Download US Pharmacy Policy: A Public Health Perspective on Safety and Cost

Accepted for Publication in Social Work in Public Health
Volume 24, Issue #6, 2009
U.S. Pharmacy Policy: A Public Health Perspective on Safety and
Cost
Pauline Vaillancourt Rosenau, Ph.D, M.P.H. (Corresponding Author)
Division of Management, Policy, and Community Health
UT Houston - School of Public Health
1200 Herman Pressler E 915
Houston, Texas 77030
713 500 9491 (fax 713 500 9493)
email: [email protected]
Lincy S. Lal, Pharm.D, Ph.D
Pharmacoeconomic Research Specialist
Drug Use Policy and Pharmacoeconomics
University of Texas – MD Anderson Cancer Center
Jay H. Glasser, Ph.D.
Professor Biostatistics
UT Houston – School of Public Health
Abstract
This paper employs public health criteria to assess pharmacy policy as regards the safety
and cost of medication. A public health perspective, based on social justice and a population
health point of view, leads to substantive policy proposals and innovative insights. As regards
safety, public health criteria emphasize regulation and substitute legislation for litigation. While
generally considered a success by government and industry, the FDA’s policy initiatives to
reduce drug approval time receive a more mixed appraisal. Public health emphasizes safety as
much as speed of approval. Post-marketing surveillance policies regarding medication in the U.S.
are mediocre from a public health perspective because they depend heavily on manufacturers’
voluntary compliance. Medication is assumed safe and effective but this confidence may be
misplaced.
Ten policy mechanisms for controlling pharmaceutical prices are assessed; not all of
them are consistent with a public health perspective. Experience from other countries suggests
that controlling profits, establishing profit targets, extending Rx providers, revising Rx
classification schemes, emphasizing generic medications and establishing formularies are
effective in controlling costs. Public education of patients and providers and some universal
programs may reduce costs but co-pays and “cost-sharing” do not. Switching medications to
over-the-counter status, pill-splitting, and importing medication from abroad, are poor substitutes
for authentic public health pharmacy policy to control costs. Where policy changes yield savings,
public health insists that these savings should be used to increase access and improve population
health. A case study of direct-to-consumer advertising illustrates the complexity of balancing
public health perspectives on safety and cost, with employer/payer concerns, and pharmaceutical
industry interests.
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U.S. Pharmacy Policy: A Public Health Perspective on
Safety and Cost
A public health perspective on pharmacy policy merits more attention (American
Public Health Association, 2006). This is because of the expanding choices of
medications, increased efficacy, and the explosion in cost of prescription drugs
(Cockburn, 2004). A public health oriented pharmacy policy includes balancing safety of
medicine with acceptable risk as well as controlling costs. But it requires a much broader
consideration of pharmacy issues. For example, costs and utilization of prescription
drugs are likely to increase with direct to consumer marketing and continuing efforts to
influence providers (Kaiser Family Foundation, 2006c). How does a public health
orientation inform this and the many other aspects of pharmacy policy?
Public-health-based pharmacy policy takes into account both a populations
perspective and social justice (Foege, 1987). By definition, public health is populationbased, community-oriented, and prevention-aware. Public health’s constituency includes
consumers and citizens in the larger sense. Individual interest and personal choice play a
role insofar as they do not result in harm to others or subordinate the welfare of society as
a whole (Burris, 1997). Pharmacy policy from a public health perspective is grounded on
a comprehensive view of societal needs, rather than narrowly, in terms of individual
rights (Annas, 2004). It is based on the ethical principle of social justice—whether
defined as equality of opportunity, equity of access, or fairness in benefits. Social justice
is a broad concept with relevance to those of widely differing philosophical perspectives
(Chandler, 2006).
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Serving the total population, public health is concerned with equity among
various social groups, with protecting vulnerable populations, with compensating persons
for suffering disadvantage in health and health care, and with surveillance of the total
health care system.
Many players or stakeholders weigh heavily on any effort to develop or
implement a public health oriented pharmacy policy in the U.S. The most important
influence is that of the pharmaceutical industry.1 Others include the healthcares well as
special disease and illness advocates. But a responsible public health oriented pharmacy
policy must move beyond the interest of any societal component, advocate, or special
interest group. It must be formulated with a broader population-based focus.
While many aspects of public health policy merit attention, in this paper we
focus on the most obvious aspects of public health pharmacy policy related to safety and
cost. Access is of substantial importance as well, but issues regarding it are much the
same as those associated with access to general health insurance.
Pharmacy Policy and the Safety of Medication
Safety of medication in its several dimensions is especially important for public
health but problems abound. Half of all medical errors in the U.S. today are related to
mistakes in medication. Significant data collected in trials goes missing (Lewis,
Reichman, & So, 2007). Long-term safety is ignored and post-marketing surveillance is
neglected. Special populations are underrepresented in studies. Clinical efficacy based
1
Pharmaceutical industry ads contribute a great deal to the financial viability of even the most prestigious peer reviewed
journals. Importantly, industry sponsored clinical trials end up in published articles in these same prestigious journals which in turn
enhance industry financial success (Smith, 2005). The vast majority of sponsored trials reported in these journals indicate that the
sponsor’s product is superior to competitors or placebos. This result is 4 times more likely than research sponsored by other sources
(J. Lexchin, Bero, Djulbegovic, & Clark, 2003; Rochon et al., 1994). Specific techniques are employed to obtain these highly
favorable results, which include statistical manipulation. If all else fails, industry simply ignores negative results or consciously
suppresses the publications of these results that are not favorable to their product. (Smith, 2005). Merck’s dishonesty with regard to
results on Vioxx is a case study on this topic (Bombardier et al., 2000).
