The
Ethics
of Accepting
Gifts
from
Pharmaceutical
Companies
Lewis
H. Margolis,
MD, MPH
From the Department of Maternal and Child Health, School of Public Health, University of
North Carolina, Chapel Hill, North Carolina
ABSTRACT. How physicians respond to the promotional activities of the pharmaceutical industry is the subject of ongoing debate and controversy. This paper postulates that the acceptance of gifts in virtually any form violates
fundamental duties of the physician of nonmaleficence,
fidelity, justice, and self-improvement. The medical com-munity must articulate this position clearly, and it should act accordingly. Pediatrics 1991;88:1233-1237; ethics of gifts, ethics, marketing ethics.
Because the practice of medicine is linked
inex-tricably with pharmaceuticals, physicians should
examine carefully their relationship to the phar-maceutical industry. The purpose of this article is
to articulate an ethical framework for the behavior of physicians as they interact with this industry. First, the marketing activities of the industry are
reviewed briefly. Second, the professional role of physicians, with its inherent values, is analyzed as
a basis for determining ethical behavior in relating to the pharmaceutical industry. Finally, these val-ues and principles are applied to specific examples of pharmaceutical marketing activities.
PHARMACEUTICAL
INDUSTRY
MARKETING
To understand the role and responsibilities of
physicians in their relationship to this industry it is instructive to describe the nature of the
phar-maceutical industry’s marketing activities.
Accord-ing to the Pharmaceutical Manufacturers
Associa-Received for publication Feb 4, 1991; accepted Mar 7, 1991.
This is a revised and expanded version of a paper presented at
the annual meeting of the American Academy of Pediatrics,
Boston, Massachusetts, October 1990.
Reprint requests to (L.H.M.) Dept of Maternal and Child
Health, School of Public Health, University of North Carolina,
Chapel Hill, NC 27599.
PEDIATRICS (ISSN 0031 4005). Copyright © 1991 by the American Academy of Pediatrics.
tion, the more than 100 firms responsible for most
of the conventional (ordinarily termed “ethical”) pharmaceuticals in the United States had sales
greater than $50 billion in 1988. Association mem-bers employed nearly 160 000 people in the United
States of whom 23% were involved in medical
re-search and development, 28% in marketing, and 36% in production.’
The profitability of the pharmaceutical industry has been well documented in a series of hearings
conducted by the House Subcommittee on Health
and the Environment in 1985 and 1987.23 By two
of three common measures of profitability-return on sales (net income divided by sales) and return
on equity (net income divided by owners’ equity or book value)-the pharmaceutical industry ranks
very high among all industries.
Recent economic pressures on the industry,
how-ever, have been intense. Like other manufacturing
companies, the producers of pharmaceuticals can
earn profits in several ways. First, a company can
increase sales, that is, the number of prescriptions
written. This is most apparent when a new patent
guarantees a monopoly position for a limited period,
usually 17 years. Sales are limited only by the diseases for which a drug is effective. This type of
creativity, however, is expensive. Developmental and approval costs of a new drug increased from
$54 million in 1976 to $94 million in 1984 2,s171
In addition to increasing sales, a company can raise prices to earn a larger profit on each unit sold.
Drug prices have increased, but the rate of increase
has remained below the overall consumer price
index. Within the health component of the con-sumer price index, the rate of increase in the cost
of pharmaceuticals has remained below the rate of
increase for hospital or physician costs,2 perhaps
because strong competition from abroad constrains
improve its efficiency so that each unit sold earns
a greater profit.
Because unit prescription sales have remained relatively stable during the past 10 years, manufac-turers have attempted several strategies to expand
their market shares. First, some recently have launched campaigns to advertise prescription drugs directly to consumers. Second, promotional
activi-ties directed at physicians have increased and in-tensified.
According to a 1987 survey of the 25 largest pharmaceutical companies during the years 1982
through 1986, expenditures for marketing, in total dollars and percent of sales, exceeded those for research and development.3 Research and
develop-ment expenditures were 19.6% of total prescription sales of $63.6 billion, whereas marketing
expendi-tures were 20.2%.3.P’% It is not possible to state, a priori, what the percent of expenditures for either
of these activities should be. Companies that spend only 5% on research may wither away for lack of new products, or companies that spend 30% on research and development may find themselves un-able to educate the audience of prescribers about
the value of their products and similarly go out of business. The point is, however, that manufacturers
devote considerable resources to marketing.
