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KEYCODE BAYER 603

December 18, 2014

Drug companies spend lavishly to woo veterinarians

Drug companies, veterinarians tight-lipped about cash connection

CHICAGO – Rock concerts. Magic shows. Contests in which everyone who plays is a winner.
For five days, the action never stopped at the McCormick Place convention center, as more than 9,000 veterinarians and technicians flocked to see the latest medicines and attend clinical workshops organized by the American Veterinary Medical Association.
Around the show floor, the world’s biggest drugmakers had set up exhibits two stories tall, with enough flashing lights and giant twirling logos to resemble a Detroit car show.
The vets, the nation’s last line of defense against unsafe drugs getting to animals, were receiving a blizzard of meals, books, electronic gadgets and speaking fees from drugmakers.
The convention revealed just one of the many ways corporate money influences pet health care — from research to treatment to sales — threatening the objectivity of those prescribing drugs to your dog or cat.
An Indianapolis Star investigation found that pet medicines not only have a higher risk of side effects than human medicines, but that the drug industry is allowed to engage in marketing practices banned from human medicine.
In recent decades, pharmaceutical companies have been investing billions of dollars in pet medicines for the promise they hold to launch new drugs quickly and profitably. And they treat veterinarians not just as medical professionals, but as an important distribution channel to be wooed every step of the way.
That was on full display at the Chicago conference in July 2013. A glossy, 124-page convention program was packed with ads for animal drugs, workshops sponsored by drug companies and lunchtime sessions, complete with free catered meals, courtesy of a drugmaker.
In one aisle, representatives from drugmaker Novartis Animal Health pulled veterinarians from the aisles to take a multiple-choice quiz on fleas and ticks. All who played got a prize: a Brookstone Ultra-Thin Travel Speaker — “for great sound anywhere” — that retails for $39.99.
In another corner of the show floor, drug¬maker Merial wooed veterinarians into an exhibit with this display in flashing lights: “Play Ultimate Vet Challenge For a Chance to Win an iPad Mini!”
In front of the Bayer Animal Health booth, a magician was performing tricks with balls and cups. Then he asked the crowd to sit through two presentations about new products from Bayer. Anyone who attended both received a free USB charger.

Why drugmakers push pet medicines
For drugmakers, facing expiring patents on blockbuster human drugs, the stakes are high.
Eli Lilly and Co., for example, is leaning on its Elanco animal health division to cushion the pain as it copes with the loss of patents on key human drugs, including antipsychotic Zyprexa, antidepressant Cymbalta and osteoporosis drug Evista.
For the first nine months of this year, overall sales at Lilly fell by 16 percent. But Elanco was a winner, with revenues up 9 percent.
And Lilly, like other drugmakers, is raising its stake in animal health through mergers and acquisitions. In recent years, Lilly acquired the European rights to a portfolio of Pfizer Animal Health products and the animal health business of Belgium-based Janssen Pharmaceutica NV.
In April, Lilly rolled out one of the biggest deals in its 138-year history. Lilly said it would pay $5.4 billion to buy competitor Novartis Animal Health, which would make the Indianapolis company the nation’s second-largest player in the $7.6 billion pet medicine industry.
One of the reasons Lilly and others are attracted to pet medicines is the shorter, less costly safety review by the U.S. Food and Drug Administration. But that abbreviated review comes with a cost, The Star investigation found. There is a greater risk of pet drugs entering the market with unforeseen side effects.

