British pharmaceutical company GlaxoSmithKline has announced that it will end two controversial industry practices.
Glaxo will stop paying doctors to promote its products, and it will stop tying sales reps’ pay to the number of prescriptions doctors write. The New York Times writes that Glaxo is the first major drug company to take this step, although others may be expected to follow suit shortly.
Not surprisingly, it does not appear that Glaxo is acting out of any kind of altruism. Turns out the company is under investigation in China for allegedly bribing doctors and government officials to boost drug sales.
Glaxo denies the changes are in response to the problems faced in China. The CEO stated that the move is part of a yearlong effort “to try and make sure we stay in step with how the world is changing.”
By next year, the U.S. government will require that any promotional payments that pharmaceutical companies make to doctors be made public.
This is, however, a part of a larger problem in the United States. Currently, the United States and New Zealand are the only countries that allow direct-to-consumer advertising by pharmaceutical companies. This allows pharmaceutical and medical device companies to work around the doctor’s oversight and convince patients that they need medicine for conditions like “restless leg syndrome” and “low-T” by overemphasizing the benefits of the drugs and creating an overmedicated society. It also increases the price of pharmaceuticals.
According to the US National Library of Medicine National Health Institute, the pharmaceutical industry spent 1.2 billion dollars on direct to consumer advertising in 1998, an amount that has ballooned to 4.5 billion in 2009, with 1 billion alone being spent on internet advertising. Much of this advertising budget is spent to promote new drugs, which are not necessarily any more effective than the previous generation of drugs but have drastically increased cost. Many critics suggest that the pharmaceutical commercials should include the costs of generics that would have the same effect on the consumer.
The direct to consumer marketing is also adding difficulty to the FDA’s job of regulating drugs. Before the direct to consumer advertising took off the FDA did not have to worry about the content of pharmaceutical companies commercial advertising. Now, the FDA is forced to regulate the ways in which pharmaceutical companies advertise to consumers, including making sure that each and every commercial and advertisement is consistent with the warning label and approved uses of the drug. This is adding a drastic strain to the FDA’s workload and increasing the amount that the American tax payer is forced to pay in order to subsidize the FDA.
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