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Healthy Skepticism International News

July 2003

Improving the Medicines Australia Code

by Peter R Mansfield .(JavaScript must be enabled to view this email address)

The Australian Consumer and Competition Commission (ACCC) is proposing to reauthorise the Medicines Australia (MA) Code of Conduct for pharmaceutical promotion.

MA (formerly the Australian Pharmaceutical Manufacturers Association) is the industry lobby group representing patent monopoly protected, mostly foreign pharmaceutical companies. The MA Code is available on the MA website.

The ACCC is the Australian government agency with responsibility for enforcing the Trade Practices Act 1974, including:

  * section 52 which prohibits corporations from engaging in misleading or deceptive conduct;
  * section 53(c), which prohibits corporations from representing that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have;
  * section 55A, which prohibits corporations from engaging in conduct likely to mislead the public about the nature, characteristics, suitability or quantity of services.

For example, on 1 July 2003 the ACCC announced commencement of proceedings against Australian Biologics for alleging false, misleading, and deceptive claims for Thermography, Live Blood Analysis and the Bolans Clot Retraction Test. (For more detail see media release 1 July 2003 on the ACCC website.)

The ACCC also has responsibility for ensuring that voluntary marketing codes such as the Medicines Australia (MA) Code of Conduct do more good than harm. On 14 February 2002 the ACCC commenced a periodic review to decide if the MA code deserves to be reauthorised.

On 20 September 2002 ACCC staff interviewed me. A record of that interview is available in appendix 1 below.

On 27 June 2003 ACCC released a draft determination stating that they planed to reauthorise the MA Code on three conditions:

  1. Drug companies will be required to disclose information about the “benefits” they plan to provide at educational events on the MA website one month before the events. This “does not include meetings solely between medical representatives of Medicines Australia members and some or all of the healthcare professionals working within a single practice or healthcare facility.”
  2. MA will be required to make the Code of Conduct Committee Annual Report publicly available on its website.
  3. MA will be required to notify the ACCC of any changes to the MA Code.

The full wording of the proposed conditions is available in appendix 2 below. For more detail see ACCC media release 27 June 2003: Greater Consumer Awareness of Drug Companies’ Dealings with Doctors Proposed and the full 41 page draft determination (pdf 596 kB) on the ACCC website.

On 24 July two ACCC staff members met with Healthy Skepticism’s Adelaide policy group in the morning and then with me alone in the afternoon to discuss the proposed conditions and other ideas for improving the MA Code. These meetings were productive and a report is being prepared by the ACCC.

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Appendix 1

2PM (Australian EST) ON 20 SEPTEMBER 2002

In attendance:
Dr Peter Mansfield (General Practitioner; Consultant on marketing and appropriate therapeutics; Research Fellow, Department of General Practice, University of Adelaide; Director, Healthy Skepticism)
Greg Outzen and Juleen Browning (ACCC)

Mr Outzen outlined the ACCC’s authorisation process and provided background information in relation to the Commission’s consideration of the Medicines Australia (MA) Code of Conduct (the Code). Mr Outzen indicated that except where confidentiality is granted by the Commission, the authorisation process requires transparency and as such, notes of today’s meeting would be made available to interested parties via the Commission’s public register of documents. Dr Mansfield agreed to this process.

Dr Mansfield outlined his 20-year history studying and trying to improve the marketing activities of drug companies.

Dr Mansfield stated that the frequency of misleading representations in drug promotion depends on how hard you look. He had looked systematically at a large sample of drug adverts published in New Zealand and found at least one potentially misleading logical fallacy in 100% of the sample. Dr Mansfield considers the overstatement of the benefits and understatement of risks is normal because of a system problem of market failure rooted in the way drug companies are rewarded for doing the wrong thing. According to Dr Mansfield the market (the Pharmaceutical Benefits Scheme, private payments, hospitals etc) reward drug companies for selling larger quantities of more expensive drugs (new drugs with patent monopoly protection) regardless of the impact on health outcomes. Consequently drug companies have little choice but to do what works to increase sales of more expensive drugs or be taken over by more aggressive competitors. (The same applies at the micro level to company staff.) “What works” involves using promotional methods that are effective at influencing enough of the doctors enough of the time to provide good returns on investment. Influencing doctors would not be harmful it the more expensive new drugs were medically superior to older drugs and better value for money but that is rarely the case. (See footnote 1 below which summarizes a French study that found that only 76 of 2,460 (3.1%) of new drugs during the past 20 years have been clearly superior to older drugs.) Because the market failure system problem is outside the control of the companies they should not be expected to be able to fix the problem. Meanwhile if company staff believe their own propaganda then they can mislead without intending to harm.

