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Each year, physicians in the United States write more than three billion prescriptions, or about twelve prescriptions per American.1 In2009 alone, the United States spent some $300 billion on prescriptiondrugs.2 Similarly, the medical device market accounts for around $200billion in annual sales.3 With so much money at stake, it should comeas no surprise that drug and device companies invest massive sums inaggressive marketing.
Estimates vary,4 but the pharmaceutical and medical device in- dustries spend around $30 billion per year on marketing efforts de- J.D., expected May 2011, The George Washington University Law School; B.A., 2008, University of Florida. I owe countless thanks to Brian Smith, Andrew Wone, Peter Raven-Hansen, Edward Swaine, and Hannah Geyer for their thoughtful comments on prior drafts. Iwould also like to thank Niels von Deuten, Christopher Healey, Nitya Kumar, Andrew Pruitt,and The George Washington Law Review for exceptional editorial work.
Janet Lundy, Prescription Drug Trends, HENRY J. KAISER FAM. FOUND. (Sept. 2008), http://www.kff.org/rxdrugs/upload/3057_07.pdf.
Duff Wilson, Drug Companies Increase Prices in Face of Change, N.Y. TIMES, Nov. 16, Peter Stone, Take Two Kickbacks . . ., MOTHER JONES, Nov. 2, 2009, at 18.
See MARCIA ANGELL, THE TRUTH ABOUT DRUG COMPANIES: HOW THEY DECEIVE US AND WHAT TO DO ABOUT IT 120 (2004) (estimating $54 billion in marketing expenditures for 2001); Julie M. Donohue et al., A Decade of Direct-to-Consumer Advertising of Prescription November 2010
MEDICAL MARKETING IN THE UNITED STATES signed to maximize market share, and doctors are one of their maintargets.5 On average, the drug and medical device industries spendover $20,000 per doctor each year on marketing efforts that includegifts, meals, travel, consultancy fees, and continuing medical educationprograms.6 The reach of medical marketing has grown so broad thatone recent survey reported that ninety-four percent of physicians havereceived some form of benefit or payment from the drug and deviceindustries.7 For example, on any given day, pharmaceutical companiespay to deliver lunch to the twenty or so doctors and employees ofNassau Queens Pulmonary Associates in New York.8 Moreover, thepractice of paying for meals is alarmingly widespread. Indeed, “some[doctors’] offices get breakfast and lunch every day” courtesy of drugand device companies.9 Pharmaceutical outreach, however, is not limited to bagels and brunch. Drug companies flood doctors’ offices with brandedtrinkets—everything from paper and pens to mugs and mousepads—in an effort to push the latest prescription medicines.10 Under an edu-cational guise, paid and highly trained11 sales representatives en- Drugs, 357 NEW ENG. J. MED. 673, 675 (2007) (estimating $29.9 billion in marketing expendi-tures for 2005); Marc-Andr ´e Gagnon & Joel Lexchin, The Cost of Pushing Pills: A New Estimateof Pharmaceutical Promotion Expenditures in the United States, 5 PLOS MED. 29, 30 (2008),available at http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2174966/pdf/pmed.0050001.pdf (esti-mating $57.5 billion in marketing expenditures for 2004); Verispan Year in Review—2007 (June12, 2008) (presentation by Tara Hamm) (on file with author) (estimating $20.4 billion in market-ing expenditures for 2007). Estimates vary widely due to inconsistent data availability, varyingmetrics, and excluding payments made to doctors for speaking engagements and consulting feesfrom marketing estimates. See Andrew Miner & Alan Menter, The Ethics of Consulting withPharmaceutical Companies, 27 CLINICS DERMATOLOGY 339, 340 (2009) (“The total amount ofmoney presently spent on physician consulting is unknown.”).
Andrew Pollack, Stanford to Ban Drug Makers’ Gifts to Doctors, Even Pens, N.Y.
TIMES, Sept. 12, 2006, at C2 (noting that “[a]bout 90 percent of the pharmaceutical industry’s $21billion marketing budget is directed at physicians”).
A recent study estimated that the United States has 788,000 active doctors. Douglas O.
Staiger et al., Comparison of Physician Workforce Estimates and Supply Projections, 302 JAMA1674, 1678 (2009). Pharmaceutical companies spend $18.9 billion on them every year, amountingto some $23,984.77 per doctor. See Pollack, supra note 5.
Eric G. Campbell et al., A National Survey of Physician-Industry Relationships, 356 N.
Stephanie Saul, Drug Makers Pay for Lunch as They Pitch, N.Y. TIMES, July 28, 2006, at See Dana Katz et al., All Gifts Large and Small, AM. J. BIOETHICS, Summer 2003, at 39, 40 (describing the industry’s use of “reminder items,” such as pens and notepads).
One former sales representative described the training of pharmaceutical sales repre- sentatives as focusing on how to “present our products in the best possible light, . . . trivializeproblems associated with them and . . . emphasize the shortcomings of our competitors’ prod- courage physicians to prescribe more products by bringing food andfreebies to doctors’ offices, a practice known as “detailing.”12 Anddrug companies know their marketing works. One former marketingrepresentative called free meals an “incredibly effective” tool forboosting drug sales.13 The true cost of medical marketing, however, isultimately paid by taxpayers and private insurance customers whofoot the bill for industry-induced overspending.
In the face of cheaper generic medicines or more effective alter- native treatments, doctors who meet with marketers prescribe moredrugs overall and more frequently prescribe the medicine advertised.14Because costs can vary dramatically between branded medicines andtheir generic alternatives, the extra spending adds up.15 Insurancecompanies raise the price of coverage to compensate for higher costs,and “[s]ince the Federal Government is the nation’s largest purchaserof prescription drugs,” specious marketing should concern both Con-gress and taxpayers alike.16 To rein in overspending caused by medical marketing, Congress should pass stringent legislation banning the provision of gifts and freemeals. This Note proposes the Medical Marketing Act for Congress’sconsideration and defends it against legal attack. A comprehensiveban on the drug and device industries’ most troublesome marketingactivities would lower spending on prescription drugs and medical de-vices by substantially reducing doctors’ tendencies to prescribe moreexpensive and unnecessary branded drugs and medical devices.
This Note begins, in Part I, by describing how medical marketing impacts doctors’ decisionmaking and how this shift affects drug anddevice spending. Part II examines the common shortcomings of themany medical marketing proposals put forth by industry organiza-tions, state legislatures, and Congress. Part III responds to the most ucts.” Under the Influence: Can We Provide Doctors an Alternative to Biased Drug Reviews?:Hearing Before the S. Spec. Comm. on Aging, 110th Cong. 4 (2008) [hereinafter Under the Influ-ence] (statement of Shahram Ahari, former sales representative, Eli Lilly). See generally Paid toPrescribe? Exploring the Relationship Between Doctors and the Drug Industry: Hearing Beforethe S. Spec. Comm. on Aging, 110th Cong. 1 (2007) [hereinafter Paid to Prescribe].
“Pharmaceutical ‘detailing’ is the term used to describe those sales visits in which drug reps go to doctors’ offices to describe the benefits of a specific drug.” Daniel Carlat, Dr. DrugRep, N.Y. TIMES MAG., Nov. 25, 2007, at 64, 67.
See Under the Influence, supra note 11, at 2 (statement of Sen. Herb Kohl, Chairman, S.
Spec. Comm. on Aging) (discussing how Norvasc, a commonly prescribed blood pressure medi-cation, costs between $60 and $70, whereas the generic costs around $12).
MEDICAL MARKETING IN THE UNITED STATES likely challenge to the Medical Marketing Act—the accusation thatrestrictions on medical marketing impermissibly curtail commercialspeech in violation of the First Amendment. Finally, Part IV proposesthe Medical Marketing Act for Congress’s consideration.
THE EFFECT OF MEDICAL MARKETING ON DOCTORS’ The relationship between doctors and medical manufacturers has long been subject to public scrutiny.17 For decades, the pharmaceuti-cal industry made no pretense about showering doctors with lavish,nonmedical gifts.18 Despite recent attempts at reform,19 however,medical marketing remains a common practice.20 This Part beginswith an overview of pharmaceutical companies’ current marketingpractices and explains the effect this marketing has on doctors’ deci-sionmaking. Finally, this Part illustrates the dramatic impact medicalmarketing has on the cost of medicine.
Medical Marketing Is a Pervasive Practice in the United States Drug and medical device companies use their massive resources to engage in a variety of marketing activities. With approximately$500 billion in annual sales, prescription drugs and medical devices arebig business.21 But the drug and device industries are not only big;they are also highly profitable, returning some fifteen percent on in-vestments—an “extraordinary” amount.22 Accordingly, to maintain adominant market position, drug and device companies engage in anumber of marketing activities that financially entangle doctors, com- Howard Brody, Pharmaceutical Industry Financial Support for Medical Education: Ben- efit, or Undue Influence?, 37 J.L. MED. & ETHICS 451, 451 (2009) (“As early as the 1960s and1970s, astute commentators began to call into question the degree of influence that the pharma-ceutical industry was exercising over all aspects of medical research, education, and practice inthe U.S.” (citing Charles D. May, Selling Drugs by “Educating” Physicians, 36 J. MED. EDUC. 1(1961))); see also MILTON SILVERMAN & PHILIP R. LEE, PILLS, PROFITS, AND POLITICS 308(1974) (discussing the “problem” of drug detailers in the practice of medicine).
For example, when Dr. Arthur S. Levine, Dean of the University of Pittsburgh School of Medicine, graduated from medical school in 1964, “Eli Lilly gave him his first doctor’s bag,and Roche gave him an Omega watch for being valedictorian. He still has the watch.” GardinerHarris, Group Urges Ban on Medical Giveaways, N.Y. TIMES, Apr. 28, 2008, at A15.
See supra notes 7–9 and accompanying text.
See supra notes 2–3 and accompanying text.
Paid to Prescribe, supra note 11, at 2 (statement of Sen. Herb Kohl, Chairman, S. Spec.