Esti-mates of industry marketing expenditures range
from $5000 (Wilkes M, Shuchman M. New York Times Sunday Magazine. November 5, 1989:88) to $8000 per physician per year. Twenty years ago the ratio of physicians to drug representatives was
approximately 76:1; today that ratio is 31:i. The
return on these expenditures, and thus their con-tribution to profitability, is a direct function of the ability to influence physicians in the selection of their products.
Not only have marketing expenditures increased, but also the types of marketing have changed as well. According to Advertising Age,6 half of promo-tional funds is allocated to traditional techniques such as product advertising (24%), direct mail (6%), and detail staff (20%). The other half is allocated
to special events such as product-related exhibits at scientific meetings, symposia for select groups of
doctors, and an assortment of single-sponsor pub-lications ranging from monographs to newsletters, special interest magazines, tapes, and videocas-settes.6 A survey of 18 major firms revealed that expenditures for special events increased 14-fold
between 1975 and 1988.
In summary, pharmaceutical companies invest in the marketing of their products to influence the prescribing behavior of physicians. No absolute moral standard dictates that 10% or 15% or 40% of sales should be devoted to promotion, but the
po-tential conflict of interest between physicians and pharmaceutical manufacturers is clear. The
pri-mary interest of pharmaceutical companies is to
earn profits that both reward their shareholders
and, in the words of J. Huck, former chairman of the board of Merck and Co, enable companies to
develop “innovative therapies that extend life,
im-prove the quality and productivity of life, and
re-duce the overall costs of illness.”8 The primary focus
of physicians is to serve the best interests of their
patients. The motto of the Academy of Pediatrics-“For the Welfare of Children”-enunciates the professional interest of pediatricians.
PHYSICIANS
AND
PROFESSIONAL
ETHICS
Understanding the professional role of physicians provides the basis to analyze the relationship be-tween the pharmaceutical industry and physicians. According to Friedson,8 medicine manifests the two
core characteristics of professions: “prolonged
spe-cialized training in a body of abstract knowl-edge”8’77 to develop expertise or professional knowledge and “a collectivity or service
orienta-tion.”8’77 Physicians are expected to place the needs of patients before their own desires. For example, because physicians in the past felt obligated to treat all who sought their assistance, they would engage
in discretionary pricing whereby well-to-do patients
were charged more than low-income patients. This service orientation enabled physicians to provide
care regardless of the ability to pay.
From these core characteristics professional au-tonomy flows. The profession determines its own
standards of education and training, practice is
recognized legally by a license, most legislation is
shaped by the profession, and the practitioner is
relatively free of lay evaluation and control. It is
important to emphasize that “professionalism” can
exist only to the extent that the community at large and other occupations recognize and accept the
autonomy of those who claim to be professionals.
Friedson warns, however, that professional au-tonomy is flawed:
By allowing and encouraging the development of self-sufficient institutions, it develops and maintains in the profession a self-deceiving view of the objectivity and reliability of its knowledge and of the virtues of its
the need for, let alone undertake, the self-regulation it
promises.SW3693l#{176}
In other words, the autonomy of medicine may allow physicians to justify their actions without regard for the opinions or standards of the com-munity at large. Professional autonomy may lead
physicians to believe that they are immune to in-tensive pharmaceutical marketing efforts.
What are the values that are embedded in the
knowledge and service orientation of physicians that may guide their interactions with the indus-tries that complement the profession of medicine? One major theory of ethics, particularly relevant to
this discussion, is based on the articulation of rules or duties to guide conduct. The most prominent classical proponent of this theory was Kant, who
argued that one should “act in such a way that you treat humanity, whether in your own person or in the person of any other, never simply as a means,
but always at the same time as an end.”9”’6 This
theory holds that individuals are bound morally to observe various duties, independent of the conse-quences of action.
Probably the primary duty that helps to frame
the ethics of medicine is “primum non nocere.” To
do no harm, the duty of nonmaleficence, ordinarily
refers to the avoidance of harm to the physical and
mental health of patients, but it can be extended to
include the avoidance of any harmful action.
Physicians have a duty of fidelity, from which
stems the practice of confidentiality. Fidelity also
obliges a physician to be loyal to the interests of his or her patient, as well as to avoid deception.