Mr Outzen stated it has been put to the Commission that the level of influence of drug marketing may impact upon prescribing which in turn can cause harm to the health status of consumers. Dr Mansfield estimated that less than 50% of drug promotion is directly harmful by promoting drugs that are significantly more medically harmful than the alternatives. He estimated that most unnecessary premature deaths and suffering results indirectly from diversion of scarce health resources away from more cost effective therapies.

Dr Mansfield illustrated the problem of market failure (in the broader definition of the term) with the antihypertensive drug: hydrochlorothiazide (abbreviated as HCT). HCT 12.5mg appears to be one of the the best evidence based treatment for uncomplicated hypertension. Statements in many guidelines and statements from the National Prescribing Service support his opinion on this. HCT has never been available in Australia in that dose but was available as 25 mg tablets that could be broken in half. Recently, the manufacturer has withdrawn the only brand of HCT. The reason give was “supply problems” but it is more likely that the real problem was that HCT was competing against the manufacturers more expensive drugs plus this drug can not be sold at a high price because it is off patent and a low price has been locked in by the PBS. HCT is now only available in expensive combinations with less well-established new drugs. Other examples include that the 2 tricyclic antidepressants recommended by Dr Mansfield (and the Sphere Program) desipramine and nortriptyline. Both have both been withdrawn from the market presumably to reduce competition against newer more expensive antidepressants. Dr Mansfield indicated this pattern is inevitable amongst companies given they need to increase the sales of more expensive drugs to compete in the market. Consequently, companies have little choice but to remove a good, cheaper item from the market, or just not promote it, to reduce competition against their new, more expensive items. Promotion follows a similar pattern for the same reasons: there is little or no promotion of older off patent drugs and maximum promotion of new, patent monopoly protected, more expensive more profitable drugs. This occurs regardless of whether the new drugs are medically inferior or less cost effective. As indicated in the footnote 1 3.1% of new drugs are clearly superior but most are not.

Mr Outzen raised the potential role of the Therapeutics Goods Administration (TGA) in relation to the HCT example. Dr Mansfield indicated that the TGA and the PBS are unlikely to accept that it is their role to fill gaps in the market by manufacturing or importing drugs themselves or forcing drug companies to provide the drugs that the country needs in the absence of any requirement from parliament to fill such roles. Dr Mansfield also expressed his concern that drug company funding (on a cost recovery basis) for TGA activities and isolation from doctors and patients has influenced TGA’s corporate culture. If the TGA was interested in regulating drug promotion in the interests of improving health care then it would seek collaboration with Healthy Skepticism Inc so as to use or at least test the incorporation’s expertise. The previous sentence also applies to the ACCC.

Mr Outzen then raised the potential role of the National Prescribing Service (NPS) in relation to the HCT example. Dr Mansfield responded that the NPS appears to have a policy of avoiding conflict and seeking partnership with industry. This is understandable given that under the current government (and perhaps under alternative governments) conflict with industry could lead to decreased government funding for the NPS.

Dr Mansfield pointed out that the considerations above lead to a situation where his organisation could not get funding nor collaboration from the TGA, PBS or the NPS. Consequently the ACCC appeared to be the last hope. In that context the ACCC’s refusal to take up a complaint from Healthy Skepticism Inc a few years ago was a source of deep disappointment. It had been suggested recently to Dr Mansfield that the ACCC might now be willing to investigate violations of section 52a of the Trade Practices Act by drug companies. That is why Dr Mansfield had approached the ACCC and his second approach had lead to this interview. Dr Mansfield offered the services of Healthy Skepticism as a consultancy organisation should the Commission wish to engage expertise that has been recognised by the World Health Organisation so as to investigate violations of the Trade Practices Act. Mr Outzen noted this offer but indicated that he was not aware of any plans within the ACCC to investigate violations of the Trade Practices Act by drug companies. He indicated that resources had only been allocated to a review of the MA Code. Dr Mansfield stressed that a decision to take up this offer could result in dramatic reductions in unnecessary suffering and premature deaths for large numbers of people. He estimated that he could identify about 100 promotional items violating Section 52a of the Trade Practices Act per week (ie about one every ½ hour during a 50 hour week).