Comm. on Aging). “From 1995 to 2002, pharmaceutical manufacturers were the nation’s mostprofitable industry (profits as a percent of revenues). They ranked 3rd in profitability in 2003and 2004, 5th in 2005, 2nd in 2006, and 3rd in 2007 . . . .” Lundy, supra note 1, at 3.
promising patients’ health and raising healthcare costs as a result.
Drug and device companies call their activities educational,23 but asone former sales representative made clear before the Senate SpecialCommittee on Aging, “[a]mong the myriad of myths that the industryuses to justify the pharma-physician relationship, none is more dan-gerous than the notion that the drug rep provides valuable educationto the doctor. As their formal title implies, pharmaceutical sales rep-resentatives are hired to sell. Period.”24 Armed with detailed prescriber data, medical sales representa- tives carefully tailor their approaches based on the personalities andprescribing habits of particular physicians.25 Moreover, medical salesrepresentatives receive extensive—albeit nonmedical—training tohone their craft.26 On average, physicians meet with pharmaceuticalsales representatives around four times a month.27 One study foundthat the vast majority of “physicians (94%) reported some type of re-lationship with the pharmaceutical industry, and most of these rela-tionships involved receiving food in the workplace (83%) or receivingdrug samples (78%).”28 In addition to showering physicians with free food and gifts, drug and medical device companies hire doctors as consultants and repre-sentatives, “offer[ing] lucrative consulting arrangements to top-notchteachers and even ghost-[writing] research papers for busy profes-sors.”29 One researcher discovered that fifty-six percent of the doctors In response to a report by the Association of American Medical Colleges calling for a ban to most gifts, meals, and other medical marketing activities, chief executives Jeffrey B. Kin-dler of Pfizer and Sidney Taurel of Eli Lilly wrote that medical marketing programs “can beworthwhile educational activities.” Harris, supra note 18.
Under the Influence, supra note 11, at 4 (statement of Shahram Ahari, former sales To better understand doctors’ motivations, detailers receive “psychological profile train- ing, beginning with [their] own psychological profile.” Id. at 5. Understanding their own psy-chological profiles allows detailers to learn “to assess . . . doctors,” how their “personality traitsoverlap with . . . physicians’ traits, and how best to ingratiate” themselves with doctors theymeet. Id. Moreover, detailers “seek out personal details from [their] encounters with the doc-tors and analyze them to determine what sales methods will be the most effective. This informa-tion gets recorded, compiled and shared company wide throughout the years, without doctors’consent, or often, even their awareness.” Id. Id. at 4 (“Although drug reps learn a modicum of science, the fact is our science training is secondary to our ability to establish a friendship with [doctors], and we maximize every oppor-tunity to befriend them.”).
Ashley Wazana, Physicians and the Pharmaceutical Industry: Is a Gift Ever Just a Gift?, Campbell et al., supra note 7, at 1742.
Harris, supra note 18.
Drug companies exert control by controlling drug trials and linking them to mar- MEDICAL MARKETING IN THE UNITED STATES contributing to the diagnostic criteria of the widely used Diagnosticand Statistical Manual of Mental Disorders (“DSM”) had financialties to the pharmaceutical industry.30 Indeed, “[d]rug companiesspend billions wooing doctors—more than they spend on research orconsumer advertising.”31 And detailing works: as one judge describedit, “[t]he fact that the pharmaceutical industry spends over$4,000,000,000 annually on detailing bears loud witness to itsefficacy.”32 Medical Marketing Affects Doctors’ Decisions Pharmaceutical marketing impacts the prescribing habits of doc- tors, causing them to prescribe expensive branded medications whencheaper or more effective alternatives are available.33 Although medi- keting efforts; nurturing key opinion leaders . . . to influence medical decisionmak-ing; providing money, travel, and publicity for community doctors when they agreeto promote certain products; funding professorships and other academic needs ofthose who support company interests; using unrestricted grants to influence jour-nals, societies, meetings, and Web sites; controlling speakers and presentation of[continuing medical education] courses and materials; and creating bogus expertpanels to promote products and treatments.
Paid to Prescribe, supra note 11, at 12 (statement of Greg Rosenthal, M.D.).
Lisa Cosgrove et al., Financial Ties Between DSM-IV Panel Members and the Pharma- ceutical Industry, 75 PSYCHOTHERAPY & PSYCHOSOMATICS 154, 154 (2006). The DSM is “a med-ical guidebook and a cultural institution” that “helps doctors make a diagnosis and providesinsurance companies with diagnostic codes.” Benedict Carey, Psychiatry’s Struggle to Revise theBook of Human Troubles, N.Y. TIMES, Dec. 18, 2008, at A1.
Harris, supra note 18. Based on spending figures disclosed in Minnesota, psychiatrists received payments ranging from $51 to $689,000. Gardiner Harris, Psychiatrists Top List in DrugMaker Gifts, N.Y. TIMES, June 27, 2007, at A14.
IMS Health Inc. v. Ayotte, 550 F.3d 42, 56 (1st Cir. 2008), cert. denied, 129 S. Ct. 2864 See Ernst R. Berndt et al., Information, Marketing, and Pricing in the U.S. Antiulcer Drug Market, 85 AM. ECON. REV. 100, 104 (1995) (finding that detailing had a significant effecton prescription behavior and that the impact was greater than the effect had by journal ads,direct-to-consumer advertisements, and pricing); Anthony D. Bower & Gary L. Burkett, FamilyPhysicians and Generic Drugs: A Study of Recognition, Information Sources, Prescribing Atti-tudes, and Practice, 24 J. FAM. PRAC. 612, 615–16 (1987) (finding that family physicians whorelied the least on pharmaceutical marketers were most likely to prescribe generic drugs, andthat those who relied “a great deal” on marketer information were substantially less likely toprescribe generic drugs); Mary-Margaret Chren & C. Seth Landefeld, Physicians’ Behavior andTheir Interactions with Drug Companies: A Controlled Study of Physicians Who Requested Addi-tions to a Hospital Drug Formulary, 271 JAMA 684, 684 (1994) (finding a strong and specificrelationship between physician interactions with pharmaceutical companies and requests by phy-sicians that drugs manufactured by those companies be added to hospital formularies); PuneetManchanda & Pradeep K. Chintagunta, Responsiveness of Physician Prescription Behavior toSalesforce Effort: An Individual Level Analysis, 15 MARKETING LETTERS 129, 138 (2004) (find-ing that pharmaceutical detailing impacts prescribing behavior); Natalie Mizik & Robert Jacob-son, Are Physicians “Easy Marks”?: Quantifying the Effects of Detailing and Sampling on New cal marketing can impact patients positively—by, for instance, increas-ing a doctor’s ability to identify treatment for a complicated illness34—drug and device marketing engenders alarming negative effects aswell. Studies demonstrate that medical marketing can impact doctors’abilities to recognize incorrect claims about medication and canchange their attitudes and preferences regarding pharmaceutical rep-resentatives and their products.35 Medical marketing also increasesthe likelihood that doctors will request that the advertised product beadded to hospital formularies, even when the medicine lacks a signifi-cant advantage over existing products.36 Most important, gifts need not be of any particular value to affect the recipient; even the pens, notepads, and plush toys that drug andmedical device detailers give to doctors impact medical decisionmak-ing.37 In one survey-based study, a team of researchers concluded that“the use of the information provided by pharmaceutical representa-tives . . . [was an] independent positive predictor[ ] of prescribingcosts.”38 In fact, the same study found that when doctors choose treat-ments, cost to the patient becomes less important the more doctorsrely on promotional materials for information.39 Medical marketing affects physician psychology in at least two ways: the norm of reciprocity and priming.40 The norm of reciprocitysuggests that “we should help those who help us . . . . [and] is appar- Prescriptions, 50 MGMT. SCI. 1704, 1714 (2004) (finding that past detailing affects current pre-scribing habits); Wazana, supra note 27, at 373 (analyzing twenty-nine studies of industry-physi-cian relationships and concluding that “[t]he present extent of physician-industry interactionsappears to affect prescribing and professional behavior”); Toshiaki Iizuka & Ginger Z. Jin, TheEffects of Direct-to-Consumer Advertising in the Prescription Drug Market 22–23 (Univ. of Md.,Working Paper, 2002), available at http://www.cramton.umd.edu/workshop/papers/jin-direct-drug-advertising.pdf (finding that direct-to-consumer advertising does not affect prescribing hab-its, but “that doctors’ decisions are highly influenced by promotional efforts by pharmaceuticalsalespersons”).
Wazana, supra note 27, at 378.
See Katz et al., supra note 10, at 39 (“Considerable evidence from the social sciences suggests that gifts of negligible value can influence the behavior of the recipient in ways therecipient does not always realize.”).
T. Shawn Caudill et al., Physicians, Pharmaceutical Sales Representatives, and the Cost of Prescribing, 5 ARCHIVES FAM. MED. 201, 206 (1996).
For a study analyzing a number of other potential ways detailing affects physician be- havior, see E. E. Roughead et al., Commercial Detailing Techniques Used by PharmaceuticalRepresentatives to Influence Prescribing, 28 AUSTL. & N.Z. J. MED. 306, 306 (1998).
MEDICAL MARKETING IN THE UNITED STATES ently a very powerful force in our social lives.”41 We regularly relyimplicit on an expectation of reciprocity.42 “For example, when some-one does us a favor, we are expected to return the favor at some pointdown the road. Hence, the phrase ‘much obliged’ is used as a syno-nym for ‘thank you.’ ”43 In this respect, medical marketing is hardlydifferent. The gifts, payments, and meals provided by drug and devicecompanies create a significant, yet unconscious, desire to reciprocateamong practitioners.44 “While medical professionals might believethemselves to be ‘more rational and critical’ than the average person,the success of pharmaceutical marketing illustrates that physicians areas susceptible to target marketing as others.”45 Medical marketing also affects the decisions of doctors through the effect of priming. Priming is a psychological phenomenonwhereby prior exposure to information leading up to, and during, themaking of a choice affects how brands are perceived and which brandsare chosen.46 In one experiment, researchers manipulated advertise-ments placed near fictional magazine articles being read by partici-pants in a purported memory study.47 At the end of the readingexperiment, the participants were asked for additional input for a sep-arate study relating to purchase activities.48 On average, the individu-als incidentally exposed to relevant product ads were over fifty KENNETH S. BORDENS & IRWIN A. HOROWITZ, SOCIAL PSYCHOLOGY 257 (2001) (em- See Robert B. Cialdini et al., When Tactical Pronouncements of Change Become Real Change: The Case of Reciprocal Persuasion, 63 J. PERSONALITY & PSYCHOL. 30, 30 (1992)(“There is good evidence that a rule for reciprocity governs much of human experience: Wereport liking those who report liking us; we cooperate with cooperators and compete with com-petitors; we self-disclose to those who have disclosed themselves to us; we try to harm those whohave tried to harm us; in negotiations, we make concessions to those who have made concessionsto us; and we provide gifts, favors, services, and aid to those who have provided us with thesethings.” (citations omitted)).
