Not so far from selling medicine in Conestoga Wagons

An email from a reader last week contained a link to an article (see here) about the FDA's proposal to ease the efficacy and safety standards for approving new Alzheimer's drugs.  His terse comment was, "If it goes through, it will open great opportunities for snake oil salesmen."

His brief remark was on target.  When a society depends upon a competitive market to develop its new therapies, a proportion of snake oil salesmen will inevitably enter the mix.  That applies especially to conditions such as Alzheimer's, where the precise disease mechanism remains open to question and even a diagnosis depends upon an imprecise combination of imaging, laboratory and behavioral screens.  That kind of uncertainty applied to most conditions in the 19th century.  As a result, charlatans went around in covered wagons selling snake oil to farm towns and mining camps.

But jeopardizing the rest of society in order to make a buck is the holiest of core values in this country, so don't expect things to change anytime soon.  For example, Judy Segal from the University of British Columbia compared old advertisements for nineteenth century potions to contemporary ads for prescription pharmaceuticals.  While the ads for miracle elixirs and nostrums claimed to relieve such symptoms as fatigue, nervousness, constipation and general disappointment with life, "Drug ads today," according to Segal, "are much the same."  Ads for Lydia Pinkham's vegetable compound played on the same moodiness theme as Yaz, the same menopausal symptoms as Premarin, and the depression that Zoloft promises to dispel.

Pharma's caravan recently reached another milestone in the case of Warner Chilcott (WC), a pharma with global headquarters in Ireland and US offices in New Jersey.  The company is a second- or third-tier pharma that sells products for conditions in gastroenterology, women's health, dermatology and urology.  It was spun out of Warner Lambert in 1996, a few years before Pfizer acquired the latter company.  Since that time Warner Chilcott has survived remarkably well, even buying Procter & Gamble's pharmaceutical business in 2009.

Some of its business practices alleged by former employees, however, can make a person nostalgic for the selling approaches used in the Conestoga wagons.  Last November they filed a whistleblower suit (see here) against the company, charging senior management with hounding sales reps to bribe physicians and manipulate insurance forms for the purpose of boosting sales.

The pay-to-play inducements for physicians took the form of retaining them as speakers at "Med Ed" sessions on behalf of WC's products.  Physicians who attended the Med Ed events received the benefit of lavish dinners, even though the professional attention to medical therapies there, according to the complaint, may have been minimal or nonexistent.  Each of the company's sales reps received a budget ranging between $15,000 and $20,000 a month to pay for such dinners.  Everyone was required to host at least twelve sessions every month.

According to the suit, the resulting gratitude of physician attendees who prescribed WC's products obliged Medicare and Medicaid programs to overpay for drug coverage.

WC's reps were then allegedly coached to develop other skills for bilking both government and private insurance plans.  One such ploy involved bribing physicians who sat on insurers' formulary committees.  To round out the effort, the suit claims reps were coached to fill out prior authorization forms for physicians, thereby violating patient privacy laws in the process.

But that wasn't all.  Instead of limiting their promotional efforts on behalf of WC's drugs to FDA-approved uses, the suit alleges reps were encouraged to download studies from the internet that suggested their utility for other purposes.

The whistleblowers claim that WC's management did not want reps to flaunt their lavish expense accounts too openly.  After all, various states maintain restrictions on the amount of money that can be spent per attendee at a Med Ed dinner.  Other rules require liquor costs to bear a certain relationship to food expenses.  To circumvent such restrictions, the suit claims WC reps were taught to order extra meals or otherwise fudge the expense reports by "overstating headcount in order to dilute the per capita cost."  In other cases where laws allow reps to provide meals in physicians' offices, but prohibit such generosity in restaurants, the suit charges that reps were told to have restaurants write up the charges as take-out, even though the function took place inside the dining establishment.  Reps who demurred from this Diamond Jim Brady program, according to the suit, were routinely fired.

This news about Warner Chilcott surfaced as Time magazine devoted the longest cover story in its history (see here) to the outrageously high costs of health care.  One commenter on a pharma blog remarked that this synchronicity makes pharma an easy villain for politicians looking to cut health care costs..

Even opportunistic politicians have a point when the industry corroborates the accusations of its most determined critics by acting as an organized criminal enterprise.  It is informative in this respect to read some of the comments posted to the Warner Chilcott story when it appeared on an industry blog site (see here).  One person castigated the company largely for being so blatant about these abusive practices instead of conducting them more subtly.  Others suggested they're merely an endemic feature of the industry, so complaining about them remains pointless.

Somewhere in the recent past, probably during the 1990s, pharma's business practices started retrogressing.  Back they went, predating the '60s, going past the New Deal and World War I, and eventually landing in the old west during the 1880s.  That's hardly compatible with an industry whose putative purpose is the advancement of 21st century curative medicine.