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Rx SALES AND MARKETING PRACTICE GUIDELINES WILL BE DISCUSSED BY PMA EXECUTIVE COMMITTEE, ASSOCIATION PRESIDENT MOSSINGHOFF TELLS SEN. METZENBAUM

Executive Summary

The Pharmaceutical Manufacturers Association may look into industrywide guidelines for ethical sales and marketing compaigns, association President Mossinghoff told the Senate Judiciary/Antitrust Subcommittee at an Oct. 21 hearing. Subcommittee Chairman Metzenbaum (D-Ohio) suggested that PMA consider "setting some ethical standards for the industry" concerning "sales tactics and techniques." Mossinghoff said he would take the suggestion "under advisement and talk to the executive committee about it." Mossinghoff assured Metzenbaum that he would keep the subcommittee apprised of PMA's review of the issue. At the Oct. 21 Senate hearing, Metzenbaum and several witnesses described a series of promotional activities which the Ohio Democrat labeled as anti-generic marketing programs. No individual companies testified at the hearing. Former FDA Commissioner Jere Goyan, PhD, pharmacy dean at the University of California at San Francisco, discussed an Ayerst promotion which came in for criticism from a practitioner writing to The New England Journal of Medicine. Goyan said that "Ayerst has established a 'frequent flyer' program for physicians." Goyan explained that under the program, Ayerst awarded "points" to physicians "for each patient for whom the physician prescribes their product, Inderal LA." Doctors "who prescribe this product for 50 patients and fill out a 'marketing survey,' earn a free airline ticket to any place in the U.S.," he said. Pharmaceutical manufacturers "have always maintained they are part of the quote, 'health care team.' If they are going to be part of the health care team," Goyan commented, "they have to believe in what I consider to be a reasonable manner. And I think paying physicians to prescribe a drug is not reasonable; it's a kickback." Metzenbaum asked Mossinghoff whether professional integrity is compromised when a physician is offered a financial incentive for prescribing a brandname product. In response, Mossinghoff pointed out that PMA does not, and cannot, due to antitrust restrictions, "get involved in specific marketing practices" of member firms. However, Mossinghoff said, "I do not think there ought to be financial inducements for a doctor to prescribe a brandname or a generic." Physicians "should act in the best interests of their patients." He added when such financial inducements are offered, they are generally intended to compensate for participation in "a market survey or other information-gathering campaign." Physicians "probably wouldn't have time to [participate] if there weren't some kind of inducement," he said. In response to refusals to testify from Ayerst and Pfizer, Metzenbaum suggested that he might schedule a follow-up hearing for the two companies. "We invited two companies that have been involved in anti-generic activity, Ayerst Laboratories and Pfizer Pharmaceutical, to appear before the subcommittee," he said. "They have each declined to testify. "Why?" The senator maintained that he would consider "whether or not subpoenas will be issued for their appearance" at a future date. Generic drug manufacturers could also testify at a subsequent hearing. Metzenbaum said manufacturers, "including Ayerst and Pfizer, that persist in unfair competition," should know "the subcommittee intends to pursue this matter fully." Antitrust Subcommittee members indicated that the hearing did not uncover violations of antitrust laws. For example, Sen. DeConcini (D-Ariz.) asked whether brandname industry activities described at the hearing reached the level of violation. DeConcini said he is "aware that there is an appeal pending in the case [brought by the National Association of Pharmaceutical Manufacturers] against American Home Products" ("The Pink Sheet" May 11, p. 11). However, he noted that the federal court dismissed the complaint and quoted the court ruling: "While misleading advertising, including breach of contract and the like, is not competition on the merits, it is likewise not an antitrust violation." DeConcini said he does not "condone any of those practices"; however, "the court has clearly found that there was no monopolistic conduct that violates" the law. PMA testified that 1,000 generic drugs, representing "nearly 20% of the multisource drugs on the market" have "B" ratings in FDA's Orange Book and therefore "are not considered therapeutically equivalent to the pioneer products." Mossinghoff questioned why those products are permitted to remain on the market. Metzenbaum asked the PMA president what percentage of those 1,000 B-rated products are manufactured by PMA member firms. Mossinghoff replied: "I have not counted them. Several of the PMA member companies produce those drugs. We're not charging that any are unsafe; we're saying that FDA itself indicates that it has not made the kind of [bioequivalence] determination that Congress required in 1984." Mossinghoff added that generally "about 55 or 56% of the generics sold in the U.S. are sold by member companies of the PMA." Notwithstanding the association's position on B-rated generics and criticisms of FDA's bioequivalence standards, he said PMA is "not anti-generic" and does not endorse anti-generic marketing strategies. The American Association of Retired Persons also recommended that FDA require submission of updated bioequivalence data, where possible, for generic drugs with B ratings. AARP Senior Policy Analyst Jack Guildroy said AARP "recommends that elimination of all 'B-rated' generics where the state of the art is available to ensure the products' bioequivalence." FDA should "act quickly to make sure that generic copies of very old brand drugs undergo current state-of-the-art tests that may not have been available at the time of the drug's approval years ago," Guildroy testified. "In this way doctors and pharmacists will be assured that any generic drug that has been approved by FDA has undergone the most current bioavailability or dissolution testing and is interchangeable with the reference product. FDA Commissioner Young testified that the agency has "yet to confirm a documented instance where a generic product has been shown to be bioinequivalent after it was approved by FDA and evaluated by us as therapeutically equivalent." FDA "files contain numerous reports of therapeutic failures with both generic and brandname products," Young said. However, "we have not yet seen a documented instance that showed a generic product that we rated as therapeutically equivalent to be, in fact, not bioequivalent."
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