Katz et al., supra note 10, at 41. The norm of reciprocity crops up in popular culture as well. In an episode of the television show The Office, one of the show’s main characters, DwightSchrute (played by Rainn Wilson), brings bagels from New York City to his Scranton, Penn-sylvania, office as a favor. The Office: Double Date (NBC television broadcast Nov. 5, 2009).
Rather than providing breakfast out of goodwill, however, Dwight’s bagels are intended to leavehis coworkers indebted for future favors. Id. As Dwight puts it, “Don’t mention it. You owe meone. You all owe me one.” Id. Katz et al., supra note 10, at 40–41 (citations omitted).
See Prakash Nedungadi, Recall and Consumer Consideration Sets: Influencing Choice Without Altering Brand Evaluations, 17 J. CONSUMER RES. 263, 273–74 (1990) (finding that rela-tive brand name accessibility in an individual’s memory affects his or her choice).
Stewart Shapiro et al., The Effects of Incidental Ad Exposure on the Formation of Con- sideration Sets, 24 J. CONSUMER RES. 94, 96–97 (1997).
percent more likely to consider the advertised product than those whohad not seen the ads.49 Priming occurs by way of the logo-ladentrinkets that drug and medical device companies litter throughoutphysicians’ offices—gifts which the drug and device companies aptlyrefer to as “reminder items.”50 By leaving calendars, clocks, foamtoys, pens, and paper around a doctor’s office, drug and device com-panies increase exposure to the company’s brand and affect medicaldecisionmaking in subtle, yet important, ways.51 As a whole, gifts, meals, and interactions with detailers affect doctors’ prescribing habits in wily ways because gifts work psychologi-cally. That is, the undesirable effect of medical marketing occurs un-consciously upon the completion of the exchange.52 Invidious medicalmarketing is less about quid pro quo exchanges and more about subtlemanipulation by companies with a financial incentive to encourageconsumption of expensive medicines.
Medical Marketing Produces Significant Overspending AmongBoth Taxpayers and Insurance Policyholders The assiduous efforts of drug and medical device detailers have a clear impact on medical decisionmaking.53 In the aggregate, these ef-forts result in overspending on prescription drugs and medical devicesdue to the substantial price differences between branded and genericproducts. For example, once-a-day Solodyn (an acne medication)costs $514 a month, or $6168 per year.54 By contrast, the twice-dailygeneric version, monocycline, costs $109 a month, or $1308 per year.55Similarly, “[c]linical studies show that 95 percent of the populationwith arthritis—those not at risk for side effects—could take generic Katz et al., supra note 10, at 40. Reminder items are so prevalent that one network of hospitals in Minnesota collected more than 18,700 items—enough to fill twenty shopping carts—“including clocks, mugs, surgical caps, calculators, tape dispensers, and a stress-relieving squeezetoy made to look like a red blood cell.” Larry Oakes, Adios, Allegra Pens; Farewell, FlonaseMugs, STAR TRIB., Jan. 18, 2008, at A10.
James Jastifer & Sarah Roberts, Patients’ Awareness of and Attitudes Toward Gifts from Pharmaceutical Companies to Physicians, 39 INT’L J. HEALTH SERVICES 405, 406 (2009).
See, e.g., James P. Orlowski & Leon Wateska, The Effects of Pharmaceutical Firm En- ticements on Physician Prescribing Patterns: There’s No Such Thing as a Free Lunch, 102 CHEST270, 270 (1992) (finding that, despite self-predicting otherwise, physicians who attended all-ex-pense-paid symposia at popular vacation sites used the drugs advertised at those symposia moreoften after attending).
Chana Joffe-Walt, Drug Coupons Hide True Costs from Consumers, NAT’L PUB. RADIO (Oct. 20, 2009), http://www.npr.org/templates/story/story.php?storyId=113969968.
MEDICAL MARKETING IN THE UNITED STATES ibuprofen for pennies a day, compared with about $1,000 annually forVioxx.”56 Moreover, “[n]ame-brand prices have risen even as pricesof widely used generic drugs have fallen by about 9 percent in the lastyear . . . [and] name brands account for 78 percent of total prescrip-tion drug spending in this country.”57 The higher price of branded medicines and the increasing fre- quency of their use in turn cause private insurance companies to raisepremiums. And because “around half of all Americans get theirhealth care courtesy of the government,”58 taxpayers end up payingfor much of that medical overspending.59 The Government Accounta-bility Office monitored the price of ninety-six prescription drugs fromJanuary 2000 to December 2004 and found that “retail prices for drugsfrequently used by Medicare beneficiaries increased 24.0 percent—anaverage rate of 4.5 percent per year. In general, higher drug pricesmean higher spending by consumers and health insurance sponsors,including employers and federal and state governments.”60 The samereport found that brand-name drug prices increased “three times asfast as generic drug prices.”61 In 2000 alone, “[i]f a generic had beensubstituted for all corresponding brand-name outpatient drugs,”62 thenational savings would have topped $8.8 billion, or “approximately Scott Serota, Letter to the Editor, Drugs and Advertising, N.Y. TIMES, Nov. 28, 2001, at A6. It should be noted that Merck, the maker of Vioxx, has since pulled the drug off the market,“citing its safety risks.” Barnaby J. Feder, Merck’s Actions on Vioxx Face New Scrutiny, N.Y.
TIMES, Feb. 15, 2005, at C1. Vioxx nevertheless presents a useful example of price differentialsbetween branded medicines and alternate treatment options. See generally Under the Influence,supra note 11.
Wilson, supra note 2; see also STEPHEN R. MACHLIN & MARIELLE KRESS, AGENCY FOR HEALTHCARE RES. AND QUALITY, U.S. DEP’T OF HEALTH & HUMAN SERVS., TRENDS INHEALTH CARE EXPENDITURES FOR ADULTS AGES 18–44: 2006 VERSUS 1996, at 2 (2009), http://www.meps.ahrq.gov/mepsweb/data_files/publications/st254/stat254.pdf (finding that, from 1996to 2006, the average cost to purchase prescription medicine more than doubled, jumping from$79 to $161).
Back from the Dead, ECONOMIST, Oct. 31, 2009, at 20; see also Christopher D. Zalesky, Pharmaceutical Marketing Practices: Balancing Public Health and Law Enforcement Interests:Moving Beyond Regulation-Through-Litigation, 39 J. HEALTH L. 235, 238 (2006) (noting thatfederal spending on Medicare, Medicaid, and other health programs amounted to approximately$521.7 billion in 2005).
See supra text accompanying note 16.
U.S. GOV’T ACCOUNTABILITY OFFICE, PRESCRIPTION DRUGS PRICE TRENDS FOR FRE- QUENTLY USED BRAND AND GENERIC DRUGS FROM 2000 TO 2004, at 2–3, 13 (2005), http://www.
Jennifer S. Haas et al., Potential Savings from Substituting Generic Drugs for Brand- Name Drugs: Medical Expenditure Panel Survey, 1997–2000, 142 ANNALS INTERNAL MED. 891,891 (2005).
11% of drug expenditures.”63 Taken together, medical marketing andthe price of brand name drugs dramatically increase already exorbi-tant healthcare costs by encouraging wasteful overspending.
As medical marketing receives increased public attention, a grow- ing group of doctors and other professionals has started to call foradditional regulation of medical marketing.64 Medical schools,65 in-dustry organizations,66 state legislatures,67 and Congress68 have eachattempted to regulate medical marketing; however, each venture hasfallen short. This Part will discuss the most common shortcomings ofthese efforts.
Regulations that Require Disclosure With the exceptions of California69 and New Hampshire,70 every statutory attempt at regulating the interactions between detailers and See generally Gardiner Harris, In Article, Doctors Back Ban on Drug Companies’ Gifts, Harvard Medical School recently became the latest major medical school to institute restrictions on interactions between affiliated individuals and drug and medical device compa-nies. See Duff Wilson, Hospitals Connected to Harvard Cap Outside Pay to Top Officials, N.Y.
TIMES, Jan. 3, 2010, at A1.
See, e.g., COUNCIL ON ETHICAL & JUDICIAL AFFAIRS, AM. MED. ASS’N, CODE OF MEDI- CAL ETHICS (2010), available at http://www.ama-assn.org/ama/pub/physician-resources/medical- ethics/code-medical-ethics.shtml [hereinafter AMA CODE OF MEDICAL ETHICS]; PHARM. RE- SEARCH & MFRS. OF AM., CODE ON INTERACTIONS WITH HEALTHCARE PROFESSIONALS 5 (2008), available at http://www.phrma.org/files/attachments/PhRMA%20Marketing%20Code%202008.pdf [hereinafter PHRMA CODE].
See, e.g., CAL. HEALTH & SAFETY CODE § 119402 (West 2006); D.C. CODE § 48-833.03 (2009); ME. REV. STAT. ANN. tit. 22, § 2698-A (2004); MASS. GEN. LAWS ch. 111N, § 2 (2009);MINN. STAT. § 151.47(f) (2009); W. VA. CODE ANN. § 5A-3C-13 (LexisNexis 2006).