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on surrogate endpoints has been adopted even when it is far from certain that they
represent the true outcome (Henney, 1999). Off-label use is widely tolerated and little
studied. The relative efficacy of different medications is too often unknown. Conflicts of
interest are apparent throughout the process of drug approval (Steinbrook, 2005).
Industry too often ignores agreed upon voluntary compliance with FDA directives
(Bennett et al., 2005). Study designs are worrisome. Poor communication of information
to practitioners is legendary (Ray & Stein, 2006). Elected government officials require
scientists at the FDA to amend their conclusions to professional, scientific papers or
presentations to FDA Advisory Committees (Okie, 2005b). In the end the role and
performance of the FDA in protecting the public’s medication supply is in doubt as has
been widely noted (Committee on the Assessment of the US Drug Safety 2006; Furberg,
Levin, Gross, Shapiro, & Strom, 2006; U. S. Governmental Accountability Office,
2007).
As regards the safety of medication, there is an inevitable dilemma concerning
speed of approval. The public health community emphasizes that safety is as important
a consideration as speeding drugs to market (American Public Health Association, 1999).
In general public health is likely to side with slower approval, waiting until more
information on safety in the long term is available, before making a drug available to the
public (American Public Health Association, 1999).
However, speedy approval is needed to bring new medication and vaccines to
market when it is clear that patients and society stand to benefit. This is illustrated by the
experience with the approval process for HIV/AIDS medication. AZT was made
available before all clinical trials were complete due to the high levels of morbidity and
mortality associated with this disease (United States Food and Drug Administration :
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Department of Health and Human Services, no date). Since then, accelerated approval of
many other drugs of possible benefit to specific groups of individuals seems to be more
routine regardless of benefit (Henney, 1999)2. From a public health perspective, new
medications on the “fast track” should be authentic innovations rather than copy cat drugs
that will cost more but not increase efficiency. In the case of vaccines, public health is
likely to emphasize speedy approval, especially if new forms of vaccines stand to benefit
large, very poor populations (for example, vaccines that no longer require refrigeration).
While generally considered a success by government and industry, the FDA’s
initiatives to reduce drug approval time receive a mixed appraisal when public health
performance criteria are employed. Congress did not appropriate funding adequate for
the FDA to hire enough scientists to assure timely approval. As a result, user fees for
speedier approval seemed like an appropriate means to solve the problem and the
Prescription Drug User Fee Act (PDUFA) was adopted. Members of Congress liked the
idea because they did not have to raise taxes or reduce financing commitments in other
areas to fund the speedier drug approval process. Industry representatives favored this
approach because they wanted to have drugs approved more quickly and they could
recuperate the money they contributed by shifting these costs to the consumer. Quicker
approval translates into a longer patent protection once a medication is on the market.
A public health perspective questions the wisdom of allowing pharmaceutical
companies to pay to increase the speed of the drug approval process. The interests of the
pharmaceutical industry and the public are sometimes at odds, and some critics fear that
PDUFA may have increased the FDA’s responsiveness to the former at the expense of
2
The Supreme Court upheld the constitutional right of the terminally ill to use medication even if it has not been proven effective.
This decision is said to call into question standard FDA approval processes and to make it more difficult to test the efficacy of new
medications because they will be distributed straight away outside the clinical trial environment (Okie, 2006)
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the latter. In short, industry shapes the scope and nature of PDUFA goals. Critics argue,
specifically, that PDUFA gives too much power to the pharmaceutical industry because
the bulk of user fees go toward paying the salaries of employees hired to speed up that
approval process rather than to monitor safety, thus prioritizing faster drug approvals
over drug safety (Avorn, 2007). They also point out that the user fee system creates an
environment of intense pressure on FDA reviewers due to the agency’s dependence on
industry funding (FDALegislative Watch, 2007). Industry argues the contrary – that
PDUFA do not influence approval decisions and that on balance user fees have a highly
positive impact on the public’s health (McClellan, 2007).
By 2007, the pharmaceutical industry and the FDA appeared to work in close
collaboration. The FDA was criticized for being overly responsive to political pressure to
be more free-enterprise oriented (Hilts, 2003). The FDA’s capacity to assure the safety
of medication, especially post-market surveillance of drugs, was widely recognized as
flawed (U. S. Governmental Accountability Office, 2006). This may well be an example
of what policy scholars call agency “capture” (Egilman, Presler, & Valentin, 2007;
Kaiser Family Foundation, 2006a). Public health oriented alternatives to PDUFA were
called for with a goal of i) reducing the conflicts of interest inherent in user fees and ii)
restoring the independence of the FDA (Hennessy & Strom, 2007; Vaughan, 2005;
Viscusi, Vernon, & Harrington, 2000).
