COVER STORY

HOW MANUFACTURERS VIEW PHARMACISTS

Drug company executives think pharmacists are a growing force to be reckoned with, an exclusive survey finds

Pharmaceutical companies tend to look upon pharmacists as a positive force in their mission to get products to patients. They specifically recognize R.Ph.s' value in product introduction, product selection and purchase, and patient counseling on the use of their companies' products. As a testament to their high regard, many firms made an effort during the past year to recruit pharmacists, especially for drug information and clinical research.

But the drug industry generally feels there is more that pharmacists could be doing. Many manufacturers especially expressed concern that pharmacists are not giving them enough support when it comes to explaining drug prices to consumers.

These are but a few of the findings uncovered by an exclusive survey of drug manufacturing executives conducted by Drug Topics. The results that follow cover pharmacy issues as well as pharmacy-manufacturer relationships. To augment the survey, we talked to several respondents for additional insight into their responses.

Pharmacists' influence

Asked to comment on pharmacists' influence in four areas—product development, pricing, promotion, and introduction—respondents reported that R.Ph.s exert the least influence in the first two areas and the most power over the latter two.

Nearly two-thirds of the manufacturers polled said pharmacists have considerable influence on product introduction. That should be obvious, according to the president of a New York-based drug company, who asked not to be identified. "We have to get pharmacists to stock the product before we can actually start promoting it to physicians."

Bruce Paddock, president of Paddock Laboratories in Minnesota, also gave pharmacists the highest rated level of influence for product introduction. "We really have two focuses, and both involve the pharmacist. First, we sell products for extemporaneous compounding, so the pharmacist makes that first choice, and is the only one who makes that choice. Second, we have bioequivalent generics, and, again, it's the pharmacist who decides whether to use a Paddock bioequivalent product or somebody else's. So the pharmacist truly is the one we have to talk to."

While product development scored lowest in our survey for R.Ph. influence, Henry Libby of Libby Laboratories in Berkeley, Calif., sees it differently. "Pharmacists are a link between the lab and the people who use the product," he said. "We have so many ideas that are not pertinent, and we talk to the pharmacists, who tell us, 'Yes, this is what we need,' or 'No, this isn't.' "

Just how much influence do pharmacists wield over the selection and purchase of drug products today? More than half (56%) of respondents said pharmacists have considerable influence when choosing their products, 21% said they have minimal influence, and 22% were neutral (see pie chart below). Asked if this level of influence has changed over the past two years, 54% of respondents said it has remained the same, 37% said it has surged, and 9% felt it had slipped.

Elaborating on why he thinks the pharmacist's level of influence on product selection and purchase has increased compared with two years ago, one company president said, "It's harder and harder to get new drugs stocked, particularly for companies that aren't the top-tier firms. So you come out with something new, and often the pharmacist says, 'I'll just wait until I get a script before I order that.' That makes it tough on us, because it becomes a catch-22. When the script does show up and pharmacies don't have it, the patient doesn't want to wait, so the doctor writes something else. Here we've spent a lot of money to influence the physician, and when the pharmacist doesn't have it, the physician basically won't prescribe it again. So it's money wasted."

Counseling on products

On the positive side, two-thirds of respondents said they feel pharmacists are doing a good job of counseling patients on the use of their company's products. But one-third of the executives responded negatively and were blunt in their criticism.

"I don't think pharmacists are doing a good job of counseling on any products," one company president told us. "Unfortunately, most of the research on this is based on surveys, instead of behavioral research. Pharmacists say they spend 20% of their time counseling. But go stand by a prescription department in any pharmacy and observe. You'll see there's not much counseling going on."

The most frequently cited reason manufacturers think R.Ph.s don't counsel was lack of time, also expressed as being too busy. Robert Lohr, president of Lobob Laboratories in San José, Calif., said this is particularly true with nonprescription items. "There are so many things pharmacists have to read, that they don't read the labeling on items out front," he said. "We've had several instances in which even the doctors themselves have suggested uses for the product that were inconsistent with the labeling. But the pharmacists don't have time to peruse OTC items unless they themselves use it. And the information just doesn't get to the consumer."

Instead of counseling on their products, pharmacists elect to switch to generics or substitute other products they stock, according to several respondents. As one general manager explained further, "The pharmacies are selling a lot of private-label stuff and generics, so it's getting harder to compete against those products."

How can pharmacists improve their patient counseling on manufacturers' products? Here are some suggestions from manufacturers:

• Have more pharmacists on duty.

• Understand the products better.

• Get out from behind the counter.

• Reverse roles with technicians.

Paddock blames the lack of counseling time on managed care. "So much that's dispensed today is covered by managed care, and because managed care restricts reimbursement, the pharmacist's gross profit margin is extremely tight. Until managed care reimburses pharmacists for their cognitive services, they won't have the time [to counsel]."