Dr Mansfield outlined processes adopted by doctors when making medical decisions such as the prescription of drugs. Dr Mansfield described the process as sometimes involving “short cuts” because of lack of time to critically appraise all the evidence. One example of a short cuts is: “Newer is better”. This short cut usually gets people efficiently to the correct answer when buying high technology goods such as computers. However as documented in footnote 1 newer drugs are often inferior. It is normal for people including doctors to using short cuts when facing time pressure. Time pressure is the norm in clinical practice. However, the use of short cuts leads to vulnerability if they are manipulated by promotional techniques. For example “experts know best” can be a good short cut to the correct answer. However there is usually a range of views amongst experts. It is understandable that a drug company will prefer to fund research and education only by experts with opinions near the extreme most favourable to its drugs. Consequently doctors usually hear more from a biased selection of experts who are supported by drug companies.

Dr Mansfield suggested that government subsidies paid to drug companies should be reorganised so that payment levels are linked to the degree to which the drug improves health outcomes, thus reducing current perverse incentives to drug companies. Failing that, any influence from drug companies is more likely to be adverse than beneficial for the reasons that were explained above. Consequently, until the system is reformed, everything that can be done to reduce the adverse influence of drug companies should be done so as to improve health care.

Dr Mansfield address the commonly made claim that competition between companies leads to balancing or correction of misleading promotion. In reality there is often competition between promotion of two or more expensive new drugs but little promotion of older cheaper drugs and non-drug treatments.

Dr Mansfield referred to the evolution of voluntary regulation of drug promotion in the UK which is much more advanced than the equivalent in Australia. The key factor leading to improvements was a criminal conviction and jail term for a senior drug company executive. Dr Mansfield suggested that if the ACCC was serious about improving the Medicines Australia Code then it should follow that proven strategy. However he did not believe that even dramatic reform of the Medicines Australia code would be enough to protect Australians from misleading drug promotion. The best approach would involve a combination of strategies as outlined in Ian Ayres, John Braithwaite Responsive Regulation: Transcending the Deregulation Debate (Oxford Socio-Legal Studies) 1997. This would include contracting an appropriately qualified NGO to detect and violations to the voluntary regulatory system and then report them for enforcement by the ACCC when the voluntary regulatory system failed.

Dr Mansfield outlined some of the deficiencies of the current MA Code including the vagueness of the provisions under the Code, which should provide examples on what constitutes a breach so as to provide clarity. Such information should be made available in an unrestricted way on MA’s website for people to refer to if they have concerns with the activities of a pharmaceutical company. Also, Dr Mansfield also considers that the explanations used by the Code Administration Committee for not find companies in breach of the Code and their explanations for inadequate sanctions demonstrate bias or lack of expertise or both. The sanctions are so low that companies have little choice but to repeat breaching the code because the extra profits gained are much greater than the costs of the sanctions.

Dr Mansfield referred to an imbalance in the appeals process whereby if a manufacturer is found not to have breached the Code, the complainant cannot lodge an appeal with the Appeals Committee. By contrast one of his contacts in the UK has just won on Appeal a case that was mistakenly rejected on the initial complaint. The problem for complainants is that lack of appeal means they have no opportunity to expose misleading defences from drug companies and no way to predict them because they do not arise from evidence nor logic. By contrast, if a breach were deemed to have occurred, the manufacturer is able to appeal this decision to the Appeal Committee. Also, complainants are expected make their way to Sydney at their own cost for any Appeals Committee hearing. Dr Mansfield had been asked to attend an Appeal Committee hearing at 8:00 am which would have required him to spend the night before in Sydney, again at his own expense.

Dr Mansfield offered to provide the Commission with documentation relating to his interactions with the Code Administration Committee in the past.

Dr Mansfield outlined the importance of drug reps in the promotional mix. This included the example that drug reps will record the names of the children and pets of prescribers along with which specialists influence the practice of GPs. Dr Mansfield observed that some practitioners are surprised and upset that this level of information is collected whilst other practitioners see this as being part of many medical rep activities.