Pediatric commitment to advocacy for children
stems from a duty of justice. Justice, equity, or fairness is the principle by which burdens and
ben-efits are allocated within a society. Philosophers
have argued for distribution on the basis of need, merit, equal share, market value, effort, and other
principles.’0 Much of the advocacy work of
pedia-tricians is based on the implicit understanding that
children have special needs; resources should be allocated to children accordingly.
Finally, physicians maintain a duty of
self-im-provement, or, in the words of W. D. Ross,
“im-proving oneself with respect to the intrinsic values
of intelligence and virtue.”9’23 Physicians have an
obligation to build upon their basic education by
attaining new knowledge and by continuing to cul-tivate the care and sensitivity with which they treat
patients and families.
Physicians may have additional duties in other
contexts, the most obvious being beneficence, the
promotion of the intrinsic value of patients in
pa-tient encounters. The four duties of
nonmalefi-cence, fidelity, justice, and self-improvement have particular relevance for defining interactions with
the pharmaceutical industry.
THE ETHICS OF GIFTS TO PHYSICIANS
Just as these duties guide physician interactions with patients and other professionals, so too can they guide encounters between physicians and
pharmaceutical companies. In a thoughtful essay
on doctors and drug companies, Chren and colleagues” clearly summarize the gift relationship.
“By offering a gift to another, a person is really
proffering friendship, a relationship.”3449
Accept-ing a gift is “accepting the initiation or reinforce-ment of a relationship, and it triggers an obligatory response from the recipient . ..the recipient
gen-erally assumes certain social duties such as grateful
conduct, grateful use, and reciprocation.”3’”9
Whether it involves a pen with a company logo or
a dessert reception at a professional meeting, the offering or exchange of gifts signifies a complex
relationship.
The duties of physicians can guide this complex
relationship in several ways. The first duty, to do no harm, should instruct physicians to reject these gifts for several reasons. Gifts ultimately are paid
for by patients through the costs of the drugs. To
the extent that such gifts represent costs over and
above the ordinary costs of research, production,
and marketing, gifts harm patients by increasing the cost of their care. In the extreme, one could
argue that the physician is stealing from the pa-tient, because the added costs are unrelated in any way to the service that the physician provides.
Although physicians are unlikely to prescribe clearly incorrect medications as a result of entice-ments by drug representatives, the extent to which
drug decisions are made on any ground other than what is best for the patient also constitutes harm.
The duty of fidelity is violated in several ways by
the acceptance of gifts. First, as the gift relationship
implies, acceptance of gifts makes physicians agents of the companies that have entered into that
will-ing to disclose this gift relationship to their pa-tients, because deception also violates the duty of
fidelity.
The acceptance of gifts violates the duty of
jus-tice, particularly so for pediatricians who, as advo-cates for children, are likely to define justice as the distribution of resources on the basis of need. As
R. Fakes, a British physician, remarked, “. ..we are being given a meal which many of our patients could not afford but which they would appreciate much more.”2 Clearly, with 20% of children living in poverty,’3 physicians should not participate in practices that unfairly reallocate resources to
them-selves.
Physicians have a duty as professionals to con-tinue “prolonged specialized training in a body of abstract knowledge,” that is, a duty of
self-improve-ment. That many physicians have not exercised
this responsibility adequately is evidenced by the fact that state regulatory agencies make licensure and/or recertification contingent on documentation of continuing education. This need for formal reg-ulation suggests that the legitimacy of physicians
as professionals is already suspect. The acceptance of, or the need for, the incentive of gifts to
partici-pate in continuing education also suggests that
physician regard for the importance of self-im-provement has eroded. Rejection of gifts is all the more important because physicians are quite
sus-ceptible to commercial (in contrast to scientific)
influences on prescribing.’4 Further, “education” that is acquired through commercial relationships may not be as effective as that acquired through noncommercial scientific presentations more de-pendent on a physician’s self-motivation.’5
Although companies and physicians share the
objective of furthering professional education, they
do not share the objective of promoting brand by-alty. Companies use glamorous sites such as ocean-side and mountain-top resorts to cultivate loyalty. They could provide the same education at a lower cost by sponsoring meetings at less enchanting locations. Because the resources utilized to promote brand or company loyalty ultimately come from patients, the acceptance of this type of company support violates the duties of nonmaleficence, fi-delity, and justice. If physicians want to combine continuing education with entertainment, they themselves should be responsible for the added
costs.