Educating pharmacists

Nearly half (44%) of respondents said their companies sponsor continuing education programs targeted to pharmacists. Among those who do listed program goals ranged from building company name awareness and product knowledge to building relationships and selling more products.

As a New York drug company executive noted, "Most of us are not so noble that we're doing education for the sake of it. We're also trying to get a message across to the audience."

When asked whether continuing education programs are effective, Gary Grandfield, director of pharmacy for CAPS, a subsidiary of B. Braun, said they are. "But by no means do they substitute for someone going out into the field, talking to pharmacists, and showing them what's going on."

As an indication of how much manufacturers value pharmacists these days, half of the respondents said their companies have made an effort to recruit pharmacists in the past year. Among the comments offered were the following:

• "We are beginning to recognize the growing importance of pharmacists and use that expertise internally."

• "We like the science expert approach."

Building relationships

When asked to rate their organization's relationship with R.Ph.s in general, more than half (53%) the respondents indicated it was "excellent," while only 14% pegged it "poor." Which type of pharmacists do manufacturers have the best and worst relationship with? Independents came out on top and chains ended up at the bottom (see table).

Which type of pharmacist does your company have the best, worst relationship with?

Independents' high standing could be related to the way manufacturers detail them. The survey found that more drug firms are detailing independents than other types of pharmacists. Overall, 51% of respondents said their company's sales force is required to detail pharmacists. Of these 40 executives, 87% said they detail independents, 74% chains, and 54% hospitals. Other pharmacists who are detailed include: mass-merchandisers (46%), supermarkets (41%), HMOs (36%), mail-order facilities (28%), and consultant pharmacists (26%).

Several strategies were suggested as the best way to improve their company's relationship with pharmacists. "Education," including "information," was the approach mentioned most frequently. To illustrate this point, Dan Leritz, president of The Leritz Co. in St. Louis, gave this example: "Most people really don't realize that acetaminophen is Tylenol; they think Tylenol's different. And that's where the pharmacist can come in and help his customer, because the private label is normally less expensive than the brand. And many times the profit margin on the private label is just as good for the store. But many people are apprehensive about store brands, and if they talk to a pharmacist, it helps reinforce the point that the store brand is essentially the same product."

Following education/ information, the next most frequently listed strategy for building relationships with R.Ph.s was through "communication," including more frequent visits to pharmacies and attending professional meetings. Several respondents suggested emphasizing the importance of the pharmacist's role. Other methods offered: provide value-added services and good contracts, help them with their work, provide useful tools, and provide effective products that are priced reasonably.

When asked to consider manufacturer/pharmacist rapport from the other direction—What can pharmacists do to improve their relationships with manufacturers?—"communication" between the two was the tactic of choice. Several respondents suggested that more and better communication with customers would, in the long run, improve relationships with the product producers.

As a New York drug company executive explained, "The latest information says it costs more than $500 million to bring a new drug to market. There's got to be some cost recovery on the other side. You have to look at the total value of what's being delivered. And pharmacists can help get that message across." He went on to stress the importance of pharmaceutical companies bringing out new drugs. "If we don't, there's no future to the industry in general. If pharmacists were selling only drugs from 30 years ago, they'd barely make a living. So we're all in this together."

In addition to better communication, respondents said R.Ph.s could improve relationships with them by:

• Becoming more knowledgeable about the industry

• Taking time to really learn about the business, rather than relying on media accounts

• Reading labels

• Becoming familiar with manufacturing issues

• Providing better counseling services

• Making the time to be detailed; being open to new ideas

Misconceptions

Asked what they believe to be the biggest misconceptions pharmacists have concerning drug manufacturers, respondents identified pricing and profits as the predominant issues. Consider the following answers:

• Unreasonable pricing

• Manufacturers are only profit oriented

• All manufacturers overcharge; they are price gougers

• Margins are still as high as they were 10 years ago

• Manufacturers make big, easy money

• Manufacturers establish prices

• Manufacturers have unlimited resources

Lohr, who listed "big, easy money" as the biggest misconception, explained his response. "Having been on both sides of the fence, I know that the average pharmacist doesn't realize we have to pay for shelf space. He doesn't realize the economic impact of all these federal regulations—that we have to test all the parts of the packaging and verify the package is really what the manufacturer of the package and the plastic bottle said it was. And we have to periodically break down all our equipment and certify that it's working properly. We have to run test batches of the product and make sure that there's compliance in all the different directions. We're not making money; we're spending money."

Leritz, who said R.Ph.s think manufacturers are more profitable than they are, explained, "I'm selling acetaminophen, for example, for less today than I was 20 years ago. So margins are extremely tight. It's very competitive in the generic end, and I don't think pharmacists understand that."

