Here are two more pieces of evidence that the pharma industry's rep is more Johnny Rotten than Pope Francis.
A new Harris poll confirms that pharma gets a big thumbs-down from most of the general public, with only 37% of respondents saying "positive" things about the industry--even fewer than last year. That puts the drug business about on par with the airlines, and we all know how much love they get.
That's the hard data. The soft? A report from HBO's John Oliver on Last Week Tonight, which pilloried the industry in general--and its marketing practices in particular. Oliver, ex of Jon Stewart's The Daily Show, spent 17-plus minutes detailing the reasons why we should care about pharma's misbehavior. And detailing said misbehavior. Then, almost every popular news outlet--including Rolling Stone--wrote up Oliver's report as news.
The bullet points are familiar to regular pharma-watchers. Drugmakers spend more to market their products than they do on R&D? Yes, according to a study reported right here at FiercePharma. (We've also reported a different conclusion here.)
Point two: Pharma sales types are motivated by quotas just like your average salesperson. For a here's how, Oliver runs a video clip in which a GlaxoSmithKline ($GSK) exec promises "ungodly" amounts of money to be made by reps promoting Advair. A very old statement, we should point out, given that Advair is now off patent, but representative enough, apart from the unfortunate word choice.
Oh, and pharma reps are handsome, pretty or both, but you know that from watching "How I Met Your Mother."
And for those who don't know how to connect the dots, Oliver does so: Pharma spends billions on direct-to-consumer advertising, sometimes clever, sometimes laughable, but almost always with the suggestion, "Talk to your doctor." Pharma spends even more on sales reps and materials squarely directed at physicians, so they're primed for patients who ask that very question. Drugmakers pay doctors to speak about their products, too. Some $1 billion just for the last 5 months of 2013, according to the government's Open Payments database.
It's true that Oliver simplifies a complex issue. For instance, doctors do need information about new drugs, particularly those that are complicated to use, and those that work entirely differently from their predecessors. Who's going to hand out that info but the drugmakers? Or take GSK. The company paid $3 billion to settle marketing allegations, off-label and otherwise, and then got caught bribing Chinese doctors to use its drugs. That bill? $490 million. But while its Chinese operation was handing out gifts and trips, in the U.S., GSK swore off doctor-speakers and scrapped its sales-rep quota system. Now, with new drug launches delivering less than expected, some analysts are blaming that cleaned-up marketing approach. Damned if you do, slammed if you don't.
But if pharma gets a big smack from a popular news show--and the smack goes viral--the industry can't blame the messengers. Glaxo was far from the only big drugmaker to plead guilty to stepping over the lines in marketing their drugs. Johnson & Johnson ($JNJ) and Risperdal, AstraZeneca ($AZN) and Seroquel, Eli Lilly ($LLY) and Zyprexa, Amgen ($AMGN) and Aranesp, Pfizer ($PFE) and Bextra, to name a few, and the investigations go on. Liability lawsuits make news almost every day, often with headlines that suggest pharma execs knew their products could harm people, but hid the fact till they were forced to admit it.
We've said it before, and we'll say it again: It's ironic that an industry supposedly in the business of saving lives, treating the sick and preventing disease is so incredibly unpopular with the public. Thing is, pharma's products do save lives; oncology drugs from Celgene ($CELG) and Novartis ($NVS) have made many blood cancers into chronic illnesses rather than death sentences. They treat the sick (new hepatitis C meds with cure rates approaching 100%). They prevent disease (vaccines, of all kinds). But pharma companies also charge prices as high as the market will bear and for years have ignored diseases they don't see as big marketing opportunities, even if those diseases afflict millions of people.
What public opinion is trying to do is reconcile those opposites, but it's bound to skew negative. Frankly, the scales are weighted. People expect more from drugmakers because they are in the business of treating the sick. People want pharma to let its conscience be its guide, regardless of industry analysts, shareholders, stock prices, activist investors and executive compensation plans that lean heavily toward stock-based incentive pay. The public wants drugmakers to behave not like businesses, but like not-for-profits.
No, we are not saying that shareholder value justifies hiding drug risks, breaking marketing rules, overpricing products or spending more on marketing than R&D. Never. Should the U.S. Justice Department continue flogging drugmakers for mismarketing their meds? Absolutely. Should regulators consider abolishing direct-to-consumer advertising? Maybe--the U.S. is one of only two countries in the world that allows it, after all. Should doctors stop letting pharma reps visit? Many have, and more put up barricades every day.
Drugmakers should behave better. Drugmakers should absolutely follow the rules, and yes, drugmakers should behave as if they have a conscience. But if the public opinion scales are stacked against pharma's image, then the behavior scales are balanced away from Jiminy Cricket. With share price and earnings as the goals, incentives are leading in the opposite direction.
People shouldn't criticize drugmakers for behaving like businesses. They are businesses, and they follow the rules of business, which are significantly different from the rules individuals are expected to go by every day. If we want a pharma industry that doesn't, then we need to start talking about government research funding, socialized medicine and higher taxes. And if we really care about companies and their consciences, then that's a much bigger problem.
-- Tracy Staton (email | Twitter)