Although this duty-based assessment of the
eth-ics of gifts is fitting, some may argue that a utili-tarian analysis is more appropriate. Utilitarian the-ory holds that the consequences of one’s actions determine the right thing to do. Utilitarian models require individuals to foresee all outcomes of
ac-tions and to evaluate the consequences. Even when various duties are violated, if the overall
conse-quences are beneficial, the action is considered moral or ethical.
Under a utilitarian assessment of gifts, the out-come that society would seek to maximize would be improved health. It is possible that marketing prac-tices result in profits that drug companies then invest in the search for other highly effective prod-ucts. A utilitarian calculation may reveal that so-ciety is better off in terms of health as a result of these gift-generated profits. The major costs of this strategy, however, must be defined clearly before such a calculation is undertaken. First, the loss of
autonomy as physicians become the agents of phar-maceutical manufacturers could have several
det-rimental consequences. Their ability to evaluate products objectively would diminish; feedback pre-sumably is useful to manufacturers and to the
Fed-eral Drug Administration as new products are dis-seminated. Furthermore, physicians likely would
become less attuned to the needs of their patients
and more attentive to the manufacturers. As man-ufacturers search for new pharmaceutical needs and products, physicians, through their direct contacts with patients, are a major source of information. Another cost could be depreciation in the value of physicians as professionals, with a decline in the
putative healing benefits that flow from the practice of medicine as a profession.
CONCLUSIONS
It is apparent from this analysis that physicians ought to take umbrage at the acceptance of gifts in virtually any form, a position that is at variance
with the recent statement of the American Medical Association.16 The gift relationship undermines several of the fundamental duties, nonmaleficence,
fidelity, justice, and self-improvement, of physi-cians. Similarly, a utilitarian analysis suggests that the costs of this practice may exceed the benefits. The belief by physicians that they can remain ob-jective in the face of marketing efforts is likely to be a manifestation of the self-deception to which
professionals, in their search for autonomy, are susceptible.
What is acceptable practice within the ethical
framework that has been outlined? Because phar-maceutical companies share a societal interest in the development of well-educated physicians, sup-port for educational activities at teaching
insti-tutions, therefore, should have complete control over the speakers and content of such activities.
Acknowledgment of company support, analogous to
commercials in the broadcast media or
advertise-ments in medical journals, is acceptable when it is clearly noted as such. Support for attendance at
conferences is consistent with the enhancement of knowledge, but it should also be administered
through institutions or medical societies and not
directly from companies to individuals. The
accept-ance of support for individuals, such as spouses, not
directly involved in the educational activity is ob-viously wrong because resources would be allocated to an individual who does not have patient care responsibilities.
Educational activities, to the extent that they
improve the quality of care provided to patients, are the only activities for which support can be
justified. Pharmaceutical contributions have no
role to play in social activities. Sponsorship of
receptions or even the provision of light refresh-ments at meetings cannot be justified. Because such activities do not enhance the practice of medicine in general nor the relationship to patients in par-ticular, they have no legitimate place. Similarly,
gifts of even small office items, such as pens or
pads, are unacceptable.
Gifts for participation in clinical “research” in
which physicians are rewarded on a per case basis
undermine the legitimacy of physicians. This type
of payment often amounts to engaging the
physi-cian as an agent of the company in question,
vio-lating the duty of fidelity. Pharmaceutical
compa-nies that need information about the experiences of clinicians with their products can engage them
for this purpose, but there are institutional and
governmental protocols for such activities. In par-ticular, informed consent should be obtained for
such “trials,” and patients must be informed explic-itly about the remunerative relationship between
the practitioner and the sponsor company. The growing bureaucratization and
institution-alization of medicine, with threats to professional
autonomy in the form of managed care, governmen-tab regulation, and medical liability, may make
phy-sicians more vulnerable than in the past to the gifts of pharmaceutical companies. The rejection of gifts manifests a commitment to the best interests of patients. Physicians, affirming the ethical values
imbedded in their professional role, should abandon
the practice of accepting gifts from pharmaceutical companies.
ACKNOWLEDGMENTS
I am grateful to Pam Protzel for research assistance and to Linda Frankeb, Barry Roberts, and George Pickett
for critical readings of earlier drafts.
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