Sex, Drugs, Stock and Rolls and rolls of cash
December 13, 2005 3:15 PM Subscribe
Medical professionals can buy shares in pharmaceutical companies. Is this good for my health? (Both my medical and economic health)
A doctor friend of mine has just purchased £52G of Merck shares. It seems to me that there is an obvious conflict of interest which could be to the detriment of his patients. But his investment seems to be entirely legal.
Given that free lunches and branded pens from pharma comps are considered to be dangerously influential, how are the private investments of medical professional reconciled with their obligations to give the very best health care to their patients? What proportion of pharma shares are owned by drs? Who regulates this? Where can I read more about this type of thing? (UK only. Not very interested in hearing about other systems, unless its for a usefull comparrison)
A doctor friend of mine has just purchased £52G of Merck shares. It seems to me that there is an obvious conflict of interest which could be to the detriment of his patients. But his investment seems to be entirely legal.
Given that free lunches and branded pens from pharma comps are considered to be dangerously influential, how are the private investments of medical professional reconciled with their obligations to give the very best health care to their patients? What proportion of pharma shares are owned by drs? Who regulates this? Where can I read more about this type of thing? (UK only. Not very interested in hearing about other systems, unless its for a usefull comparrison)
are free lunches and branded pens considered dangerously influential? By whom? They certainly aren't banned. The doctors I know are all highly independent souls who prescribe as they have been taught - in order to get the best result for the patient based on the observable clinical signs and test results.
/partially playing devil's advocate
posted by altolinguistic at 3:39 PM on December 13, 2005
/partially playing devil's advocate
posted by altolinguistic at 3:39 PM on December 13, 2005
Yeah - I think people should be allowed to buy what they know about, as long as there's no clear connection between their own purchasing power in the field (in this case, prescriptions) and the success of the company. If they were, say, working for the FDA on drug approval, I would be much more suspicious. Suffice to say, your doctor-friend has no power (as delmoi says, above).
That said, he does have knowledge. While Merck is all-kinds-of-screwed right now, a few people I've talk to think that they're undervalued because of the risk they're in. Of course, these people are making some assumptions about that risk.
So, if you trust your friend as a doctor, I wouldn't worry about the next prescription he gives you. I might look carefully at his investment advice, though. (Particularly given yesterday's hung jury, which really shouldn't have been. These juries are out for blood.)
posted by metaculpa at 3:46 PM on December 13, 2005
That said, he does have knowledge. While Merck is all-kinds-of-screwed right now, a few people I've talk to think that they're undervalued because of the risk they're in. Of course, these people are making some assumptions about that risk.
So, if you trust your friend as a doctor, I wouldn't worry about the next prescription he gives you. I might look carefully at his investment advice, though. (Particularly given yesterday's hung jury, which really shouldn't have been. These juries are out for blood.)
posted by metaculpa at 3:46 PM on December 13, 2005
The doctors I know are all highly independent souls
well, so are all the consumers i know, and yet, advertising works great. you don't have to brainwash someone to get your marketing across - all that's required is to plant the seed, name recognition or whatever, and doctor so-and-so might choose to prescribe blimpterol instead of obesitix. doctors are still people, after all, and no amount of medical school is going to remove some basic features of human nature. certainly staring at a blimpterol pen all day would make it a subliminal presence in one's mind, and the last thing i want is my doctor even approaching the decision under the influence of the same sort of thing that makes people choose sprite over 7-up. so you can count me in with the people who consider it dangerous.
posted by sergeant sandwich at 3:54 PM on December 13, 2005
well, so are all the consumers i know, and yet, advertising works great. you don't have to brainwash someone to get your marketing across - all that's required is to plant the seed, name recognition or whatever, and doctor so-and-so might choose to prescribe blimpterol instead of obesitix. doctors are still people, after all, and no amount of medical school is going to remove some basic features of human nature. certainly staring at a blimpterol pen all day would make it a subliminal presence in one's mind, and the last thing i want is my doctor even approaching the decision under the influence of the same sort of thing that makes people choose sprite over 7-up. so you can count me in with the people who consider it dangerous.
posted by sergeant sandwich at 3:54 PM on December 13, 2005
Response by poster: Delmoi. I would have thought that the power of a senior doctors to influence the market goes beyond their day-to-day prescriptions. My friend, for example, is a consultant at my local hospital and has some sway in which companies get their products on the formulary-- hence what drugs are widely used. My point is that as seniority increases, so does influence. Are the private interests of senior doctors regulated proportionally or are their investments made public in any way?