Other misconceptions drug manufacturers think pharmacists have about them include:

• Inflexibility

• We don't care about the patients or the pharmacists

• Big companies make better products

• Generic drugs are the same

• Generics may not be equal to brand

• We do not respect the pharmacists' role in health care

On the generic issue, Srinivasa Rao, director of regulatory affairs for Thames Pharmacal, New York, explained, "Some pharmacists do still think that generics are not equal to brand. But they are equal because it's all approved by the Food & Drug Administration, and [the generic drugs go] through all types of testing to prove they're equal to the brands."

Drug prices—and costs

More than three-quarters (78%) of responding drug manufacturers think pharmacists are not giving manufacturers enough support when it comes to explaining drug prices to consumers. Several manufacturers wrote that R.Ph.s don't have time to explain prices. A few respondents believe that pharmacists don't understand enough about pricing to be able to explain it. But others made comments like, "It's easier to blame us," or, "The tendency is to blame us rather than explain the issues."

One executive, who said that pharmacists often take the easy way out, instead of explaining the economics of drug development, expanded on his reasoning. "I was a pharmacist and I understand the pressures, because drugs are expensive and patients are always complaining about price. What happens in most cases is that pharmacists just say, 'Well, those damn manufacturers, they're sticking everybody with these high prices'—which is really not in the best interest of us as an industry. It doesn't mean that we as manufacturers always do the best job that we should, either, in getting that message across to the consumer. So I'm not blaming only the pharmacists; I think it's something we as a group need to address."

He's not the only one who believes manufacturers can do more about the cost of drugs. More than half (58%) of those who responded to the question, "Do you think manufacturers are doing all they can to reduce prices?" answered No.

Cutting patient advertising costs was the most common suggestion for reducing drug prices. Reducing government regulations and packaging requirements were also mentioned several times as potential cost-cutting areas. One strategy proposed to cut costs is to "lobby for less FDA regulation." While packaging costs are blamed on government regulations, Lohr said manufacturers do have some control there. "You have to follow regulations as far as type size and quality of packaging, but not so much the package size." Because the large manufacturers spend extra money on packaging, he said, the smaller companies must do the same to compete. "And we don't have the advantage of big quantity discounts." Other suggestions respondents gave for ways to cut costs include the following:

• Reduce the number of samples given out

• Stop wasting money on select interest groups

• Reduce the cost of physician entertainment

• Increase efficiency among employees

Grandfield suggested that, instead of working on cutting costs, manufacturers should reevaluate their prices based on their profits from the previous year. "They all have targets, and if they beat their target one year, they should lower the price the next year."

But Paddock doesn't foresee manufacturers doing much about lowering prices to any great extent. "At least we in manufacturing have the opportunity to increase our prices aggressively. I feel sorry for most community pharmacists, because they cannot; their hands are tied by managed care and the government," he said.

Medicare Rx benefits

Nine out of 10 respondents favor an outpatient drug benefit for Medicare patients, but almost all of those stipulate that it should be offered on the basis of need. Some said the benefit should be restricted to a "limited amount for expensive drugs" or should include "a generic mandate. Otherwise, the use of brand drugs will make it outrageously expensive."

Those few (9%) who are against a drug benefit for Medicare patients cite governmental red tape as the reason for their opposition. One wrote, "Government will add cost, reduce effectiveness, create more bureaucracy, and bungle the program."

Physician dispensing

While most manufacturers support a Medicare outpatient drug benefit, nearly three-quarters (72%) do not favor physician dispensing. Most of the reasons given related to physicians' lack of drug knowledge and potential ethical problems. In a follow-up interview, one executive elaborated on the ethical risks:

"If I'm a physician, I'm not going to have every drug that a pharmacist has. Let's say we're talking about cholesterol reducers. Maybe there are seven or eight on the market, and I've only got one of them in my dispensing room. Well, guess which one I'm going to dispense, regardless of whether it's the right one for the patient? I'm a firm believer that even if you look within a class of drugs, let's say ACE inhibitors, this ACE inhibitor may work better for this patient, and that one might work better for another. So physicians need to try to tailor their drug therapy to their patients. And if your prescribing decision is made by what's on the shelf in your dispensing room, I think that's a conflict of interest."

In addition to concerns about education and ethics, respondents offered these reasons against physician dispensing:

• Physicians don't have enough time now to treat patients.

• Doctors are swayed by sales reps.

• Patients see many different doctors, so they could get multiple prescriptions with potential adverse events.

• Physicians are not geared to handle patients' and policy questions.

But 28% of respondents do favor physician dispensing, citing location and circumstances as possible reasons for doing so. Grandfield doesn't have a problem with it on a limited basis and with a caveat. "Obviously, there's conflict of interest that could go on here, but physicians do send out a lot of samples, which is great because they know people who either don't have insurance or don't have money, and maybe they can make a few patients better. But if physicians are going to dispense, they should have some education to go along with it."

