NUCCA News - Feds Want to Change How MDs, Drug Makers Deal

BY ROBERT PEAR

THE NEW YORK TIMES

http://www.sltrib.com/2002/Dec/12262002/nation_w/14572.asp

WASHINGTON -- Drug companies and doctors are fighting a Bush administration plan to restrict gifts and other rewards pharmaceutical manufacturers give doctors and insurers to encourage the prescribing of particular drugs.

In October, the Department of Health and Human Services said that many of the gifts and gratuities were suspect because they looked like illegal kickbacks.

Since then, a few consumer groups, including AARP, have voiced support for the restrictions. But they are outnumbered by the drug makers, doctors and health maintenance organizations that have flooded the government with letters criticizing the proposal.

In arguing that the proposed federal code of conduct would require radical changes, those opposing the change discuss their tactics with unusual candor and describe marketing practices that have long been shrouded in secrecy.

Even so, they do not divulge who received how much for promoting a specific drug, nor do they provide details of individual marketing campaigns.

Still, drug companies acknowledged that they routinely made payments to insurance plans to increase the use of their products, to expand their market share, to get onto a list of recommended drugs or to reward doctors and pharmacists for switching patients from one brand of drug to another.

Insurers, doctors and drug makers said that such payments were so deeply embedded in the structure of the health-care industry that the Bush administration plan would be profoundly disruptive.

In its guidance to the industry, the government warned drug companies that they must not offer financial incentives to doctors, pharmacists or other health-care professionals to prescribe or recommend particular drugs.

The government said that the industry's aggressive marketing practices could improperly drive up costs for Medicare and Medicaid, the federal health programs for 75 million people who are elderly, disabled or poor.

But a coalition of 19 pharmaceutical companies, including Pfizer, Eli Lilly and Schering-Plough, said the Bush administration proposal was "not grounded in an understanding of industry practices."

Merck & Co. said it routinely gave discounts and payments to health plans to reward "shifts in market share" favoring its products. Merck complained that the administration proposal would "criminalize a wide range of commercial conduct" that the industry regards as normal and entirely proper.

At least one HMO, the Great Lakes Health Plan, which serves more than 90,000 Medicaid recipients in Michigan, supported the Bush administration effort to crack down on "switching arrangements."

Eric Wexler, general counsel of the Great Lakes plan, said that pharmacy benefit managers sometimes sent letters to doctors recommending that they shift Medicaid patients from generic drugs to brand-name medicines.

In many cases, he said, the brand-name drugs cost more, but are less effective.