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Make mandatory guidelines developed by the pharmaceutical industry regarding gifts, meals, and other inducements given to doctors

September 8, 2004
The Honorable Arnold Schwarzenegger
Governor of California
State Capitol
Sacramento, CA 95814
Re: Request for Signature on SB 1765 (Sher)
Dear Governor Schwarzenegger:
Consumers Union, the nonprofit publisher of Consumer Reports magazine, respectfully requests your signature on SB 1765 (Sher). This bill would codify federal recommendations and voluntary guidelines adopted by the pharmaceutical industry relating to marketing and gift giving to doctors. Drug prices in the United States are the highest in the world. From 1997-2002, prescription prices in the U.S. have increased an average of 17% per year, far greater than the rise in inflation. Rising prescription drug costs are one of the biggest causes of higher healthcare costs overall.
In 2001, the drug industry spent $19.1 billion on marketing to doctors. Marketing activities include lavish trips for doctors, free dinners, sporting event tickets, and constant visits from “detailers”–in essence lobbyists for certain medications. Obviously, these companies would not spend such an amount if it did not work. Cash payments, gifts, paid travel, meals and lodging may have undue influence on physicians. Study after study reveals that such marketing influences prescribing patterns by doctors. But the efficacy of a drug or treatment for a particular patient, not the size of its maker’s marketing budget, should be the determining factor in a physician’s decision. Furthermore, when doctors prescribe newer, more expensive–and heavily marketed–drugs in place of lower-priced and equally effective drugs, we all end up paying needlessly more for healthcare for little benefit.
The federal Office of the Inspector General within the Department of Health and Human Services recommended that pharmaceutical companies develop a “Comprehensive Compliance Program” to ensure that industry practices do not lead to inappropriate utilization of prescription drugs. The PhRMA guidelines address some of the worst marketing practices. But, because OIG and industry guidelines are merely voluntary without any enforcement, we strongly support giving these guidelines the force of law. For these reasons, Consumers Union supports SB 1765.
Earl Lui
Senior Attorney
cc: Senator Byron Sher