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At Lunch With Peter Rost ...

So, I ventured into sunny Millburn, NJ, for a quiet lunch with Peter Rost today. No big deal. Just shooting the breeze with a source-turned-congenial-competitor. We ate at La Campagna, a new-ish Italian place where I recommend the vodka penne. Not exactly Elaine's, if you know what I mean.

When I get back to the office I see this. Jeez. I guess Rost's life is even more of a goldfish bowl than I thought it was.

Anyway, what Peter reports is mostly true. I am extremely good looking. I am leaving Brandweek in August to become a Knight Bagehot fellow at Columbia. But I'll still be blogging and reporting on the drug marketing biz until then ... so keep those emails and comments coming!

By the way, Rost showed up wearing dark sunglasses and a panama hat, like a character from a Graham Greene novel. He said it kept him cool in the sun. But could it be that he's trying to hide from Jeff Kindler's hitmen? Perhaps the stress of all that litigation is getting to him ...

PAL Gives GSK 'Bitter Pill' Award for Alli ... But Is It Deserved?

The Prescription Access Litigation Project has handed out another of its sarcastic Bitter Pill awards, this one for Alli, GSK's new OTC weight loss pill. Why? Because Alli's side effects include some pretty drastic loose-bowel-movement risks and PAL believes teens with eating disorders should have to go through a doctor before trying it. "By aggressively marketing alli and eliminating the need for a doctor’s supervision, GSK will cause this drug to be used inappropriately and even abused," sez PAL.

I saw the Alli launch commercial on TV last night and my first reaction was -- they didn't list any of the side effects! That's against PhRMA's extremely strict rules! But then I realized that as this is an OTC, not an Rx, product, GSK doesn't have to abide by those rules ... which just seems wrong.

Regardless, does GSK deserve PAL's insults? It is certainly true that if Alli is even halfway effective then the eating disorder crowd will get their hands on it. Of course, as eating disorders are primarily mental illnesses, these people are driven to get their hands on harmful products regardless of what GSK can do.

But to give GSK some credit, the company is jumping through some expensive marketing hoops--an info kit and a paperback come with the pills--to make it plain to users that Alli's side effects are grim, and that the drug only works if users are willing to completely change their diet and take up exercize. It's hard for me to think of another drug campaign (except for Celebrex) that touts its flaws as prominently as GSK touts Alli's advantages.

Bottom line: I'll wait and see what the long term effect of this drug's arrival on the market is before passing judgment. There's every chance that Alli will be as big as flop as its Rx version, Xenical (in which case PAL's complaints are moot).

NYT Publishes Completely Pointless Story About Avandia Advertising

I've read today's NYT story on the Avandia troubles so you don't have to. Here are the main points:

1. GSK has been "widely praised" for using a lot of black people, like actress Della Reese, in its Avandia ads.

2. This is because "Type 2 diabetes is a disease twice as likely to affect black Americans."

3. "But now ... some black advertising executives wonder if Glaxo’s advertising strategy could end up working against the company."

4. '"I’d expect competitors now to step up their outreach to African-Americans,' said Howard Buford, the founder and chief executive of Prime Access, a multicultural advertising agency in New York."

5. But "Avandia’s main competitor in this country is a drug called Actos...which does not conduct significant consumer advertising in the United States. A spokesman for Takeda said the company had no plans to increase its advertising to consumers in light of safety concerns about Avandia. So, the competitive issue raised by Mr. Buford could be largely theoretical."

6. Oh ...

7. Er ...

8. Never mind then ...

A classic example of a great idea for a business story that fell apart once the reporting was done but was somehow allowed into print anyway. Never underestimate editors' desire to fill space, come what may!

PhRMA Continues Its DTC Ad Report Coverup

One June 1 I offered PhRMA chief Billy Tauzin $50 -- to go to a charity of his choice -- if the second PhRMA report on violations of its DTC guidelines named any names. Well, PhRMA published its second report the same day (guess I don't check the press release list often enough!) and you don't get any prizes for guessing that PhRMA has indeed named no names despite finding 458 "comments" about DTC ads. "Comments"? That's right -- PhRMA does not even distinguish between complaints and praise.

