What the drug industry does not need is another expose book on its marketing practices. A new scathing book, Our Daily Meds from New York Times Correspondent Melody Petersen, adds to the body of literature looking into the drug marketing machine. I have not yet read it, but I did read her interview with Pharmalot to get the gist.

She has the usual complaints. Too much push for expensive, sometimes unnecessary drugs. Too much behind the scenes use of monetary incentives to physicians. I get it. It is not that she or other drug marketing critics are wrong. Drug marketing is designed to sell drugs. Ok, I said it. It is not usually to educate objectively. Education of either consumers or physicians is an effect, not a goal of drug marketing.

Like it or not, our whole health care system is rife with marketing pitches. Doctors, hospitals, insurance companies, and health information media all advertise their wares. Drug companies are just a part of a larger capitalist system. Our physicians are not independent decision makers on the drugs we get. If there were no drug marketing, do we really think we would get the best drug for us? Would insurance companies cover the best drug on the market or only the cheapest? If we were to re-invent the whole system, then a world without drug marketing may make sense. For now, drug marketing is a way to compete in a free market of health products. It is world where no one can be totally trusted to be on your side.

What most liberal critics assume is the consumer is a helpless soul. They want to protect them from being duped by slick advertising. I give consumers more credit than that. They know a drug company is trying to sell them on that product. They know it may not always work as well as the ad implies. They know other treatment alternatives exist. So can we give consumers a little credit for being skeptical on ad claims?

Does all this drug marketing create demand for products that may have cheaper equally effective alternatives? I am sure it does. Does all this advertising also get people to visit doctors and then discover other serious health issues? I am sure it does. Free market advertising is messy. Consumers are always getting pitched and often buy things they do not need. I look into my wife’s closet and see ten handbags she does not need that are wildly overpriced. I see my used golf collection of expensive gimmicky clubs that did not lower my score despite the ad claims.

Critics say drugs are different and we must do more to protect the easily conned consumer. We do just that by having FDA review all ad claims. I wish the Federal Golf Administration existed to tell me if the golf club advertised really lowered scores. Consumers also must have their doctor conned before he will prescribe, so they have two added layers of protection.

I know our system is imperfect. If we want to have a single payer system, with government boards reviewing efficacy and cost trade-offs of all drugs, then maybe we will have the perfect non-marketing influenced system. Of course, are governments really objective? Their goal is usually to cut cost. So, in what system would we, as citizens, know we are getting the best drug for us? I guess this is the classic liberal versus conservative argument. Liberals usually trust government more than private industry. In some cases they may be right. I am not sure eliminating drug marketing, however, will create a more consumer valuable system. The debate is worth having and books like Our Daily Meds raise worthy issues. I guess I fall on the side that more imperfect information from drug makers, critics, insurers, employers, and physicians is better than one source of government controlled information.

This bill is meant to discourage payments to doctors by outing them and the drug company on a public site. The $25 level includes about everything a drug company does for doctors. The box of pens, the office pizza, as well as consultant fees would be covered. Of course this would be an administrative nightmare for detail forces. Penalties are high per violation so a rigorous tracking system would be needed at the detail rep level.

The idea of exposing influence on physicians is not a bad one. It is reasonable for patients to know what their doctor gets from drug companies to determine if they are getting objective advice. The issue is how to make such information useful to consumers. It is very hard for a consumer to differentiate types of payments. For example is wrong to use a doctor to consult? Is it wrong for them to speak to other doctors on a disease or drug as a paid speaker? Is it wrong to get a few pizzas from a drug rep? Any bill requiring reporting needs to think through how the public will be educated to evaluate those payments.

This bill seems overly onerous and of not much value to public understanding of financial relationships between drug companies and doctors. I would support public disclosure of payments of significance such as for speaking to other physicians on a drug company’s behalf. I would also support disclosure of free trips to symposia or other influence peddling events such as Super Bowl trips. Clearly reporting large payments is useful in public understanding of how drug companies influence doctors.

At $25 and up, this bill is excessive in administrative burdens. No doctor is overly influenced by pens and pizza, although it may get some goodwill among office staff. On the other hand, most observers believe large consultant or speaking fees do have an influence. It would be useful to see how much of my doctor’s income is supplemented by drug companies.

Clearly drug companies prefer no disclosure because they do want physicians to be discouraged from working with them. A little sunshine on the relationship would not be a bad thing, however, as long as it is for amounts that may in fact cause influence. I would start at a level of $500 or more and let the pens and pizza slide.

Although DTC is often criticized by Congress, at least it is highly transparent. Both the message content and the dollar amount spent are publicly available. On the other hand, relationships between drug companies and doctors are often the least transparent. I would expect these relationships would be the Congressional priority in the next few years. They may not like DTC much, but they know the bulk of marketing spending remains with physicians.

