If you buy the book “A Call to Action” by Pfizer’s CEO, Dr. Hank McKinnell, with the notion that you will learn what this pharma executive believes the industry should do to reform itself, you are in for a big surprise. Notwithstanding an Amazon.com review of the book written by Peter Rost – Pfizer’s whistleblowing, soon-to-be non-head of Pfizer’s endocrine care marketing unit and “Pharma’s Black Knight” – in which McKinnell is described as making “an impressive mea culpa,” this book is actually a mea non culpa!
I had reason to expect to see suggestions for changes in the way pharma operates because at the very beginning of the book (page 13), McKinnell said that “if Pfizer wanted a seat at the table where important healthcare solutions were being hammered out, we had to earn it by acting differently, partnering differently, and communicating differently.” Unfortunately, the rest of the book does NOT carry through on this theme and focuses instead on how consumers, society, employers, managed care, and government need to act differently.
Before getting to the action items, McKinnell tries to answer the most important questions put to the industry by critics and the public. These questions are:
• Why are Prescription Medicines So Expensive?
• Why Does the Industry Do So Much Advertising?
• Why Do Americans Pay More Than Canadians for Drugs?
Unfortunately, McKinnell sticks to the standard pharma industry playbook except on one or two occasions where he seems to offer contrary opinions.
Why are Prescription medicines So Expensive?
It turns out, according to McKinell, that drugs are not as expensive as you think (silly you!) and that branded drugs are cheaper than the alternative – the old “an ounce of prevention is worth more than a pound of cure” defense.
In essence, his argument is, drugs are not as expensive as you think, cheaper alternatives are soon available, and drug profits are good and well deserved.
I should acknowledge at least one refreshingly contrary view expressed by McKinnell: an admission that it is a “fallacy to suggest that our industry…prices a product to recapture the R&D budget spent in development.” He suggests instead that it is “investors’ confidence in the risk and rewards” that drives prices.
McKinnell takes exception to critics such as Senator Bill Frist who claim that “increased direct-to-consumer advertising has helped fuel escalating drug costs” (See “Deconstructing Frist on DTC“). McKinell, like PhRMA, insists that “studies show there’s no correlation between prices or price increases and DTC advertising.”
McKinnell cites a study done in 2001 by The National Institute for Health Care Management entitled “Prescription Drug Expenditures in 2000: The Upward Trend Continues.” McKinnell claims that this study shows that the “average price of drugs that are advertised is lower than those that aren’t.” The report, however, concludes that the increase in prescription drug spending is due, in part, to “more aggressive marketing of prescription drugs to both doctors and consumers.”
Why Does the Industry Do So Much Advertising?
McKinnell wants us to believe that DTC advertising is really education (he prefers ro call it “DTC education”). This is not a new mantra. Johnson & Johnson Chief Executive William Weldon, for example, said in an address to PhRMA: “Our communication with patients should really be thought of as Direct to Consumer Education” (see “DTC Straight Talk”).
Why Do Americans Pay More Than Canadians for Drugs?
To be honest, I didn’t read this chapter. According to Peter Rost, “McKinnell … admits that drugs from Canadian pharmacies are safe …[and] that ‘perhaps pharmaceuticals represent too low a percentage of total healthcare spending’ and he calls for ‘price controls to be lifted’ around the world, because “It is time for Canadians and others to pay their fair share.”
A Call to Action Starts Here
Chapter 13 is the chocolate nugget of the book. In this chapter McKinnell lists 10 actions that he believes should be taken to reform the healthcare system in the U.S. Only one action on the list, Reform Direct-to-Consumer Advertising, is an action item for the drug industry. All the others are the responsibility of individuals, society, employers, managed care, and governments, not the pharmaceutical industry. Coincidentally, at least six actions would either benefit the pharmaceutical industry in general or highlight specific Pfizer initiatives. Rather than focus on these – you can read more about it in the Summer 2005 issue of Pharma Marketing News – I’d like to focus on Mickinnell’s suggestions for reforming DTC.
Reform Direct-to-Consumer Advertising
This is the one action item mentioned in the book that applies directly to the pharmaceutical industry and can be said to require a change in the way it does business. Here’s what McKinnel recommends for DTC:
• Improve communications about risk
• Provide information about alternative therapies available, including therapies that do not require a medicine
• Promote prevention and wellness, compliance with treatment regimens, and disease awareness
• Promote access to medicines and do a better job communicating about patient assistance programs
• Implement external oversight of DTC, including working with the FDA to get their views on advertisements before they are run
Mckinnell’s action plan for DTC reform, however, does not go as far as some other emerging principles do. He does not suggest, for example, a 1-year moratorium on DTC for news drugs or to limit TV ads to the appropriate audience at the appropriate time of day (something that Congress may impose on ED ads). Both of these principles have been adopted by Bristol-Myers Squibb in its Direct-to-Consumer Communications Code. It should be noted, however, that McKinnell has said in another venue “No erectile dysfunction drug ads on television except for 10 pm to 6 am. I’m in favor of that.” (Washingtonpost.com Viewpoint interview, 2004).
Needless to say, this book is not going to shake up the pharmaceutical industry nor does it offer much new defense against critics of the industry. It often sounds like an advertorial for Pfizer’s programs. A Pfizer spokesman referred a reporter to McKinnell’s book as the “best source” for the company’s perspective on advertising. I wouldn’t recommend it, however, as the best source for an action plan to reform drug advertising in general.