Not surprisingly, in September 2007 Congress adopted the FDA Amendment Act
in an attempt to balance the FDA’s mandate to both approve new medications as well as
ensure the safety of the poulation. This law reauthorized the Prescription Drug User Fee
Act (PDUFA IV) for five more years and strengthened the FDA’s post-marketing drug
safety authority. It improved the FDA’s ability to force pharmaceutical manufacturers to
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comply with required post-market clinical trials – fines may be imposed. It set up a new
process for risk evaluation and reduction, Risk Evaluation and Mitigation Strategy
(REMS). For low risk drugs, reporting and labeling of side effects is reiterated. For
riskier medications, the FDA may require additional clinical trials, a program to train
physicians in prescribing the medication safely, or limitations on advertising to the
public. The bill also strengthened FDA safeguards against conflict of interests on
scientific advisory committees by requiring all individuals under consideration for
appointment on such committees disclose personal financial interests that might affected
by the committee’s decisions (McGlew, 2007).
Balancing risk and benefit in making medication available as soon as it is deemed
safe, is also a public health priority. The dilemma is where to draw the line in striving to
achieve this balance, especially since there will always be some patients who react
negatively to any specific drug. If a medication is of great value to many people, are the
potential negative effects on a few acceptable? If a drug were only of marginal benefit to
a great many individuals, would the same highly negative effects on a few individuals be
tolerable?
Having accurate information based on careful post-market approval monitoring
for widespread low-level side effects is an essential aspect of any pharmacy policy for
public health. Similarly, any risk-benefit analysis would consider acceptable levels of
risk and measurable population health improvement. From the perspective of public
health, post-approval monitoring of medication is critical because side effects might be
slow in developing but broad in terms of population consequences.
Historically post-marketing surveillance policies have been judged mediocre from
a public health point-of-view, in part because they depended heavily on manufacturers’
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good will and manufacturers’ fear of litigation. Today, efforts to monitor medication
effects on the general population are dependent on the voluntary reporting by busy
healthcare professionals who do not always take the time to register the problems they
observe (Brewer & Colditz, 1999). While voluntary automated reporting programs are
already in place, better technology and improved software would go a long way to
improving systematic, comprehensive, mandatory, and routine methods of reporting
adverse drug reactions to public health officials (Gottlieb, 2005, pp. 938-942; Kaiser
Family Foundation, 2006d).
To improve post-marketing safety of medication, personal health information
databases and drug prescription databases should be linked. However, in the US today
only the Veterans Administration adopts this approach of linking medical and pharmacy
files for individuals to improve patient care and optimize research on the effects of
medication (Platt & Ommaya, 2005). There are many reasons why this is the case: fears
about privacy protection of individuals, absence of political will, lack of funding, and
concerns of insurance companies who feel that would jeopardize proprietary information.
The public health community is very sensitive to the problem of privacy versus research
requirements in the matter of linking databases.
The FDA attempts to monitor performance of prescription medications once they
are on the market and, in many cases, it orders pharmaceutical companies to conduct
further clinical studies. Industry’s compliance with these FDA post-marketing
requirements has been very low. Many pharmaceutical companies simply ignored the
FDA’s orders because there were no credible sanctions in place (Wood, 2006 p. 622).3
Historically, only about half to a third of the time did the pharmaceutical industry
3
On occasion long term studies funded by NIH have forced drugs off the market (Henney, 1999)
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actually comply with FDA orders to further test already approved drugs on the market
(Dooren, 2005; Office of Inspector General of the Department of Health and Human
Services, 2006). There were few compelling incentives for the pharmaceutical industry
to conduct such studies voluntarily in the absence of enforcement. As a result postmarketing surveillance in the US today was mediocre compared to that of other countries
(Avorn, 2007). It is too soon to assess whether or not the “FDA Amendment Act” of
2007 will make a difference.
The public health community calls for pharmaceutical assessment research and
drug evaluation activities carried out independently of the FDA and the pharmaceutical
industry (American Public Health Association, 2003). New approaches for studying
post-marketing effects of medication are needed – one such approach would be to employ
Medicare claims data as an inexpensive means of post-marketing surveillance.
It has also been suggested that user fees paid by the pharmaceutical industry or
revenue from a tax on medication could be used for post-marketing surveillance
(Carpenter, 2005) (Ray & Stein, 2006). However, the public health relevance of such
proposals has not been assessed. If the FDA is to play a role in serious post-marketing
surveillance it would have to be a renewed FDA with independence from the
pharmaceutical industry. Another possibility is an agency outside the FDA, specializing
in post-market approval surveillance with full responsibility for managing dedicated
funds no matter what their source (industry or government).
Medication is assumed safe and effective in the U.S. However, today drug
manufacturers, in the last instance, are responsible for seeing to it that this is the case. If
recent history is any guide, such confidence is misplaced (Psaty, Furberg, Ray, & Weiss,
2004). In the absence of effective regulation, the fallback mechanism for assuring that
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manufacturers are watchful is the legal system. Today, a manufacturer’s incentive to
behavior responsibility rests heavily on the fear of legal repercussions. This idea is
discussed further in the conclusion.
In countries where a national health system assumes responsibility for the
health of the population, pharmacovigilance is associated with statutory compulsion
much more than voluntary action on the part of industry (Clark, Layton, & Shakir, 2001).
