Marketing Techniques Of Pharmaceutical Companies Essay, Research Paper

INTRODUCTION

The marketing practices followed pharmaceutical companies attempt to sway consumers as well as healthcare providers to use their products. From misleading direct-to-consumer advertising, to gift giving, the industry has often been accused of pushing the envelope. Marketing representatives from pharmaceutical companies, or “Drug reps” as they have become known in the industry, solicit medical providers in many ways to entice them into using their products. With changing guidelines established by the FDA, inappropriate marketing practices can become costly to a pharmaceutical company, as well as to a provider. In a review of several of the different strategies used by these companies, I will analysis the techniques most frequently used, and how they influence consumers and providers.

BACKGROUND AND SIGNIGICANCE

I have chosen this topic, as I am currently employed as the Office Manager of a 9-physician primary care group. I have seen thousands of these “drug reps” come in and out of the practice. Patient confidentiality is a serious issue. These individuals often stand around patient care areas waiting to pounce on a provider the minute he/she walks out of a room. They show little or no respect for the patients’ right to confidentiality, nor to the provider’s time. They plaster notices offering dinners, tickets to football games, free movie passes, and even bring in lunches for the providers and staff. Many offer to help with practice events such as the company Christmas party. Some pay for physicians’ conference fees in which the physician is able to travel to exotic locations for seminars and educational meetings. Although some of these perks seem wonderful, under regulations from the newly signed Health Insurance Portability and Accountability Act, as well as guidelines established by the FDA, AMA, and the IPCAA, certain limits have to be set as to what can and cannot be accepted. Educational functions must accompany these perks in order to make them acceptable. Even then, there are dollar limits and guidelines as to what the companies can and cannot pay for that must be set. Above all else, the confidentiality of patients needs to be preserved. In the course of soliciting, many of these individuals seem to have forgotten the sole purpose of their existence, is to provide the most effective care for the patients.

DISCUSSIONS, IMPLICATIONS, AND RECOMMENDATIONS

DIRECT TO CONSUMER ADVERTISING. Pharmaceutical companies promote their products in a variety of ways. There are several different markets these companies are trying to solicit. One, of course is the patient. Consumers are bombarded with television ads for prescription medication. Prior to August 1997, the companies did not even disclose what the product was for. This prompted thousands of patients to call their physicians asking what the product was used for and would it help their conditions. Drug companies were omitting the uses of the drug in order to get around a regulation requiring the disclosure of all benefits and risks of the drug in the ads. Due to the confusion this created, and the fact that these ads were misleading the consumers, the FDA reviewed its policies on broadcast ads. It allowed companies to air a product directly to viewers without requiring the listing of detailed risk information.

While this has helped eliminate some of the confusion, the ads still cause some controversy. Some healthcare providers feel that the ads mislead patients because they fail to give a complete and/or accurate picture. Patients see a serene happy person that suffers (no longer) from the same conditions they have. They see the product as an answer to their problems. The lack of information given to the consumer in a 30 or 60-second advertisement, such as drug interactions and side affects, become a difficult topic for provider to explain to a patient who has false hope. Patients who are successfully being treated on a different regime become interested in trying something new, just because the ad was enticing. Unfortunately, the ads fail to advise patients that changing medications unnecessarily can be dangerous.

Other providers feel that the ads have helped patients become more involved in their own healthcare. Patients ask more questions. They have a better understanding of the other options to consider for treatment of certain conditions. Patients come in for an appointment with more questions and more information than ever before. Physicians often find that patients are researching via the Internet many of the products that they see on TV. Providers often find that it is easier to explain the uses of certain medications to patients who have read up on their condition. These ads have prompted many patients to do just that.

To help alleviate the chance of any misinformation being broadcast to patients, the FDA often reviews the material used by drug companies in these ads, as well as in printed materials. If an advertisement is found to be misleading or false, the agency may take action against the company. The FDA regulates all prescription drug promotions, including the promotional tactics of its sales staff. With this in mind, the threat of a sanction from the FDA often looms over the head of some of these companies and their ambitious salespeople.

LABELING OF PRESCRIPTION MEDICATIONS. Healthcare providers find that many of these drug companies fail to label medications responsibly. The FDA to improve the labeling of prescription medication has drafted a proposal. Package inserts are a primary means of providing information about medications to providers. The FDA now reviews and approves drug product labeling before it is distributed. Practitioners find the inserts to be complicated, lengthy, and difficult to use. The proposed format would offer a highlighted section of bulleted information to the prescriber. This would allow quick access to the important details. Such changes could reduce practitioners’ time spent looking for information, decrease medical errors, and improve the medications overall effectiveness.

