Wall Street Journal Examines ‘Precision-Targeted’ Marketing of Prescription Drugs
In a front-page story today, the Wall Street Journal examines how large drug makers pay pharmacy chains to call or send letters to customers urging them to order refills or switch to a newer version of a brand-name drug -- a practice that has drawn numerous lawsuits and the attention of regulators. Such "precision-targeted" marketing is a way to help drug makers "protect the franchises of their premium-priced proprietary medicines," the Journal reports. Under a typical contract, a drug maker will pay a drugstore franchise to "scour their data banks for people with prescriptions for a particular drug" and then compile a list of their names, addresses and phone numbers. According to industry officials, the chains receive between $.85 and $1.50 for each letter they mail to a consumer, and between $2 and $3.50 for each call they make, touting a particular drug. Some contracts call for the chains to contact several hundred thousand patients up to four times per contract period (typically one year) and some allow pharmacies to receive drug-price rebates. The contracts often come as a drug faces the prospect of generic competition. For example, Merck has contracted with Longs Drug Stores to urge users of the osteoporosis drug Fosamax to switch to a new, weekly version. The contract came as Merck was facing a patent lawsuit from a generic company attempting to make a cheaper copy of the daily version of the drug. The campaign has helped Merck switch 85% of Fosamax users over to the weekly version, according to Merck.
The drugstore chains and drugmakers say the goal of the contracts is "patient education," not marketing, a designation that the Journal reports allows them to escape "stricter regulation." But Catherine DeAngelis, editor of the Journal of the American Medical Association, said that the programs interfere with the doctor-patient relationship. "If a doctor prescribes a medication, and a pharmacy suggests you try something else, I think that is practicing medicine without a license," she said. John Coster, a vice president of the National Association of Chain Drug Stores, said that the contracts reduce overall health costs by promoting cheaper drugs while encouraging patients to take their medications appropriately, thereby reducing the number of unnecessary hospitalizations. But the Journal reports that in a contract between Eckerd and Eli Lilly, the pharmacy urged insulin users to upgrade to a new treatment nearly twice as expensive as the older version.
The campaigns also raise privacy concerns. Pharmacy customers nationwide have filed lawsuits against drugstore chains alleging that the contracts violate their privacy rights by using confidential information without first obtaining consent. HHS has issued rules, scheduled to take effect next April, that would require pharmacies to obtain consent from patients before using their records for marketing purposes. But the regulations, the Journal reports, "include wide exclusions to the marketing definition -- for any communications that are made 'for treatment' of an individual, for 'case management or care coordination,' or to 'direct or recommend alternative treatments'" (Zimmermann/Armstrong, Wall Street Journal, 5/1).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.