Secondly, Im not suggesting that a doctor would prescribe 'bad drugs'. The difference between different drugs is obviously more complex than a choice between good/bad. What I am curious about is the extent to which private interest is a factor in the decision.
posted by verisimilitude at 3:56 PM on December 13, 2005
Secondly, Im not suggesting that a doctor would prescribe 'bad drugs'. The difference between different drugs is obviously more complex than a choice between good/bad. What I am curious about is the extent to which private interest is a factor in the decision.
posted by verisimilitude at 3:56 PM on December 13, 2005
Given that free lunches and branded pens from pharma comps are considered to be dangerously influential
I agree with altolinguistic. I work in market research and we interview hundreds of doctors about what drugs they do and do not prescribe and why. Doctors use drugs they feel work well with n reason of side effects and cost as well as other important factors. Sure a rep may convince them to at least try a drug but pens and notepads really have never been mentioned. No amount of subliminal advertising can make a drug work...
The doctors I know are all highly independent souls...
well, so are all the consumers i know
There is a big difference between choosing coke over pepsi and prescribing a drug. I think when it comes to one's profession (be it physician or IT or human resources) their are more important considerations that pens and notepads. Our IT person has lots of crap like that from many different tech companies but she still shops around considerably when she makes a purchase so that she can get what the company needs for the best price. Our HR person shops around for our health insurance every year despite the BlueCross BlueShield cd player that sits on her desk everyday.
posted by TheLibrarian at 4:13 PM on December 13, 2005
I agree with altolinguistic. I work in market research and we interview hundreds of doctors about what drugs they do and do not prescribe and why. Doctors use drugs they feel work well with n reason of side effects and cost as well as other important factors. Sure a rep may convince them to at least try a drug but pens and notepads really have never been mentioned. No amount of subliminal advertising can make a drug work...
The doctors I know are all highly independent souls...
well, so are all the consumers i know
There is a big difference between choosing coke over pepsi and prescribing a drug. I think when it comes to one's profession (be it physician or IT or human resources) their are more important considerations that pens and notepads. Our IT person has lots of crap like that from many different tech companies but she still shops around considerably when she makes a purchase so that she can get what the company needs for the best price. Our HR person shops around for our health insurance every year despite the BlueCross BlueShield cd player that sits on her desk everyday.
posted by TheLibrarian at 4:13 PM on December 13, 2005
I once had an OB/GYN tell me that generic birth control pills didn't work as well as branded ones. THAT made me crook an eyebrow. Doctors aren't infallible - there are clueless people in every profession.
posted by chocolatepeanutbuttercup at 5:21 PM on December 13, 2005
posted by chocolatepeanutbuttercup at 5:21 PM on December 13, 2005
Not to threadjack (but yes, to slightly threadjack) but chocolatepeanutbuttercup: You should take a look at this brief discussion on generics versus brand name medications.
"However, it should be noted that current regulations permit a variation of up to 20% either way in the bioavailability of the active ingredient."
Just sayin'.
Meanwhile, I think that there could easily be a middle ground here. As long as I know my practitioner is heavily invested in a certain company, it will let me make the appropriate decisions about how to receive his advice and treatment plans. That seems about as simple as asking him to disclose it to you. In your case, it's already done, and you can carefully examine the basis any time he prescribes you several thousand milligrams of Propecia just for the hell of it.
posted by disillusioned at 5:34 PM on December 13, 2005
"However, it should be noted that current regulations permit a variation of up to 20% either way in the bioavailability of the active ingredient."