The first attempt at regulating medical marketing on a federal level came in the form of the Drug and Medical Device Company Gift Disclosure Act, H.R. 3023, 110th Cong. (2007)[hereinafter Gift Disclosure Act]. This bill, introduced during a previous session of Congress,died in the Subcommittee on Health. As part of Congress’s recent sweeping healthcare reform,Congress enacted a disclosure scheme requiring annual disclosures of most payments and ex-changes of value worth over $10. Patient Protection and Affordable Care Act, Pub. L. No. 111-148, § 6022, 124 Stat. 119, 696 (2010) [hereinafter Patient Protection Act]. This scheme largelyincorporates an earlier bill, the Physician Payments Sunshine Act, S. 301, 111th Cong. (2009).
The Patient Protection Act explicitly preempts state disclosure statutes as of January 1, 2012.
Patient Protection Act § 6022, 124 Stat. at 694. Nonetheless, given the substantial similaritiesbetween the Patient Protection Act and state statutes on point—and the lessons learned throughthe states’ experiences thus far—the analysis contained here remains relevant.
California’s law merely requires compliance with the Office of Inspector General’s April 2003 Compliance Program Guidance for Pharmaceutical Manufacturers, a publication fo- MEDICAL MARKETING IN THE UNITED STATES doctors—both state71 and federal72—relies on Justice Brandeis’s ad-monition that “sunlight is the best disinfectant”73 by requiring regulardisclosure of various marketing expenditures.74 Disclosure schemesare designed to “outlaw particular conduct by bringing legal or moralpressure to bear upon those engaging in it.”75 Disclosure-based regulations fall short as a means of eliminating the pernicious effect detailers have on medical decisionmaking be-cause disclosure laws, although admirable in theory, “do not restrictconduct beyond requiring that certain information be provided.”76Therefore, disclosure alone does little to counteract the effects detail-ers have on medical decisionmaking. Even though doctors claim thatgifts do not affect their medical judgment,77 the subconscious effectthat gifts have on the behavior of doctors occurs upon receipt of thegift, regardless whether the gift is subsequently disclosed.78 Moreover, disclosure is an empty gesture because patients cannot adequately use disclosed information to adjust their approaches to cused more on avoiding quid pro quo remunerations and other potential violations of the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b (2006). See CAL. HEALTH & SAFETY CODE § 119402.
New Hampshire’s law is far more limited in its reach. It only governs the release of prescription information to data companies (a business known as “data mining”), a controversialfeature of pharmaceutical marketing beyond the scope of this Note. See N.H. REV. STAT. ANN.
§ 318:47-f (2006).
155 Cong. Rec. S788 (2009) (statement by Sen. Grassley) (quoting Justice Brandeis); accord LOUIS D. BRANDEIS, OTHER PEOPLE’S MONEY 92 (1914) (“Publicity is justly commendedas a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants;electric light the most efficient policeman.”).
See, e.g., MINN. STAT. § 151.47(f) (2009) (“A wholesale drug distributor shall file with the board an annual report, in a form and on the date prescribed by the board, identifying allpayments, honoraria, reimbursement or other compensation authorized under section 151.461,clauses (3) to (5), paid to practitioners in Minnesota during the preceding calendar year. Thereport shall identify the nature and value of any payments totaling $100 or more, to a particularpractitioner during the year, and shall identify the practitioner.”).
STEPHEN G. BREYER, REGULATION AND ITS REFORM 162 (1982).
Doctors consistently self-report that gift giving does not impact their medical decisions.
See, e.g., Robert V. Gibbons et al., 13 J. GEN. INTERNAL MED. 151, 153 (1998); Dennis Murray,Gifts: What’s All the Fuss About?, 79 MED. ECON. 119, 119 (2002).
See, e.g., Katz et al., supra note 10, at 39 (“Considerable evidence from the social sci- ences suggests that gifts of negligible value can influence the behavior of the recipient in waysthe recipient does not always realize. Policies and guidelines that rely on arbitrary value limitsfor gift-giving or receipt should be reevaluated.”); Nedungadi, supra note 46, at 274 (finding thatthe mental accessibility and cues associated with a brand name affect choice); Mark A. Whatleyet al., The Effect of a Favor on Public and Private Compliance: How Internalized Is the Norm ofReciprocity?, 21 BASIC & APPLIED SOC. PSYCHOL. 251, 251 (1999) (finding that the presence of afavor or gift increases compliance and reciprocity).
seeking treatment. Even when information is accessible, patientsoften lack the knowledge to apply the information profitably. As oneauthor described the perils of medical disclosure: For disclosure to be effective, the recipient of advice mustunderstand how the conflict of interest has influenced the ad-visor and must be able to correct for that biasing influence.
In many important situations, however, this understandingand ability may be woefully lacking. For example, imagine apatient whose physician advises, “Your life is in danger un-less you take medication X,” but who also discloses, “Themedication’s manufacturer sponsors my research.” Shouldthe patient take the medication? If not, what other medica-tion? How much should the patient be willing to pay to ob-tain a second opinion? How should the two opinions beweighed against each other? The typical patient may behard-pressed to answer such questions.79 Some evidence even suggests that disclosure can make matters worse. Disclosure can fail because “people generally do not discountadvice from biased advisors as much as they should, even when advi-sors’ conflicts of interest are disclosed . . . [and] disclosure can increasethe bias in advice because it leads advisors to feel morally licensed andstrategically encouraged to exaggerate their advice even further.”80 In addition to the conceptual difficulties faced by disclosure stat- utes, disclosure laws enacted thus far also fall victim to crippling prac-tical defects. To have an effect, disclosed information must get“transmitted to the buyer in a simple and meaningful way.”81 Withoutmarketing data that is easy to find and use, patients cannot use dis-closed information at all. Unfortunately, few medical marketing dis-closure laws make the relevant information easy to obtain, let alonepublicly available.82 In his testimony before the Senate Special Committee on Aging, one doctor discussed how his attempts at obtaining disclosed data inVermont and Minnesota “required much effort.”83 In Vermont, datacould be accessed online, but the only information available consisted Daylian M. Cain et al., The Dirt on Coming Clean: Perverse Effects of Disclosing Con- flicts of Interest, 34 J. LEGAL STUD. 1, 3–4 (2005).
BREYER, supra note 75, at 163.
For instance, Minnesota’s disclosure laws explicitly make disclosed information public, whereas Vermont publishes information disclosed by pharmaceutical companies online. Paid toPrescribe, supra note 11, at 20, 25 (statement of Peter Lurie, Deputy Dir., Public Citizen’s HealthResearch Group).
MEDICAL MARKETING IN THE UNITED STATES of aggregate reporting information, not physician-specific payment in-formation that patients could actually use.84 Obtaining physician-spe-cific data in Vermont took a legal battle that lasted almost an entireyear and still resulted in only partial disclosure due to much of themarketing data being labeled as trade secrets.85 In Minnesota, pay-ment data has never been publicly available.86 “Indeed, the disclosureforms submitted have literally sat in boxes for up to a decade, gather-ing dust and never being analyzed.”87 To obtain the records, research-ers had to travel to the Minnesota Board of Pharmacy’s office inMinneapolis and photocopy each form at a cost of $0.25 per page.88Unfortunately, attempts at curbing the effects of medical marketingthrough disclosure consistently fall short, both in theory and in prac-tice. In light of problems such as these, any attempt at reducing theimpact of medical marketing on doctors’ decisions should eschew dis-closure in favor of restrictions delineating the limits of acceptablemarketing behavior.
Besides statutes proposed at the state and federal level, con- cerned industry groups have also attempted to address the pitfalls ofmedical marketing by issuing their own guidelines. Two organizationsin particular have issued broad regulations pertaining to medical mar-keting: the American Medical Association (“AMA”) and the Pharma-ceutical Research and Manufacturers of America (“PhRMA”).89 Thecodes proffered by both AMA and PhRMA represent respectable at-tempts at curbing many of medical marketing’s most troubling as-pects, including free meals,90 complimentary entertainment andrecreation,91 funds for continuing medical education,92 questionableconsultancy agreements,93 inflated speaking fees,94 and even gifts.95 See id. at 27 (noting that forty-four percent of companies that disclosed marketing infor- mation in Vermont “designated at least some of their payments as trade secret”).
See PHRMA CODE, supra note 66, at 4.
However, both the AMA Code of Medical Ethics and the PhRMACode are completely voluntary and, thus, invite noncompliance.96 Despite purportedly admirable intentions, by issuing voluntary guidelines industry organizations are unlikely to actually affect medi-cal marketing.97 Especially in such a competitive business, companieswill not voluntarily risk losing huge swaths of market share for thesake of a clean conscience. In fact, “due to their voluntary nature,[the AMA and PhRMA] guidelines are likely to be more effective atstaving off legislation than reducing marketing excesses.”98 Drug andmedical device companies have a strong financial incentive to con-tinue their current marketing activities.99 Thus, to substantially reducethe overspending caused by medical marketing, any new attemptshould use mandatory guidelines to ensure compliance.
Attempts at changing the doctor-detailer relationship also fall short because they contain exceptions that ultimately undermine thegoal of reducing the impact of medical marketing on doctors’ deci-sionmaking. The most common impediment to regulatory progresscomes from exceptions that allow gifts and meals so long as they re-main under a certain dollar amount.
With one exception,100 every effort at regulating medical market- ing contains exceptions for gifts that are cumulatively valued below acertain dollar amount. For example, the District of Columbia’s disclo-sure statute exempts expenses worth under $25 and “reasonable com-pensation and reimbursement” for clinical trials, as well as certainproduct samples and scholarships.101 Maine uses similar exceptions,102and Minnesota’s law exempts payments and provisions valued under See AMA CODE OF MEDICAL ETHICS, supra note 66, at xvii (stating that the “[p]rinciples adopted by the [AMA] are not laws, but standards of conduct which define theessentials of honorable behavior for the physician”); PHRMA CODE, supra note 66, at 3(describing the PhRMA Code as “voluntary”).
See Paid to Prescribe, supra note 11, at 2 (statement of Sen. Herb Kohl, Chairman, S.
Spec. Comm. on Aging) (“While there are voluntary guidelines already in place . . . it seemsclear that they are not being sufficiently followed.”).
Id. at 28 (statement of Peter Lurie, Deputy Dir., Public Citizen’s Health Research See supra notes 2–3, 22 and accompanying text.
