Drug companies spent $5.0 billion on marketing prescription drugs directly to consumers last year and, as I have written in the past,  these ads have paid off. Studies have found that every dollar spent on DTC ads generates up to four dollars in additional sales of new drugs that are often only marginally better than far cheaper, generic versions or older drugs.

But as companies cut advertising budgets and introduce drugs that command smaller markets, there are signs that the days of $100 million-plus DTC ad campaigns might be over. A recent report by TNS Media, (a company that tracks media ads) found that DTC drug advertising was down 8% last year. Another survey of pharmaceutical industry marketers found that 58% of them plan to decrease DTC advertising this year, up from 28% in 2008.

One reason for the slowdown, according to the TNS report, is that companies are introducing fewer blockbuster drugs; the newest entries are approved for narrower uses with fewer potential patients and weaker sales projections. The report doesn’t mention that consumers also appear to be fed up with incessant advertising for erectile dysfunction, sleep problems and overactive bladder, and might be tuning out many of these mass-market missives. Drug companies also are facing keener oversight from policy makers who question the educational benefit of some DTC advertising and are examining their roll in increasing health care costs.

So where do drug companies go next to market their drugs? It turns out that many companies are refocusing their marketing efforts on an old, familiar target—physicians and their prescription pads.

 Pharmaceutical companies, of course, have always marketed directly to doctors—to the tune of more than $7.2  billion a year according to the Pew Prescription Project. That averages out to about $8,800 per doctor—although clearly some physicians (psychiatrists, for one) are targeted more heavily than others.

Much of that industry money is spent on detailing; the legions of sales reps who regularly visit physicians’ offices, pulling rolling bags stuffed full of free drug samples, journal articles and other giveaways. Drug companies also pay for doctors to travel to tropical islands and interesting cities to attend CME conferences, and they pay doctors to speak about the benefits of proprietary medications. They advertise in medical journals, fund research and send articles extolling the benefits of their drugs to physicians—including papers that recommend off-label uses. The euphemism commonly employed by the industry is that much of this pedaling is in the interest of “physician education.”

But, alas, public outcry—and the threat of federal legislation like the Physician Payment Sunshine Act that would require companies to report any payments or services provided to physicians valued at $100 or more—have caused companies to scale back on some of these time-worn methods. In January, for example, the industry trade group PhRMA voluntarily agreed to have member companies stop giving “branded” gifts (pens, pads, T-shirts, etc.) to doctors. They also promised to stop paying for physician meals and are requiring that money allocated for continuing medical education (CME) programs be handled by personnel who are not from sales and marketing departments.

To many, these voluntary efforts are hollow gestures; they do nothing to rein in industry-paid speaker fees, journal article handouts and other marketing ploys that are likely to have greater influence on doctor prescribing practices. And they also do nothing to address “data mining:” a growing—and controversial—industry practice in which companies like IMS Health and Verispan collect data on physician prescribing habits from pharmacy benefit managers and insurers and then sell this data to drug companies.

The resulting prescriber profiles—which include a physician’s name and the drugs he or she prescribes—have patient names removed by the time they are sold to drug companies. But armed with these profiles, marketers can tailor marketing material and detailing calls to individual providers. So, for example, if a doctor is prescribing Ambien for most of his sleep-deprived patients, he might receive marketing material and visits from Sepracor representatives that extol the benefits of Lunesta instead.

Critics see data mining as an invasion of privacy, for both patients and providers. From the provider side, many doctors are unaware that this confidential information is being sold. Ironically, the American Medical Association is a willing participant: the group sells physician profile information to companies like IMS to use in data mining efforts. In one year alone, the AMA profited $44 million in income from the practice (16% of its annual budget).

From the patient side, there is the concern that identifying information isn’t always removed by data mining firms before it is provided to marketers. Evidence of this comes from New Hampshire, where in 2006 the state legislature passed a prescription confidentiality law prohibiting the commercial use of prescribing records where the prescriber or patient is identified. According to New Hampshire Representative Cindy Rosenwald (one of the bill’s sponsors);

“We did hear testimony in New Hampshire that not all marketers actually do remove the patient’s name before they release those records to the outside vendor to begin the process of data mining the prescriber’s identity and prescribing record. . . .Our pharmacy board used to hear complaints from patients (about receiving ads in the mail for drugs to treat the medical conditions they have), and after our prescription confidentiality law went into effect, the complaints stopped.”