CONTINUED MEDICAL EDUCATION AND THE DRUG REP. Of any issues created by pharmaceutical companies, the solicitation of medical information for lunch, dinner, movies, ball games, and so on, is a very sensitive issue. While it is understandable that all providers need to continue to learn all that they can in their scope of practice, it is also a concern that information, which they obtain, be nonbiased and accurate. It is also a concern that the provider actually receives the education he/she has been sponsored for.

The American Medical Association has developed an ethical opinion on gifts to physicians from the healthcare industry. In a report of the Council on Ethical and Judicial Affairs that was presented with the Ethical Opinion to the House of Delegates of the AMA on December 3, 1990, the ethical concerns regarding gift giving were listed. The information basically requests that members of the AMA should only accept gifts of insubstantial value that individually that entail benefit to patients, or are related to the physician’s work (e.g., notepads, pens). Continued medical education conferences can be subsidized as long as the conference can contribute to the improvement of patient care. The report does state that subsidies should not be accepted to pay for the costs of travel, lodging, and other personal expenses of physicians attending conferences, nor should compensation for the physicians’ time be rendered. Scholarships are permissible as long as the academic institution makes the selection of students, residents, or individuals who will receive the funds. The final provision is that no gifts should be accepted if there are strings attached. A gift should not be accepted in relation to the provider’s prescribing practices. By following these guidelines; a medical provider can avoid accusations and incrimination.

Along the same lines, pharmaceutical companies often belong to the IPCAA. This organization has established a similar code of conduct for its members to follow. If the drug reps stay within these guidelines, they too shall avoid any problems with alleged misconduct.

Now the question is, how do these companies promote their products, prescription medications that are similar to that of a competitor’s? These companies have come up with many ideas to promote and plug their drug. Coming from a medical practice, I can share several interesting and creative strategies these companies have used.

CASE STUDY ON MARKETING STRATEGY OF A NEW PRODUCT. SmithKline Beecham is one of the world’s leading healthcare companies. It markets over 400 products and employs 47,300 people worldwide, with operations in 160 countries. The product I will discuss is called Avandia. It is a new product launched in June of 1999. This drug is used for treating type 2 diabetes in the United States. Avandia is an agent used to put the patient’s insulin back to work. It eliminates insulin resistance, which allows the pancreas to work more effectively. Avandia also helps prevent adverse side affects of type 2 diabetes, such as low blood sugar. After receiving FDA approval Avandia was launched in over 20,000 pharmacies in a week’s time. The results of studies of Avandia were released which showed that Avandia improves blood sugar control when used in combination with other products for type 2 diabetes. A direct-to-consumer campaign was launched in the United States in late September. The campaign directs patients to SmithKline Beecham’s Web site, where they can receive additional information on Avandia, as well as on how to manage their type 2 diabetes. All of this information has been given to healthcare providers in the form of brochures, movie clips, case studies, etc. Drug reps from SmithKline Beecham present their statistics and information to physicians over lunches in their office. Informative dinner meetings are held in nice restaurants where specialists talk of type 2 diabetes management and hint that products such as Avandia are advantages to the patients. Bus trips to baseball games and/or football games are offered with specialists offering their views on Avandia and the benefits it has to offer patients.

Physicians have patients come in for a check up and ask questions about Avandia, as they have seen information on its treatment for type 2 diabetes. The physician review the medications the patients currently take for all his chronic conditions. The patient and physician decide to try Avandia. A follow up appointment is made, along with weekly blood work, to ensure that the patient’s glucose level is safe while using the new drug. Thus, it has been a success with this patient. Other patients that have had trouble regulating their sugar levels are tested on Avandia, and by February 2000, over 1.5 million prescriptions have been written for over 500,000 patients. Avandia is now approved in 24 markets worldwide and has been launched in 13 already.

In a nutshell, this is a prime example of how a new product is marketed by a drug company, in an ethical manner. The problems tend occur when competing companies offer similar products that offer patients the same results. The drug reps tend to get pushy with providers, attempts to one-up the competition in what their company can offer the provider so that their product sticks in his mind more than the other are made. Unfortunately, these situations occur, and the physician may unknowingly fall prey to the trap. He may recall the extravagant dinner that served Baycol, thus forgetting to recommend or write for Benecol, another cholesterol reducing dietary supplement. The Benecol representative may have been in and spoken to the physician, but the competing company has branded their product on the providers’ mind, thus, for that product type, the physician has his mind made up for him. Thus, one of the ethical codes has been broken, unwillingly.

