Your new competition...It's not who you think it is

October 1, 2001
Christopher E. McCarthy

Pharmaceutical Representative

Demands on physicians aren't just coming from reps.

You are racing from office to office, hoping to get a word with your physicians as you drop off your samples. You know that 40% of the time you won't even get to see the doctor. Sitting in the waiting room, you look around. There he is – the representative from your biggest competitor. You curse yourself for having such lousy timing and wish the rep would just dissapear. What you do not realize is that now, that other representative may not be your biggest competitor. Instead, the United States government, pharmaceutical companies, insurance companies and physicians themselves are rapidly becoming the greatest threats to your ability to make a living. Powerful forces at work in the medical marketplace today are changing the way physicians prescribe medications. The following forces may have a profound effect on your sales now and in the future.

Gain-sharing agreements

Over the last decade, health maintenance organizations have been instrumental in slowing the growth of healthcare costs. This ability is coming to an end, however, as HMOs have squeezed about as much money out of physicians and hospitals as they can. Now much of their focus is on new ways to reduce pharmaceutical costs.

Through the years, HMOs have used open and closed drug formularies to try to control physician prescribing behavior. This has met with some success, but patients' objections have helped limit the effectiveness of these formularies. In order to continue to control prescribing habits, the HMOs developed other tactics, hiring pharmacy benefit managers to administer their pharmacy benefits.

These PBMs, in concert with the HMOs, send out physician profiles to compare physicians' pharmaceutical costs with their peers'. Disease management information pamphlets are constantly being mailed to physicians' offices. With these come suggestions for non-pharmaceutical treatments and ways to use less-expensive or over-the-counter drugs. Then comes the onslaught of faxes asking physicians to change a patient's prescription to a preferred product. Some of the PBM pharmacists will even call the physician to "discuss the patient's management." This is nothing more than another attempt to get the physician to change the patient's prescription.

Finally, though, it has become apparent to the HMOs and PBMs that profiling physicians, sending them letters and faxes, and calling on the phone just isn't working. They realize that to change physician behavior, they need to involve the physician in the financial costs of prescription medications.

Thus is born the gain-sharing agreement. Now physicians can share in some of the HMO's cost savings if they reduce the number of tests they order and the number of procedures they perform, and cut down on the use of expensive pharmaceuticals.

This new arrangement differs from "global risk contracts" by which physicians are at risk for almost all the costs of a health plan. These contracts have had tremendous financial downside risk for physicians and have proved to be disastrous in many cases. One only has to look to the many medical groups going bankrupt in California to see what can result from global risk contracts.

The gain-sharing agreement, however, has only upside risk. This means that physicians cannot lose money, but they can make extra cash if they keep their costs down.

With capitation rates flat and their net incomes dropping year after year, physicians have jumped at the chance to improve their bottom line. Now each test ordered, each procedure performed and each medication prescribed has a price tag associated with it. Generic medications, over-the-counter medications and non-pharmaceutical treatments have become much more attractive. Suddenly, the cost of a drug becomes a much more important issue in the physician's mind.

How do you, as a pharmaceutical representative, respond to this turn of events? First, ask your physician if there are any such arrangements with the local managed care companies. Some physicians may be offended, but most will not.

You need to realize that suddenly, "true costs" have become important. In the past, the physician wanted to know what tier your drug was on, since this represented what the average patient actually had to pay for the drug. Now the real cost of your drug to the health plan has become much more important to the physician. If your drug's price to the HMO is cheaper than that of similar drugs, even if the drug is on a higher tier co-pay to the patient, then you need to tell your physicians. If you know any tricks to lower the cost of your drug (e.g., cutting the pill in half), tell them. Ask your company for any information that might show outcomes data, especially total cost savings, for the particular disease state your drug deals with. Remember that the physician is involved with more than just pharmaceutical costs. Don't have the information sent directly to the physician, who is likely to throw it away unread. Have the company send it you. Then call the physician and say you want to show him or her the information in person.

Ultimately, the choice of a drug by a physician, while influenced by cost, will rarely be determined solely on that basis. Don't get too caught up in the battle over which drug is cheapest. Remember that the physician has to believe in the value of your drug first.

Evidence-based medicine

There is a movement sweeping through medicine called "evidence-based medicine." Surgical procedures, preventative health screenings, treatment algorithms and pharmaceuticals are all being evaluated to see if they do what they were designed to do.

Many of these reviews are being done via a "meta-analysis," in which multiple, similar studies are combined and evaluated. Each study is given certain weight, depending on its design and size. The studies are analyzed, and a conclusion is drawn regarding the effectiveness, or ineffectiveness, of a certain treatment.

These results are then published via a number of magazines, books and Web sites. The best-known of these is the Cochrane Library (www.cochranelibrary .com). Many meta-analyses start with the Cochrane systematic reviews and move on from there. Other excellent sources for evidence-based medicine are UpToDate (www.uptodate.com) – an evidence-based textbook for general internal medicine – ACP Journal Club, Evidenced-Based Medicine, Best Evidence, Scientific American Medicine and Clinical Evidence (www.clinicalevidence.org).

How does this affect you? In today's world of cost-containment, many pharmaceuticals are being examined very carefully for evidence of equal or superior efficacy. If the evidence reveals only equal efficacy to a generic or less-expensive drug, tremendous pressure is applied within the medical community and from insurance companies to use the cheaper drug. Some HMOs have gone as far as sending out free copies of evidence-based textbooks to physicians. They hope that these textbooks will encourage physicians to use less-expensive drugs. Physicians coming out of medical school are being trained using evidence-based medicine. This new approach will certainly affect their prescribing habits as they enter medical practice.

