Direct-to-physician activities accounted for the bulk of spending, with $5.3 billion spent on a practice called "detailing" - visits to physicians by pharmaceutical sales representatives in order to promote their firm's drugs. Free drug samples distributed during these visits were valued at roughly $16.4 billion.
"As the cost of prescription drugs continues to escalate, increased attention is being focused on the role of pharmaceutical marketing practices as a cause of higher drug prices," said Robert Jacobson, professor of marketing at the University of Washington Business School and co-author of the paper appearing in the December issue of Management Science.
"The concern that pharmaceutical marketing practices compromise physician integrity and have exacerbated increases in public health costs has prompted government actions at both the federal and state levels. The key public policy issue is the extent to which the industry's promotional tactics lead to an increase in appropriate versus inappropriate use of drugs in a cost- effective manner."
In the study, researchers analyzed data for three widely prescribed drugs issued by some 74,000 physicians over a two-year period to investigate the effect of pharmaceutical sales representatives on physician prescribing behavior. For each of the drugs in the study, Jacobson and Natalie Mizik, assistant professor of marketing at Columbia University, assessed the effects of changes in the numbers of sales calls and free samples on the number of new prescriptions the physician issued.
A detailing visit typically lasts two to five minutes, and information about a drug's composition, therapeutic value, proper dosage and potential side effects is communicated. Although the effects of detailing and sampling differ across drugs, the effects of the marketing activities on physician prescribing behavior ranged from very small to modest for each of the drugs studied. For the three drugs in the study, results indicated that it would take, on average, from 0.5 to 6.5 more visits by pharmaceutical sales representatives to induce one new prescription. It would take 6.5 to 73 additional free samples to induce one new prescription.
According to Jacobson, for the largest-selling drug in the study, which is also one of the most widely prescribed drugs in the United States, results indicated that it would take approximately 3 additional visits by a pharmaceutical sales representative to induce one new prescription. It would take 26 additional free samples to induce one new prescription.
Prescription drug spending by consumers is projected to remain the fastest growing sector of health care costs. Such spending is expected to account for 14.5 percent of $3.1 trillion health care expenditures by 2012, compared to approximately 10 percent in 2001.
Jacobson said that, contrary to popular belief, physicians are not easy targets readily persuaded by salespeople, but rather are tough sells as evidenced by the minimal influence of sales activities on their prescribing behavior. According to Jacobson, the most important factor explaining the limited effect of sales representatives is that physicians know they have other sources of information. Scientific papers, advice from colleagues and a physician's own training and experience also influence prescribing practices and, he said, most physicians view these sources as far more reliable and trustworthy than salespeople.
"Additionally, many physicians are skeptical of or hold negative attitudes toward sales representatives," he said. "Physicians recognize that information presented is biased toward the promoted drug and is unlikely to be objective or even accurate. Thus, physicians often discount information received from a sales representative. As physicians have access to alternative sources of information, which are more highly regarded, it is no wonder that the salesperson's influence is minimal."
Jacobson added that pharmaceutical marketing aimed directly at consumers might be expected to have greater impact.
For more information, contact Jacobson at 206-543-4780 or email@example.com