Just sayin'.
Meanwhile, I think that there could easily be a middle ground here. As long as I know my practitioner is heavily invested in a certain company, it will let me make the appropriate decisions about how to receive his advice and treatment plans. That seems about as simple as asking him to disclose it to you. In your case, it's already done, and you can carefully examine the basis any time he prescribes you several thousand milligrams of Propecia just for the hell of it.
posted by disillusioned at 5:34 PM on December 13, 2005
The difference between different drugs is obviously more complex than a choice between good/bad. What I am curious about is the extent to which private interest is a factor in the decision.
it _is_ more complex. but it's not necessarily dangerous. there's a big leap between saying that drug food/pens/etc. are influential and saying that they're dangerously influential. i'll leave it to you to show otherwise.
in regards to how much physicians are influenced: well, apparently, we're suckers. my gut reaction says that it's not as bad as nofreelunch.org makes it out to be, but i have no studies showing the opposite. so yes, we're influenced. but is it dangerous?
i don't think so. let's pick on merck for a bit and pretend:
1. hyzaar. i'm a compensated physician who lectures on the benefits of hyzaar. it's great. it lowers blood pressure like you've never seen! woo! here, have some samples and a spiffy pen. also, have some burritos, too.
a patient comes in, newly diagnosed hypertensive. what to give? certainly not hyzaar. guidelines say i should start with HCTZ, which is a component of hyzaar, and work from there. if he doesn't respond, or doesn't respond well enough, i'll try or add another agent. even if i ultimately end up treating him with HCTZ and an ARB (which hyzaar's other component falls under the class of), i could write for generic HCTZ plus the ARB alone, which could be cheaper than hyzaar alone. this would mean he'd have to take two pills instead of one, and if convenience or compliance is a factor, then yes, i'd consider writing for hyzaar. is any part of this dangerous? i don't think so.
where is the danger in writing for hyzaar for people who need both HCTZ and an ARB?
2. zocor. i've recently enjoyed a tasty burrito lunch with a totally hawt drug rep, who told me that zocor's the bomb. not only does it work well, but i should seriously consider using the 40mg dose in all type-2 diabetics, as diabetes is a cardiac risk factor equivalent, and has a low LDL cholesterol goal.
ok. thanks for the burrito. thanks for reminding me, too, that i should vigorously pursue lowering cholesterol levels in diabetics. i'm madly in love with you, miss drug rep, and will do whatever you say, and write for zocor only.
is this dangerous? no. i'm not going to write for zocor in people who don't need it. i'm not going to blindly write for zocor, either, in patients who might otherwise be able to lower their cholesterol through diet and exercise.
where is the danger in writing for ONLY zocor for patients who require medical treatment with a drug from that class of drugs?
3. vioxx. say i used to eat vioxx-sponsored burritos before it got pulled from the market. the big deal with the class of medications that vioxx was in was that it worked a lot like NSAIDs such as motrin and naprosyn did, without the risk of GI complications. i'd give it to patients who wanted long-term pain relief from arthritis, for whom taking motrin for such a long time would be risky for causing bleeds.
was it dangerous? well, yes. as i'm sure everyone's aware, vioxx has been tied with cardiac complications. was my treatment wrong? not necessarily.
celebrex, which is in the same class as vioxx and bextra, has so far been shown to be safe. safer, in fact, than motrin and aleve, in terms of future cardiac problems. am i wary? of course. but the risk of GI bleed from long-term NSAID use is known, and considering the best data i have, the best care i can give for someone asking for pain relief over long periods of time for, say, arthritis, is to write for celebrex.
we're suckers. ok. so what? how is that dangerous? we get paid or compensated to speak about or hear about specific drugs. so what? we still follow guidelines and the best evidence for treatment. we may prescribe medications that are shown to be harmful. how are we supposed to know? do we shun all new drugs? what about drugs in a field where there are limited drugs (such as treatment of MRSA)?