Massachusetts’s medical disclosure legislation is the only legislation in effect that actu- ally bans gifts to most medical professionals. MASS. GEN. LAWS ch. 111N, § 2 (2010).
ME. REV. STAT. ANN. tit. 22, § 2698-A(5) (2004).
MEDICAL MARKETING IN THE UNITED STATES $100.103 Although the aforementioned state disclosure statutes will bepreempted as of January 1, 2012, by the Patient Protection and Af-fordable Care Act,104 the new federal statute itself includes its ownexception for gifts and payments valued under $10.105 Even thePhRMA Code expressly permits gifts that “advance disease or treat-ment education”106 as well as meals that are both “modest as judgedby local standards” and “provided in a manner conducive to informa-tional communication.”107 Exceptions like these allow detailers tocontinue giving doctors gifts and meals and, thus, ultimately under-mine the effectiveness of any regulatory regime.
First, low-value gift exceptions frustrate attempts at regulation because any exchange of value affects medical decisionmaking.108Cheap trinkets and modest meals trigger the norm of reciprocity, ulti-mately contributing to overspending on prescription drugs and medi-cal devices.109 Moreover, drug companies do in fact “inundateprescribers with gifts, running from writing pads, pens, and coffee cupsemblazoned with the name of a drug to free lunches.”110 Second, drugand device detailers can, and often do, take advantage of regulatoryexceptions to further undermine reform. For instance, during his tes-timony before the Senate Special Committee on Aging, ShahramAhari, a former Eli Lilly sales representative, dismissed the effects ofthe PhRMA Code’s requirements, observing that “in the past, as asales rep, I would spend $100 on a golf club for a physician allowinghim/her to spend $100 on a medical textbook. Today, I buy the bookand he/she buys the golf club. It is still a gift, still a perk, and still$100.”111 Exceptions open the door for companies to circumvent regu-lations; eliminating the effect of medical marketing requires absoluteprovisions.
Although avoiding paternalistic approaches that unduly interfere with market forces is ideal, medical marketing has fostered an envi-ronment of overspending and unsustainable waste, making stringentregulations necessary. Effective regulation of medical marketing re- Patient Protection Act, Pub. L. No. 111-148, § 6022, 124 Stat. 119, 694 (2010).
PHRMA CODE, supra note 66, at 11.
See supra notes 41–45 and accompanying text.
IMS Health Corp. v. Rowe, 532 F. Supp. 2d 153, 160 (D. Me. 2007).
Under the Influence, supra note 11, at 12 (statement of Shahram Ahari, former sales representative, Eli Lilly) (emphasis added).
quires mandatory restrictions with clearly delineated limits. Any suchproposal, however, must survive First Amendment scrutiny.
The most common argument against restricting medical market- ing is that such restrictions would violate the protections afforded bythe First Amendment.112 Traditionally used to “protect the exchangeof ideas and political, social, scientific, or artistic expression,”113 theSupreme Court has expanded the First Amendment’s reach to alsoinclude commercial speech.114 This Part discusses the Court’s stan-dard of review for commercial speech cases and considers whether themarketing practices previously discussed qualify as commercial speechand whether they can be constitutionally restricted.
Does Medical Marketing Fall Within the First Amendment? The Supreme Court has not yet addressed whether drug and medical device detailing qualifies as speech warranting First Amend-ment protection. Drug and medical device companies are likely toargue that detailing qualifies as speech because the Court has treatedsolicitations and spending as speech in other areas, most notably inthe area of political contributions.115 It is possible, however, that de-tailing does not constitute speech under Citizens United v. FEC be-cause gifts to doctors do not involve “political expression” or the“discussion of governmental affairs” the way political contributionsdo.116 For example, in IMS Health Inc. v. Ayotte, the First Circuit up-held a New Hampshire statute limiting the pharmaceutical industry’spractice of data mining.117 In so holding, the First Circuit concludedthat the challenged restrictions on medical marketing regulated con- See, e.g., IMS Health Inc. v. Ayotte, 550 F.3d 42 (1st Cir. 2008), cert. denied, 129 S. Ct.
2864 (2009). The First Amendment protects freedom of speech by providing that “Congressshall make no law . . . abridging the freedom of speech . . . .” U.S. CONST. amend. I.
Brienne Taylor Greiner, Note, A Tough Pill to Swallow: Does the First Amendment Pro- hibit WV From Regulating Pharmaceutical Companies Advertising Expenses to Lower the Cost ofPrescription Drugs?, 109 W. VA. L. REV. 107, 122 (2006).
See Thompson v. W. States Med. Ctr., 535 U.S. 357, 366–67 (2002). “Commercial speech is defined as expression related solely to the economic interests of the speaker and itsaudience or speech proposing a commercial transaction.” United States v. Philip Morris USAInc., 566 F.3d 1095, 1143 (D.C. Cir. 2009) (internal quotation marks omitted).
See Citizens United v. FEC, 130 S. Ct. 876, 899–900 (2010) (listing cases extending First Amendment protection to corporations).
See Buckley v. Valeo, 424 U.S. 1, 14 (1976).
MEDICAL MARKETING IN THE UNITED STATES duct and not protected speech.118 The court also held that, in the al-ternative, the contested regulations were permissible restrictions onprotected speech if marketing did indeed qualify as speech.119 Because parties have invoked the First Amendment in other as- pects of advertising regulations generally120 and pharmaceutical mar-keting specifically121—and because a challenge by pharmaceuticalcompanies depends on marketing qualifying as speech deserving pro-tection—this Note assumes that gifts and other payments count asspeech under the First Amendment.
Is Medical Marketing Pure Speech or Commercial Speech? The distinction between pure speech and commercial speech is more than just cosmetic. Pure speech receives the most exacting con-stitutional scrutiny, whereas commercial speech is afforded far lessconstitutional protection and is thus more easily regulated.122 Phar-maceutical companies and medical device manufacturers have arguedthat their marketing amounts to “scientific and academic speech,which is entitled to the highest level of First Amendment protec-tion.”123 Past precedent suggests, however, that medical marketing al-most certainly constitutes mere commercial speech.
First, in Bolger v. Youngs Drug Products Corp., the Supreme Court held that speech qualifies as commercial speech when thespeech is an advertisement, references a specific product, and is moti-vated by the economic interests of the speaker.124 Here, detailing bydrug and device companies meets all three criteria. Medical market-ing is concededly a marketing activity,125 detailers push specific prod- See, e.g., Commonwealth Brands, Inc. v. United States, 678 F. Supp. 2d 512, 520–21 See, e.g., Wash. Legal Found. v. Friedman, 13 F. Supp. 2d 51 (D.D.C. 1998), vacated sub nom. Wash. Legal Found. v. Henney, 202 F.3d 331, 337 (D.C. Cir. 2000); Complaint at 26, Al-legran, Inc. v. FDA (D.D.C. Oct. 1, 2009) (No. 09-cv-01879), 2009 WL 3187592; Jacob Rogers,Essay, Freedom of Speech and the FDA’s Regulation of Off-Label Drug Uses, 76 GEO. WASH. L.
REV. 1429, 1435 (2008).
United States v. Edge Broad. Co., 509 U.S. 418, 426 (1993) (“The Constitution . . .
affords a lesser protection to commercial speech than to other constitutionally guaranteedexpression.”).
Wash. Legal Found., 13 F. Supp. 2d at 59; see also Harris, supra note 18.
Bolger v. Youngs Drug Prods. Corp., 463 U.S. 60, 66–67 (1983) (holding that each factor alone was not dispositive as to the status of speech, but that “[t]he combination of all thesecharacteristics . . . provides strong support for . . . [concluding] that the [advertisements] areproperly characterized as commercial speech”).
See PHRMA CODE, supra note 66, at 2 (stating that the industry’s guidelines are aimed ucts,126 and detailing is motivated by the economic interests of thespeaker.127 As such, medical marketing qualifies as commercialspeech under Bolger.
Second, in Board of Trustees v. Fox, the Court upheld a ban on commercial demonstrations (in this case, Tupperware parties) within astate university dormitory because the speech fundamentally “pro-pose[d] a commercial transaction,” despite the fact that the presenta-tions also “touch[ed] on other subjects . . . such as how to befinancially responsible and how to run an efficient home.”128 Thepractice of detailing is similar. Even though medical marketing is su-perficially educational, medical marketers are chiefly concerned withincreasing product sales.129 Any educational information detailersprovide serves only to encourage physicians to use the product adver-tised, whether or not it is a significant improvement over existingdrugs.130 Thus, because detailers “propose[ ] a commercial transac-tion,”131 medical marketing constitutes commercial speech.
at “interactions with healthcare professionals that relate to the marketing of [pharmaceutical]products” (emphasis added)); Saul, supra note 8 (quoting a PhRMA representative referring todetailers as “sales rep[s]”).
See, e.g., Schering Corp. v. Pfizer, Inc., 189 F.3d 218, 222 (2d Cir. 1999) (describing Pfizer’s promotion of Zyrtec as “us[ing] a method that is common in the pharmaceutical indus-try: [Pfizer] employed a team of approximately 1200 sales representatives to visit physiciansacross the nation and emphasize the product’s qualities in one-on-one informational meetingscalled ‘detailings’ ”); Carlat, supra note 12, at 67 (defining “detailing” as “the term used to de-scribe those sales visits in which drug reps go to doctors’ offices to describe the benefits of aspecific drug” (emphasis added)).
See, e.g., IMS Health Corp. v. Rowe, 532 F. Supp. 2d 153, 159 (D. Me. 2008) (discussing how “[t]he pharmaceutical industry employs a small army of sales representatives” who “regu-larly visit prescribers at their clinics and medical offices to persuade them to prescribe theirproduct”); Tina Benitez, A Primary Concern, INCENTIVE, Feb. 2003, at 18, 19 (describing a pro-gram designed for pharmaceutical sales representatives that “awarded points for increased incre-mental sales throughout the year, which could later be redeemed for a variety of merchandiseand travel award in a company catalog”).
Bd. of Trs. v. Fox, 492 U.S. 469, 473–74 (1989) (quoting Va. Pharm. Bd. v. Va. Citizens Consumer Council, 425 U.S. 748, 762 (1976)).