SAMPLING PRODUCTS. One of the most popular as well as successful strategies used by pharmaceutical companies is the sampling of their product to healthcare providers. Millions of dollars are spent by these companies for the packaging of samples of different medications they market. Drug reps come around to physician offices and check the sample closet to ensure that their product is well stocked. By providing the office with samples, the drug reps have accomplished a number of things. First of all, the doctor is reminded of that product when he/she is looking for samples for patients. The package designs are created to make a stand out impression in the physician’s mind. Keeping the product available for the physicians’ grasp reminds the physician of that particular product. The patient is given the sample, which also sees that fancy packaging. If this medication is effective, the patient retains the name and often suggests it to the physician if a condition calling for a similar product reoccurs. When a patient has a chronic illness, he/she will be placed on a product that treats the condition. She or she requires follow up care with the provider, and will continue to receive refills of a product. Having the product available in a medical office when a patient has run out makes a lasting impression on the provider, as well as the staff.

The main problem with sampling is it requires a regular detail in the office check on the need for samples. With so many different products to promote, companies have several representatives to cover their products. This causes a lot of traffic in a medical office. Pharmaceutical representatives are required by law to have a physician or licensed mid-level provider, such as a Physician Assistant or a Nurse Practitioner, sign off on any samples left. This can create a large influx of people standing around waiting for a provider’s signature. These drug reps usually try to talk to the providers about the products they are soliciting, thus taking the provider away from patient care. Even with office policies in place limiting the number of reps in the building per day and stating that they are to remain in a waiting area for a signature to be obtained, there is a huge problem with pushy reps. They often stand at a nursing station, waiting for a provider to come out of a room. They do not excuse themselves from an area when a patient is being triaged or asking questions to a nurse. In my office, I have had to escort dozens of reps out of the patient care areas, threatening to contact their company about their conduct. Yet, some of these individuals continue to push and pry to get to a doctor. Our office has established lunchtime as the period of time that reps may detail their products to physicians. There is a lunchtime sign up calendar available at the drug rep check in area. We require that reps that are scheduled to be in the building to sample or to detail where visitor passes. This is to eliminate having other reps wonder through the building without appropriately following the office policies. Some of the actions taken in the office have been successful. Drug reps that respect the providers and the patients have stated that the policy implementation was long over due. The reps had free reign in the building for far too long. Those reps that like to push the envelope and attempt to sneak through are suspended from the building for a period of time, with a call going to their company. Some of these same reps are the very rude individuals that have gone so far as to say that they will no longer provide samples to our practice if we cannot be more accommodating to their needs. To this point, no reps have stopped coming in, they have only learned to conform.

I believe that a drug rep, which is in essence as salesman, has to be bold and try to push their product to physicians. I believe that those that respect the rights of patients, as well as the providers’ need to provide uninterrupted care to their patients, are the most successful in their work. By hiring individuals that are truly concerned about the health of patients, pharmaceutical companies are able to have their product best represented.

WORLDWIDE MARKETING. After a successful year in 1999, SmithKline announced it would be merging with Glaxo Wellcome, another leader in the pharmaceutical and healthcare industry. With the combined finances and research and development of these giants in the industry, their bid for a successful future is quite secure. The combined efforts of the two may result in some job loss, as well as some product elimination, but the effect such a merger will have on the industry is remarkable. It is notable to add that this merger is on the heels of another marriage of two other leaders in the industry, Warner-Lambert Company and Pfizer, Inc. As these companies move ahead, the industry continues to grow. Research and development teams can boast the best personnel in the industry. Former competitors become teammates, and time and money is spend on educating the drug reps on the newly acquired products, as well as how to answer questions on the effects the merger will have on other products. People are the most important part of the pharmaceutical industry. Harnessing their skills, desires, energies, hopes, and dreams can make a company’s changes more positive, as well as a benefit to all involved.

CONCLUSION. Pharmaceutical companies use many marketing strategies to promote their products. Often, the main goal, to provide patients with the most effective care available is overshadowed by the need of these companies to sell their product. The overall goal of a company should be to put patient care and the needs of the consumer and the healthcare providers ahead of quotas and solicitation, these companies could market their products in an ethical and safe way.

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