Sampling: Crimes in the Closet - Pharmaceutical Executive

ADVERTISEMENT

Sampling: Crimes in the Closet
Time-honored sampling practices used to be good selling strategies. UntilOIG called them fraud.


Pharmaceutical Executive


The pharmaceutical industry devotes more of its promotional budget to samples than anything else, unless you count the army of sales representatives that delivers them. This year, the average wholesale price of samples passed out to doctors will approach $15 billion—roughly twice the value of samples five years ago. And although few in the industry have come to grips with it, the federal regulations governing this enormous investment have undergone drastic changes.

Instead of just accounting for which physicians receive how many samples, companies must now be ready to explain why they give samples to specific doctors. In other words, firms must now deal with two regulations: one that requires pharmaceutical companies to keep good records, and a second that can force them to justify their intentions.

Many pharmaceutical companies have missed the magnitude of this change, perhaps because the old, familiar law governing sampling remains in effect. The Prescription Drug Marketing Act (PDMA), which was enacted in 1988, is still on the books. However, Congress has created a new level of PDMA enforcement, in addition to FDA, which monitors companies' sample-accountability programs to certify which doctors receive how many samples.

In 2003, OIG began looking at how companies distribute samples to doctors who receive state or federal reimbursements, a group that includes most doctors. Backed up by the Department of Justice, OIG released guidelines to safeguard the Medicare and Medicaid budgets. OIG's view of PDMA goes well beyond counting drug samples. OIG investigates fraud, and has fined pharma companies $2 billion in the past two years.

Ironically, many of the standard practices that conform to FDA's reading of PDMA will run afoul of OIG enforcement unless companies can demonstrate that they avoid sampling practices that OIG deems fraudulent. To use OIG's terms, companies must show that they refrain from using samples to commit inducement, enticement, kickbacks, over-utilization, and off-label uses.

This is harder than it sounds. What OIG calls enticement, for example, looks very much like good selling. Consider this pitch: "You're an allergist, Dr. Jones, and I understand that you are buying the antihistamine X and starting patients off on that medication at your own expense. If I were to give you 1,000 samples, enough for every single patient in your practice, you wouldn't have to buy X anymore, and you'd see the advantages of my product over the competitor."

Most sales managers would approve that strategy and, according to FDA, it is perfectly acceptable. The samples were counted. Dr. Jones signed for them. The correct disclosure and conditional statements were on the form. But according to OIG, the sales pitch is absolutely inappropriate. The rep is enticing Dr. Jones with free samples. By giving him samples, the company offsets Dr. Jones's expenses, subsidizes his practice, and goes beyond the generally accepted therapeutic rationale for sampling.

OIG is poised to question other long-standing sampling practices that pass FDA muster. To anticipate OIG criticisms, companies must strive for more than just transparent sample accounting. Instead, companies must see sampling as a marketing tool that aims to achieve particular outcomes. They must be prepared to say why, in each instance, they sampled in a particular way. At present, many companies will be defenseless against OIG investigations, simply because sales departments lack the data to adjust their sampling practices.

For example, OIG may ask why pharmaceutical companies regularly allot huge numbers of samples to physicians who do very little prescribing. Many of these samples may be going to senior citizens or indigent patients. FDA accepts this practice, as long as the samples are accounted for, but OIG is likely to call it overutilization.

Consider Dr. Ryan, a hypothetical physician who practices in a poor neighborhood. Pharma ABC regularly gives 1,000 samples to Dr. Ryan, even though he doesn't write many prescriptions. Instead, he's giving 90 percent of his samples to patients with no health coverage and little income. OIG could say that by giving large numbers of samples to Dr. Ryan, Pharma ABC is encouraging him to provide samples to indigent patients. Why does OIG care about that? Such patients usually stay on indigent programs for 90 to 120 days. Then, after they have begun to respond to medication, they go on Medicaid or Medicare, so the government is stuck paying for expensive single-source medication. By "overutilizing" samples at Dr. Ryan's practice, Pharma ABC raised a red flag for the government, and opened itself to an OIG investigation.


ADVERTISEMENT

blog comments powered by Disqus

Source: Pharmaceutical Executive,
Click here