‘Amazed at what a free lunch does’
On the main floor of the convention, hundreds of veterinarians and technicians stood in a line that stretched to the far wall to enjoy a free lunch and hear from a world-class researcher on fleas. But he was not exactly an impartial player.
The lunch began with a warm-up speech by a representative from Merck Animal Health, based in Summit, N.J., who welcomed the crowd and reminded them to stop by the company’s booth, play a multiple-choice game and get a free book on animal parasites.
Then the featured speaker took the stage, Dr. Michael Dryden, a professor of veterinary parasitology at Kansas State University.
His talk was called “Get your ACT together with flea control.” The title was a play on the name Activyl, a drug Merck recently launched to prevent fleas.
“Thanks all for coming,” he said, looking at the packed room. “I’m always amazed at what a free lunch does.”
Dryden, whose university profile says he is “considered one of the world’s foremost experts on fleas and ticks” and who has lectured in 22 countries, got down to business.
Dryden talked for more than a half-hour on how fleas nest and lay eggs in a pet’s fur.
Then he listed the benefits of Merck’s Activyl — how the active ingredient blocks insect nerve impulse transmission, which halts insect feeding “and causes irreversible convulsions, paralysis and death” to the fleas.
What Dryden didn’t say was that Merck had paid him $56,705 to conduct research on the effectiveness of Activyl. Or that his research at Kansas State has received more than $5 million in industry funding in recent years.
Dryden did not respond to several phone messages and emails seeking comment about whether he feels beholden to industry and what he does to avoid conflicts of interest.
A Merck spokeswoman, Pamela Eisele, declined to say how much the company had paid Dryden or other veterinarians in recent years for research, speaking or consulting.

‘Building trust’
Unlike the veterinary medicine industry, the relationship of drugmakers and physicians is becoming more and more transparent.
The trade association that represents makers of human drugs updated its Code of Interactions with Healthcare Professionals in 2008 to say that lunches or dinners for physicians should be limited to “modest meals” such as sandwiches during meetings. And handouts should be restricted to educational materials “that benefit patients.” No iPads. No wireless speakers.
Federal law now requires all drug companies and medical-device makers covered by federal health care programs to publish databases of all payments to physicians of more than $10.
The law, known as the Physician Payment Sunshine Act, is designed to increase patient safety and reduce the secrecy and potential conflicts of interest.
The law followed years of criticism that drug companies were influencing how doctors prescribed drugs, through the very type of secret payments and freebies that are still widespread in the pet medicine industry.
Even before the law, a growing number of pharmaceutical companies had published detailed registries on their websites of how much they give to physicians, for everything from consulting services to free meals.
Some did so voluntarily. Others, such as Lilly, did so as part of a “corporate integrity agreement” with the federal government to settle criminal investigations into illegal marketing of drugs to doctors. The company had been accused of selling drugs for unapproved uses and hiding certain side effects of the drugs. Lilly agreed to pay $1.415 billion in fines, which at that time was the largest amount paid by a single defendant in the history of the U.S. Department of Justice.
The disclosure agreement was welcomed by consumer advocates and public health officials. They say the registries make it easier for the public to track where doctors get their money.
So now if you visit Lilly’s website, you can see that Lilly paid physicians $26.8 million in January and February of this year for research, speaking, meals and travel.
You can scroll through more than 1,000 pages of data and zero in on individual physicians. It’s all there at the click of a mouse. “Building Trust Through Transparency,” the Lilly Web page says in big letters. Novartis and most other drug companies also express high ideals for disclosing such payments. Novartis says it “fosters trust with patients … and upholds our commitment to ethical behavior.”
But Lilly still keeps its animal division under tight wraps. How much did Lilly’s Elanco division pay veterinarians in 2012? Lilly declined several requests to disclose such payments, saying “there is currently no disclosure requirement.”
Other animal health companies, including Zoetis and Novartis, also refused to release the information with roughly the same argument.
“The Sunshine Act does not currently require payments to veterinarians to be captured and reported,” Novartis said in a statement. “Novartis Animal Health would fully comply if the rule were to change.”
So the decision of whether to disclose the payments is left to individual veterinarians.

