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Thursday, July 10, 2008
Pharmaceutical Sales Reps Lose 'Swag'-Giving Privileges
Associated Press
NEW YORK -- Drug company sales representatives will have to stop doling out coffee mugs and pens that push their products when they visit doctor's offices. But they can still sneak in the occasional free lunch.
Pharmaceutical Research and Manufacturers of America announced Thursday that it has revised its conduct code for interacting with health care professionals. The updated guidelines ban the knicknacks bearing company and product logos.
Sales representatives also are prohibited from providing restaurant meals and entertainment or recreation. But they can still provide the occasional meal in a healthcare professional's office "in conjunction with informational presentations," according to a statement from PhRMA.
The association represents pharmaceutical and biotechnology companies and is made up of executives from companies in the industry.
The new rules take effect Jan. 1. PhRMA said meetings between sales representatives and doctors should be focused on informing health care professionals about products, sharing scientific and educational information and supporting research and education.
"We are also concerned that our interactions with healthcare professionals not be perceived as inappropriate by patients or the public at large," the Washington, D.C.-based trade group said in a news release. "This code is to reinforce our intention that our interactions with healthcare professionals are professional exchanges designed to benefit patients and to enhance the practice of medicine."
The trade association said in January that it was considering a revision to its 2002 code.
"There's been a backlash to some of our members' sales and marketing practices," Ken Johnson, a PhRMA senior vice president, said at the time. "While it's not bubbling up all across the country, prudence dictates that we take a look at the problem and see if we can address concerns of physicians and patients."
Critics of these sales practices have included the nonprofit organization No Free Lunch, which is run by a New York-based internist. It urges medical school students to pledge that they'll shun free gifts or meals from the drug industry.
No Free Lunch also promotes a pen amnesty program on its Web site, where it offers to replace with "no questions asked" drug company pens that doctors receive. It states that the pens will be "donated to a worthwhile cause."
Members of PhRMA are required to state their intention to comply with the code, and Johnson & Johnson, Merck & Co., Amgen Inc., Eli Lilly & Co. and AstraZeneca PLC did so Thursday morning.
AstraZeneca said its U.S. representatives will not give doctors items including pens, pads of paper, hand soap and tissues as part of sales visits. The company said its sales representatives will still be able to offer educational items like teaching models if they "are not of substantial value."
While taking health care professionals to restaurants is not allowed under the new code, sales reps are still permitted to bring meals occasionally if they are small and not part of an entertainment or recreational event.
AstraZeneca said it will still support medical events for health care professionals through grants to independent providers, and the British company says it will not give any guidance about the content or faculty of those events and will provide no direct support for meals.
Lilly said in a separate statement that it will comply with or exceed the new guidelines. It said the revised code will help ensure "the information exchange with healthcare providers continues to be appropriate and ethical."
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Some mutual funds want you to pay for the privilege of them (or your investment adviser) taking your money to invest. It's called a load, and it works like a cover charge to get into a nightclub. Luckily, there are such things as no-load funds. As the name implies, shares of these funds are sold without a fee paid to a broker or investment advisor.
The entire amount you invest in no-load funds goes to work for your returns. On the other hand, with load funds, right off the bat you're charged commission (not to mention other fees incurred over the life of the investment). Let's say, for example, you invest $25,000 into a load fund that charges a 5% commission. This costs you $1,250 off the top, bringing your actual investment down to only $23,750.
The often-cited horse race analogy argues against investing in load funds. Here's the logic behind it: Would you place a bet on a horse that had to start a race 200 yards behind the others? Well, maybe you would if you got a tip from a sketchy, trench coat-clad man in a dark alley. However, under most circumstances, it's not smart to put your money on that handicapped horse.
But some argue that at times that man in the trench coat (aka your broker) knows more about the horses than you do, and has a better shot at picking a winner. Also, sometimes these fees are unavoidable because some funds are available only through investment advisers.
Cost-benefit analysis can help determine when a load fund is worth it (in other words, when it will score you a load) and when it is better to "do it yourself" and avoid the fees. Load-fund fees range depending on share class and can cover a variety of costs, such as paper work and fund management.