There are no great surprises in the latest survey of consumers by The Kaiser Family Foundation/USA Today and Harvard School of Public Health. Consumers are not too happy with drug companies. The favorable rating as an industry ranks above oil companies and health insurance companies but below airlines, banks, food companies and doctors.

Only 15% have a very favorable view of drug companies. Mostly this is because consumers do not like the prices they pay. Of those unfavorable 68% of the negatives are related to prices and high profits. Among all respondents 79% said drug prices are unreasonable and 76% feel they pay higher prices than Canadians, Mexicans and Europeans for the same drugs.

Respondents think high drug prices are a result of several factors. Creating profits is first, followed by the cost of R&D, cost of advertising and marketing, and cost of lawsuits. What is very concerning is that 75% of consumers still want more price controls even if it meant less R&D would be done.

Consumers still highly value the drugs developed. 56% feel drugs reduce costs by preventing illness. 59% feel drugs prevent costly hospitalizations. Over 70% think drug companies offer reliable information on efficacy and safety. 80% feel drug companies develop new effective drugs. Only 55% feel drug companies quickly release new safety concerns.

The survey probed about advertising. On the plus side the price assistance programs are getting awareness. 58% have heard of those programs, but 65% say these programs have not gone far in enough in price reductions. 70% say drug companies are more concerned about profits than helping people. That is not a good sign given all the corporate ads on their research.

On DTC, 91% have seen DTC ads. 53% feel DTC is a good thing, while 40% think it is a bad thing. 56% of consumers think drug ads do a good or excellent job of discussing benefits while 45% think the same about discussing side effects. What is concerning is that 77% think DTC costs make drug prices expensive, and 66% think drug ads encourage them to take medicines they do not need. On the positive side is that 67% believe drug ads educate them on treatments they may not have been aware of previously.

So what does all this data tell us? Consumers find good and bad in DTC. They want it to stay, but feel ads do raise prices. They like its educational value, but feel it is too focused on selling us on drugs we may not really need. They generally think it is fair in presenting benefits and side effects. Their overall view on pricing should be a great concern in this political year. There is no easy solution on pricing, but this issue will not go away no matter how much drug companies talk about expensive research. As most past research has shown, this new data shows consumers are still ambivalent about DTC. My guess is that this new data will be cherry picked by both sides when presenting plans to change DTC. I doubt the information from the study is strong enough, however, to support any significant change in DTC practices.

The Democratic candidates, as well as John McCain, seem to have drug companies in their cross hairs for profit reduction through price controls. All have characterized drug companies as profit hungry, unfairly charging U.S. consumers higher prices than most of the citizens of the free world. Consumers generally believe these charges as well. Drug prices, say the candidates, should be lower through re-importation and price negotiation through Medicare Part D.

These same candidates bemoan world price competition for other industries. Where have the good paying industrial jobs gone? Why are Ohio, Pennsylvania, and Michigan losing their job base? The Democrats want to protect these jobs. I have no problem re-invigorating our manufacturing sector. I am even willing to pay a bit more for U.S. made televisions, clothes, toys and other things now made largely in Asia. What the Democrats expect us to do for these industries is exactly what they object to for the drug industry. Keeping jobs here for any manufactured good usually means higher labor costs and higher retail prices.

I see some hypocrisy here. The drug industry is a huge employer in the United States. It is a significant economic contributor to New York, New Jersey, North Carolina, Illinois, Pennsylvania, Michigan, California, Indiana and Delaware. Every state has drug detail reps. Here is an industry that is now doing exactly what the Democrats want to do in the future for rust belt industries. That is, through protectionism, they would make U.S. consumers pay more at retail to fund higher U.S. manufacturing costs. Protecting the middle class has a useful societal purpose and it may be advantageous for society to import less, pay more for U.S. made goods, and employ more. 

In the short term candidates get political rewards for savaging drug companies. Long term, however, making the drug industry less profitable will only encourage it to transfer jobs to Asia. We may in fact get lower drug prices, but the dominant U.S. based drug industry will become another Asian based research, marketing, and manufacturing industry. Can India do most of our R&D? Can China make all our drugs? Can they produce promotional materials? Yes they probably can.

Senators Obama, Clinton and McCain ought to think hard before they risk damaging one of our most important industries. What do they expect drug companies to do if they force prices down by 30%? These drug companies will seek to lower costs, most of which are in R&D, manufacturing, and marketing. Jobs will be lost. In fact many administrative jobs can also be outsourced to India.

The bottom line is that we have few industries left that have not been lost to world competition. The drug industry is largely American made. Paying more is a strategy to keep it healthy, as it may be for other industries. Getting the best world price to consumers has its advantages, but as we have seen, costs U.S. jobs.