the need for a dependent relationship where physicians draw on the pharma rep as a credible resource. In the U.K., general practitioners will be required to register with the Care Quality Commission to help ensure doctors’ skills are kept current. Similar bodies exist in the U.S. and Australia but not in Canada, where “[O]nce an MD opens an office and hangs out a shingle, he or she can operate as a general practitioner until career’s end,” writes Aw. Continuing education requirements for all medical practitioners would help ensure better standards in all areas of care, including prescription management.

This relationship between physician and sales rep has an unmistakable effect on the costs of health benefits plans. The often-cited example of the noticeable sales increases of Crestor, coinciding with the end of Lipitor’s patent protection in Canada, provides evidence that this special relationship affects plan costs.

According to data provided by Apotex, for the first nine months of 2011, sales of Crestor were up 18% from the same period last year. Sales of branded Lipitor, however, made up only 12.9% of sales for the same period. While sales of the generic Atorvastatin more than doubled over these months, the data suggests Crestor (whose sales totalled approximately $540 million for the first nine months of 2011) was sold at the expense of both Lipitor and the generic equivalent (which had a sales total of approximately $341 million for the first nine months of 2011). This begs the question: is there a bias toward sales of the branded product over the lower-cost alternative once the incumbent brand patent expires? Perhaps.

The potential loss of cost containment—and its direct attribution to a doctor recommending one branded product at the expense of another simply because of a change in patent status—is not proven here, but is suggested as possible. The onus for cost containment then, unfortunately, falls on the shoulders of the patient who must take charge and ask the question as to why a generic could not be at least considered.

The benefits provider, plan sponsor and advisor alike must work harder and smarter to educate the plan member to prompt greater dialogue and understanding. It is important to stress that the doctor is there to help and not to intimidate, and to encourage plan members to ask questions about their healthcare—including about the availability of generic equivalents. Most healthcare professionals would surely agree.

Currently, private Canadian drug plans exhibit less than 50% generic utilization rates as opposed to their American and German counterparts, which boast adoption rates in excess of 75%, according to research by Apotex. A more educated consumer asks better questions, suggesting our American and German cousins realize the importance of due diligence in maintaining cost control. We here in Canada need to live to the same standard.

Today, less than 50% of all private plans include any incentive for generic drug utilization and only 8% include mandatory generic utilization clauses. While there are very good reasons why mandatory substitution may not be the best course of action for all patients, there remains a real opportunity to increase utilization rates via moral suasion and plan incentives. Stepped coinsurance amounts favouring the use of generic drugs might tilt the numbers more in favour of using the lower-cost alternative. It will be interesting to see the sales numbers for Crestor post April 2012, when that drug loses its patent protection in Canada.

Until then, we must remember that every healthcare product in Canada is sold by a pharma rep, and it is up to us to ask questions of our doctors and consider any and all viable alternatives.