Physician and Pharmaceutical Industry Relationships

According to a national survey of doctors published in The New England Journal of Medicine, 94% of physicians have “a relationship” with the pharmaceutical, medical device or related industries. And Integrated Medical Systems, a research firm, estimates that drug companies spend over $20 billion annually marketing directly to physicians. With statistics like these, it is not surprising that the public is becoming concerned that these ties may influence how medications are developed, marketed and prescribed.

Governments, too, are looking into the issue. In 2003, Washington, DC, passed legislation requiring drug makers to disclose marketing expenditures to the City Health Department. Several states have passed or considered similar laws, some including a ban on all industry gifts to physicians. The U.S. Congress shows no reluctance in issuing subpoenas to medical device firms as it seeks to determine what kinds of payments they made to private-practice physicians, and why.

In short, due to rising dissatisfaction over an actual or perceived influence of drug and device manufacturers over patient health care, transparency is becoming the watchword for our times.

Sorting Through the Confusion

Some medical experts and care providers may find the uproar confusing, especially in light of their long-standing (and previously largely unquestioned) close relationships with drug manufacturers. While they are increasingly being advised to be careful about the interactions they have with pharmaceuticals makers, they may not be seeing the whole picture: It is also important that they look at the issues from the vantage point of drug manufacturers.

Why should the advice given to manufacturers by their lawyers and risk managers be of interest to health care providers and the lawyers who defend them? Because many civil liability lawsuits based on adverse medical outcomes are “blended” claims, brought against both the physician and a drug or device manufacturer. Promotional issues are often inextricably bound up together with physicians' actions in allegations when patients claim injury. Allegations may include claims that the life science company co-opted the doctor through various financial inducements, and that physicians let their objectivity and better judgment to be clouded by cozy ties to drug or device makers. Knowing how drug companies can drift into hot water via marketing practices may assist physicians in avoiding the same drift.

Risk Management Issues

In the hothouse competitive environment for sales and market share, life science companies seek ways to get their message, information and products in front of physician decision-makers. Any of these situations is fodder for personal injury attorneys to use to pursue lucrative injury claims by portraying medical manufacturers as greedy companies undermining doctors' objectivity through financial inducements. The “profits over people” theme often plays well to juries, especially given the background media “noise” over drug and device safety, alleged lapses in FDA oversight, and the ailment du jour that surfaces as some pill's side effect.

Marketing tactics targeted by plaintiff attorneys may include:

• Fellowships;
• Royalties;
• Consulting agreements;
• Stocks and stock options;
• Travel junkets and “educational trips;” and
• “Freebies” of various sorts.

(For a detailed discussion of the gamut of inducements used by pharma and medical device firms to market to doctors, see The Truth About Drug Companies by Marcia Angell, former Editor of The New England Journal of Medicine.)

Given the risks and modern perceptions that life science firms exert financial influence over physicians, these organizations are being advised to find some equilibrium between reasonable promotional overtures to physicians and exposure to claims of co-opting the medical community or creating conflicts of interest. Some of the advice they are receiving includes the following.

Exercise Care When Retaining

Physician Consultants to Boost Product Sales and Development

Clearly separate the sales function from internal testing being conducted with outside consultants, to curtail allegations of conflicts of interest. Further, cover disclosure issues with physician consultants so that they are well aware of what needs to be divulged to patients about financial ties with manufacturers.

Involve Legal and Regulatory ' EARLY!!

Work with in-house legal and regulatory teams to understand safe promotional activities and avoid those that may invite criticism and questioning. Legal review of practices may reveal hidden perils in promotional activities that seem to be benign. For example, suppose there is a group of cardiovascular physicians who gather monthly for dinner and discussions. Sales reps from different medical device firms alternate picking up the dinner tab. During some discussions, mention is made of possible off-label device use. This exposes the device companies that paid for dinner to claims of promoting off-label use of their products (and exposes doctors to charges that they were unduly influenced by these companies when making medical decisions). One possible solution is for the device firms to make grants, with no strings attached, to the society that is sponsoring the dinners.

Watch 'Detailing' Visits by Medical Device Representatives

Companies are being advised to train sales reps about the kinds of “freebies” and meals that are permissible under law. They have learned it may be safer to avoid providing food and entertainment to physicians and that the practice of distributing free samples is being more heavily scrutinized. Doctors, for their part, should be wary of accepting too much from sales reps, as small favors may come back to haunt.

