BUSINESS
Drug firms score by paying doctors for time
A startup company is assembling a network of physicians willing to be
paid to listen to sales pitches from pharmaceutical salespeople.
By
Tyler Chin, AMNews staff. May 6, 2002.
Additional information
When a company that brokers meetings between drug detailers and doctors
asked him to set aside some time on his schedule to listen to sales pitches
from pharmaceutical sales representatives for a fee, Neal Moser, MD, agreed.
He was so busy in the office that he often didn't have time to talk to
the approximately 10 sales representatives a day who would drop by
unannounced, trying to grab his attention to tout their drugs. They would
buttonhole him on his way to see patients, and the conversations were so
brief that he did not learn anything about the drugs the salespeople were
pitching, said Dr. Moser, a pulmonary and critical care physician with a
13-doctor group in Edgewood, Ky.
"We weren't getting any information, and they weren't giving their
message to us, and it was slowing our practice down," Dr. Moser said.
So Dr. Moser signed up to serve as a consultant to Time-Concepts LLC,
located in Crestview, Ky., near Cincinnati, because it lets him control when
and how he talks to sales reps and gives him a more efficient way to obtain
the clinical drug information he needs, he said. And, he gets paid $50 to
set aside 10 minutes with a rep.
There is 1 drug sales rep for every 4.7 physicians.
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Aware that the number of pharmaceutical sales reps has more than doubled
over the past five years and that doctors don't have time to see them -- and
vice versa -- Time-Concepts has launched a service that it says meets the
needs of each group.
Physicians can use Time-Concepts' consultation service to receive the
information they need and make themselves and their staff work more
efficiently, while sales reps can use it to gain access to doctors that they
could not reach before, said Patrick T. Burns, MD, the company's co-founder
and a family physician with a 70-doctor primary care practice in Covington,
Ky.
Pharmaceutical firms pay $105 per consultation, of which $50 goes to the
physician, $50 to Time-Concepts and the rest to one of five charities the
doctor selects, Dr. Burns said. Drugmakers also must pay a $50 registration
fee for each sales representative. The service is free to physicians.
An onslaught of reps
The idea of having drug companies pay for access has grown more
attractive to some doctors as the number of pharmaceutical representatives
has grown. According to Scott-Levin, the pharmaceutical sales consulting
division of Research Triangle Park, N.C.-based Quintiles Transnational, the
number of office-based doctors per drug representative has decreased to 4.7
in 2001 from 8.8 in 1996. Including part-time and contract workers, the
pharmaceutical industry employed 87,892 sales representatives in 2001, up
110% from 41,855 in 1996.
Meanwhile, the Kaiser Family Foundation reports that last year drug
companies spent $13.2 billion in direct marketing to physicians, five times
the $2.5 billion spent in direct-to-consumer advertising.
The increase in drug sales -- in part driven by a lack of new blockbuster
drugs and the loss of patents on popular drugs such as Eli Lilly's Prozac (fluoxetine
hydrochloride) -- has doctors complaining that even if they wanted to, they
don't have enough time to have detailed meetings with drug reps.
The number of drug sales reps more than doubled in 5 years.
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That's where Time-Concepts stepped in. In addition to claiming that it
provides a more efficient way for doctors and salespeople to communicate,
Time-Concepts also argues that, ethically, its service is better than the
pharmaceutical companies' existing sales practices. These include offering
free meals, trips and other perks to gain access to physicians and influence
their prescribing habits.
Last month, the Pharmaceutical Research and Manufacturers of America, a
trade industry group, approved a set of voluntary ethical guidelines
designed to curb those practices, which have come under increasing fire.
The guidelines are similar to the AMA's 12-year-old ethical guidelines on
gifts to physicians from industry, which PhRMA has endorsed to its members.
Under the AMA's guidelines, physicians may accept gifts of minimal value,
defined as $100 or less, if they serve an educational, practice-related or
patient care function.
