Pharmaceutical Marketing Cutbacks, Doctors Getting Squeezed

Posted by Chris Burns on Mon,Apr 29, 2013 @ 10:00 AM

Two of the biggest pharmaceutical companies, Pfizer Inc. and GlaxoSmithKline, are significantly reducing spending with doctors for events at which doctors make presentations to their peers. Combined with cutbacks in spending on meals during lunchtime presentations by drug makers, doctors are feeling the financial impact. 

Increased Scrutiny of Pharmaceutical Marketing Practices - Will it Affect Drug Development?

Pharmaceutical Marketing Changes - Payments to Doctors Down SignificantlyPfizer and GlaxoSmithKline have cut spending on dinners and other events where expert doctors are paid to give presentations to peers about drugs and diseases as part of the pharma companies' drug development and marketing efforts. An increase of layoffs of pharmaceutical sales representatives and patent expirations for big-selling drugs are resulting in fewer sales calls and fewer free lunches provided to physicians’ offices.

There is increased scrutiny on the relationship between the pharmaceutical companies and the doctors who prescribe their drugs over concerns the perks may affect doctors’ prescribing patterns. The Sunshine Act included in the 2010 US healthcare overhaul requires drug companies and medical device makers to report doctor payments to the federal government for later posting of the information online.

Reported Cutbacks in 2012

The cutbacks listed below are difficult to accurately compare among companies as some use different criteria for reporting and many have changed their criteria in 2011 thereby making year-over-year comparisons difficult to assess.

    • Pfizer: 40% reduction on doctor meals- due to an increase in “virtual meetings” many meals can be avoided (Spokeswoman Sharon Castillo) 
    • Pfizer: total payments reduced from $173.2 million, down 11% from 2011. Most payments were related mainly to clinical research, which stayed flat.
    • Eli Lilly & Company: 30% reduction in US sales force while facing the loss of patent protection on two top-selling drugs. 
    • GlaxoSmithKline: 20% reduction in payments to US physicians (skewed partially due to a change in reporting criteria) to 97.1 million, reflecting a reduction in the need to fund speaker programs in recent years found through yearly re-evaluation. 
    • Teva Pharmaceutical Industries Ltd.'s TEVA-0.69% Cephalon unit reduced payments to health care professionals in 2012 by nearly 11% to $28.1 million.

Pfizer’s Cuts Based On Loss of Exclusivity

Pfizer cut more than 60% of its spending on expert-led forums including events where company-paid doctors discuss Pfizer drugs or certain diseases.  Cut from 1,539 health-care professionals speaking to peers 3,569 in 2011, average payments declined to $5380 from $6110. This drop was partially related to loss of exclusivity for drugs like Lipitor triggering low-cost generation generic competition. Pfizer also attributes the decline in spending on speaker programs to “more efficient ways to deliver educational materials and evolving approaches to meet physicians’ information needs.”

The Drive for Transparency in Pharma Company Payments to Doctors

According to Allan Coukell, deputy direction of medical programs for the Pew Charitable Trusts, “It is possible the trend we’ve seen for a few years toward increasing focus on payments will continue, and both providers and companies” will re-examine some of these financial relationships.

Drug makers claim payments are needed to compensate doctors who advise, assist in research and clinical trials, and educate other doctors about drugs and diseases. However, proponents of transparency are concerned with the patients’ knowledge of money doctors receive for prescriptions from the makers of drugs they provide.

Major changes in doctor compensation from pharmaceutical companies include:

    • 44 medical schools ban/restrict faculty participation in speaker’s bureaus (AMSA reports)
    • Commercial support for continuing medical education –needed for doctors to maintain licenses- has trended downwards
    • Industry influence is waning due partly to limitations on what medical school faculty and students can accept from companies

Doctors Concerned Over Payment Disclosures

Some doctors fear inaccurate or misleading data to will be posted online by the Federal government.  Of 1,000 doctors surveyed by MMIS Inc. and Healthcare Data Solutions, 63% showed concern regarding public disclosure and 21% said they would sever relationships with manufacturers reporting inaccurate information.

Some Companies Showed Increased Spending

    • AstraZeneca PLC- showed increases of about 2% to $30.6 mission million including consulting fees, speaker fees and meals but not clinical research
    • Johnson & Johnson- Some pharmaceutical divisions report increases by 15% to $27 million attributed to J&J’s scientific educational activities

The above post is a condensed and edited summary of an article appearing in the Wall Street Journal online on April 12, 2013.

Pennside Partners is a leading pharmaceutical and biotech consulting firm with over 25 years experience. They have offices in the United States, United Kingdom, and Switzerland.

Tags: Drug Developers, Drug Development, Pharmaceutical Marketing

Receive Blog Posts by Email

Follow Us

Learn More About Our Services

Learn more about Pennside's pharma war games, strategy workshops, and competitive simulations for the pharma and biotech industries

Learn more about Pennside's pharma launch analog services, including pharma business development, pharma benchmarking, pharma best practices, pharma business analytics, business intelligence, ci, competitive intelligence, pharma launch planning, and other strategic consulting services for the pharmaceutical industry. 

Learn more about Pennside's  pharmaceutical and biotechnology consulting services spanning the following areas: competitive intelligence and monitoring, pipeline analysis and disease landscape consulting, marketing/sales/reimbursement support benchmarking, launch support and best practices benchmarking, customer facing and new commercial models, licensing and support consulting, strategy workshops, and outsourced business intelligence and fixed term contractors consulting for the pharma and biotech industries. 

Learn more about Pennside's Robust Pharma Competitive Intelligence and CI Monitoring Services. We provide superior pharma strategies based on actionable corporate intelligence. 

Learn more about our Oncology Drug Development Support Services: oncology launch analog service, oncology congress coverage service, post-launch intelligence and market monitoring, oncology business development and licensing and M&A support, and tumor/MOA clinical pipeline analysis services. Oncology launch adoption and market strategy services include: launch planning support, primary field intelligence and market insights, oncology competitive pipeline analysis, inlicensing reviews, oncology biomarker analysis, and benchmarking of oncology organizations. Oncology Congress Coverage services include: preparing a targeted congress schedule, attending and capturing key oncology conference information, and presenting oncology conference findings.

Contact Us or Request Information

Experience You Can Trust

Trusted pharma and biotech consulting experts for over 25 years