Rethink the Role of Sales Representatives in the Operating Room

Sales reps in the operating room represent a danger area that life science firms are being asked to ponder carefully. Sometimes, in the event of an adverse patient outcome, allegations arise that reps exceeded their sales roles and became unlicensed health care practitioners. Some patients have claimed negligence on the part of sales representatives who gave a doctor bad advice during a procedure. See, e.g., Zappola v. Stryker Corp. et al., Nos. 86038 and 86102, 2006 WL 1174448 (Ohio Ct. App. May 4, 2006). In such scenarios, aggrieved patients may claim that a doctor abdicated responsibility for providing proper care to an unlicensed person. In other cases, patients have sued for invasion of privacy, alleging that no one told them a medical sales rep would be witnessing their medical procedure. Because of this risk, it is imperative for both life science companies and physicians to make sure that proper disclosures are made to patients, and their permission is obtained.

Conclusion

From a risk management standpoint, pharmaceutical companies' promotional practices can have reverberations that are not benign, either to themselves or to the physicians they court. When injured patients file lawsuits, managers and employees of life science firms may find themselves in the defendant's docket along with physicians, having to explain, rationalize and defend the propriety of close ties they have spent much time and effort developing.

On the other hand, if life science firms sequester themselves from physicians, it will be difficult to market products and to educate and train doctors on their proper use. Importantly for patient safety, doctors also provide useful feedback after using pharmaceutical products in clinical settings, which can be used by manufacturers to improve and enhance products.

In short, pharmaceutical companies, the medical care profession and even patients all have an interest in the continuation of responsible marketing aimed toward physicians. The key to achieving this is in finding a “happy medium” in reconciling legitimate promotion and doctor partnerships without risking undue influence, and the resulting claims of conflicting interests. The interests of pharmaceuticals marketers and medical care providers are best served when their interactions are open and above-board, offering patients the assurance that their doctors are treating them based on medical insight, not marketing influence.

Kevin Quinley, a member of this newsletter's Board of Editors, is Vice President, Risk Services for Berkley Life Sciences, LLC. The views expressed here are his own, do not constitute legal advice and do not necessarily reflect those of Berkley Life Sciences or its customers. Quinley can be reached at [email protected].

According to a national survey of doctors published in The New England Journal of Medicine, 94% of physicians have “a relationship” with the pharmaceutical, medical device or related industries. And Integrated Medical Systems, a research firm, estimates that drug companies spend over $20 billion annually marketing directly to physicians. With statistics like these, it is not surprising that the public is becoming concerned that these ties may influence how medications are developed, marketed and prescribed.

Governments, too, are looking into the issue. In 2003, Washington, DC, passed legislation requiring drug makers to disclose marketing expenditures to the City Health Department. Several states have passed or considered similar laws, some including a ban on all industry gifts to physicians. The U.S. Congress shows no reluctance in issuing subpoenas to medical device firms as it seeks to determine what kinds of payments they made to private-practice physicians, and why.

In short, due to rising dissatisfaction over an actual or perceived influence of drug and device manufacturers over patient health care, transparency is becoming the watchword for our times.

Sorting Through the Confusion

Some medical experts and care providers may find the uproar confusing, especially in light of their long-standing (and previously largely unquestioned) close relationships with drug manufacturers. While they are increasingly being advised to be careful about the interactions they have with pharmaceuticals makers, they may not be seeing the whole picture: It is also important that they look at the issues from the vantage point of drug manufacturers.

Why should the advice given to manufacturers by their lawyers and risk managers be of interest to health care providers and the lawyers who defend them? Because many civil liability lawsuits based on adverse medical outcomes are “blended” claims, brought against both the physician and a drug or device manufacturer. Promotional issues are often inextricably bound up together with physicians' actions in allegations when patients claim injury. Allegations may include claims that the life science company co-opted the doctor through various financial inducements, and that physicians let their objectivity and better judgment to be clouded by cozy ties to drug or device makers. Knowing how drug companies can drift into hot water via marketing practices may assist physicians in avoiding the same drift.

Risk Management Issues

In the hothouse competitive environment for sales and market share, life science companies seek ways to get their message, information and products in front of physician decision-makers. Any of these situations is fodder for personal injury attorneys to use to pursue lucrative injury claims by portraying medical manufacturers as greedy companies undermining doctors' objectivity through financial inducements. The “profits over people” theme often plays well to juries, especially given the background media “noise” over drug and device safety, alleged lapses in FDA oversight, and the ailment du jour that surfaces as some pill's side effect.