"It is not a $100 bill or a $50 gift certificate," said Frank A. Riddick,
MD, chair of the AMA's Council on Ethical and Judicial Affairs. "No matter
how you slice this, [a cash payment] doesn't meet the standard. If the
purpose of the contact is to educate the physician, then there is no need to
pay the physician."
Still, some do not see a problem with paying doctors for listening to
sales reps if details of the transaction are fully disclosed and there's a
true educational exchange of information between the physician and sales
representative.
Direct drug marketing to physicians cost $13.2 billion last year.
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"It's very up-front," said Pamela Coyle-Toerner, president and COO of
Queen City Physicians in Cincinnati and one of the owners of its subsidiary,
Physician Access Management Ltd. Last fall, Physician Access began charging
sales reps $65 if they wanted to talk to Queen City's physicians for 10
minutes as a way to help pay for an electronic medical records system that
Queen City had bought at a cost of more than $1 million.
Dr. Moser also does not see an ethical problem. The fee "barely covers
the cost of my time" and the consultation program is open to any
pharmaceutical company.
Not the only one
So far, it's not the Mercks and Pfizers of the world who have signed up
for pay-for-access services. At Physician Access, only pharmaceutical sales
representatives from Celltech Pharmaceuticals Inc. and Shire Richwood Inc.
have signed up and paid the $65 fee, said Neil Konerman, director of
marketing and development for Physician Access and Queen City. Those
salespeople are meeting individually once or twice a month with 20 of the 50
doctors who have signed up.
Physician Access and Time-Concepts said smaller companies are more
amenable to their plans because they can't afford to spend thousands of
dollars a month to buy lunches for entire physician offices just so they can
get their foot in the door like the big drug companies can.
"We level the playing field for them against Big Pharma," Dr. Burns said.
"They can't take 10 physicians and their spouses out to dinner at one of the
best restaurants in Cincinnati."
Time-Concepts said it had signed up four small pharmaceutical companies
that it declined to identify. Salespeople from those companies are
scheduling meetings once or twice a week with each of the 50 doctors in
Cincinnati and northern Kentucky who have signed up with Time-Concepts, Dr.
Burns said.
To sign up, doctors must register and create customized calendars on
Time-Concepts' Web site, indicating when they are available to meet with
salespeople. The sales reps access an online list of company consultants. If
they see someone they want to meet, they schedule an appointment and the
system transmits an e-mail notifying that doctor of the appointment.
The marketing presentation is actually delivered in person at the
physician's office. Doctors have 21 days to complete an "impact analysis"
questionnaire online, offering their evaluation of the data they received,
Dr. Burns said. "They don't get paid unless it's filled out."
Back to top.
Selling power
The number of pharmaceutical sales representatives has more than doubled
over the last five years while the number of physicians has grown at a
slower pace. Many physicians report that it's not uncommon for at least 10
sales reps to show up daily at their offices.
Sales Office-based Physicians
reps* physicians per rep
------ ------------ ----------
1996 41,855 368,000 8.8
1997 53,815 376,000 7.0
1998 63,152 383,000 6.1
1999 70,520 391,000 5.5
2000 83,051 406,000 4.9
2001 87,892 414,000 4.7
* Includes contract, part-time and full-time sales representatives from
the top 40 pharmaceutical companies in the United States
Source: Scott-Levin
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Weblink
Time-Concepts.com LLC
(https://www.time-concepts.com/)
AMA Council on Ethical and Judicial Affairs
Opinion
8.061 Gifts to Physicians from Industry (http://www.ama-assn.org/ama/pub/article/5915-4236.html)
AMA Council on Ethical and Judicial Affairs
Clarification
of Opinion 8.061, E-Addendum II (E-8.061) (http://www.ama-assn.org/ama/pub/category/4263.html)
Release, "PhRMA adopts new marketing code" from Pharmaceutical Research
and Manufacturers of America (http://www.phrma.org/press/newsreleases/2002-04-19.390.phtml)
Back to top.
Copyright 2002 American
Medical Association. All rights reserved.
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