Magazine Article | May 31, 2019

Will What Happened With Product Promotion Be Replicated In Product Pricing?

Source: Life Science Leader

By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL

In the “From The Editor” of the April 2016 issue of Life Science Leader, I wrote that if we don’t police ourselves, it will be done for us. Within that article I drew upon my experience as a pharma sales rep during the dine-and-dash era: a time when drug reps were encouraged to detail (i.e., execute a sales call) physicians outside normal office hours. This is because doctors had become increasingly busy at the office. To gain access to high-decile doctors (i.e., big prescribers), use of dine and dashes seemed an obvious solution.

The “dash” concept was simple. Reps booked a table at a local eatery and invited physicians to swing by on their way home from work. The doctor placed a “to-go” order, and while the meals were being prepared, the rep detailed the physician. However, the concept soon spun out of control, with ever more dubious dashes being done (e.g., ham and scrams, detail [i.e., car wash] for a detail, gas and dash). It seems incredible biopharma leaders didn’t foresee the reputational damage being done. Did we not think patients saw what was going on? After all, they were in offices when reps dropped off flyers advertising upcoming dashes and at various venues when dashes were being done. Though PhRMA attempted to police itself by publishing a code on interactions with healthcare professionals in 2002, we eventually saw implementation of the Sunshine Act, a law requiring manufacturers of drugs, medical devices, and biologicals that participate in U.S. federal healthcare programs to track and report payments and items of value given to physicians and teaching hospitals. In other words, it was too little, too late.

Why this second trip down memory lane? In the May 1, 2019, issue of The Wall Street Journal, there appeared the article, “Maryland Is Poised to Cap Drug Prices.” Long story short, the state is primed to create a panel to review “expensive” prescription drugs and cap how much public agencies pay. The legislation has already cleared the state legislature, and Gov. Larry Hogan (R) had until the end of May to either sign or veto the bill. So, by the time you read this, we will likely know the outcome. But let’s be clear. A veto in MD is not necessarily a win for biopharma, because lawmakers in other states are already considering similar legislation. Given our industry’s current negative reputation, combined with value-based pricing that can cause sticker shock when sensationalized by the media, along with past biopharma price increase practices, odds seem better than average that one will eventually pass. Could a domino effect follow and, if so, what will be the end result? History has shown that price floors create surpluses, while price ceilings result in shortages, and in the case of biopharma, those who will suffer the most are the ones the industry is striving to serve. Whether it’s product promotion or pricing practices, biopharma’s inability to envision long-term consequences when implementing short-term decisions further handicaps what it is trying to do, and in the end we will only have ourselves to blame.