we do the best we can, with what we know. we are influenced, but this isn't necessarily dangerous. and we get just as upset at big pharma hiding negative data about the drugs we end up writing for.
in regards to the stock: big deal. same deal. i don't see how it's dangerous. any competent physician is still going to follow guidelines/evidence/sensitivities/etc. for the treatment of his or her patient. if it so happens that the class of drug that's called for is something that merck does business in, so be it.
sorry for the long-winded reply. i'm just trying to avoid a push-n-pull argumentation where i'd probably say the same things, but over several posts.
on preview: oh, man. don't even get me started on generic vs name-brand.
posted by herrdoktor at 6:20 PM on December 13, 2005
it _is_ more complex. but it's not necessarily dangerous. there's a big leap between saying that drug food/pens/etc. are influential and saying that they're dangerously influential. i'll leave it to you to show otherwise.
in regards to how much physicians are influenced: well, apparently, we're suckers. my gut reaction says that it's not as bad as nofreelunch.org makes it out to be, but i have no studies showing the opposite. so yes, we're influenced. but is it dangerous?
i don't think so. let's pick on merck for a bit and pretend:
1. hyzaar. i'm a compensated physician who lectures on the benefits of hyzaar. it's great. it lowers blood pressure like you've never seen! woo! here, have some samples and a spiffy pen. also, have some burritos, too.
a patient comes in, newly diagnosed hypertensive. what to give? certainly not hyzaar. guidelines say i should start with HCTZ, which is a component of hyzaar, and work from there. if he doesn't respond, or doesn't respond well enough, i'll try or add another agent. even if i ultimately end up treating him with HCTZ and an ARB (which hyzaar's other component falls under the class of), i could write for generic HCTZ plus the ARB alone, which could be cheaper than hyzaar alone. this would mean he'd have to take two pills instead of one, and if convenience or compliance is a factor, then yes, i'd consider writing for hyzaar. is any part of this dangerous? i don't think so.
where is the danger in writing for hyzaar for people who need both HCTZ and an ARB?
2. zocor. i've recently enjoyed a tasty burrito lunch with a totally hawt drug rep, who told me that zocor's the bomb. not only does it work well, but i should seriously consider using the 40mg dose in all type-2 diabetics, as diabetes is a cardiac risk factor equivalent, and has a low LDL cholesterol goal.
ok. thanks for the burrito. thanks for reminding me, too, that i should vigorously pursue lowering cholesterol levels in diabetics. i'm madly in love with you, miss drug rep, and will do whatever you say, and write for zocor only.
is this dangerous? no. i'm not going to write for zocor in people who don't need it. i'm not going to blindly write for zocor, either, in patients who might otherwise be able to lower their cholesterol through diet and exercise.
where is the danger in writing for ONLY zocor for patients who require medical treatment with a drug from that class of drugs?
3. vioxx. say i used to eat vioxx-sponsored burritos before it got pulled from the market. the big deal with the class of medications that vioxx was in was that it worked a lot like NSAIDs such as motrin and naprosyn did, without the risk of GI complications. i'd give it to patients who wanted long-term pain relief from arthritis, for whom taking motrin for such a long time would be risky for causing bleeds.
was it dangerous? well, yes. as i'm sure everyone's aware, vioxx has been tied with cardiac complications. was my treatment wrong? not necessarily.
celebrex, which is in the same class as vioxx and bextra, has so far been shown to be safe. safer, in fact, than motrin and aleve, in terms of future cardiac problems. am i wary? of course. but the risk of GI bleed from long-term NSAID use is known, and considering the best data i have, the best care i can give for someone asking for pain relief over long periods of time for, say, arthritis, is to write for celebrex.
we're suckers. ok. so what? how is that dangerous? we get paid or compensated to speak about or hear about specific drugs. so what? we still follow guidelines and the best evidence for treatment. we may prescribe medications that are shown to be harmful. how are we supposed to know? do we shun all new drugs? what about drugs in a field where there are limited drugs (such as treatment of MRSA)?
