Marc-André Gagnon and Joel Lexchin, Professor at York University, developed a more robust estimate of the promotion expenditures of the U.S pharmaceutical industry. They found that it spends almost twice as much on promotion as it does on R&D. In 2004, up to US$57.5 billion had been spent on drug promotion (24,4% of the annual sales), which represented close to US$61,000 by physician. This first observation ran counter to the argument that pharmaceutical companies deserve more business-friendly regulatory measures because they represent innovative research-driven enterprises.
According to Gagnon, while the number of physicians in the U.S. increased by 38% between 1996 and 2004, the number of sales reps increased by 150%. Within the same period, the number of promotional meetings increased by 254%. Indeed, the Top 10 prescribing physicians received from 2 to 4 times more rep visits, private funding of continuing medical education increased by 465% (surpassing public funding) and direct to patient promotion increased by 509%. Although ethical guidelines and disclaimers do accompany most of these activities, the problem is that most people, including doctors themselves, believe they can’t be fooled by marketing strategies. Plenty of evidence nevertheless shows that marketing does in fact influence prescribing practices (see www.pharmaceuticalpolicy.ca).
recent conference, Gagnon presented his analysis of the dominant business model of the Big Pharma companies: the top 17 companies representing 64% of the world market share. He showed how they massively engaged into producing medical knowledge. Up to 70% of the industry’s R&D budget goes to Contract Research Organizations (whose independence is close to nil) to conduct various clinical studies. The other 30% is contracted out to university-based researchers under strict rules (nondisclosure of findings).
According to Gagnon, 75% of the industry sponsored Phase IV clinical trials (post-marketing) are established mainly for promotional purposes, focusing on the efficacy of one drug compared to a placebo for instance. When conducted rigorously and independently, post-marketing studies are, however, important for measuring safety, or setting up the comparative cost-effectiveness of one drug against another. The industry is thus introducing system-wide biases by flooding the pool of available publications.
Parallel to this industry-driven production of clinical trials, another practice has emerged over time: ghostwriting. Physicians and researchers who take part in clinical studies are offered to sign as authors scientific papers that are in fact written by staff hired by pharmaceutical companies. While these papers are submitted to standard peer-review processes, they nonetheless enable the portraying of even less than convincing research findings in a positive light (that is through carefully formulated abstracts and conclusions). Gagnon argues that even though clinicians who take part in Big Pharma sponsored clinical trials may have good intentions, produce what could be labeled “good science,” and do not necessarily infringe ethical codes of conduct, they become part of a system that changes the overall value of clinical research.
Today’s clinical research landscape is changing because one of the key imperatives behind the Big Pharma’s dominant business model is to respond to shareholders’ concern for economic growth. Few individuals or organizations can escape the new rules of the game: this is the key property of institutional dynamics. Therefore, perhaps what we need is research that can lead to developing alternative business models that are more clearly geared at producing healthy societies.
Author : Pascale Lehoux, Ph.D.
Gagnon, M.-A., Lexchin, J. (2008) The Cost of Pushing Pills: A New Estimate of Pharmaceutical Promotion Expenditures in the United States. PLoS Med 5(1): e1. doi:10.1371/journal.pmed.0050001
Gagnon, M-A. (2009). The Dominant Business Model in the Pharmaceutical Sector: Profits Based on Control over Medical Knowledge. McGill Continuing Medical Education, Montreal, November 12, 2009.