With all this in mind, it is important to remember the limitations of evidence-based medicine in the daily practice of medicine. By its very nature, evidence-based medicine is two to three years behind current medical thinking. Concepts and ideas in medical treatments occur faster than the meta-analyses and large community-based studies can be done. Examples of this are the use of ACE inhibitors in diabetics with proteinuria and the use of beta-blockers as prophylaxis for migraine headaches. Look how long it has taken for the evidence to become strong enough to support these indications. Benefits discovered clinically by physicians are rarely overturned by evidence-based medicine. Remember that scientific significance (the total evidence and plausibility of the findings) is different from statistical significance (the P value). Scientific significance is truly what matters. These meta-analyses look at populations as a whole, not at an individual patient. The physician's clinical experience will always win out over evidence-based medicine.

Like it or not, evidence-based medicine is here to stay. Know what the latest reviews say about your drugs and the diseases they treat. Look for recent Consensus Panel Recommendations from authoritative bodies. These would be the National Institutes of Health, the American College of Physicians-American Society of Internal Medicine, the American Medical Society and the American Academies of Family Medicine and Pediatrics. These recommendations carry a lot of weight in the minds of both physicians and lay people.

Generics and office-based prescribing

Recently, Franklin Lakes, NJ-based Merck-Medco started a test program in different sites across the United States, supplying physicians with a number of free generic drugs. The idea behind this, clearly, is to get physicians to give out the generic samples with a prescription, in place of your samples and a prescription. This idea goes hand-in-hand with the recent move to gain-sharing agreements: Free generic samples mean less-expensive generic prescriptions.

A number of companies are now in the business of aiding physicians in selling generic drugs out of their offices. This practice is legal in most states and can be very convenient and inexpensive for the patient. Not only that: Sometimes a 90-day script can be filled, too. With primary care physicians' incomes under assault, look for this practice to increase in popularity.

If one of your physicians starts giving out free generic samples or selling generics out of the office, don't panic, and don't stop going to that office or cut off the supply of samples of your drug; the only person you will hurt is yourself. Keep calm and continue to promote the benefits of your product. Be sure to know the actual cost of your drug at local pharmacies, not just the average wholesale price. Outcomes data, consensus panel recommendations, etc., will also be helpful. Continue to make yourself valuable to the practice through patient education materials and other services.

Don't get mad, because many other representatives will be happy to jump in when you walk away.

The Institute of Medicine Report

Nothing has damaged the credibility of the healthcare system in the United States as much as the recent Institute of Medicine Report on medical errors. In that report, physicians, hospitals and prescription drugs were made to appear careless, dangerous and, most of all, deadly. Congress is already exerting tremendous pressure on organized medicine to do something about this. The natural outgrowth of this will be tighter regulations on the tracking of pharmaceuticals.

Providing drug interaction data will become mandatory. Careful accounting of the distribution of samples may be applied to all medical offices. Currently the Joint Commission on Accreditation of Healthcare Organizations requires all hospital-owned physician practices to account for every drug sample received and dispensed. As the amount of work to provide this type of accounting increases, the pressure on physicians to stop distributing samples will steadily rise. Already some large group practices around the country have banned samples in the office.

You can help head off this disastrous turn of events by asking if you can help your physicians organize their drug samples; you do not want them to stop giving out samples altogether.

Coupons

On the surface, giving out coupons seems like a great idea, and some physicians love it. Unfortunately, the majority of physicians do not, for the following reasons:

Primary care physicians primarily provide advice. Rarely do they do anything to the patients beside talking to them and examining them. If they do, it is something simple like cutting off a mole or freezing a wart. The patient may have waited 30 minutes or so to see the doctor, and then had an office evaluation. The physician may have prescribed some medication, given some advice about lifestyle changes and then sent the patient to the receptionist with the bill. After paying the bill, the patient has to go to the pharmacy, wait another 30 minutes or so, pay the pharmacy bill and go home.

With samples in the office, the doctor can give patients some of the medication they should be taking. This makes the patients happy: They leave the office with something of value in their hands (the samples) and are spared the hassle and expense of going to the pharmacy. They are usually very appreciative of the samples, especially when they are being started on a new medication. For some people, these samples represent the difference between taking and not taking the medication, if they aren't able to afford it.

If you replace samples with coupons, the whole dynamic changes. Patients still have to go to the pharmacy. They still have to wait there, fill out paperwork and possibly even send in the rebate coupons themselves. There is no question that compliance will suffer, as some studies have shown that up to 20% of prescriptions are never filled.

If your company is going to use more coupons and rebates, be prepared. You must have some way of making it as easy as possible for the physician to remember to give out the coupons. Also, it has to be simple and easy for the patient to get the benefit of the coupon. Avoid coupons that apply only to certain health plans. Doctors can't take the time to remember which coupons apply to which plans. Plus, the patients will be very upset if they get to the pharmacy and discover that the coupon doesn't apply to them.

As you can see, a lot of changes are taking place now in the world of pharmaceutical prescribing. You can be guaranteed that there will be even more changes in the future. Try to identify a group of physicians in your territory who are willing to talk to you about new developments as they occur. Do not wait until you get a memo from your company or read about it in the newspaper. Change happens too quickly in today's world, and you do not want to be left behind. PR

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