UConn Professor Asks: Would Reducing Pharmaceutical Sales Calls to Physicians Help, or Harm, Patients?

When a pharmaceutical company sends a representative to your doctor’s office to promote a new or existing medication, is that a benefit to you as a patient? Would restricting those visits bring greater fairness to the pharmaceutical industry—or prevent your doctor from being well-informed about treatment options?

Those are some of the questions that UConn marketing professor Hongju Liu and three colleagues tackled in a research paper titled, “An Empirical Model of Drug Detailing: Dynamic Competition and Policy Implications” that is pending publication in the journal Management Science.

“The pharmaceutical industry is tremendously important and has recently undergone significant changes,” Liu said. “What we discovered could have ramifications for physicians, the industry and each of us as patients.”
-Hongju Liu

The vast amount of detailing—in-person calls by drug-company representatives—in the pharmaceutical industry has drawn interest from the public and legislators. In 2013, the Physician Payment Sunshine Act went into effect, creating transparency requirements resulting in physician practices and hospitals limiting pharmaceutical sales representatives’ access to doctors. Yet there has been little research about how these restrictions impact doctors’ prescription behavior and industry competition, Liu said.

Wide-ranging legislative proposals in different countries have been proposed to regulate and limit detailing activities, and there have also been efforts at self-regulation by both the industry and medical profession. The United Kingdom limits pharmaceutical firms’ sales promotion; Spain prohibits firms from providing more than 10 sample packages to a doctor in one year; and in 2009, Pharmaceutical Research and Manufacturers of America issued new guidelines on marketing to physicians, prohibiting non-educational and practice-related gifts, including pens.

In the U.S., sales representative access to physicians has become increasingly difficult. In 2013, some 45 percent of prescribers put significant restrictions on detailing representative access, compared with just 23 percent five years earlier.

For their research, Liu and his colleagues tracked the prescriptions for three popular statins, including Lipitor (Pfizer), Crestor (AstraZeneca) and Zocor (Merck). Statins are a group of drugs that reduce levels of fats, including triglycerides and cholesterol in the blood. In 2004, when the study began, statin sales surpassed $15.5 billion, making them the biggest-selling drugs in the U.S.

Liu and the other researchers studied 448 physicians who wrote almost 15,000 statin prescriptions and received more than 26,000 detailing visits. The study was based on data from 2002 to 2004 and mid-way through the study period, the new drug, Crestor, was introduced.

Liu and his colleagues wanted to know what the implications were for strategic behaviors as firms compete for the limited number of times they can meet physicians. Which firms gain, and which lose, in terms of revenue and profits? And what are the implications for the industry and public policy?

The researchers drew several conclusions:

• By “leveling the playing field,” restrictive policies benefit firms that have the weakest detailing effects, while hurting firms with the strongest. These effects are especially pronounced on prescriptions for new drugs, which need to build up their physician interest. This may be undesirable when new medications are better therapeutically.
• Imposing a ceiling on detailing frequencies leads to a significant reduction in detailing across the board.
• A self-imposed restrictive detailing policy established by a single drug firm is not likely to succeed in reducing detailing levels of other firms.
• With firms’ detailing levels reduced by a restriction policy, the number of non-drug treatment or generic drug prescriptions by medical practitioners expands. But whether that is a benefit or hindrance to public health is undetermined.

Liu collaborated with Qiang Liu, a marketing professor at Purdue University, Sachin Gupta, a professor at Cornell University and Sriram Venkataraman, a professor at the University of North Carolina at Chapel Hill.