Many European countries have a far more public health oriented pharmacy policy as
regards post-marketing surveillance; they require that a medication be reassessed once it
has been on the market for 5 years. These follow-up monitoring assignments are carried
out by an independent drug safety office (Bowe, 2004).
Costs
Costs are another area where public health brings a special perspective to
pharmacy policy. In general, public health has no argument with pharmaceutical policies
designed to control costs. In 2000 the American Public Health Association adopted a
position paper on pharmacy policy which underlines all these essential elements of a
pharmacy policy for public health (American Public Health Association, 2000).
Overall, public health seeks a balance where fair distribution of medication is a
priority. This means pharmaceutical costs must be controlled. Equitable distribution
implies that a medication should be available to all who need it. “Price disparities among
sectors in the U.S. market” should be minimized. This is especially important for
vulnerable populations. Many mechanisms designed to control the costs of medication
are available but some are more in line with public health goals than are others. In
addition, some of the available options present public health dilemmas.
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Pharmacy policy grounded in economic analyses such as cost-effectiveness (value
for money) is consistent with public health values in a world where resources are scarce.
Such information might contribute to more informed decisions on the part of both
patients and practitioners. The value of medication is often assessed by economists based
on this type of analysis. In actual use however, cost-effectiveness analysis is limited
because it depends on the perspective employed: the patient, the society, the employer, or
the insurer. Data to examine the cost-effectiveness ratio of a medication from the larger
community point of view is not always readily available. Externalities that may change
the outcome of such analyses are not always predictable. The default perspective is
usually the third-party payer’s point of view regarding the costs included in the analysis.
This is also because they are usually the funding agency for such research. However, this
is far too narrow a perspective from the public health point of view.
-- Price Controls
Reducing prices of medication directly – such as regulating prices, reference
pricing or setting profit levels, as is the case in many other industrialized countries – is in
line with public health goals4. This makes it more likely that patients can purchase
needed prescription medication. However, this mechanism is of questionable political
viability in the U.S. It generates strong opposition from pharmaceutical companies
whose representatives argue that price controls reduce funds available for pharmaceutical
research and innovation. The problem with this response is that the actual costs of
developing medication is very difficult to calculate and may be exaggerated (Donald W.
Light, 2005; D.W. Light & Lexchin, 2004; Scherer, 2004; Vernon, 2005).
4
APHA supported limiting price increases to an average basket index of other industrialized countries
(American Public Health Association, 2000)
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-- Profit Targets
Many mechanisms, especially regulations that are employed in other modern
western industrialized countries to control pharmaceutical prices are in line with good
public health pharmaceutical policy. The U.S. is among the least aggressive in
controlling profits as a means to keep costs low and access equitable (Scherer, 2004). For
example, the profit margin of the pharmaceutical industry is controlled or “targeted” in
Britain (17-21%) and Spain (12-18%) by negotiated agreement (Ess, Schneeweiss, &
Szucs, 2003, p 95-96). There is substantial evidence that such regulatory efforts in
Europe are very effective in containing costs, especially “reference pricing.” The
arguments from the pharmaceutical industry opposing profit targets are the same as those
outlined above regarding price controls. As regards the industry’s claim that profit
targets would adversely affect their ability to carry out research, several sources
document that such worries are exaggerated(Donald W. Light, 2007; Donald W. Light &
Lexchin, 2005).
--Education and Transparency
Education of patients and providers is another mechanism for lowering costs of
medication that resonates with the public health community. Making more information
available about the comparative efficiency of medication permits doctors and patients to
be better, more cost-conscious consumers in choosing medication. It would require
changes in how medications are tested so that population-costs-and-benefits would be
calculated and overall societal benefit assessed. For example, testing a medication
against a placebo in Phase 3 clinical trials should be supplemented with testing it against
other existing standards of care. Extended periods of exclusivity might be approved for
new medications found to be cost effective and clearly superior to already existing drugs
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for the same medical conditions, in head-to-head trials that directly compare the
performance of two or more medications that are used to treat the same medical condition
(Wood, 2006). This kind of pharmacy policy would put a limit on cost increases except
in cases where therapeutic superiority from the societal point of view was demonstrated
(Scherer, 2004). The public health community supports head-to-head comparative
evaluation of pharmaceuticals in general (American Public Health Association, 2003).
-- Universal Programs and Volume Discounts
Universal programs that include volume discounts are another means to control
costs in line with public health pharmacy values (American Public Health Association,
2000).5 The logic is that the negotiating power of volume purchasers results in lower
prices for the group as a whole. The Veterans Administration and many state Medicaid
programs are examples. States make such purchases for their Medicaid populations
through drug-discount programs. These efforts are aligned with public health views
(American Public Health Association, 2001).
The Medicare Part D program to provide insurance for pharmaceuticals to the
over-65 population illustrates that universal programs do not always include a public
health orientation to pharmacy policy. In this case the bill creating the Medicare
pharmacy benefit prohibits traditional Medicare from negotiating with pharmaceutical
companies for volume discounts for medication (Iglehart, 2004, p. 832). If permitted, the
cost savings would likely be enormous thought pharmaceutical manufacturers dispute this
view (Kaiser Family Foundation, 2006b). Negotiating for volume discounts is supported
by the American Public Health Association (American Public Health Association).
