News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel

News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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Pharma Companies Lay Off Sales Reps and Use More Digital Tools to Market to Office-Based Physicians

Clinical laboratories and pathology groups may benefit from the attractive economics of digital marketing

For more than two decades, pharmaceutical sales representatives have been ubiquitous in doctors’ offices. But in a surprise development, many of the nation’s largest pharma companies are dramatically downsizing their sales forces and opting to promote their products through digital media.

This is an important new trend which has consequences for those clinical laboratories and anatomic pathology groups which send their own medical laboratory sales reps into doctors’ offices. It is evidence that the economics of sending sales reps into offices to educate and persuade physicians to prescribe new drugs for patients may be less favorable when compared to the economics of reaching physicians via the growing number of new digital sales and marketing channels.

In a recent story published by The Wall Street Journal, it was noted that pharmaceutical companies, as they reduce the number of sales reps who make calls on office-based physicians, increasingly make greater use of digital sales and marketing programs that include the Internet, smart phones, tablet technology and even iTunes.

Whatever Happened to the Cervical Cancer Vaccine?

Because of HPV’s link to cervical cancer, and because cervical cancer screening is a major activity in the laboratory industry, big pharma efforts to make money from HPV-related products are worth watching. That’s because big pharma has the resources to powerfully influence public opinion and legislative action.

Here in Texas, home to Dark Daily and The Dark Report, it was big news last month when our Republican Governor, Rick Perry, bypassed the state Legislature and signed an order making Texas the first state to require that schoolgirls get vaccinated against HPV. Because HPV is considered a sexually-transmitted virus that causes cervical cancer, of course there were the usual public harangues about the moral implications of this order by folks from the right and from the left. Shortly thereafter, all the buzz died down.

But that’s not the end of the story, because Governor Perry’s order caused the media to look more deeply into why more than 20 state legislatures were actively considering bills to mandate HPV testing for school-aged children. How was it that so many state legislators were suddenly inspired to champion this cause, at almost the same time? It turned out that Merck & Co, the manufacturer of Gardasil, the only FDA-approved vaccine for HPV in the market, was supporting an active, behind-the-scenes lobbying program.

Within a couple of weeks after news stories made this connection public, Merck announced that it was suspending its support of programs designed to lobby state legislators in favor of laws to require HPV vaccinations of school-age children. There were numerous reasons for this suspension. Merck identified negative publicity as the primary one, but groups sighted potential damaging effects of the vaccine on young girls, the fact that this vaccine was quite different from other vaccines required by school systems (those vaccines are for diseases passed by casual contact), and a slew of other reasons. Doctors were happy to see the lobbying stop for another reason entirely, however.

Pediatricians and gynecologists nationwide are refusing to stock Gardasil, the HPV vaccine, because of its $360 price and “totally inadequate” reimbursement from most insurers. Pediatricians, in particular, are fed up after years of declining reimbursement for vaccines, an explosion of new vaccines, and fast-escalating vaccine prices. Vaccines pose a problem for practices because they tie up $50,000 or more in inventory, run multiple refrigerators, require vaccine insurance, and require inventory management. Practices also must absorb the cost of broken or wasted vials.

With insurance companies reimbursing just $2 to $15 over the $120 per dose (3 doses required for the whole vaccine) charged by Merck, most doctors have chosen to either not give the vaccine or to require a surcharge. Pediatrician Dr. Herschel Lessin pointed out on CNN that it was ironic that insurers wouldn’t give physicians an extra $25 to cover their costs, but they would spend tens of thousands if a patient developed cervical cancer without question.

The issue of coverage for HPV vaccination won’t disappear. That’s because GlaxoSmithKline expects regulatory approval for its own HPV vaccine, called Cerverix. When that happens, there will be two deep-pocketed pharma giants with an economic motive to increase the rate of HPV vaccination. For laboratory directors and pathologists, it is an opportunity to watch a business school case study play out in the real world. There will also be as-yet-undetermined, but direct, consequences to current cervical cancer screening guidelines. As a larger proportion of the female population is vaccinated for HPV, it will be necessary to revamp cervical cancer screening guidelines. That may eventually reduce the volume of Pap testing done annually in the United States.

Related Articles:

HPV Vaccine Lobbying Suspended

Texas governor orders anti-cancer vaccine for schoolgirls