Ultimately, the kind of targeted marketing that results from data mining promotes the use of newer, more expensive drugs over their cheaper alternatives. It can lead to medication changes that harm patients and disrupt treatment. But from the industry’s point of view, data mining works. “According to the data mining industry itself,” states a Prescription Project fact sheet, “‘research has shown that winning just one more prescription per week from each prescriber yields an annual gain of $52 million in sales.’” 

The drug industry has stepped up these efforts even more;  they are now enlisting the help of large pharmacy chains and prescription drug benefit managers in marketing directly to doctors. Earlier this month, Daniel Carlat, a psychiatrist in Massachusetts who publishes The Carlat Blog, wrote that he received a mailing marked “Confidential” from CVS/Caremark, the pharmacy benefit manager and drugstore chain. The letter said that CVS/Caremark managed the benefits for one or more of Dr. Carlat’s patients, and that they were “committed to providing health care professionals with information about drug therapy.” This commitment apparently included providing Dr. Carlat with a 6-page newsletter about the benefits of prescribing Cymbalta (made by Eli Lilly) for fibromyalgia. Cymbalta, which had $2.7 billion in sales last year, was approved for use in treating fibromyalgia in June 2008.

“Pure and simply, it is an advertisement for Cymbalta, Eli Lilly's antidepressant which was recently approved for the treatment of fibromyalgia,” Carlat writes.

 "But it doesn't look like an ad. It looks like a letter from a pharmacy that is deeply concerned that my fibromyalgia patients receive the best treatment.”

Carlat goes on to question:

“How much is Eli Lilly paying CVS Caremark to perpetrate this deception? Which executive at CVS became so overcome with greed that he or she approached Eli Lilly about this joint venture? Has CVS Caremark informed its patients that it is selling their pharmacy information to a drug company?”

John Russell, a reporter for the Indianapolis Star decided to answer these questions and more this week in his investigative piece, “Lilly pays CVS Caremark to try to get doctors to prescribe Cymbalta.”
What he found out is that CVS Caremark is selling its services to other drug companies too. How much money the company is making on the venture is not public, but physicians around the country are reporting that they too are receiving mailings from CVS “that appear to look like important patient information but turn out to be promotions for Lilly, Merck, AstraZeneca, Bayer and other pharmaceutical companies,” according to Russell.

The letters can even refer to particular patients.

“Dr. Matthew Mintz, an internist in Washington, D.C., got a letter last fall from CVS Caremark, telling him he should consider prescribing the diabetes drug Januvia, made by Merck, for one of his patients taking a different medicine. The mailing was sponsored by Merck.

‘It's jus
t plain wrong,’ Mintz said. ‘It's an ad disguised as a professional-to-professional communication, using my patients' private data.’”

There is clearly a lot of creative thought that goes into designing new ways to market pharmaceuticals. And sometimes marketers step over the line. The industry has put out billions of dollars in settlements and fines for aggressively promoting drugs for off-label uses (Eli Lilly’s $1.4 billion settlement for improperly marketing Xyprexa, its antipsychotic, for unapproved uses, is the latest example) and for running deceptive ads that oversell benefits.

But as long as transparency rules remain mostly voluntary, companies will continue to employ new strategies, like data mining, to help garner more customers. Physicians will not be the only targets of these efforts. Websites designed to help connect patients with others suffering from the same disease—Patients Like Me is the leader in this area–sell data they’ve collected about medications taken by their members, for example, to drug companies. Companies that manage electronic health records for large health care organizations also sell “de-identified” patient data on diagnosis, medication, treatment, etc. to drug companies. The buying and selling of patient data, accessed through electronic health records or from disease websites or from pharmacies—it’s the fasted-growing method for better drug marketing.

It is time to crack down on prescription data-mining. The New Hampshire Prescription Privacy Law is the strongest statute limiting the practice, and so far it has been upheld in the face of legal challenges by IMS and Verispan on grounds that the law restricts free speech. In June the Supreme Court refused to review a lower court's decision to uphold the statute.

Vermont has passed a similar law that requires physicians to “opt-in” if they want their identities and information about their prescribing habits available for commercial use. Other states are considering similar legislation, and there are sure to be more court battles on this issue, especially as more industries employ marketing practices that depend on the buying and selling of consumer data.

In the end, there is clearly a greater need for transparency in the marketing practices of drug companies. If physicians and patients knew that their personal data was being manipulated to help companies sell drugs they, like Daniel Carlat, just might speak out about it. We also need to make a strong commitment to counter-detailing—putting together independent groups of experts who gather unbiased research on best treatment practices and visit doctors in their offices just like drug company reps do. The marketing geniuses will continue to find ways to sell more drugs—the challenge is to make sure these methods are ethically and legally sound—and to be astute enough to know when we’re being oversold.