The Ethics involved within Pharmaceutical Sales is built from the organizational ethics, which is a matter of system compliance, accountability and culture (Grace & Cohen, 2005). The ethics formed is based on the legal requirement required by law and regulatory boards, the law however should be seen as a minimum standard and a higher ethical standard should be demanded; from pharmaceutical companies have seen these demands by both agency and public demand across the world. Organizational ethics are used when developing the marketing and sales strategy to both the public and the healthcare profession of the strategy. Ethics within pharmaceutical sales has become a matter of public interest over the recent years and the ethical conduct of the major pharmaceutical company and the industry as a whole has been scrutinized for unethical behaviour within it sales and marketing practice.
The controversy over the ethics pertaining to Pharmaceutical sales began in 2004, after a series of negative events gained the attention of the media, and soon became a matter of public interest.
Merck & Co
In 2004 the drug Vioxx
, which was a drug produced by Merck & Co
draws attention and was withdrawn from the market. Merck & Co
voluntarily withdrew the product due to major concerns about the cardiovascular side effects. The marketing practices of Vioxx
also gained attention with the off-label promotion; there was also a series of allegations made about the withholding of drug information and also the use of. (Sales Force Effectiveness, 2006)
In 2004, Eliot Splitzer a New York Attorney General launched a lawsuit against GlaxoSmithKline
, for withholding negative information on their drug Paxil (Paroxetine)
is an antidepressant used for children and adolescents. GSK agreed to a settlement, which involved the release of post summaries of all clinical trial results to be published on its corporate website for all approved products. (Sales Force Effectiveness, 2006)
Allegations where made against Astrazeneca
for its use of inappropriate gifts and promotions. It was alleged that a promotional event for the drug Crestor
was held by Astrazeneca in the French Riviera and invited physicians to attend and paid for their hotel, flights and other promotional activities which included tickets to Musical performances. (The Guardian, 2006)
Sales and Marketing Practice in Europe
A study published in 2004 by the Institute for Evidence-Based Medicine found that 94% of the promotional advertisement and brochures being sent to German physicians did not have the support of clinical evidence included. (Sales Force Effectiveness, 2006)
The pharmaceutical industry is a highly competitive business and its success is dependent on the sales and marketing of each drug. The cost of research and development for each drug is millions of dollars. In 2005 the research and development expenditure for the biopharmaceutical industry within Europe and the US was 15,474 million euro.(The Pharma Industry Figures, 2006). The actual drug discovery
and the drug development
can take years. After which, testing and clinical trials are required prior to getting approval by regulatory boards. After launching the drug the company has much at stake as it has already outlaid millions of dollars the success of it sales is important factor to the success of the company.
Patents and generics
Generally speaking each brand name pharmaceutical product is covered by several patents
. There may be a patent to cover the molecule
, drugs use for a given indication, and even the manufacturing process can be patented. The typical patent life, as established by trade agreements, is 20 years. In the United States, pharmaceutical patent practices were severely altered by the Hatch-Waxman Act
. This legislation made the entrance of generic competition easier because it reduced the amount of data needed for FDA
approval of generic products. Generics are not required to complete as much testing as a new branded product, they only need to prove bioequivalence
to the existing product. Generics are approved using the pathway defined as 505(j) as opposed to the traditional pathway of 505(b1). Due to the increased competition pharmaceutical products face after the patent expires it is important to pharmaceutical companies to get maximum return on investment ROI
while the product is still patent protected. To maximize ROI they use tactics such as a large sales force or direct-to-consumer advertising
(DTC). There is much controversy surrounding each of these practices and it has led to dozens of lawsuits. These lawsuit typically arise when a group feels that the promotion is not listed on the package insert. The package insert in pharmaceutical products contains all the information about a product and is required as part of the new drug application in the FDA. Legally, only information which appears on the package insert can be used for promotion by the pharmaceutical company
In 2006 six major drugs were taken off he market due to having patents expire; Zocor (simvastatin), Pravachol (Pravastatin), Zoloft (sertraline), Ambien (zolpidem), Lamisil (terbinafine) and Zofran (ondransetron). The generics (copies) of these six drugs alone where estimated to cost the companies $23 billion dollars. (The pharmaceutical industry: key events and trends, 2006)
Duty of care
Pharmaceutical companies have a duty to uphold an ethical relationship within the marketplace. There is a duty of care to the health and safety of all. Issues are raised that as pharmaceutical companies have a large investment to protect and stakeholders to please how do we ensure that an ethical standard is upheld.
