Report highlights marketing-related health costs
By David Taube
VERMONT PRESS BUREAU | October 18,2012
Vermont’s attorney general is suggesting that increased spending on marketing-type efforts by makers of pharmaceuticals and other health products is threatening to force up the cost of health care for Vermonters.
Attorney General William Sorrell said that advertising strategies employed by drug manufacturers should come under heightened scrutiny as the state looks to contain health care costs and implement a government-paid health insurance system.
His comments last week came as the state released the most recent report on health product marketing. This year’s annual report showed manufacturers of products ranging from medications to devices such as artificial hips spent about $7.5 million last year to do what some characterize as directly or indirectly marketing their products in Vermont through gifts, clinical trials and educational materials.
“As Vermont moves toward a publicly funded single-payer health care system, understanding the extent to which rising manufacturer spending is a barrier to health care cost containment takes on an enhanced importance,” Sorrell said.
The report details marketing-related expenses that drug companies are by law required to disclose. The spending doesn’t include the cost of free drug samples, said Assistant Attorney General Wendy Morgan.
Previous reports also included how much pharmaceutical companies spent on free meals given to doctors, but the state passed legislation in 2009 to ban the practice, among other changes.
Total spending has been increasing, but new disclosure categories have been added. The report did compare the category of pharmaceutical marketing spending, however, thereby providing a more long-term, uniform comparison. Pharmaceutical spending, part of total spending, has increased in the last three years, rising to just under $3 million for 2011, the most recent year reported by the state. The industry, however, had spent more in some earlier years.
Pharmaceutical marketing spending was more than $3.1 million in fiscal year 2007 and topped $4 million in fiscal year 2004. Fiscal year reports, no longer in use, started and ended in the summer.
One of the largest areas of spending in 2011 was more than $1 million for educational materials, which can include items like a brochure about a product.
Another chunk of the total money was for clinical trials — more than $2.4 million.
Companies also paid some $186,000 to neurologist Dr. Keith Edwards, one of the highest expenses associated with any single recipient aside from those who were paid solely for clinical trials. His money was largely for speaking fees, travel lodging and meals, plus about $43,000 for clinical trials.
Edwards had a practice in Bennington, the Multiple Sclerosis Center of Southern Vermont, which closed this year. He currently works in the Albany, N.Y., area. He did not immediately return a phone call Tuesday.
The report used 2011 data. For a full copy of the report, visit www.atg.state.vt.us/.
Manufacturers with highest total expenditures in 2011 as required to be reported:
1. Aptalis: $804,251
2. Pfizer: $717,079
3. Novartis Pharmaceuticals: $704,127
4. Abbott Laboratories: $634,520
5. Medtronic: $483,527
Products with the most free samples distributed to providers in Vermont:
1. Advair, an asthma product by GlaxoSmithKline
2. Abilify, an antipsychotic product by Otsuka & Bristol-Myers Squibb
3. Lipitor, a heart attack prevention product by Pfizer