Volume discounts may mean medication is available at lower prices. This could improve manufacturers’
profits if lower prices mean a greater number of people purchase the drug.
5
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Overall, the future cost of pharmaceuticals for the elderly, for taxpayers, and for those
enrolled will be greater than if the new Medicare Part D program had been fully
integrated into traditional Medicare (Lueck, 2006).
In addition, policy analysts worry that the Medicare Part D program as currently
structured encourages the pharmaceutical industry to focus on development and approval
of very expensive drugs that may be useful to small populations, rather than on cheaper
medication of use to broader populations.6 It will give additional benefit to unique drugs
still under patent protection that are expensive. This is because the program provides
unlimited access at very low co-payment levels (5%) to all medications once a patient
gets beyond the initial shared payments (donut hole) – a little over $3,000 in 2006
(Iglehart, 2004). In this instance, the Medicare Drug Plan with its “donut hole” is doubly
problematic from a public health policy perspective.7 It gives the wrong incentive to
pharmaceutical manufacturers and at the same time it is a substantial financial obstacle
for the poor. This same problem in supplemental coverage for lower income seniors has
been noted for the Medicare insurance in general (Taylor, Chernew, & McLaughlin,
2006).
-- Co-pays or “Cost-Sharing”
Public health goals are not in line with certain “cost sharing” measures aimed at
patients (these include co-pays, caps on the number of prescriptions, co-insurance, and
deductibles). In the long term, they often end up costing more than they save because
6
While this pharmacy policy may be welcomed at the moment by the private pharmaceutical companies, how long they will remain
content in the future is hard to say – the federal government as the payer behind the scenes could at any time move to reduce profit
levels and this could bring government and the pharmaceutical industry onto a collision course. Price Waterhouse Cooper sees the US
as inevitably moving in the direction of countries with a national health service system (Bowe, 2006).
The Wall Street Journal concludes that the Medicare Drug Plan will benefit those pharmaceutical companies that “make drugs that
have less competition and higher markups….” The early winners include as well “the nation’s largest health plans, which are
peddling the drug coverage” (Lueck & Fuhrmans, 2006, B 1) This is a case where insurance for pharmaceuticals “enhances the ability
of pharmaceutical companies to set their prices well above the cost of production and distribution, all else being equal” (Scherer,
2004, 928).
7
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they reduce the probability that the patient will obtain needed medications. Ironically in
some situations they result in greater health system costs often borne by taxpayers (Hsu et
al., 2006; Thorpe, 2006). These measures are especially detrimental to vulnerable
populations including the elderly and the poor because these groups are the most likely to
suffer serious adverse events when they skip needed medication. In general patients who
forego essential medications are more likely to need emergency room services and their
use of health services rises (Anis et al., 2005; Ess et al., 2003; Joel Lexchin &
Grootendorst, 2004; Tamblyn et al., 2001). The findings of the Rand Health Insurance
Experiment has, for 20 years, been used to justify these cost-sharing measures but reanalysis suggests that voluntary attrition in the cost-sharing arm of the study jeopradizes
its conclusion, that cost-sharing is without serious effecs on populatin health (Nyman,
2007).
-- Switching from Rx Status to OTC as a Means to Cost Control
Switching medication from brand name, prescription status, to over-the-counter
(OTC) status may reduce costs (Cohen, Paquette, & Cairns, 2005). Whether this is in line
with a public health oriented pharmacy policy is not an easy question. Switching may
provide for greater access to medications at lower costs for uninsured patients because
they do not need a prescription from a physician. It saves the patient money if the
medication is safe and effective and if the patient can easily self-diagnose and treat the
problem (Strom, 2005). If self-diagnosis does not result in serious harm, OTC access is
appropriate because the patient can always schedule a doctor’s visit if the condition does
not improve.
However, from a public health pharmacy policy point of view, switching
medication from prescription status to over-the-counter is ambiguous for several reasons.
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Switched drugs are very expensive immediately after they leave prescription status.
While the cost of a doctor visit is avoided, patients who have insurance can no longer use
it to help cover the cost of the medication (Cohen et al., 2005; P. V. Rosenau, 2000).
Switched drugs can cause harm if taken by individuals who self-prescribe but who do not
really need a medication; these individuals put themselves at risk for the various sideeffects associated with the medication (Brass, 2001). Also of concern to public health is
the possibility that switching leads to unsupervised patients developing resistance to the
medications preventing their future use.8
--Extending Rx Providers & Adopting New Rx Classifications
Expanding the power to write prescriptions may lower costs and increase access
to medication. If healthcare providers, including nurses, nurse practitioners, naturopathic
doctors, and psychologists were given such rights to prescribe certain classes of
medication, it might help reduce costs and it is in line with public health policy priorities.
Some states in the U.S. have successfully experimented with these mechanisms for lower
health care costs (Spencer, 2004).
