Vermont is considering a new bill that would make it the second state in the country to ban the sale of physician prescribing data. The state would be keeping up with its next-door neighbor--New Hampshire's eight-month-old Prescription Confidentiality Law is currently being challenged in a court case there. Data companies IMS Health and Verispan brought the suit, arguing that law compromises their freedom of speech.

Like the New Hampshire law, Vermont's bill would bar third-party entities like pharmacists, insurers, and data-collection companies from selling prescription data "for any commercial purpose"--namely the marketing and promotion of prescription drugs. The bill is intended to keep the data away from drug reps, who use it to tailor their sales calls to individual physicians.

But Vermont is also adding another provision to prevent "unconscionable pricing" of prescription drugs. "Unconscionable" is defined as a wholesale price that is more than 30 percent higher than the price available to federal agencies, the state's Healthy Vermonters program, or the "most favored purchase price."

The state's Senate Finance Committee has so far endorsed the bill, and the Health and Welfare Committee will review it next. The Vermont Medical Society--like its counterpart in New Hampshire--is also backing the bill. On the other side of the fence, a team from PhRMA is lobbying against the restrictions on drug marketing and price caps. The New Hampshire suit, which is awaiting a decision, could also have an impact on the bill's future.

"It seems like the state government is almost engaging in price controls," said Art Woolf, a professor of economics at the University of Vermont and a principal at Northern Economic Consulting. "Price controls never serve a good purpose." But Woolf noted that his primary concern is that the data would be unavailable to public health researchers, who often get it free of charge from data-collection companies. "There is a only very small chance that the government would [pay to] collect this data," he said, calling it "prohibitively expensive."

David Meltzer, a physician and professor of economics at the University of Chicago, similarly called the data "incredibly important for public policy reasons. One of the hidden consequences of these laws is that they will make research harder to do." And he added that the bill is unlikely to make a major dent in healthcare costs. "Pharmaceuticals are only about 10 percent of healthcare expenditures," he said.

Detailing, moreover, has become less effective in an era when insurance and other patient incentive programs dictate which drugs are most cost-effective, he noted. "Drug promotion is changing dramatically anyway. A lot of companies are reducing the size of very large sales forces. My guess is that [detailing] would be replaced by another form of advertising."

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A second state is looking to hold down drug costs by going after data collectors.

Hands Off Prescribing Data, Says Vermont

GlaxoSmithKline is playing it characteristically cool about any possible plans to scale back its sales force in the manner of AstraZeneca, Pfizer, and other industry giants. But it is forging ahead with cost-cutting on its marketing side, largely snipping away at its agency attachments.

The company outlined its "Next Generation Now" marketing model with its 2006 financial results. The move calls for consolidating all of its professional advertising--not including direct-to-consumer ads or public relations--under a single holding company. It also institutes "key changes for agency reviews" and "financial parameters and resource guides" to streamline the account-management process and hold down rates.

GSK launched the model in the fourth quarter of last year when it hired a number of Interpublic Group agencies for some of its biggest growth drivers, including diabetes drug Avandia (rosiglitazone) and asthma drug Advair (fluticasone and salmeterol inhalation powder). The bulk of the work went to ad firms FCB Healthcare, Regan Campbell Ward McCann, and Torre Lazur McCann. All told, GSK spent just under $1.5 billion on advertising last year, an increase of three percent over 2005.

On the sales side, GSK pointed to a customer-service initiative called Worldwide Sales Force Excellence, which trains drug reps to deliver information in a "when," "why," and "how" format--often supported by visual aids of clinical data. It also set up a certification program, which tests reps on their product knowledge, and its annual report noted that "scores were consistently around 98 percent."

But CEO Jean-Pierre Garnier was coy when a reporter asked whether he planned to reduce the firm's headcount--as many competitors have already done. "We are not going to say on the day of a press conference that we're going to fire 3,000 people--that's not good management," he said. "We closed 28 manufacturing sites, but you never hear about that--we just do it. It's important to get on and concentrate on the R&D."

Garnier at no point ruled out the possibility of layoffs, however, and analysts offered contradictory opinions of whether GSK might--quietly, of course--follow the trend. While some have described industry's staffing of drug reps as an "arms race" that is finally being demobilized, others are quick to point out that GSK--with its ten and counting CEDDs (Centers of Excellence for Drug Discovery)--isn't facing the same pipeline woes dogging much of Big Pharma.

Its top product, Advair, brought in about $6.4 billion last year, an increase of 11 percent, and is expected to get a boost from new data this quarter. In addition, GSK's blockbuster diabetes franchise grew 25 percent to $3.1 billion. Here, too, the company is promoting the results of its ADOPT study, which supports Avandia as a first-line treatment. The company's own market research suggests that 92 percent of physicians expect that the study results will have at least a moderate impact on their prescribing habits.

Sarah Houlton contributed reporting to this story.

Drug giant streamlines professional advertising but remains coy about sales force headcount.

Pharmaceutical Executive-03-14-2007

Hands Off Prescribing Data, Says Vermont

GSK's Garnier Gets Snippy at Marketing Costs