It's impossible to say anything meaningful about the report because it is so vague, has so little information it, and doesn't go into specifics in any way. For instance: 3 of its 11 pages are simply a re-listing of the guiding principles themselves.

This time the report is accompanied by a panel's recommendations, which also mention no names and don't go into specifics. But the panel report does offer some clues suggesting that some of the 458 comments raised serious issues.

For instance, the report says:

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"Many health professionals still feel unprepared to address patient issues about a new medicine when new DTC advertisements debut."

"The panelists expressed some concerns about ads that potentially glamorize a health condition (for example, by featuring celebrity patients in high-energy situations), or present unrealistically healthy patients who do not reflect the average consumer with the condition."

"The vast majority of DTC ads did not include mention of PhRMA’s Partnership for Prescription Assistance program or other assistance programs that provide low-cost or free medications to those in need. Members suggested that all ads should inform consumers of these resources."

These criticisms alone suggest that drug companies are not following their promises to fully detail doctors before starting DTC; that their ads are not all that truthful or educational; and that drug companies aren't as keen as they'd have us believe for us to take them up on their offers of free drugs for the uninsured.

As readers of this blog know, Lilly recently ended its PAP scheme in order to please Wall Street. So that's one company that won't be advertising its patient assistant efforts any time soon.

Both Ed at Pharmalot and John Mack both regard the new PhRMA report as a whitewash -- as do I (which is why there's an image of a bucket of whitewash at the top of this post, in case you didn't notice).

The only question now is, when will PhRMA begin to realize that its ridiculous DTC reports are hurting the industry more than helping it? My guess: Not any time soon, as Tauzin's Troopers are still basking in the glow of having defeated DTC reform.

Villanova Study Claims DTC Spend Has No Effect on Drug Prices

The boffins in the business school at Villanova University are touting a formidable study with this headline: DTC advertising has no effect on the price of drugs (see download below). 

The study is potentially important because the role of the cost of DTC ads on the price of drugs (and therefore the price of healthcare) is continuously controversial.

(That scream you just heard was the folks at PhRMA yelling for joy because they finally found some academic backing for the notion that $4.5 billion spent on ads has no effect on prescription prices.)

I had a lengthy chat with two of the authors and they explained their research to me.

Here’s the summary:

They looked at the period 2001-2005, across five drug categories (sleep, antidepressants, bladder control,  cholesterol and erectile dysfunction). They compared prices with spend on DTC ads, detailing, sampling, and journal ads.

Once the numbers are crunched,  they say,  it turns out there is no relationship between adspend and moves in drug prices.

If you’re mathematically inclined I recommend looking at the charts on the download -- let me know if they got anything wrong!

As with all these things, the devil is in the details.

First, the data tracks changes in pricing, rather than initial pricing itself. That’s an important distinction because, arguably, the central question in the debate is what effect do DTC budgets have on pharma company decisions to set drug prices in the first place.

Second, in one category, bladder  control, the Villanova team did find that DTC spend had some role in driving prices. Let’s assume something completely unscientific -- that the proportion of categories in the Villanova study that did show DTC affects prices (1 in 5) is true across the board: I’d say that if the price of drugs in one of every five disease categories was affected by DTC, then that would indeed be quite significant.

Thirdly, in three of five categories the Villanova team found that other drug marketing factors, specifically sampling, did have an effect on creating “decreases in price sensititvity.” The presumed explanation is that if you’re given a free sample and it works, most patients will be extremely reluctant to switch even if price is a hurdle.

Fourth, the study sets up something of a straw man, because although everyone complains that DTC spend is jacking up the price of drugs, everyone in the business really knows that DTC spend is negligible in comparison to spend on detailing, sampling, etc. It is that spend that really drives pricing. The industry spends more on SG&A than it does in R&D, even though the industry routinely claims that drug prices are driven by the cost of R&D.