See IMS Health Inc. v. Ayotte, 550 F.3d 42, 46 (1st Cir. 2008) (“[T]he detailer attempts to gain access to the physician’s office, usually by presenting herself as a helpful purveyor ofpharmaceutical information and research. The detailer comes to the physician’s office armedwith handouts and offers to educate the physician and his staff about the latest pharmacologicaldevelopments. In other words, detailers open doors by holding out the promise of a convenientand efficient means for receiving practice-related updates.”).
MEDICAL MARKETING IN THE UNITED STATES Regulations on Medical Marketing Satisfy the CommercialSpeech Test The test for regulating commercial speech comes from Central Hudson Gas & Electric Corp. v. Public Service Commission.132 If thespeech subject to regulation “concerns an otherwise lawful activityand is not misleading—statutory regulation of that speech is constitu-tionally permissible only if the statute is enacted in the service of asubstantial governmental interest, directly advances that interest, andrestricts speech no more than is necessary to further that interest.”133While Congress and a number of states have enacted statutes aimed atregulating medical marketing,134 no case challenging such a statute hascontested restrictions on medical marketing as it is discussed here.135Accordingly, the analysis here relies on relevant and otherwise analo-gous caselaw to demonstrate that drug and medical device companies’provisions of gifts and meals can be constitutionally restricted.
Does Restricting Medical Marketing Advance a SubstantialGovernment Interest? The government has an interest in restricting medical marketing in order to save taxpayers’ money and reduce consumer costs. In therealm of Social Security alone, “[t]he average price of drugs per pre-scription among older persons rose 48% between 1992 and 2000, anddrug expenses now consume 14% of the average Social Security bene-fit, up from 8% in 1992.”136 Moreover, “[t]he prescription drug costsincurred by some 850 000 [sic] older Americans who lack insurancethat covers drugs are more than $2000 per year. The increased cost ofprescription drugs accounted for the largest share—44%—of the totalincrease in health care costs in 1999.”137 The Supreme Court would likely find this interest substantial for two reasons: consumer and taxpayer savings have constituted a sub-stantial government interest in other cases, and the Court frequentlydefers to legislative findings regarding the government’s substantialinterest in legislation. In the context of regulating medical marketing,the First Circuit has already held that cost containment constitutes a Cent. Hudson Gas & Elec. Corp. v. Pub. Servs. Comm’n, 447 U.S. 557, 566 (1980).
Caselaw on point primarily focuses on challenging restrictions on data mining rather than medical marketing, as discussed in this Note. See supra notes 70, 112.
Frank Davidoff, Editorial, The Heartbreak of Drug Pricing, 134 ANNALS INTERNAL Id.; see also notes 57–63 and accompanying text.
substantial government interest.138 Likewise, the district court in IMSHealth Inc. v. Sorrell relied on Ayotte to conclude that “Vermont’sinterest[ ] in cost containment . . . [is] substantial.”139 And the court inIMS Health Corp. v. Rowe discussed the fact that “the Maine Legisla-ture found that the pharmaceutical companies use the prescription in-formation to attempt to influence prescribers to prescribe higherpriced drugs, thus increasing the market share and profitability of themanufacturers and driving up the cost of health care.”140 Various federal courts have found that savings to consumers and taxpayers constitutes a substantial government interest in other con-texts as well. In Missouri v. American Blast Fax, Inc., the Eighth Cir-cuit held that, in passing restrictions on unsolicited fax ads, Congresshad a substantial interest in preventing the practice, even though thecosts were low relative to the increased spending associated with med-ical marketing.141 The findings of state legislatures and Congress are also important because the Supreme Court frequently defers to legislative judgmentswhen evaluating legislation, especially in commercial speech cases.142In Ayotte, Judge Lipez wrote separately and provided an extensive listof both empirical and anecdotal evidence that had been submitted tothe New Hampshire legislature to show that detailing affects medicaldecisionmaking.143 To that end, Congress has already recognized therising cost of prescription drugs, the pervasive marketing practices ofdrug and medical device companies, and the impact marketing has onprescribing habits and medical spending.144 IMS Health Inc. v. Sorrell, 631 F. Supp. 2d 434, 450 (D. Vt. 2009).
IMS Health Corp. v. Rowe, 532 F. Supp. 2d 153, 160 (D. Me. 2008) (internal quotation Missouri v. Am. Blast Fax, Inc., 323 F.3d 649, 655 (8th Cir. 2003) (“There was evidence that unsolicited fax advertisements can shift to the recipient more than one hundred dollars peryear in direct costs . . . .”); see also Destination Ventures, Ltd. v. FCC, 46 F.3d 54, 57 (9th Cir.
1995) (“Viewing the facts in the light most favorable to Destination, we conclude that Destina-tion’s own figures do not rebut the admitted facts that unsolicited fax advertisements shift signif-icant advertising costs to consumers.”).
See, e.g., Turner Broad. Sys., Inc. v. FCC, 520 U.S. 180, 195–96 (1997) (noting multiple reasons for granting deference to congressional findings); Metromedia, Inc. v. City of San Diego,453 U.S. 490, 509 (1981) (granting deference); N.Y. State Liquor Auth. v. Bellanca, 452 U.S. 714,718 (1981) (granting deference to a state legislature).
Ayotte, 550 F.3d at 88–89 (Lipez, J., concurring and dissenting).
See generally Under the Influence, supra note 11; Paid to Prescribe, supra note 11; Sur- geons for Sale: Conflicts and Consultant Payment in the Medical Device Industry: Hearing Beforethe S. Spec. Comm. on Aging, 110th Cong. 1 (2008); 155 Cong. Rec. S788 (2009) (statement ofSen. Herb Kohl) (“It has been estimated that the drug industry spends $19 billion annually on MEDICAL MARKETING IN THE UNITED STATES Is Medical Marketing Misleading and Does the MarketingConcern a Lawful Activity? Under Central Hudson, “there can be no constitutional objection to the suppression of commercial messages that do not accurately in-form the public about lawful activity.”145 The lawfulness of medicalmarketing is a nonissue; the drug and device industries produce legalproducts.146 Although allegations of misleading marketing do exist,147the drug and device industries more likely than not engage in suffi-ciently honest—albeit competitive—marketing.
Is the Substantial Government Interest Advanced Directly? In commercial speech cases, “the State must demonstrate that the challenged regulation advances the Government’s interest in a directand material way.”148 The Supreme Court requires a direct and mate-rial effect because the government’s “burden is not satisfied by merespeculation or conjecture; rather, a governmental body seeking to sus-tain a restriction on commercial speech must demonstrate that theharms it recites are real and that its restriction will in fact alleviatethem to a material degree.”149 In this respect, specific restrictions onhow medical marketers can interact with physicians will likely befound to directly and materially impact the government’s asserted in-terest in saving money and reducing costs.
The available body of empirical data would go a long way toward satisfying the Court’s “directly advanced” requirement because of theCourt’s deferential treatment of empirical evidence in commercialspeech cases. For example, in Edenfield v. Fane, the Court struck marketing to physicians in the form of gifts, lunches, drug samples and sponsorship of educationprograms. Americans pay the price as through unnecessarily high drug costs and skyrocketinghealth insurance premiums. Rising drug prices hurt us all by undermining our private and publichealth systems, including Medicare and Medicaid.”).
Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n, 447 U.S. 557, 563 (1980).
Cf. Vill. of Hoffman Estates v. Flipside, 455 U.S. 489, 504–05 (1982) (holding that the government could regulate advertisements relating to the sale of marijuana pipes because thegovernment can regulate or ban entirely speech that proposes an illegal transaction).
See, e.g., In re Zyprexa Prods. Liab. Litig., 253 F.R.D. 69, 105 (E.D.N.Y. 2008) (detailing allegations of misleading marketing); Gordon v. Pfizer, Inc., No. CV-06-RRA-703-E, 2006 WL2337002, at *4 (N.D. Ala. May 22, 2006) (referring to “affidavits from several physicians statingthat the pharmaceutical representatives had made misrepresentations to them”); Michael G.
Ziegler et al., The Accuracy of Drug Information from Pharmaceutical Sales Representatives, 273JAMA 1296, 1296 (1995) (surveying 106 statements made by pharmaceutical marketers duringthirteen presentations and finding that eleven percent of statements made were inaccurate).
Fla. Bar v. Went For It, Inc., 515 U.S. 618, 625–26 (1995) (internal quotation marks omitted) (citing Rubin v. Coors Brewing Co., 514 U.S. 476, 487 (1995)).
Edenfield v. Fane, 507 U.S. 761, 770–71 (1993).
down Florida’s ban on in-person solicitations in large part because thestate board “present[ed] no studies that suggest personal solicitationof prospective business clients by [certified public accountants] createsthe dangers of fraud, overreaching, or compromised independencethat the Board claim[ed] to fear.”150 The Court noted in particularthat “[t]he record [did] not disclose any anecdotal evidence, eitherfrom Florida or another State, that validate[d] the Board’s supposi-tions.”151 Here, by contrast, the evidence demonstrates the effect thatmarketing has on medical decisionmaking152 and the economic tollthose decisions can have.153 Simply put, “past detailing affects currentprescription behavior.”154 Conversely, in Florida Bar v. Went For It, Inc., the Court upheld a regulation on solicitations by lawyers in part because of the extensiveempirical and anecdotal evidence that substantiated the state’sclaim.155 Justice Kennedy, however, disagreed with the weight givento the empirical evidence offered because much of it was not pub-lished in peer-reviewed publications and little information was availa-ble on the data’s methodologies.156 Not only does the empirical andanecdotal evidence here match the breadth and depth of the evidenceoffered in Went For It, Inc.,157 but it also satisfies Justice Kennedy’sconcerns because most of the studies cited here disclose their method-ology and were published in peer-reviewed publications.158 Moreover,in Lorillard Tobacco Co. v. Reilly, the Court accepted the findings ofvarious studies presented by the government to conclude that limitingyouth exposure to tobacco marketing would reduce underage tobaccouse and held the Central Hudson test satisfied.159 Similarly here, theextensive body of evidence documenting the link between medicalmarketing and doctors’ decisionmaking supports the claim that mar-keting causes overspending160 and limiting physician exposure to in- Puneet Manchanda & Elisabeth Honka, The Effects and Role of Direct-to-Physician Marketing in the Pharmaceutical Industry: An Integrative Review, 5 YALE J. HEALTH POL’Y L. &ETHICS 785, 802 (2005).