we do the best we can, with what we know. we are influenced, but this isn't necessarily dangerous. and we get just as upset at big pharma hiding negative data about the drugs we end up writing for.
in regards to the stock: big deal. same deal. i don't see how it's dangerous. any competent physician is still going to follow guidelines/evidence/sensitivities/etc. for the treatment of his or her patient. if it so happens that the class of drug that's called for is something that merck does business in, so be it.
sorry for the long-winded reply. i'm just trying to avoid a push-n-pull argumentation where i'd probably say the same things, but over several posts.
on preview: oh, man. don't even get me started on generic vs name-brand.
posted by herrdoktor at 6:20 PM on December 13, 2005
Well, if your owns £52k of Merck , who's market cap is $63.19 billion, every extra pound he makes for Merck makes him £1.45638076 × 10-7.I don't think that is the concern. What if the doctor started noticing a high rate of bad side effects, or some other phenomenon that is potentially damaging or harmful to the company's reputation? Do you not think they might be just a little less likely to act on or to report to regulatory agencies something that could potentially result in a drug being pulled from market if they knew it would tank the share price of the company? It wouldn't even have to be such a stark whistleblower-type situation either. Suppose the doctor is expected to fill out regular questionnaires or surveys about what he has observed with certain drugs. Don't you think -- even subconsciously -- he might be somewhat less explict about stating what he has seen or experienced if he knew that in aggregate such results might potentially put a drug's safety under question? I don't mean that he would necessarily participate in a cover-up conspiracy if he owned a large amount of stock (but then again....), just that it might color his judgement in certain ways.
posted by Rhomboid at 6:27 PM on December 13, 2005
I don't think that is the concern. What if the doctor started noticing a high rate of bad side effects, or some other phenomenon that is potentially damaging or harmful to the company's reputation? Do you not think they might be just a little less likely to act on or to report to regulatory agencies something that could potentially result in a drug being pulled from market if they knew it would tank the share price of the company?
I think he'd sell.
posted by delmoi at 6:42 PM on December 13, 2005
I think he'd sell.
posted by delmoi at 6:42 PM on December 13, 2005
Most peer-reviewed medical journals, as well as medical conferences, require disclosure statements from the authors/speakers which are part of the article or presentation.
Something like,
"Dr Ikkyu2 is currently employed in a part-time consultancy capacity by Merck, has accepted honoraria from Pfizer and UCB Pharma for dinner lectures, and owns stock in GlaxoSmithKline and Elan Pharmaceuticals."
Articles have been retracted and academic careers ruined over inaccurate disclosure statements, although that's pretty rare.
Disclosure: I've never been employed by, paid off by, or owned stock in a drug or device company.
posted by ikkyu2 at 7:22 PM on December 13, 2005
Something like,
"Dr Ikkyu2 is currently employed in a part-time consultancy capacity by Merck, has accepted honoraria from Pfizer and UCB Pharma for dinner lectures, and owns stock in GlaxoSmithKline and Elan Pharmaceuticals."
Articles have been retracted and academic careers ruined over inaccurate disclosure statements, although that's pretty rare.
Disclosure: I've never been employed by, paid off by, or owned stock in a drug or device company.
posted by ikkyu2 at 7:22 PM on December 13, 2005
He might as well flush his cash into a sewer.
That said, in reference to the original question, give me a fucking break.
posted by docpops at 7:34 PM on December 13, 2005
That said, in reference to the original question, give me a fucking break.
posted by docpops at 7:34 PM on December 13, 2005
Chocolatepeanutbuttercup--Many physcians will NOT write for generic hormones (included in this are BCP and thryoid supplements). With generic you don't know what you are getting, or if you are consistantly getting the same brand. BCP needs to be constant. More recently I remember a pharmacist saying he would not fill a thyroid medication with a generic. I remember when I was on BCP years ago there were problems with generic BCP--seems as though the active and the inert ones were accidently in the wrong place.
