Cost Drivers: Prescriber Data Increases Health Care Costs?

How to reduce the cost of our health care lies at the center of the health care reform debate.  It’s no wonder then that “cost containment” became a primary point of focus in the recent ruling by the U.S. District Court in Vermont upholding a Vermont state law which essentially prohibits the use of prescriber data to market and sell pharmaceuticals.

Basically, the VT Attorney General argued that keeping prescriber data from sales reps makes their sales efforts less effective and thus keeps doctors from prescribing newer (i.e. riskier) and more expensive branded drugs – while saving Vermont a significant amount of taxpayer money.  The counter argument, of course, states that prescriber data allows sales reps to be more efficient and thus helps reduce the cost of drugs.

The fall-out from major drug failures and headlines questioning the legitimacy of drug prices makes it easy to see why the VT legislature saw it fit to pass the law at issue here.  On the other hand, the majority of drugs on the market are not blockbuster material and are not the ones driving current headlines.  Smaller companies do benefit from prescriber data that allows them to allocate their more limited resources to areas where their drugs are more likely to be needed.

Increased conflict of interest controls, lackluster product pipelines, the move toward so-called personalized medicine, cost constraints and other industry developments already are changing the way in which drugs are marketed and sold.  It will be interesting to see how the legal details continue to play out, but by the time the final rulings are made, the industry may have moved on.

Further Reading

PDF file of the 4/23/2009 ruling by the US District Court for the District of Vermont

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