‘A fee increase will almost never be noticed’
Veterinarians serve as the primary distribution arm of the medicines they prescribe. Most human drugs are purchased at pharmacies, but the nation’s 90,000 veterinarians sell most of the nation’s pet medicines. And they make money on every prescription they dispense.
About 58 percent of all pet-medicine sales take place at veterinary clinics, according to market researcher Packaged Facts.
In fact, drug sales provide as much as 30 percent of a typical veterinary clinic’s revenues, according to Veterinary Practice News, a trade journal. And veterinary consultants speak openly about the need to more than double the price of drugs to turn a healthy profit.
“To operate a pharmacy as an efficient profit center, veterinarians need to be able to manage inventory and price products appropriately,” Dr. Lowell Ackerman, a veterinarian who taught at Tufts University, wrote in a 2011 article widely distributed in the industry. In the article, he wrote it’s “not unusual” for veterinary clinics to mark up products by 200 percent.
At the Pacific Veterinary conference in Anaheim, Calif., in 2007, accountant Fritz Wood advised veterinarians that keeping medicine priced high was a smart way to make a clinic more profitable.
“Clients have no idea how much medicine should cost, so a fee increase will almost never be noticed,” he said, according to a copy of his presentation.
The cost of veterinary care nearly quadrupled for the average household from 1986 to 2011, according to the American Veterinary Medical Association. It’s unclear, however, how much of that increase is due to the rising cost of medicines.
Other consultants have given similar advice. Amanda L. Donnelly, a veterinarian and industry consultant in Florida, wrote that it’s standard practice for veterinary clinics to mark up drugs 100 to 150 percent, then add a “dispensing fee” of $8 to $12.
Two years ago, the Federal Trade Commission held a workshop to examine the way pet medicines are distributed to customers and how those practices affect prices.
Among those testifying to the FTC was Robert Hubbard, assistant attorney general in the Antitrust Bureau of the New York attorney general’s office. He said that drug manufacturers often restrict distribution of their products to veterinarians, a practice that emphasizes “profits for veterinarians, rather than value for consumers.”
Because the clinics are relatively small, the drugmakers aren’t subjected to hardball price negotiations typical of big-box retailers.
Elanco says it sells all its medicines exclusively through distributors, who resell them to veterinarians. The company did not answer repeated questions from The Star about its use of veterinarians to sell its products.
Yet a recent lawsuit demonstrates how highly Elanco values its relationship with vets. In 2011, Elanco sent a letter to thousands of veterinarians across the country, attacking competitor Bayer Animal Health for selling drugs directly to large retailers.
“We continue to keep our sole focus on veterinarians and their practices,” the letter said, “and that includes directing our efforts to keeping our products dispensed only by veterinarians.”
The letter continued: “Your business is at a crossroads. Will you stand by and watch while industry ‘leaders’ redirect patients outside your office for veterinary products?”
The implication was clear: Don’t use our competitor’s products if you want to maintain your drug profits.
Bayer sued Elanco in federal court in New York, and the two companies eventually settled.

Calls for reform are met with resistance
Some critics say the animal health industry is overdue for reform and that the undisclosed flow of cash and goodies is bound to have a corrosive effect.
“If you’re going to give money to a veterinarian, you need to be public about it,” said Margaret McLean, director of bioethics at the Markkula Center for Applied Ethics at Santa Clara University.
But several pharmaceutical companies say they are merely following the law. They say there is no need for them to publish payments to veterinarians, because little if any federal money is used to pay for veterinary care, unlike Medicaid and Medicare for human care.
“It’s a different model,” said Elinore White, a spokeswoman for drugmaker Zoetis. “There are no third-party payers involved here, in terms of prescribing and dispensing medicines.”
In recent years, several members of Congress have introduced bills to give consumers the option to shop for cheaper drugs outside of veterinary clinics.
The American Veterinary Medical Association, the American Animal Hospital Association and the veterinary medical associations of all 50 states fought the bill.
The latest version of the bill, the Fairness to Pet Owners Act of 2014, is still strongly opposed by veterinarians and has not made it out of committee. John Russell