Marketing tactics targeted by plaintiff attorneys may include:

• Fellowships;
• Royalties;
• Consulting agreements;
• Stocks and stock options;
• Travel junkets and “educational trips;” and
• “Freebies” of various sorts.

(For a detailed discussion of the gamut of inducements used by pharma and medical device firms to market to doctors, see The Truth About Drug Companies by Marcia Angell, former Editor of The New England Journal of Medicine.)

Given the risks and modern perceptions that life science firms exert financial influence over physicians, these organizations are being advised to find some equilibrium between reasonable promotional overtures to physicians and exposure to claims of co-opting the medical community or creating conflicts of interest. Some of the advice they are receiving includes the following.

Exercise Care When Retaining

Physician Consultants to Boost Product Sales and Development

Clearly separate the sales function from internal testing being conducted with outside consultants, to curtail allegations of conflicts of interest. Further, cover disclosure issues with physician consultants so that they are well aware of what needs to be divulged to patients about financial ties with manufacturers.

Involve Legal and Regulatory ' EARLY!!

Work with in-house legal and regulatory teams to understand safe promotional activities and avoid those that may invite criticism and questioning. Legal review of practices may reveal hidden perils in promotional activities that seem to be benign. For example, suppose there is a group of cardiovascular physicians who gather monthly for dinner and discussions. Sales reps from different medical device firms alternate picking up the dinner tab. During some discussions, mention is made of possible off-label device use. This exposes the device companies that paid for dinner to claims of promoting off-label use of their products (and exposes doctors to charges that they were unduly influenced by these companies when making medical decisions). One possible solution is for the device firms to make grants, with no strings attached, to the society that is sponsoring the dinners.

Watch 'Detailing' Visits by Medical Device Representatives

Companies are being advised to train sales reps about the kinds of “freebies” and meals that are permissible under law. They have learned it may be safer to avoid providing food and entertainment to physicians and that the practice of distributing free samples is being more heavily scrutinized. Doctors, for their part, should be wary of accepting too much from sales reps, as small favors may come back to haunt.

Rethink the Role of Sales Representatives in the Operating Room

Sales reps in the operating room represent a danger area that life science firms are being asked to ponder carefully. Sometimes, in the event of an adverse patient outcome, allegations arise that reps exceeded their sales roles and became unlicensed health care practitioners. Some patients have claimed negligence on the part of sales representatives who gave a doctor bad advice during a procedure. See, e.g., Zappola v. Stryker Corp. et al., Nos. 86038 and 86102, 2006 WL 1174448 (Ohio Ct. App. May 4, 2006). In such scenarios, aggrieved patients may claim that a doctor abdicated responsibility for providing proper care to an unlicensed person. In other cases, patients have sued for invasion of privacy, alleging that no one told them a medical sales rep would be witnessing their medical procedure. Because of this risk, it is imperative for both life science companies and physicians to make sure that proper disclosures are made to patients, and their permission is obtained.

Conclusion

From a risk management standpoint, pharmaceutical companies' promotional practices can have reverberations that are not benign, either to themselves or to the physicians they court. When injured patients file lawsuits, managers and employees of life science firms may find themselves in the defendant's docket along with physicians, having to explain, rationalize and defend the propriety of close ties they have spent much time and effort developing.

On the other hand, if life science firms sequester themselves from physicians, it will be difficult to market products and to educate and train doctors on their proper use. Importantly for patient safety, doctors also provide useful feedback after using pharmaceutical products in clinical settings, which can be used by manufacturers to improve and enhance products.

In short, pharmaceutical companies, the medical care profession and even patients all have an interest in the continuation of responsible marketing aimed toward physicians. The key to achieving this is in finding a “happy medium” in reconciling legitimate promotion and doctor partnerships without risking undue influence, and the resulting claims of conflicting interests. The interests of pharmaceuticals marketers and medical care providers are best served when their interactions are open and above-board, offering patients the assurance that their doctors are treating them based on medical insight, not marketing influence.

Kevin Quinley, a member of this newsletter's Board of Editors, is Vice President, Risk Services for Berkley Life Sciences, LLC. The views expressed here are his own, do not constitute legal advice and do not necessarily reflect those of Berkley Life Sciences or its customers. Quinley can be reached at [email protected].