18. Nationwide Collusion between Drug Companies and Pharmacists

Source: THE NEW YORK TIMES, Date: 7/29/94, Title: "Pharmacists Paid To Suggest Drugs," Author: Gina Kolata

SSU Censored Researcher: Susan Kashack

SYNOPSIS: Major drug companies have started to pay pharmacists to promote their drugs over those of their competitors.

In an investigative report in The New York Times, Gina Kolata explains how the process works at Medco, a company that buys drugs from manufacturers and sells them through pharmacies and mail orders to 38 million Americans: "When customers appear with prescriptions for high blood pressure medicine, for example, the pharmacist often advises them that they could receive another, similar drug for less money, under their Medco plan. Would it be O.K., the pharmacist might ask, if they called the doctor and had the prescription switched to the other drug?"

About 80 percent of the doctors say "no problem" when asked to approve the switch since they have no reason to doubt the good intentions of the pharmacists and because the new drugs often save the patient money. Studies also show that over a period of time, after repeated requests to switch the drug, doctors eventually start writing all prescriptions for that particular brand of medicine.

However, what the patient and doctor may not know is that Medco is owned by Merck, a major drug manufactures, that the other drug is made by Merck, and that Merck will pay the pharmacist a cash commission for arranging the switch.

Merck pays rebates of six to ten percent of the wholesale price of each drug sold to pharmacists who dispense the company's line of generic drugs and also pays pharmacists $5 per prescription for increasing sales of the total line of drugs from Medco.

While Merck pioneered this new arrangement when it bought Medco last year, it is not alone. In May of 1994, SmithKline Beecham bought Diversified Pharmaceutical Services, which handles prescription drugs for 11 million people; in July, Eli Lilly said it would buy PCS Health Systems, which has enrolled 50 million Americans.

Some say there is nothing wrong with paying pharmacists for helping patients get the best drug at the best price. John Doorley, a Merck spokesman, said pharmacists would suggest a switch only if it would help a patient. However, other critics point out that pharmacists, who traditionally are ranked at the top of trusted professionals in opinion polls, are no longer disinterested parties once they start getting paid to recommend specific drugs.

"It's outrageous, it's manipulative and it's dishonest," said James Love, who follows the drug industry for the Center for the Study of Responsive Law.

Dr. Arthur Caplan, director of the Center for Medical Ethics at the University of Pennsylvania, said, "Traditional medical ethics is being replaced by traditional business ethics." At the very least, he pointed out, any arrangements between pharmacists and drug companies should be explicitly disclosed to both doctors and customers.

Further, by adding an additional expense to drug distribution, the manufacturers are further increasing out-of-control health care costs which already are plaguing the American people. Sooner or later that additional cost is passed on to the consumer.

COMMENTS: Journalist Gina Kolata said the issue of medical kickbacks to pharmacists was largely ignored last year. She also pointed out that patients -- and doctors -- have a right to know that their pharmacist may no longer be as disinterested a party as before. "Although the pharmacist is widely viewed as an advocate for patients," Kolata added, "that role may be a relic of the past." The primary beneficiaries of the minimal coverage given this subject are the drug companies and pharmacists according to Kolata.

It should be noted that drug makers' kickbacks are not restricted to pharmacists. An editorial in USA Today (10/19/94) criticized drug makers for sometimes offering kickbacks to physicians who used their products.