Selling Sickness

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Presentation from ANZMAC 09 on the marketing of prescription drugs particularly antidepressants

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Selling Sickness

  1. 1. Selling Sickness" A Macro Research Agenda for the Marketing of Pharmaceuticals Steven Ward, Murdoch University and Anthony Pecotich, The University of WA
  2. 2. Introduction <ul><li>The marketing of prescription pharmaceuticals has the potential to impact the decisions of the medical profession resulting in a high level of social, and government concern as well as significant international debate. </li></ul><ul><li>This expenditure on pharmaceuticals in Australia is subsidized through the Pharmaceutical Benefit Schemes' (PBS) $A6 billion-dollar annual budget. </li></ul><ul><li>The cost of pharmaceutical marketing in Australia is estimated to be between $AUS 1-1.5 billion a year. </li></ul><ul><li>Rodgers et al. (2004) and Breen (2004) estimates that the industry in Australia spends around $AUS 21,000 per year per practicing doctor on drug promotion. </li></ul>
  3. 3. Macromarketing Issues <ul><li>Macromarketing social welfare issues related to the marketing of pharmaceutical drugs, similar to antidepressants are many including: </li></ul><ul><li>(1) they may not cure an illness per se; </li></ul><ul><li>(2) the development of new drugs may not yield substantive improvements in social benefits: </li></ul><ul><li>and (3) the private industry concern for profit erodes the affordable health benefits for the community (Lehmann 2006 and Cadeaux 2000). </li></ul>
  4. 4. Research on the Marketing of Pharmaceuticals <ul><li>Evans and Beltramini (1986) who found that physicians rated salespeople as their second most important source of pharmaceutical information, second only to pharmacists. </li></ul><ul><li>Later research by Andaleeb and Tallman (1996) also suggested that doctors see pharmaceutical sales representatives as an important source of information, even though they could have acquired this information without the representative’s assistance. </li></ul><ul><li>Recent research using panel data of major health insurers in the United States (Gonul et al. 2001), found that the prescription choices of the General Practitioners (GP’s) were also significantly influenced by marketing activities, such as free samples and personal selling. </li></ul><ul><li>Research by Richard and Van Horn (2003) found that the amount of detailing, or selling and sales promotion expenditure did have an influence on brand choice within a chemically equivalent therapeutic class (e.g. Selective Serotonin Reuptake Inhibitors (SSRIs) antidepressants) </li></ul>
  5. 5. The role of brand name in pharmaceutical markets <ul><li>Research by Richard and Van Horn (2004), suggest that brand names may have some direct influence on prescription choices of medical specialists, even amongst drugs which are therapeutically and therefore chemically the same. </li></ul><ul><li>Gonul et al (2001) also suggest that the marketing activities and expenditure and therefore brand name, may also influence prescription choices. </li></ul><ul><li>Other research by Druss, et al (2004) suggest that the introduction of cheaper, chemically equivalent generics, in this case generic SSRIs only marginally changed the market share, by less than 1% of all established branded products in this category such as Prozac. </li></ul><ul><li>This indicates the importance of brand name in repeat purchasing as discussed by Richard and Van Horn (2003). This is especially so for new or innovative pharmaceutical products. Marketing expenditure and the extent of branding have been found to be the most important predictor for the success and uptake of new drugs by the medical profession (Van den Bulte and Lilien 2001). </li></ul>
  6. 6. Pharmaceuticals, ethics and human welfare
  7. 7. The effect of expertise and specialisation of medical practitioners on the acceptance of pharmaceuticals <ul><li>Beardsley et al. (1988) noted that psychiatrists were more likely to provide a mental health diagnosis as a reason for a drug prescription than (general Practitioners) GPs. </li></ul><ul><li>Hadsall et al. (1982) found that GPs prescribed 45% of psychotropic drugs for non-emotional or mental health problems and that these drugs were more likely to be prescribed by the less educated and experienced GPs. </li></ul><ul><li>Zelino (1982) noted an inverse relationship between the efficacy of advertising (i.e. brand name) and the experience and further training of GPs. </li></ul><ul><li>Benson’s (1983) research indicates that the prescription of drugs was positively associated with confidence in training, negatively with the degree of scepticism, of the pharmaceutical benefits of the drugs and with the extent of professional activism. </li></ul><ul><li>Recent research at a more macro level, of the PBS database of prescriptions (Ward, Pecotich, O'Cass and Julian 2008) showed though that psychiatrists were just as likely to be influenced by the branding of antidepressants as were general practitioners. </li></ul>
  8. 8. A Research Agenda for the Marketing of Pharmaceuticals <ul><li>What is the extent of marketing that occurs with pharmaceuticals in Australia compared to other countries in the OECD, Asia-Pacific and the developing world? </li></ul><ul><li>Does greater marketing of pharmaceuticals in countries imply greater costs or benefits (greater acceptance of important therapies for example) of their health systems? </li></ul><ul><li>How important are sources of information about pharmaceuticals from companies that sell them to doctors and medical specialists that make decisions on prescribing them? </li></ul><ul><li>What policy regulations need to be introduced to provide greater transparency on promotions received by doctors? </li></ul><ul><li>To what extent does indirect or direct marketing to consumers influence their requests for a particular brand of pharmaceutical? </li></ul><ul><li>Can and should doctors be also trained to understand the marketing techniques that are used to try and influence their prescription behaviour? </li></ul>
  9. 9. Conclusion <ul><li>Pharmaceutical companies often provide many incentives to prescribe a brand of drugs. This may include support of educational seminars, conferences and trips, use of free samples and extensive sales promotion. </li></ul><ul><li>A measure of drug companies’ marketing may be the cost blow-out of the PBS, which rose to $700 million (AUS) last year and has been increasing at a rate of 13.6% every year for the past decade. </li></ul><ul><li>One wonders, despite the efforts of the Australian Federal government, how long such a process can continue. </li></ul><ul><li>The impact of the quality of life of such marketing practices therefore needs further investigation at the micro and especially the macro level (Malhotra 2006). There is also a danger that marketing practices may undermine the social benefits of affordable medical care for all. </li></ul>

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