Fla. Bar v. Went For It, Inc., 515 U.S. 618, 626–29 (1995).
Id. at 640–41 (Kennedy, J., dissenting).
Compare id. at 626–29 (majority opinion), with supra note 33.
Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 560–61 (2001).
See generally supra Part I.B–.C.
MEDICAL MARKETING IN THE UNITED STATES dustry gifts will decrease the use of overpriced and unnecessary drugsand medical devices.
Pharmaceutical companies and medical device manufacturers may contest the link between advertising (in the form of detailing)and consumption (in the form of prescribing) to argue that regulationswould not directly advance the government’s interest. However, thevery size and scale of the medical marketing machine attests to theextent to which detailing directly boosts sales of expensive medicines;companies would not devote billions of dollars to detailing and doc-tors if marketing did not benefit business.161 Just as the Court madeclear in Central Hudson, “[t]here is an immediate connection betweenadvertising and demand . . . . [Plaintiff] would not contest the adver-tising ban unless it believed that promotion would increase its sales.
Thus, we find a direct link between the state interest in conservationand the Commission’s order.”162 Is the Regulation Narrowly Tailored to Serve the Government’sInterest? The fourth prong of the Central Hudson test is that restrictions must be “no more extensive than necessary to further the State’s in-terest.”163 The Court qualified this part of the test in Fox, where Jus-tice Scalia wrote that the language “not more extensive thannecessary” is less demanding than a least-restrictive-meansstandard.164 What our decisions require is a “fit” between the legisla-ture’s ends and the means chosen to accomplish thoseends—a fit that is not necessarily perfect, but reasonable;that represents not necessarily the single best disposition butone whose scope is in proportion to the interest served; thatemploys not necessarily the least restrictive means but . . . ameans narrowly tailored to achieve the desired objective.
Within those bounds [the Court] leave[s] it to governmental See supra text accompanying note 32.
Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n, 447 U.S. 557, 569 (1980).
Other courts have also used the magnitude of marketing initiatives to satisfy the direct advance-ment prong of the Central Hudson test. See, e.g., Dunagin v. City of Oxford, 718 F.2d 738, 749(5th Cir. 1983) (“It is beyond [the court’s] ability to understand why huge sums of money wouldbe devoted to the promotion of sales of liquor without expected results, or continue withoutrealized results . . . . [D]ollars go into advertising only if they produce sales.”).
Cent. Hudson Gas & Elec. Corp., 447 U.S. at 569–70.
Bd. of Trs. v. Fox, 492 U.S. 469, 480 (1989) (noting that although restrictions must be narrowly tailored, they need not be the least restrictive means).
decisionmakers to judge what manner of regulation may bestbe employed.165 In other words, “this standard requires the restriction to be ‘in reasonable proportion to the interest served.’ ”166 This aspect of thecommercial speech test is the most treacherous.167 Regulations aimedat restricting medical marketing, however, should survive this elementof judicial scrutiny so long as they are carefully crafted to avoid beingimpermissibly broad.
The Court, in assessing this prong of the test, balances the costs of the regulation, in terms of legal or useful speech banned, against thebenefit likely to be realized—meaning the extent to which the regula-tion will further the government’s goal.168 In Thompson v. WesternStates Medical Center, the Court overturned a ban on the advertise-ment and promotion of certain compounded medicines.169 In additionto rejecting the government’s proffered justifications, the Court de-nounced the regulations under Central Hudson because of “theamount of beneficial speech prohibited” by the regulation in ques-tion.170 The Court found the regulation lacking under the CentralHudson test because an absolute ban on promoting compoundeddrugs would prohibit a disproportionate amount of speech that is ben-eficial to patients.171 In other words, the legislature’s solution to a per-ceived problem was unreasonably broad because it prohibited toomuch speech.
Likewise, in Lorillard Tobacco Co., the Court rejected a ban on outdoor advertisements for cigars and smokeless tobacco within 1000feet of a school because the restriction would, in certain metropolitanareas, “constitute nearly a complete ban on the communication oftruthful information about smokeless tobacco and cigars to adult con-sumers.”172 The Court found the statute’s broad reach indicated a fa- Id. (internal quotation marks and citations omitted).
IMS Health Inc. v. Ayotte, 550 F.3d 42, 59 (1st Cir. 2008) (quoting Edenfield v. Fane, Cent. Hudson Gas & Elec. Corp., 447 U.S. at 569 (referring to the fourth prong as “the See City of Cincinnati v. Discovery Network, 507 U.S. 410, 417 (1993) (holding that the state must carefully calculate “the costs and benefits associated with the burden on speech im-posed” by prohibitions on commercial speech).
“Drug compounding is a process by which a pharmacist or doctor combines, mixes, or alters ingredients to create a medication tailored to the needs of an individual patient.” Thomp-son v. W. States Med. Ctr., 535 U.S. 357, 360–61, 376 (2002).
Lorillard Tobacco Co. v. Reilly, 533 U.S. 525, 561–62 (2001) (observing that the cumula- MEDICAL MARKETING IN THE UNITED STATES tal lack of tailoring.173 The Court described the dilemma in terms alsoapplicable to the regulation of medical marketing: The State’s interest . . . is substantial, and even compelling,but it is no less true that the sale and use of tobacco productsby adults is a legal activity. We must consider that tobaccoretailers and manufacturers have an interest in conveyingtruthful information about their products to adults, andadults have a corresponding interest in receiving truthful in-formation about tobacco products.174 Accordingly, medical marketing regulations could likely pass the Court’s scrutiny so long as they do not effectively prohibit pharmaceu-tical companies and medical device manufacturers from communicat-ing “truthful information” to physicians, either in marketing materialsor through industry-sponsored educational activities.175 Carefully tai-loring regulations on drug and medical device detailing acknowledgesthat physician-industry relationships are not per se harmful. Indeed,pharmaceutical companies and medical device manufacturers ought tomaintain contact with medical professionals in order to inform themabout new and existing products. Given the Court’s standard for eval-uating restrictions on commercial speech, a carefully tailored statuterestricting medical marketing would likely pass the Court’s muster.
Although others in both the legal and medical community have lambasted medical marketing, few have offered concrete, detailed so-lutions.176 This Part proposes statutory text for Congress to adopt, fol-lowed by a section-by-section analysis of this Note’s solution: theMedical Marketing Act. Finally, this Part evaluates the Medical Mar-keting Act in light of the Central Hudson test and the FirstAmendment.
tive effect of zoning restrictions and the regulations at issue would effectively prohibit cigar andsmokeless tobacco advertisements “in 87% to 91% of Boston, Worcester, and Springfield,Massachusetts”).
See, e.g., Stephen A. Talmadge, Influencing Physicians’ Prescribing Behavior: Ethical Issues Related to Pharmaceutical Gifts, 11 MICH. ST. J. MED. & L. 303, 318–20 (2007) (suggestingways to avoid doctor-industry entanglements); Zalesky, supra note 58, at 260–64 (proposingcharacteristics for a framework of reform); Scott Velasquez, Note, There Ain’t No Such Thing asa Free Lunch: A Look at State Gift Disclosure Laws and the Effect on Pharmaceutical CompanyMarketing, 41 J. MARSHALL L. REV. 563, 580–81 (2008) (recommending the enactment of afederal gift disclosure law modeled on California and Vermont statutes).
To reduce overspending on drugs and devices caused by medical marketing, Congress should amend section 353 of title 21 of theUnited States Code—the section of the United States Code that al-ready contains regulations pertaining to drug sales and drug sam-ples177—to add the following language, which may be cited as “TheMedical Marketing Act”178: (h)(1) A manufacturer or distributor of a drug or device maynot— (A) give a covered health entity a gift of any value, ei-ther directly or indirectly, or(B) make a payment or transfer of value to a coveredhealth entity, either directly or indirectly, except as pro-vided in (h)(2).
(2) A manufacturer or distributor of a drug or of a devicemay make payments or transfers of value to a covered healthentity for the following purposes, and subject to the follow-ing restrictions, notwithstanding (h)(1)(B): (i) Payments for consulting and advisory servicesmay not exceed the reasonable fair market valuefor such services as determined by theCommissioner.
(ii) Token consulting or advisory arrangements areprohibited.
(iii) Covered health entities engaged in a bona fideconsulting or advisory relationship may receive rea-sonable reimbursement for time, travel, lodging,and other out-of-pocket expenses.
(B) Continuing Medical Education and Third-Party Ed-ucational or Professional Meetings—A sponsorship ofcontinuing medical education or independent medicaleducation may be made if— See 21 U.S.C. § 353(c)–(d) (2006).
The structure and language of this proposed legislation is borrowed in part from the Patient Protection Act, Pub. L. No. 111-148, 124 Stat. 119 (2010), the Physician Payments Sun-shine Act, S. 301, 111th Cong. (2009), the Gift Disclosure Act, H.R. 3023, 110th Cong. (2007),and the PhRMA Code, supra note 66. The Patient Protection Act is neither stricken nor ex-pressly preempted by the Medical Marketing Act because both laws can peaceably coexist. TheMedical Marketing Act may narrow the applicability of the Patient Protection Act by, for in-stance, banning many activities that would otherwise require disclosure. Nonetheless, the twoActs are not in direct conflict. The proposed statutory language begins at subsection (h) simplybecause section 353 of title 21 of the United States Code presently ends at subsection (g). See 21U.S.C. § 353.
MEDICAL MARKETING IN THE UNITED STATES (i) payment is made directly to the educational pro-vider to reduce the participation cost for allattendees;(ii) responsibility for and control over the selectionof content, faculty, educational methods, materials,and venue belongs exclusively to the organizers ofthe conferences or meetings in accordance withtheir guidelines; and(iii) no payments for cost of travel, lodging, or oth-erwise are made directly to a covered health entity.