So, arguably, the real headline here is that either some drug price shifts are driven by DTC, or that most drug price shifts are driven by the cost of sampling.

The next crucial question is: Was this study funded by the drug industry? A PR woman for the Villanova team said no, definitely not.

But it’s worth noting that one of the authors of the study is Lance Longwell, who members of the media will recognize as the same Lance Longwell who’s a PR spokesman for IMS Health, the drug business measurement company whose main clients are, er, drug companies. So make of that what you will.

Personally, I’d like to see Pharmalyst to weigh in on this, because my knowledge of stats sucks and I already know I’m going to be making lots corrections to this entry.

Download dtc_drug_advertising_and_drug_prices_study.pdf

Can Pfizer Get Over Its Anger and Utilize the Leverage It Has With Rost?

It's extremely difficult to ignore the fact that Fortune has done a flattering feature story on Peter Rost. Rost could be on the verge of parlaying his position in the media from "one hit blogging wonder" into "permanent fixture that all drug companies will have to deal with in the future."

Whether Rost can successfully negotiate the transition over the next couple of years will be interesting. (It won't be a secret, of course. He'll tell us all about it whether we like it or not.) My money says Rost could be in this for the long run.

There is, of course, one variable -- his two ongoing lawsuits against Pfizer, which to my knowledge are both unresolved.

What Pfizer's general counsel's office has been ignoring so far -- probably because the lawyers there find Rost infuriating -- is that they actually have a fantastic opportunity in front of them that no other drug company has: The ability to tie Rost up in a legal settlement that would prevent him from blogging about Pfizer ever again.

If Pfizer is ever able to swallow its pride and offer Rost a decent settlement, it is highly likely that they would require that he never say a public word again about the company. And given the scale of pharma settlements, it is highly likely, IMHO, that Rost would feel duty bound to accept those terms. He has a house, wife and kids to provide for after all, and bloggging and publishing don't make people rich.

Ironically, there are several pharma companies -- AZ among them -- who would love to be in Pfizer's position right now for that exact reason.

Why SEIU Is Crazy to Believe PhRMA Will Slam J&J's Remicade Campaign

The Service Employees International Union is starting to get some media traction for its protests that Johnson & Johnson does not give health insurance to the janitors that clean its offices. This has led to the ironic situation of the guy who sweeps the floor of the Centocor staffers who market Remicade being unable to actually get any Remicade to treat his rheumatoid arthritis.

Today it emerged that SEIU has asked PhRMA to investigate Johnson & Johnson's use of the documentary Inner State to market Remicade. The SEIU believes the Remicade documentary falls afoul of the ad guidelines that J&J has agreed to abide by, because the documentary doesn't mention its corporate sponsor.

This, presumably, is merely a publicity stunt by the SEIU for its janitor protests. The union can't possibly believe that PhRMA will really investigate J&J. As I've already noted here, PhRMA's guidelines are not designed to police the drug ad business. Quite the opposite, they're designed to hide wrongdoing in the drug ad business -- specifically, they're designed to conceal who is breaking the PhRMA guidelines that J&J signed onto in the first place.

Take a look at PhRMA's first report into who broke PhRMA's guiding principles. Not a single company's name is mentioned -- even though the report  PhRMA received 284 "comments" on issues to do with DTC ads.

To give you an idea of how seriously J&J takes PhRMA's ad guidelines, check out this section of MediaPost's story: "PhRMA has already indicated that it doesn't feel it is appropriate to apply its guidelines--which were created with an eye toward traditional advertising such as a 30-second TV spot--to the documentary, [ Michael Parks, Centocor's vice president/corporate communications] adds."

In other words, Parks doesn't believe the PhRMA ad guidelines apply to all ads. How convenient!

I will give $50 to a charity of Billy Tauzin's choice if, next September, PhRMA's 2007 report names a single drug company as having violated its ad promises.