New York Times Examines Drug Makers’ Payments to Doctors for Prescribing Their Products

The New York Times on Sunday examined the "shadowy system of financial lures that pharmaceutical companies have used to persuade physicians to favor their drugs," including payments to doctors by Schering-Plough for prescribing its medicines. The Times interviewed 20 doctors, industry executives and people familiar with an investigation into the marketing practices of large pharmaceutical companies by the U.S. attorney's office in Boston. The investigation, for which Johnson & Johnson, Wyeth and Bristol-Myers Squibb have been subpoenaed, seeks to determine whether drug companies are persuading doctors to prescribe their treatments through use of payoffs. Further, the investigation is looking into whether drug companies have manipulated their prices to "cheat" Medicare and Medicaid, the Times reports. Lawsuits making similar allegations have been filed by whistle-blowers and state attorneys general.

According to the interviews, some physicians received unsolicited checks for $10,000 or more from Schering-Plough for prescribing the company's hepatitis C drug Intron A, now sold as Peg-Intron, the Times reports. In addition, nine of the doctors said that Schering-Plough set up company-sponsored clinical trials that paid doctors $1,000 to $1,500 per patient for prescribing Intron A. In return for the payments, doctors were supposed to collect data on patients' progress and provide that information to Schering-Plough. However, many doctors "were not diligent about their recordkeeping, and the company did little to insist on accurate data," according to the Times.

Traditionally, participants in clinical trials receive drugs at no cost, but patients in these trials or their insurers would pay for Intron A. The Times reports that Schering-Plough allegedly would remove any doctor from its clinical program who prescribed competing treatments to patients, participated in clinical trials that used alternative treatments or "spoke favorably" about competing treatments. Dr. Chris Pappas, director of clinical research for St. Luke's Texas Liver Institute, said that Schering-Plough "flooded the market with pseudo-trials," adding that the large payments from Schering-Plough "looked like payments of money with no clear agreements on what was supposed to be executed." According to the Times, investigators are looking into whether the practices by Schering-Plough were "little more than thinly disguised marketing efforts that required little effort on the doctors' part."

The Times reports that Schering-Plough officials said that the activities occurred before its new CEO Fred Hassan arrived in April 2003 and that the company since has changed its marketing practices to eliminate inducements. According to Schering-Plough officials, the company no longer allows sales representatives or marketing executives to have any input clinical trials, physician education or medical consulting. In addition, the Schering-Plough officials said that patients have received treatments for no cost in all clinical trials that began in the last year. "The temptation to give clinical grants to high prescribers and consulting agreements to high prescribers is why we pulled those decisions out of the hands of the sales representatives," Brent Saunders, Schering-Plough senior vice president for compliance and business practices, said. He added, "Sales representatives had an input into that process before, which I think is still fairly normal in the industry." Hassan and other executives at Schering-Plough declined to discuss marketing practices, and former Schering-Plough CEO and Chair Richard Kogan declined to comment (Harris, New York Times, 6/27).