Many countries outside the U.S. have more than two (over-the-counter and
prescription status) categories of access to pharmaceuticals. For example, pharmacists
play useful roles as medical practitioners in countries where medication might be kept
“behind the counter” requiring a pharmacist consult with the patient as to how to take the
medication before it will be sold (Ess et al., 2003). The U.S. state of Florida also
8 Pharmaceutical manufacturers are thought to always gain from switching a medication but this is not clear-cut.
Sometimes switching is part of their advance planning and their marketing strategy early on in the development of a drug. In these
cases, there is no doubt that the manufacturers will profit from it. Manufacturers also benefit because they receive extended patent
protection to compensate for the additional costs of the research they must undertake concerning how a medication will be used by the
public after it is switched. In a few cases the FDA recommends for switching a medication though the manufacturer is against this
action (Cohen et al., 2005, p. 40). Such was the case with Claritin. Sometimes manufacturers and insurance companies are on opposite
sides of the switch movement. Insurance companies have publicly lobbied for increasing switches and filed “interested third party”
requests for specific cases with the FDA. Their incentive is that insurance companies do not have to cover drugs once they are overthe counter (Reynolds, 2002).
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attributes a more complex role to pharmacists (Carmichael et al., 1997; Florida
Administrative Code, 1986).
--Pill Splitting
In the U.S., controlling costs is so important that sometimes providers feel
compelled to employ extreme measures. One mechanism, pill splitting, is almost never
encountered in other countries. It involves prescribing medication in doses that are twice
the dose a patient actually needs and then instructing the patient to divide the pill in half
at home and take half of a pill at each administration of the medication. Pill splitting as a
cost control mechanism is in line with public health perspective when it reduces costs
without jeopardizing population health. Those patients who take medication that can be
split and whose physicians agree to write prescriptions for larger-than-needed doses gain,
if it is the only way that they can afford needed medication (Parker-Pope, 2005).
However, “pill splitting” sometimes leads to medication errors and it is therefore hardly a
suitable pharmacy policy alternative to systematic attention to the problem of cost and
affordability of needed medication.
-- Generics and Formularies
Public health pharmaceutical policy supports increased incentives to use cheaper
generic versions of medication rather than brand name drugs where possible(American
Public Health Association, 2000). Generics are generally considered equivalent to brand
name drugs. From a societal point of view this can translate into large-scale savings, as
much as $8 billion per year (Frank, 2007).
Formularies are another cost-cutting means to confront the growing price of
medicine. Formularies are consistent with a public health perspective where they are
practiced with “accountability for reasonableness” that assures transparency, fairPage 17 of 33
mindedness, and provides mechanisms for challenging decisions about the formulary
(Levinson & Laupacis, 2006). For example, the province of British Columbia in Canada
uses outcomes-based research on medications as a criterion for inclusion on the
province’s formulary, thus controlling both cost and quality at the same time (Morgan,
Bassett, & Mintzes, 2004). Australia and Britain both use cost effectiveness assessments
to manage formularies and reduce costs (Ess et al., 2003, p 95-96; Pearson & Rawlins,
2005).
--Importation of Medications from Abroad
The American Public Health Association has endorsed importing medication from
abroad from countries where prices are lower as a means to reduce costs (American
Public Health Association, 2004). This approach to public health pharmacy policy has
both strengths and weaknesses. Cost reductions must be balanced off against possible
safety reductions in some, but not all, countries that sell to U.S. citizens over the internet.
Importing medication from abroad is a way to reduce costs but individual patient
initiative and sophisticated consumer activity is required. For example, systematic
research indicated that brand name prescription pharmaceuticals were cheaper in Canada
than in the U.S., at least prior to the rise of the value of the Canadian dollar relative to the
U.S. currency (Bradley, Firszt, & Eisenberg, 2005). This is not always the case for
generic medications where differences between the two countries vary widely and market
competition appears to be more efficient (Consumer Reports, 2005). Several states in the
US have employed importation as a method to reduce costs. For example, the Board of
Pharmacy in Nevada has certified several Canadian online pharmacies to sell medication
to its residents – this is public health policy to the extent that it makes medication
Page 18 of 33
available at lower price to more people, including some who would otherwise have to do
without it (Vogel, 2006).9
Important as a cost control mechanism, importation requires the good will and
cooperation of another country on a continuing basis.10 Good public health oriented
pharmacy policy must be reliable and predictable on a long-term basis and importation
from countries that heavily regulate prices is not the best solution. While public health
pharmacy policy is aligned with less protection of the US pharmaceutical market from
foreign competition, a sustained solution requires regulation regarding price and safety of
the internal market (P. Rosenau, 2003).
A Public Health Assessment of Direct to Consumer Ads
While the focus of most of the advertisement and marketing efforts of the
pharmaceutical industry have historically been physicians and providers, today patients
are increasingly targeted. Unrestricted direct to consumer (DTC) ads are not in line with
public health pharmacy policy.11 On balance these ads produce more awareness than
knowledge, are ineffective as a means to patient education, and increase costs by
encouraging the consumption of unneeded medication. The underlying assumption of
DTC ads is that patients are able to self-diagnose and assess the potential dangers of a
medication with accuracy (Okie, 2005a, Brian Strom quoted here). In many cases this is
9 Some Americans travel to Mexico or Canada to purchase medication but this involves additional indirect costs (Calvillo & Lal,
2003).
