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Pharmaceutical Companies & Regulation

By Alan J Simpson

Washington, DC. June 5th, 2006 ---- The way the Republican popularity graph is plummeting the better the chances of more and more left wing policies being passed in Congress. One issue that will burst upon the scene is the issue of Universal Healthcare and looks more and more like passing in some form or other. This is the Doomsday Scenario Pharmaceutical companies dread. Not because they don't want to see working Americans with healthcare, but because they see draconian regulation of their marketing and sales forces to keep costs down, and ensure ethical promotion of their products.

What has been allowed to slip by in the name of pharmaceutical marketing is nothing less than disgraceful excess by some unscrupulous sales representatives and meeting planners. It had to stop. No politician dare tell a dying aged constituent that their medication is so expensive because the manufacturer had to take Doctors, their families and girlfriends to Golf and Spa Resorts, and feed them all the best steaks and lobsters. In the past manufacturers have hidden behind the argument that the money goes to research and development not marketing. As the Oil companies have found there is a growing desire to look closely at the books of big corporations.

But many of the new breakthroughs are coming from new start-up BioTech companies and not the Big Pharma companies with their stranglehold on the marketplace, and around the throat of regulators. Many in Congress would like to see massive fines for unethical practices in marketing and promotions. They also would like to see a better and more ethical means of developing sales that the legions of Pharmaceutical Reps flooding the country and streaming through Doctors Surgeries with armfuls of "Free" samples and these days small gifts. Not long ago these young, mostly female sales force brought lunches for the entire office, tickets for Sky Boxes, Ball Games, Spa treatments and every bribe imaginable, including erotic delights. Most pharma executives turned a blind eye.

Today they would be warned and maybe fined. If the Democrats strip away the protection of Big Pharma they will face stiffer penalties.

It all comes down to one fact. A National Healthcare policy is most cost effective with regulated prices paid for pharmaceuticals from centralized national, or State purchasing Agencies.

The mere reading of that sentence will cause disruption, then increase in the heart rate of Big Pharma. But like Big Tobacco change is inevitable.

It comes down to how soon and how much. The ethics and management of sales forces, and their meetings, educational or promotional is the catalyst that can bring the whole process down at any time the regulators choose. The Achilles Heel of Big Pharma. It's difficult to question Research and Development costs, but the sales practices of a few rotten apples, supported by untrained and unethical meeting planners makes for an easy target.

The sheer size of the educational, promotional and medical meetings industry, and lack of independent policing makes compliance a hit and miss process at best. None of the meeting planners investigated in developing our own Pharmaceutical Meeting Protocols had any competitive, or effective business intelligence operations linked to compliance databases, or a Washington presence. I mention the DC presence because there needs to be a human to meet on a regular basis to define what is meant by "is" in their rules and regulations. With the corruption in DC many rules are written by lobbyists to exempt one client, and screw their competitors.

But there appears to be a belief that "It won't happen to us" amongst many of the young managers, with their buzzwords and conference calls, in splendid isolation, usually in New Jersey. The Regulators in Washington seem light years away in a far distant land. The competitive meeting planning industry wants to keep their contracts and in most cases turns a blind eye to infringements, even if they know the meetings they planned were against government guidelines.

What we have is a train screaming at full speed to a high profile train wreck as consumer, ethical, political and marketing forces collide, probably under a Democratic Administration. We can see this here in Washington, DC, so there is no excuse for pharmaceutical executives seeing it around the USA. Ask Ken Lay what happens when you can't see a train wreck coming. Just make sure you call at visiting time!


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