As Reported for the State of Vermont
Expenditures by drug companies rose last year by 11 percent, according to a new report by the Attorney General's Office.
The report said nearly 70 pharmaceutical manufacturers doled out $2.17 million to Vermont doctors, hospitals and universities between July 1, 2004, and June 30, 2005. And while that figure is nearly $1 million less than during the same period a year earlier, it reflects the fact the state's first-in-the-nation disclosure law no longer requires drug makers to report the amounts of rebates and discounts offered on their wares.
"We are still seeing a significant double-digit increase over the preceding year," said Attorney General William Sorrell, who was instrumental in passing the original disclosure law. He said he was disappointed the law was weakened and drug makers no longer have to disclose the value of rebates and discounts offered to doctors and others.
"I think you can argue that the rebates and the discounts should be in there because obviously if a doctor is prescribing a particular medication knowing he or she is going to get a rebate for prescribing it, it is potentially an incentive for that particular drug to be prescribed," Sorrell said.
The law was changed last year after pharmaceutical companies protested the inclusion of rebates and discounts.
The latest report does make adjustments to the first two that were issued, eliminating rebate and discount payments that amounted to thousands of dollars for many of the state's doctors and medical practices.
"The fact is that marketing costs continued to go up," Sorrell said. The report is the outgrowth of a Vermont law requiring disclosure of much of the marketing practices of drug companies. The report does not include, however, the money spent on free samples, compensation for clinical trials, payments under $25, some scholarships and unrestricted grants for medical education.
The report also doesn't include the amount spent on salaries for drug company representatives who directly approach medical professionals or direct advertising in the media.
At 11 percent, marketing costs in 2005 grew by less than half the 23 percent amount notched a year earlier.
The biggest spenders, according to the report, were Forest Pharmaceuticals Inc, Eli Lilly and Co., GlaxoSmithKline, Sanofi Aventis, and Merck & Co., accounting for nearly half of all marketing costs. The biggest recipients were doctors and other health-care professionals authorized to prescribe drugs; that group took in more than 80 percent of the amount spent.
Hospitals, clinics and universities received 12 percent of the total, while the rest went to pharmacists.
The report said psychiatrists received the most marketing dollars — 15 of them collected nearly $310,000 in the fiscal year in the form of cash and checks, food, and items ranging from lodging, transportation or an outright donation. That came out to 14 percent of the total marketing money reported for the year — or nearly $21,000 for each psychiatrist.
Hospitals and clinics received $180,000 — or about 8 percent of the total. The four recipients there averaged $45,000 each.
Thirteen doctors describing their specialty as internal medicine received $121,000, or nearly $17,000 each.
If the total amount of marketing expenditures were spread out over the 5,500 licensed medical professionals, each would have received less than $320, the report said.
Sorrell said it is important for people to know how much money is being spent to persuade doctors and others to recommend certain drugs, suggesting marketing efforts here are replicated nationwide.
"I don't think that the pharmaceutical industry's practices are significantly different in Vermont than elsewhere," he said. "Extrapolated over the whole country, the money spent in Vermont would come to billions of dollars. These are cash payments, payments for trips, for speeches, things of that sort. These are not payments to do real clinical trials."
Since Vermont passed its disclosure law in 2001, others have followed suit: Maine, Minnesota, West Virginia and Washington, D.C., have similar laws on the books.
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