Other respondents gave the following reasons for supporting physician dispensing:

• It provides immediate treatment, such as antibiotics and analgesics.

• In certain locales, such as rural areas, doctors may provide the only means for patients to obtain a drug.

• Patient compliance is better.

• There are fewer filling mistakes from misreading Rxs.

Therapeutic substitutions

One source of friction between manufacturers and R.Ph.s is the practice of therapeutic substitution. Respondents were almost evenly split on whether therapeutic substitutions should be permitted, with 49% saying Yes and 51% saying No. By far, the most reasons in favor of substitution related to cost savings. As Grandfield explained, "In hospitals, therapeutic substitution is huge. It makes the drug manufacturers more competitive and also lowers the price."

But another respondent had this to say, "When appropriate (i.e., when there is a true therapeutic equivalent), it reduces costs. However, we strongly oppose the frequent practice of substitution when no therapeutic equivalent exists (illegal but common)."

Pharmacist prescribing

Like therapeutic substitution, the issue of whether pharmacists should prescribe drew close to a 50-50 split among respondents. A slight majority (53%) of manufacturers are in favor of the practice, while 47% are against it.

Lohr, who acknowledged that pharmacist prescribing could be especially helpful in small communities with limited access to physicians, would limit it to "a couple of days. For emergency situations or until the patient could get hold of a health practitioner. It should be within the realm of possibility."

A Minnesota executive said, "There should be a list, like prescribing nurses have, of certain drugs that could be prescribed by pharmacists—where diagnosis isn't as important." Paddock also is in favor of the practice, if it is limited to certain meds. "Pharmacists should be able to prescribe some of these drugs. Pharmacists see what's wrong with the patient and know any allergies he or she may have."

Collaborative practice acts

When it comes to R.Ph.s' attempts to gain expanded authority by lobbying for collaborative practice acts in state legislatures, 32% of manufacturers said their company takes a neutral position on these bills, 28% support this legislation, and 11% oppose it. A Missouri executive told us he opposes it, but his company does not. "If I say the physician should not be selling the products out of his office [as he did earlier in the survey], then I think the converse is also true. The pharmacist should not be lobbying to do what the physician does."

Others who oppose the legislation gave the following reasons: "a conflict of interest on the pharmacists' part," "we don't get a fair shake," and "it reduces physicians' authority over patients."

Those who support these state bills gave the following reasons:

• Makes more sense to stop treating pharmacists as pill counters.

• Because doctors sometimes hold the monopoly.

• Improves speed of therapy.

• Pharmacists have demonstrated their value in running anticoagulation clinics.

Most knowledgeable

While manufacturers may clash with pharmacists over therapeutic substitution and pharmacist prescribing, most drug executives concede that these health professionals are the drug experts of choice (see pie chart below). Only a minority of respondents listed physicians as the most knowledgeable health professional about their products. One New York executive noted, "Physicians tend to focus on the few drugs they prescribe often. The ones we target are the ones who use our drugs. Because they actually use the drugs, they monitor the outcomes of those drugs. I think it's difficult for pharmacists to do that. Plus, a pharmacist is dealing with every drug on his shelf, and he doesn't monitor patient outcomes. So let's say someone's taking something for high blood pressure, the physician is taking the patient's blood pressure when he or she comes in; the pharmacist is not doing that. So it's difficult for the pharmacist to have the knowledge, at least from an experiential perspective, about how the drugs are working."

Few respondents hold this sentiment, however. When asked which health professionals have the most knowledge about their company's drugs, 51% said pharmacists, 39% indicated physicians, 4% said nurses, and 6% checked "other."

Similarly, many manufacturers acknowledge that R.Ph.s play a major role in postmarketing surveillance of their company's products. Asked to rate pharmacists on how substantial a role they play in this area, almost half (46%) of respondents said R.Ph.s contribute a great deal, only 27% said their role is not significant, and the balance fell in between the two poles.

Dana Cassell

Based in New Hampshire, the author writes frequently on health-related subjects.

HOW THE SURVEY WAS DONE

A questionnaire was mailed to a random sample of drug manufacturing company executives, selected on an nth-name basis from a list provided by SK&A Information Systems. The survey also went out to a sample of drug manufacturers in the National Association of Chain Drug Stores' associate member list. Combined, a total of 457 questionnaires were distributed. When the field period closed on Feb. 22, 2001, a total of 85 usable questionnaires had been received, for a response rate of 18%.

More than four out of 10 respondents (42%) are company presidents, 22% are managers/directors of pharmacy trade relations, 17% are chairmen, and 9% are general managers. Ten percent said they hold some other position.

About half (55%) of respondents stated their company's total sales for the year 2000 were less than $50 million, 5% said their company made more than $10 billion, and the remainder fell between the two.

 

Dana Cassell. HOW MANUFACTURERS VIEW PHARMACISTS. Drug Topics 2001;8:47.