Mr Outzen asked how many people are members of Healthy Skepticism. Dr Mansfield responded that they have approximately 120 paying subscribers with about 800 unpaid subscribers.

Dr Mansfield stated that there is a wide range of variation amongst medical practitioners including levels of skills, training, and attitudes. For example, feed back from over 1000 GPs for an NPS case study showed that opinions as to what proportion of drug advertisements were potentially misleading, ranged all the way from 0% through to 100% of adverts. Clearly levels of skepticism vary and that leads to varying levels of vulnerability. The best study on this was done in Belgium. The finding was that doctors who saw drug reps more often and believed that information from drug companies was more useful were significantly more likely to prescribe benzodiazepines which are habit forming sleeping tablets that should rarely be used. (see footnote 2)

Dr Mansfield compared MA’s tendency to deny that there are problems with drug promotion with the tendency to denial of any problem by severe alcoholics who as consequence have a very poor prognosis. The first and the essential sign of improvement is willingness to admit to a problem in an honest way. Because of this denial on MA’s behalf, Dr Mansfield expects that MA will be a barrier to improvement in drug marketing rather than part of the solution. Whilst opinions within drug companies vary greatly the MA appears currently to be dominated by hard line anti-patient, anti-doctor and anti-taxpayer thinking rather than the customer service focus seen in less protected industries.

Dr Mansfield described his policy re refusing drug reps. However, in his group practice, medical reps sometimes approach him with offers of bribes such as books and dinners in the shared waiting room, in full view of his patients. Other marketing practices of medical reps include the provision of samples of new drugs. Some practitioners make use of these drugs for their own family and/or for their patients. This can be an effective way of getting patients started on a course of treatment which may not be easily changed in the future.

Dr Mansfield challenged a view put forward by some stakeholders that gifts such as branded pens that are below a certain dollar value would not influential enough to raise concerns. In mounting his challenge, Dr Mansfield suggested that small gifts can be more influential and more cost effective for the company. After receiving more substantial “gifts” from drug companies (such as sponsorship to attend a conference), doctors may make prescribing decisions that are not in favour of the drug company that sponsored them, in an effort to emphasise their independence and ethical decision making processes. However, a branded pen provides a frequent reminder at the time of decision making (like point of sale advertising) and can provoke a small subconscious feeling of gratitude and thus subtle reciprocal obligation without making the practitioner feel as if he or she has accepted a substantial bribe.

To circumvent such problems, Dr Mansfield joked that drug companies should only be allowed to provide gifts in the form of cash over $500 at a time so that it would be clear that these gifts were unethical bribes. His serious suggestion was the nature of that all gifts and their cost to the company be disclosed to the doctor before they be handed over and that this information be available to inspect on a website that provided totals of costs of gifts received for patients to inspect to help them assess the trustworthiness of doctors.

Dr Mansfield mentioned a conversation he had with a CEO of an Australian subsidiary of a drug company who indicated a distaste for spending large amounts of money on hospitality/travel and sponsorship for doctors but was forced to given the extortion-type approach taken by some doctors and the need to match the competition from other companies. He said that this was an example of what some economists call the “fruit box” phenomenon (where people bring increasing numbers of boxes to stand on to see over others at a football game). In these situations competition leads to inefficiency and worse outcomes via higher costs both for manufacturers and consumers. Consequently it was in everybody’s interests to support drug companies to reduce their costs by reducing competition based on paying the highest bribes.

Dr Mansfield concluded the meeting by offering further information and assistance to the Commission in relation to this issue.

Mr Outzen concluded the meeting by indicating Ms Browning would provide Dr Mansfield with draft notes of today’s meeting for comment prior to these being made available on the Commission’s public register.

Footnote 1

The French independent drug information journal la revue Prescrire has given a rating for almost all new prescription drugs released in France since 1981.  The following table summarizes the ratings given from 1981 to 2001 inclusive for new products and new indications for use in the community and hospital settings which were assessed in la revue Preserve. It does not include non prescription drugs or range extensions (new doses, formulations or presentations).

21 years’ ratings of new drugs by la revue Prescrire.

