Iwouldn't call myself an inveterate opponent of regulation. I understand that human nature doesn't always lead to the best
possible outcomes, and that even market forces, despite their many accomplishments, need an occasional bit of nudging to get
them moving in the right direction. But over the past few years, as I've watched attempt after attempt to fix the "problem"
of pharmaceutical marketing, I've started to recognize a type of regulation I wasn't really aware of before.
Let's call it "regulation without decision making." You know how it works. A government body, say the state legislature of
New Hampshire, notices that it is spending a lot of money on drugs. And it
doesn't want to spend a lot of money on drugs. Someone goes through a rudimentary sort of analysis and reaches a conclusion:
People are buying drugs, because companies are selling drugs. Interfere with the selling process, and people won't buy as
If you're New Hampshire, you pass a law that prohibits pharmacies, prescription benefit managers, and others from sharing
prescribing information with pharma companies. If you do that, or so the argument goes, you prevent the pharmaceutical companies
from targeting high-prescribers and "pressuring" doctors to use worthless, overpriced drugs.
It's a plan, I suppose, and it's only got about three things wrong with it. First, it won't work. Pharma companies don't need
prescribing data to sell to doctors. They just need data to sell to doctors in a rational, efficient manner. Second, it's
probably illegal. We'll see how the lawsuit launched a few weeks ago by research firms IMS Health and Verispan plays out in
court, but their First Amendment argument (see "Freedom of Information") sounds pretty plausible to me.
That leaves flaw three: It can't really succeed, because it doesn't really have a goal. Or rather, it has a bunch of not-quite-compatible
goals. What, for example, does the New Hampshire law want to achieve? I think most people would say that the main goal is
to reduce drug spending. Is that a good goal? Maybe, maybe not. It depends on what reduced drug spending does to public health
and overall healthcare costs. Or maybe the goal is simply to reduce spending on expensive new drugs and encourage the use
of older, less expensive drugs. Will that save money overall? In some cases yes, and in some cases no. It all depends.
Well then, what about the goal of reducing "pressure" on physicians? That sounds good. I don't want anyone telling my physician
how to diagnose me, how to treat me, or what to prescribe for me. Unless, of course, she's wrong or ill-informed, and the
"pressure" is to get her up to current best standards. That may not be the goal uppermost in a pharma rep's mind, but sometimes
it's exactly what the rep accomplishes. The New Hampshire law may want to prevent a certain kind of outcome, but it does so
by blocking a kind of transaction—one that could produce lots of different outcomes.
It looks like we're in for a long spell of new regulation at both the state and national levels. I'm sure that a lot of it
will be complex, expensive to comply with, and ineffective. What would be nice is if at least some of it could actually get
down to the job of making decisions about what society wants to accomplish in terms of healthcare. Peter Drucker always said
you can't manage what you don't measure. He might have added, you can't truly regulate what you haven't thought about.