(C) Speaking Arrangements and Training Meetings— (i) A speaking arrangement or training meetingvenue and accommodations must be modest andreasonable as determined by the Commissioner.
(ii) A paid speaker presenting or otherwise partici-pating in the training event must have received sub-stantial training regarding the relevant products orservices.
(iii) A paid speaker presenting or otherwise partici-pating in the training event must provide a valuableservice to the relevant manufacturer or distributorof a drug or device.
(3) A manufacturer or distributor of a drug or of a device issubject to a civil monetary penalty of not more than $100,000for each violation of this subsection.
(4) Enforcement— (A) The Commissioner shall investigate compliancewith this subsection.
(B) If, after carrying out an investigation under subpara-graph (A), the Commissioner has reasonable cause tobelieve that a gift, payment, or transfer of value hasbeen made in violation of the provisions of this subsec-tion, the Commissioner may petition the United StatesDistrict Court in which the responsible party resides ortransacts business for an order requiring such relief asthe Court considers appropriate including but not lim-ited to remedies listed under (h)(3).
(A) The term “covered health entity” means a personauthorized to prescribe or dispense drugs or devices, in-cluding physicians, nurses, therapists, hospitals, nursinghomes, pharmacists, and health benefit planadministrators.
(B) The term “gift” means any payment or transfer ofany item or service of value, including meals, food other than meals, travel, entertainment, recreation, and itemsof nominal value such as pens, stationary, coffee mugs,and the like. The term “gift” does not include free sam-ples of drugs intended to be distributed to patients freeof charge.
(C) The term “bona fide consulting or advisory relation-ship” means a relationship consisting of— (i) a written contract specifying the nature of theservices to be provided and the basis of payment forthose services;(ii) a legitimate need for the services specified inthe contract under (h)(5)(C)(i); and(iii) a manufacturer, packer, or distributor of a drugor of a device not retaining more covered health en-tities than the number reasonably necessary for anyparticular purpose.
Subsection (h)(1) establishes the baseline mandatory ban on gifts and meals subject to the limited exceptions laid out in subsection(h)(2). To address some of the shortcomings of previous attempts atregulating marketing practices,179 the Medical Marketing Act banscertain behavior outright instead of settling for disclosure or voluntarycompliance.
Subsection (h)(2) sets out a limited number of exceptions to the Medical Marketing Act. These exceptions are intended to facilitateand otherwise leave, unaffected the beneficial aspects of the doctor-detailer relationship, while still drawing clear lines between acceptableand unacceptable marketing behavior.
Paragraph (h)(2)(A) addresses exceptions for consulting and ad- visory fees. These relationships can serve a useful function,180 but theyalso require certain limits to ensure that they are not misused. Sub-section (h)(2)(A)(i) is intended to limit the overall amount that medi-cal providers can receive in such arrangements, while still giving adegree of flexibility for particularly prestigious doctors and otherswho might command higher fees in a fair market. Subsection(h)(2)(A)(ii) explicitly proscribes the type of token relationships thathave occurred in the past,181 and subsection (h)(2)(A)(iii) limits the See supra note 34 and accompanying text.
For example, medical device maker Medtronic had an arrangement with a prominent MEDICAL MARKETING IN THE UNITED STATES types of expenses for which drug and device companies can reimbursephysicians without running afoul of the Act.
Paragraph (h)(2)(B) seeks a middle ground, whereby drug and device companies can fund attendance at continuing medical educa-tion programs or other informational gatherings while eliminating thepotential for reciprocity that can arise when a specific drug or devicecompany pays for a particular physician’s attendance by reducing thecosts for all participants.182 Moreover, deference to the organizers ofan educational event will help ensure that continuing medical educa-tion seminars take place at reasonable venues and focus on the educa-tional aspect of the gathering.
Paragraph (h)(2)(C) attempts to place reasonable boundaries around speaking arrangements in a way similar to subsection(h)(2)(A). Subsection (h)(2)(C)(i) ensures that training events takeplace in modest locations, and subsections (h)(2)(C)(ii) and(h)(2)(C)(iii) help eliminate token arrangements by requiring that anyspeaker or presenter receive substantial training and provide a valua-ble service.
Subsection (h)(3) establishes a stringent civil penalty for noncom- pliance. Although other legislation includes provisions for finingnoncompliant parties,183 the Medical Marketing Act imposes particu-larly severe fines because lenient penalties provide almost no incen-tive to discontinue objectionable marketing practices. Given theextraordinary profits of the drug and medical device industries,184 defi-ant companies might dismiss fines that are too low as the cost of doingbusiness. Harsh fines send a message to the industry that impropermarketing will not be tolerated.
Subsection (h)(4) establishes that the Commissioner of the Food and Drug Administration (“FDA”) shall oversee compliance with theMedical Marketing Act. This delegation of responsibility gives theMedical Marketing Act considerable administrative flexibility185 and Wisconsin surgeon whereby the surgeon received $400,000 under a consulting contract that onlyrequired eight days of work. See Harris, supra note 64.
See, e.g., Patient Protection Act § 6022, 124 Stat. at 691.
See supra note 22 and accompanying text.
See Lisa Schultz Bressman, Chevron’s Mistake, 58 DUKE L.J. 549, 568 (2009) (“Congress might aim to write just enough policy to receive a positive response for its action, while deflect-ing any negative attention for the burdensome details to the agency.”); Victoria F. Nourse &Jane S. Schacter, The Politics of Legislative Drafting: A Congressional Case Study, 77 N.Y.U. L.
REV. 575, 595 (2002) (discussing the use of “deliberate [legislative] ambiguity” and the percep-tion of ambiguity “as justified by the felt need for action or the perceived threat that inflexiblepolitical positions would thwart passage of any bill at all”).
makes sense given the FDA’s historic role as the agency “responsiblefor the regulation and enforcement of law in the area of labeling, ad-vertising, and promotion of prescription drug products.”186 Subsection (h)(5) provides definitions for some of the Medical Marketing Act’s crucial terms. Subsection (h)(5)(A) defines “coveredhealth entity” very broadly so as to apply to any professional whoprovides access to prescription drugs and medical devices. Subsection(h)(5)(B) also defines gift broadly so that the term includes everythingfrom breakfast and coffee mugs to golf clubs and getaways. To avoidthe problems of reciprocity that crop up with even the smallest gifts,187this subsection includes no exceptions based on the value of a gift.
Finally, subsection (h)(5)(C) defines “bona fide consulting or advisoryrelationship” in such a way as to reduce the possibility of a token rela-tionship. To do so, the Medical Marketing Act requires that drug andmedical device companies specify, in writing, the services requested.
This subsection also requires that drug and medical device companiesemploy physicians only where they have a legitimate need for the ser-vices and that no more consultants are employed than reasonably nec-essary. This reduces the possibility of token consultancyarrangements by linking employment to actual need.
The Medical Marketing Act and CommercialSpeech Jurisprudence In order to survive a First Amendment challenge, the Medical Marketing Act must satisfy the Supreme Court’s commercial speechtest.188 Assuming drug and medical device detailing qualifies as com-mercial speech,189 the Medical Marketing Act is aimed at advancingthe government’s interest in reducing costs and spending associatedwith prescription drugs and medical devices, a goal the Court willlikely deem sufficiently substantial.190 Also, considering the extent towhich states, Congress, and academics have linked medical marketingwith spending on drugs and devices, the Court will likely find that theMedical Marketing Act directly advances the government’s substan-tial interest.191 Zalesky, supra note 58, at 252.
MEDICAL MARKETING IN THE UNITED STATES Moreover, the Medical Marketing Act will likely meet the Court’s tailoring requirement192 because it carefully proscribes onlymarketing conduct that is particularly likely to cause wasteful pre-scribing—namely, gifts and meals.193 By carving out narrow excep-tions for those forms of industry marketing with the most educationalpotential,194 the Medical Marketing Act ardently attempts to addressthe growing problem of industry-induced overspending in a way thatimpinges on minimal amounts of beneficial speech.195 Also, by requir-ing compliance, eliminating gift value exceptions, and eschewing dis-closure, the Medical Marketing Act seeks to build upon lessonslearned from other attempts at reducing the effect of detailing onmedical decisionmaking.196 The pharmaceutical and medical device industries would likely respond that any significant restriction on marketing activity will chilltheir ability to educate physicians on new and important medical de-velopments.197 This argument is unlikely to succeed, however, be-cause the Medical Marketing Act does not prohibit sharing a meal,just paying for it; the same is true for gifts. If information is all detail-ers care to convey, pharmaceutical companies and medical devicemanufacturers remain free to pitch products to physicians under theregulations proposed here. The Medical Marketing Act is aimedsolely at the meddling of financial interests through gifts and pay-ments, not the underlying conversation between doctors and detailers.
Because medical marketers are trying to sell a product, the likelihoodof carefully crafted restrictions substantially limiting the marketer’sbusiness is minimal. Indeed, the Supreme Court has made abundantlyclear that “the greater ‘hardiness’ of commercial speech, inspired as itis by the profit motive, likely diminishes the chilling effect that mayattend its regulation.”198 For these reasons, the Medical MarketingAct would likely survive a First Amendment commercial speechchallenge.
See, e.g., Saul, supra note 8 (quoting a PhRMA employee describing free meals as “a recognition that [healthcare providers] are extremely busy. They don’t have time to talk. Per-haps the only time they do have time to talk is over lunch or dinner. So we thought it wasappropriate for the sales rep to pay for that.”).
44 Liquormart, Inc. v. Rhode Island, 517 U.S. 484, 499 (1996).
Medical marketing has become a widespread practice with perni- cious effects on doctors’ decisionmaking, which translate into unjusti-fiable overspending on prescription drugs and medical devices.
Attempts thus far by industry groups, states, and Congress have failedto appropriately address the problem due to reliance on disclosure,voluntary guidelines, and regulations containing exceptions. As such,Congress should pass the Medical Marketing Act to limit permissibleexchanges between doctors and detailers, thus reducing the wastefuloverspending that ultimately affects every taxpayer.

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