So, yes--generic BCP may prevent pregnancy and work in the same fashion. But the side effects may not be worth it.
In some medications, brand name is worth it.
posted by 6:1 at 8:40 PM on December 13, 2005
So, yes--generic BCP may prevent pregnancy and work in the same fashion. But the side effects may not be worth it.
In some medications, brand name is worth it.
posted by 6:1 at 8:40 PM on December 13, 2005
"I work in market research and we interview hundreds of doctors about what drugs they do and do not prescribe and why [...] pens and notepads really have never been mentioned. No amount of subliminal advertising can make a drug work."
What educated professional would admit to making professional decisions based on shwag, and how would they even know it if the influence was subliminal?
More to the point, why do people think advertising is necessarily about selling people something that they don't need, or which doesn't work? Much advertising is about either 1) influnencing people to choose between two equivalent and equivalently priced products or 2) influencing people to choose the more expensive of two equivalent products.
In a drug industry where companies probably spend as much effort knocking off the innovations of competitors as they do on actually developing wholly new classes of theraputic compounds, you can bet that these legions of drug reps, with their pens, pads, free coffee, gift baskets, sponsored "professional development seminars" and everything else they can think up, exist to gain any tiny bit of advantage they can so that the scrips get writted for Drugco's SSRI drug instead of Pillco's version or some generic. Probably just as importantly, its about getting practices, big and small to bitch mightily if a given drug isn't on an insurers approved formulary. When a company actually does innovate, its about making sure that doctors are aware of treatments for new drugs for conditions that were formerly regarded as either untreatable, or not worth pharmaceutical intervention.
Back to the original question, I don't see how the ethics of the situation hinge on whether one doctor has a whole lot of influence on the value of Merck's stock price. If every physician had similar ethics and took a stake in Merck, it would be difficult to imagine that there wouldn't be hundreds of thousands of them making judgement calls in Merck's favor. No need for fraud, just a little tip towards Merck.
BTW, Merck is trading at 13x Price/Earnings, so $1 in additional revenue can move the stock by $13
posted by Good Brain at 10:45 PM on December 13, 2005
What educated professional would admit to making professional decisions based on shwag, and how would they even know it if the influence was subliminal?
More to the point, why do people think advertising is necessarily about selling people something that they don't need, or which doesn't work? Much advertising is about either 1) influnencing people to choose between two equivalent and equivalently priced products or 2) influencing people to choose the more expensive of two equivalent products.
In a drug industry where companies probably spend as much effort knocking off the innovations of competitors as they do on actually developing wholly new classes of theraputic compounds, you can bet that these legions of drug reps, with their pens, pads, free coffee, gift baskets, sponsored "professional development seminars" and everything else they can think up, exist to gain any tiny bit of advantage they can so that the scrips get writted for Drugco's SSRI drug instead of Pillco's version or some generic. Probably just as importantly, its about getting practices, big and small to bitch mightily if a given drug isn't on an insurers approved formulary. When a company actually does innovate, its about making sure that doctors are aware of treatments for new drugs for conditions that were formerly regarded as either untreatable, or not worth pharmaceutical intervention.
Back to the original question, I don't see how the ethics of the situation hinge on whether one doctor has a whole lot of influence on the value of Merck's stock price. If every physician had similar ethics and took a stake in Merck, it would be difficult to imagine that there wouldn't be hundreds of thousands of them making judgement calls in Merck's favor. No need for fraud, just a little tip towards Merck.
BTW, Merck is trading at 13x Price/Earnings, so $1 in additional revenue can move the stock by $13
posted by Good Brain at 10:45 PM on December 13, 2005
This thread is closed to new comments.
He'd have to give so many bad prescriptions that Merck makes a total of £14k for him to earn a single pound. It hardly seems worth doing because it's not, especially as he could be sued for malpractice for giving bogus prescriptions.
posted by delmoi at 3:35 PM on December 13, 2005