A pharmaceutical sales representative is the key part within the sales of all drugs. They are responsible to ensure the healthcare profession is informed of the benefits of the drug along with the safety and the side effects to assist a healthcare profession as the correct information and choices to prescribe medication to the patients. The term used is ethical promotion, which can be described as communication of ethical values to promote their product to the physician. (Wright & Lundstrom, 2004)
Increased sales force
Over the last decade the number of sales representatives has increased dramatically. Pharmaceutical companies believed the most effective way to infiltrate the market were to increase the sales force. Between 1998 and 2002 the sales force doubled in size in Europe. (European Pharmaceutical Executive)
Decreased face time with physicians
The increase in sales force saturated the market which caused difficulties in either gaining face time with the physician or having the face time reduced to only a couple of minutes (Sales force effectiveness, 2006) or to as little as 30 seconds (Mackintosh, 2004) to promote the company and product key messages effectively. This then increased the competition to seek time with the physician. With increased competition also saw an increase in gift giving to reward the physician for time.
The industry has now realized that this is not an effective strategy and can no longer justify the ROI, so many companies have announced reforms within its sales force to reduce the numbers and are looking for new ways to traditional detailing to gain the physicians interest.
Gift giving has been a regular practice for so long within the pharmaceutical industry that it has now become part of the culture. The extent of gift giving has been generous in the past but now we are seeing a limitation placed gift giving.
Resistance from physician
Some physicians have joined an organization No free lunch which asked physicians to make a pledge to not accept any pharmaceutical companies gifts no matter how large or small. The members base that gift giving forms relationships, which influences behaviour and creates a conflict of interest. (No Free Lunch)
Ethical sales representative
The sales representative should be able to provide accurate information, without exaggeration of the capabilities, and be able to inform of the property compound or the mode of action of the drug and possible side effects. (Wright & Lundstrom, 2004)
Compliance & Monitoring
A problem that still exists with the sales representative is that it has been difficult to know what happens during the sales call. While many companies use a CRM system that the representative can use to input details from both pre-call and post-call, what really happens during the few minutes with the physician is difficult to know.
While the marketing departments made are held accountable for the key messages it markets there is still a need to ensure that the right messages are being delivered to the healthcare profession. The ability to monitor the compliance has been difficult while the ability exited to monitor the pre-call and post-call what happened during the sales call was difficult to know.
But the pharmaceutical company still needs to monitor what the health physicians are being told about the drug when the sales representative is out at the visitation. Are the correct marketing strategies being given? How to ensure an ethical approach is being followed.
New technology is now available to allow pharmaceutical companies to monitor compliance and ensure the message is being delivered in the manner it is intended. E-detailing and closed-loop marketing solutions are providing a positive monitoring system
There have been a number of regulates organization introduced to curve the push to physician these include. Regulations vary from regions and but they have been similar in reactions.
European Federation of Pharmaceutical Industries and Associations (EFPIA)
The EFPIA stipulates that there is a Corporate Social responsibility for the pharmaceutical industry to recognize and acknowledge the need to act responsibly towards society and the communities in which it operates.
The EFPIA has also code of practice on the promotion of medicine, which entails the regulations over many areas of the promotion of medicine. These include events and hospitality that can be extended by a pharmaceutical, what is conducive. Gifts and inducements must be inexpensive and provide value to the practice of medicine or pharmacy. All medical sales representatives must have the adequate training and sufficient scientific knowledge to provide relevant and precise information about the products. They must also comply with the requirement of the applicable codes.
Other regulator boards include
- European Medicine Agency EMEA http://www.emea.europa.eu/
- World Health Organisation WHO http://www.who.int/en/
- Food and Drug Administration FDA http://www.fda.gov/
- Pharmaceutical Research and Manufactures of America PhRMA http://www.phrma.org/