10 There is clearly little problem with the safety of medication ordered from Canada (Choudry & Detsky, 2005) though the FDA
regularly warns consumers about bogus Canadian drugs (FDA, News July, 13, 2004). Concerns about safety that emerge for the
growing global market in pharmaceuticals are unlikely to be without legislative remedy in the long term. An open global market in
pharmaceuticals appears inevitable; almost all medication is manufactured outside the country in which it is consumed today in any
case (Choudry & Detsky, 2005). Problems with fake drugs are not only a cross-border problem. They have been found internal to the
US market as well though in a far lower proportion than in Asia, Africa or South Americas (Rudolf & Bernsteing, 2004) In a global
marketplace fake drugs find their way into all countries in the end (Zamiska & Tesoriero, 2006).
11
The American Public Health Association has not, however, taken a position on this topic (American Public Health Association,
2000).
Page 19 of 33
unrealistic because medications are so complicated that even highly trained medical
specialists have problems making these assessments. In addition, medication mistakes are
costly to society and to the individual. The pharmaceutical industry employs direct-toconsumer ads largely because they increase consumption. While DTC ads are not
explicitly prohibited, historically in the U.S. they were rare until the early 1980s and of
minor importance until the 1990s. The amount of money spent on them has increased
from 100 million in 1990 to close to 4 billion in 2004 (Mintzes, 2006). Today DTC ads
are common and regulated by the FDA (U.S. General Accounting Office, 2002, pp 1724).
Only one western industrialized country outside the U.S. has permitted DTC ads
on and off for several years (Mansfield, Mintzes, Richards, & Toop, 2005). No European
county is expected to to change this prohibition in the near future (Loftus, 2007).12 The
problem of assuring compliance with regulation of advertising is one major reason why
so many countries prohibit DTC ads (Mintzes, 2006, p 9-12). In the U.S. even voluntary
industry guidelines are not always respected though the pharmaceutical industry takes the
formulation of these guidelines quite seriously (Mintzes, 2006, p 15) (PhRMA, 2005).
The pharmaceutical industry offers a broad defense for advertising
pharmaceuticals to patients. They argue that these ads are beneficial, contending that
they educate patients, increase patient compliance, and draw attention to medications
that the patient might not know about (Calfee, 2002). Patients in turn can alert their
physician to the availability of these medications. DTC ads are said to lead to earlier
diagnoses of important illnesses.
12
In the case of New Zealand, the Christchurch School of Medicine and Health Sciences has posted on its website a report to the
Minister of Health supporting a ban on DTC ads in the strongest terms possible (Toop, Richards, Tilyard, Fraser, & Arroll, 2003).
Page 20 of 33
There is, however, very little evidence to support these claims that DTC ads
improve quality of health services in any way (Gilbody, Wilson, & Watt, 2005). Those
opposing DTC ads report that the educational role of advertisement is, at best minimal,
and at worst, nonexistent (J. Lexchin & Mintzes, 2002). Research on printed media in
the 1990s found ads that targeted patients did not mention the probability of treatment
success, other non-pharmaceutical activities that could help, risk factors, or side effects
(R. Bell, M. Wilkes, & R. Kravitz, 2000; Mintzes, 2006, page 25 for a summary). In
many cases even false or inaccurate information is transmitted though vigilant monitoring
by the FDA could assure that this does not happen (R. Bell, M. Wilkes, & R. L. Kravitz,
2000; Chao, 2005; Huh & Cude, 2004). Unfortunately, the number of direct-toconsumer prescription drug advertisements reviewed by FDA decreased by about half
between the 1997-2001 and 2002-2005. The agency lacks an effective system to track
and review the more than 10,000 DTC ads and the Web sites reported to the agency on an
annual basis (Kaiser Family Foundation, 2005). It is imperative that FDA develop
criteria for review and prioritization of the DTC ads to decrease the negative impact of
these ads.
Doctors are pressured by patients who are influenced by DTC ads to prescribe
regardless of quality, appropriateness, or cost considerations weighing in the opposite
direction (Mintzes, 2002; Mintzes et al., 2003; Mintzes et al., 2002; Toop et al., 2003). It
is estimated that about 8.5 million patients each year “both requested and received from
their physician a prescription for a particular drug in response to seeing a DTC
advertisement” (U.S. General Accounting Office, 2002, page 4).
The pharmaceutical industry’s advertising too often distorts results of head-tohead research comparing medications, and supports the continued, sometimes even
Page 21 of 33
inappropriate, use of inferior medication (Liebman, 2006). For example the ALLHAT
study found greater patient safety with inexpensive diuretics for hypertension and greater
chance of heart failure with expensive newer medications such as Norvasc (generic
amlodipine) (ALLHAT Officers and Coordinators for the ALLHAT Collaborative
Research Group, 2002). But DTC ads emphasized the safety and efficacy of Norvasc and
claimed that it was equally effective to diuretics.