Judgments Explanation Number of drugs %
Bravo The drug is a major therapeutic innovation in an area where previously no treatment was available. 7 0.3%
A real advance The product is an important therapeutic innovation but has certain limitations. 69 2.8%
Offers an advantage The product has some value but does not fundamentally change the present therapeutic practice. 203 8.2%
Possibly helpful The product has minimal additional value, and should not change pre scribing habits except in rare circumstances. 414 16.8%
Nothing new The product may be a new molecule but is superfluous because it does not add to the clinical possibilities offered by previous products available. In most cases it concerns a me-too product. 1,584 64.4%
Not acceptable Product without evident benefit but with potential or real disadvantages. 67 2.7%
Judgement reserved The editors postpone their judgment until better data and a more thorough evaluation of the drug are available. 116 4.7%
Total 2460 100%

Source: Drugs in 2001: a number of ruses unveiled. Prescrire International April 2002; 11: 58: 58-60

Footnote 2

1.  Berings, D.; Blondeel, L., and Habraken, H. The effect of industry-independent drug information on the prescribing of benzodiazepines in general practice. Eur J Clin Pharmacol. 1994; 46(6):501-5.

Return to comment box

Appendix 2

The ACCC’s proposed conditions for improving the MA Code.

“The Commission proposes to grant authorisation subject to the following conditions.

Condition C1

The Code shall be amended to require members to provide Medicines Australia with the following information at least one month before the relevant educational meeting occurs:

the name, date, venue, duration, subject matter, general description of likely attendees (for example, members of particular medical specialty or specialties) and general details of any hospitality and entertainment associated with any educational meeting which a member proposes to subsidise by contributing funds or goods or services to the organising body (or bodies); the name, date, venue, duration, subject matter, general description of likely attendees (for example, members of particular medical specialty or specialties) and details of any hospitality and entertainment associated with any educational meeting in relation to which a member proposes to provide funds or goods or services to the organising body (or bodies) in return for allowing the member to promote its products or itself in any way at the meeting or at any event (including entertainment) associated with the meeting; all instances where a member proposes to provide funding or goods or services to a body where there is a reasonable prospect that the funding or goods and services or funding saved by the body by not having to purchase the goods and services will be used to subsidise an educational meeting.

Where it is reasonable to expect that the funding or goods and services or funding saved by not having to purchase the goods or services will be used to subsidise a specific educational meeting, the member shall provide the name, date, venue, duration, subject matter, general description of likely attendees (for example, members of particular medical specialty or specialties) and details of any hospitality and entertainment associated with that meeting;  the name, date, venue, duration, subject matter, general description of likely attendees (for example, members of particular medical specialty or specialties) and details of any hospitality to be provided in relation to any educational meeting proposed to be organised by a member; general details of any proposed opportunities for unstructured individual entertainment during educational meetings organised by a member; and the number of persons attending an educational meeting (whether organised by the member or not) whose attendance a member proposes to subsidise, partially or wholly, in any way (for example, travel and accommodation costs); the proportion of these persons who are medical or healthcare practitioners; the medical specialties in which these medical practitioners practice; and the name, date, venue, duration, subject matter, general description of likely attendees (for example, members of particular medical specialty or specialties) and details of any hospitality and entertainment associated with the educational meeting.

This information (including the name of the relevant Medicines Australia member) shall be accessible by the public through Medicines Australia’s website.

If any of the information listed above changes during the month preceding the relevant education meeting, Medicines Australia must be provided with the amended information within 3 working days.

Except in exceptional circumstances (for example, where there are significant technical difficulties relating to Medicines Australia’s website generally), Medicines Australia shall place (original or amended) information on its website within 5 working days of receiving it.

Educational meetings include conferences, symposiums, satellite meetings, seminars and any other type of meeting (with one exception) where one objective is to disseminate information about medical, pharmaceutical or similar matters.

It does not include meetings solely between medical representatives of Medicines Australia members and some or all of the healthcare professionals working within a single practice or healthcare facility.

The Code shall be amended to provide that any failure by Medicines Australia members to provide the information listed above within the required timeframes is a severe breach of the Code.

Condition C2

Medicines Australia shall make its Code of Conduct Committee Annual Report publicly available on its website.

Condition C3

Medicines Australia is to provide the Commission with a copy of the Medicines Australia Code of Conduct Guidelines, on which any amendments are marked, on an annual basis.”



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