Vermont watches drug marketing costs

The state's new prescription drug law requires sales reps to report gifts valued at more than $25.

By Andis Robeznieks, amednews staff. July 1, 2002.

Signed into law by a physician governor and supported by the state's medical society, Vermont's new prescription drug cost-containment law has garnered a lot of attention as well as pharmaceutical industry criticism.

"The whole thrust is to reimpose market discipline on the pharmaceutical industry," said Gov. Howard Dean, MD, a former practicing internist with presidential aspirations. "I think it will help, in the long run, to reduce pharmaceutical costs."

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He said the state could not sustain the costs of prescription drugs and supplies, which have increased by an average of 13% a year since 1992.

Officials hope to lower costs by curbing marketing expenses, and the new law requires drug company sales representatives to report gifts valued above $25 that are given to doctors.

Starting July 1, sales reps will have to report these gifts (free drug samples are excluded) to the state pharmacy board, which will forward the information onto the state attorney general's office.

According to legislative counsel Herb Olson, the cost of collecting and processing this information will be absorbed by the board and attorney general's office. He said the original bill included fees to help cover these costs, but the fees were not included in the final version which was passed into law.

Bobbie Kamen, director of the Vermont AARP chapter, said that even though the attorney general's office won't compile its first gift report for the Legislature until 2004, she still thought that the law would lower costs by changing behavior.

"Once it becomes public information, doctors will think twice about accepting gifts they don't want their names attached to," she said.

Dr. Dean, a 1978 graduate of New York City's Albert Einstein College of Medicine, compared this provision of the law to campaign-finance reform.

"Just like lobbyists have to register how much money they spend to influence politicians, drug companies have to say how much they spend to influence doctors' prescribing habits," he said.

This provision will help doctors, Dr. Dean said, by keeping sales meetings short and sweet -- just like they were when he was practicing. "I think it will make it more pleasant," he said. "The guys who detailed me were always pleasant -- they just dropped off a bunch of free samples and left."

Prescription drug cost increases in Vermont average 13% a year.

Jeff Trewhitt, spokesman for the Pharmaceutical Research and Manufacturers of America, disagreed.

He called the gift reporting "a waste of time" because it will address only the "problem few" sales reps who won't be following his organization's new guidelines outlawing expensive gifts that serve no medical purpose.

The law, signed on June 13, also:

Calls for developing a preferred drug list to promote prescriptions of lower-costing medicines.
Allows for lower-cost bulk purchasing of drugs through the Northeast Legislative Assn. on Prescription Drug Pricing.
Directs Dr. Dean to negotiate with drugmakers for supplemental rebates and discounts for Medicaid or other public assistance health plans.

Saying that drug companies already provide "generous" federally mandated rebates, Trewhitt criticized the provision for supplemental rebates and discounts. But his harshest criticisms were for developing the preferred drug list.

"Vermont is hurting Medicaid patients," he said, by forcing doctors to get prior authorization before they can prescribe higher-costing but more effective medications.

The law calls for this process to "be designed to minimize administrative burdens on prescribers, pharmacists and consumers," but Trewhitt doubts it will work as mandated.

"It can be a hassle," he said. "You can play telephone tag. You can get in long telephone conversations you don't have time for. So in many cases, the doctors just don't make the call."

The Vermont Medical Society, however, supported the bill and congratulated lawmakers on getting it passed.

"This legislation contains a number of beneficial provisions that will reduce the cost of prescription drugs and increase their availability for many Vermonters," said VMS President Carolyn Taylor-Olson, MD, in a press release.

VMS Executive Vice President Paul Harrington added that doctors were working with officials to develop the prefered drug list and a convenient prior authorization process.

"It's not a unique feature," Harrington said of the preferred drug list. "What is unique about the state of Vermont is the close, collaborative relationship they're seeking to develop with Vermont physicians."