The pharmaceutical industry watchdog body has fined individual drug companies over $1.8 million in the past year, for breaches of their own code of conduct.

The details of all the breaches, fines and other penalties have been made publicly available in the annual report of Medicines Australia, the industry’s representative group.

In the past twelve months, there were a total of 83 complaints where drug companies were alleged to have been in breach of the code, which is supposed to regulate marketing activities and relationships with doctors and patients.

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The adjudication of complaints is made by committees which include representatives from a number of outside consumer and medical bodies, as well as representatives from drug companies. The system is largely self-regulated, but is backed by law and overseen by the Australian Competition and Consumer Commission.

In 37 of the 83 cases this past year, the complaint was upheld, and companies were forced to pay fines, and take other actions like sending corrective letters to doctors.

The fines are paid to Medicines Australia, and go towards running the system and disseminating information about the industry’s code of conduct. While the industry spends a lot of time trumpeting the value of the code, some critics have for many years seen the system of self-regulation as something of a failure, with major drug companies routinely re-offending.

The highest profile fine this year went to Pfizer, the world’s largest drug company, which was fined $200,000, following a complaint by a competitor, Astra Zeneca.

The complaint related to the behaviour of a group of nine Pfizer sales reps who made disparaging remarks a competitor’s product, Astra Zeneca’s cholesterol lowering drug Crestor. The cholesterol market is one of the biggest, because many relatively healthy people are targeted with the drugs in order to reduce their risks of future heart attacks or strokes. Pfizer’s cholesterol-lowering drug Lipitor is one of the biggest selling drugs of all time.

The Medicines Australia annual report’s ten-page coverage (pages 141-150) of this dispute between two drug giants makes interesting reading, and starts to give a sense of the ruthless world of drug marketing.

But it’s worth asking again whether letting the industry regulate its own marketing practices is really the most sensible approach here.

For a company like Pfizer, with a market capitalisation of almost US$128 billion, redirecting $200,000 from your sales revenues to your industry association — so that it can tell the world how well the industry regulates itself — is not exactly a frightening outcome.

Perhaps some prudent product managers from forward-looking drug companies are even starting to put aside a few dollars now, in preparation for the coming season’s fines.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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