DTC ads may not be in line with good public health pharmacy policy but not all
U.S. professional health services associations have come out strongly against them. In
2004 the American Pharmacists Association’s House of Delegates endorsed DTC ads as
long as they conformed to rules concerning clarity and accuracy of information
(American Pharmacists Association, 2004). This group argued that there is a lack of
solid evidence about these ads and call for more assessment of them (Lyles, 2002). The
American Medical Association’s (AMA) published policy on DTC ads is balanced and
carefully worded. Only recently has AMA come close to asking that DTC ads be
prohibited in certain circumstances. It proposes that newly approved drugs “not be
advertised immediately” (American Medical Association, 2005) (American Medical
Association, 2006). This makes sense because half of the drugs in the US that are
withdrawn from the market are removed within two years of being approved (Lasser,
2002). The American Public Health Association’s official policy is much weaker – it
recommends that health care professionals and the general public report misleading ads to
the FDA but it made no call for a ban on ads (American Public Health Association,
1995).
Direct to Consumer ads could serve a public health pharmacy policy function if
they were used to educate and inform the public as part of public education or health
Page 22 of 33
promotion programs. For example, low dose aspirin taken for cardiovascular health
could save lives (Almasi, Stafford, Kravitz, & Mansfield, 2006; Chan et al., 2007).
However, almost all DTC ads are privately financed and designed with the goal of
maximizing the sale of the most profitable pharmaceuticals (Goodbody, 2005).
Conclusion
Bringing public health into pharmacy policy challenges the status quo because it
destabilizes the fragile alliances between players and stakeholders throughout this health
sector. The future, of course, is difficult to predict but public health pharmacy policy is
likely to be increasingly important and public health should strive to influence policy in
this health sector. As tax payer responsibility for providing medication expands via the
Medicare Prescription Drug Act and tax subsidized Health Savings Accounts, pressure
for policy innovations are less likely to stress individual liberty and more likely to
emphasize public health accountability because of potential cost savings. DTC
advertising will come under scrutiny as policy makers are required to respond to a closer
alignment of public health perspectives and employer/payer interests.13 Public health
requires that the whole society and the most vulnerable populations be given more
attention. This is not a threat so much as an opportunity to come to grips with changes
that in some way must be met.
As regards to safety of prescription pharmaceuticals, public health has much to
contribute to policy on topics ranging from drug approval to post-marketing surveillance.
Overall, if it is to conform to a public health perspective, policy must move from
informal mechanisms of enforcement grounded in the legal system and pharmaceutical
13
There is a role for public health advocacy on this issue because other groups are actively pursuing it as well (American
Medical Association, 2005).
Page 23 of 33
manufacturer’s fear of litigation, to a more active regulatory role on the part of
government (American Public Health Association, 1999). A better means to achieve
safety of the medication supply is surely warranted. For example, a strong case can be
made for public funding and government oversight of clinical trials (Lewis et al., 2007).
Litigation, as an informal mechanism of focusing manufacturer’s attention on
safety, is inefficient. For the most part, litigation seeks justice one person at a time or by
groups of injured patients at a time via class action cases. It is a clumsy incentive and not
at all in line with a public health orientation toward pharmacy policy. It is also
ineffective because those injured are geographically dispersed. When cases of postapproval problems emerge, injured individuals are hard to identify, and many are missed.
Too often the legal approach to safety of medication permits prolonged efforts to
avoid compliance with the law. Research on malpractice dating from the time of the
Harvard Medical Practice Study in the late 1980s and 1990s demonstrated that only a tiny
percent of those injured are ever reached, that many who benefit have abused the legal
system, and administrative expenses for achieving safety via litigation are very high
(Localio et al., 1991).
While many of the cost saving mechanisms discussed above are compatible with a
public health pharmacy policy, none by itself is a substitute for a more comprehensive
consideration of pharmaceutical prices. Profit controls and price targets are consistent
with public health values (American Public Health Association, 2000). However, they
have never been tried in the U.S. and are not politically viable at the present time. They
do however, reflect the fact that the pharmaceutical sector is an important market and the
usual supply and demand mechanisms do not apply (Rice, 2002). Other cost control
mechanisms such as education and transparency are more politically feasible. Negotiated
Page 24 of 33
price reductions, including volume discounts in universal programs, already exist and
they work. In the future, regulation may well encourage, or even require, large
purchasers in state and federal public programs -- such as the Medicare Prescription Drug
Part D program – to actively negotiate for volume discounts. Extending pharmaceutical
prescription writing authority, using generics first, and developing formularies, are also
examples of public health pharmacy policies. Pill splitting is more a temporary, stopgap
measure than real public health pharmacy policy. The U.S. is under pressure to recognize
a global market in pharmaceuticals and to reduce restrictions on medication importation.
This is another means to control to cost of pharmaceuticals though it has many
weaknesses. It is compatible with a public health approach and is likely to continue to be
utilized in the U.S. in the absence of universal health insurance coverage that includes
pharmaceuticals..
What actually happens to the “saved resources” is a matter of concern for the
public health community. If “cost savings” deprive patients of essential medication or if
“savings” go only to increase pharmaceutical companies’ profits, then there is a problem.
Cost-sharing and switching medication from prescription status to over-the-counter
status, are examples of mixed approaches to cost savings. Whether they are acceptable
forms of controlling costs or not depends on how they are structured. Certain forms of
cost sharing appear to be counterproductive and can jeopardize the health of the most
vulnerable populations. If “cost savings” are designed to maximize the health of the
population, by broadening availability of essential medications, then such “savings”
strategies are in line with public health pharmacy policy and should be adopted.
Page 25 of 33
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