Healthy Skepticism Library item: 18561

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: Electronic Source

Wokasch M
Secret Low Cost, High Revenue Generating Strategies for Pharmaceutical Companies
Pharma Reform 2010 Aug 10
http://www.pharmareform.com/2010/08/10/secret-low-cost-high-revenue-generating-strategies-for-pharmaceutical-companies/

Full text:

It’s been going on for decades and there seems to be no end in sight. Good news for pharmaceutical companies and their executives. Drive billions of dollars in revenue while saving hundreds of millions, if not billions of dollars in expense. What are these strategies that seem to be working so well for those who have figured it out and dare to deploy it?

The first strategy involves avoiding expensive clinical trials but capitalizing on markets of unmet medical need where you can formulate a story around why your product might make sense for those patients even when you have little or no data. The second strategy is to take advantage of the fact that all prescription drugs have side effects and possible adverse reactions. By mitigating and disguising the safety issues hidden in the cloud of prescribing information it is easy to downplaying side effects and adverse reactions, even if they might be fatal for some patients. You can even create a perceived competitive advantage by implying your product has fewer and less serious side effects and adverse reactions than other therapeutic options.

Yes, it might be embarrassing to get caught and you may have a credibility issue with some physicians who don’t go along with your therapeutic rationale or concocted story but the negative financial consequences are pretty benign. FDA could send you a warning letter. The government might even fine your company or make you ante up some money to settle the case. The same is true for product liability litigation. Yes, there are legal fees and occasionally the company may have to pay the victims multi-million dollar settlements. But, none of these consequences has near the financial impact of the positive revenue upside that can be generated over the same period of time.

Here is the best part about these strategies. Many pharmaceutical companies try to play by the rules, so sorting out those who are intentionally deploying these strategies takes time and it is more difficult to identify than you might think. Companies do inadvertently stray into off-label promotion and may appear to be understating their product risk profiles, especially as interpreted by the FDA. This makes it all the more effective to hide strategically intended campaigns. The FDA has to nit pick every promotion they get around to reviewing for clues of impropriety which ties up valuable agency resources making it all the more difficult to do a comprehensive job of surveillance. Without any real regulatory consequences for non-compliance, the FDA must rely on whistleblowers going to the Department of Justice with their cases in hopes of putting a stop to protracted and egregious abuses of these strategies. But that also takes time and years to gather sufficient documentation to legally take a company to task.

I am not advocating these strategies. To the contrary, I believe these corporate orchestrated strategies are potentially harmful to patients and contribute to diminishing trust and credibility of the industry. But, unfortunately, until the negative financial consequences exceed the revenue and earnings opportunities there is little incentive to stop the use of these strategies in companies with “whatever it takes” cultures. mike@pharmareform.com