09 May 2008

Arg! Mrph! Ack!

How does big pharma know which doctors are prescribing their drugs? How do they know which offices to reward with pens, sketch pads and super tasty lunches for the entire staff? The reps walk through the door knowing literally how much the physicians have prescribed, any change in prescribing rates month to month and whether the physician's prescribing practices are covering the costs of their handouts. If x (total profit on drugs) - y ( total expenses incurred) is less than zero, they stop coming. But how? How do they know?

It is pretty well known that pharmaceutical companies pay the pharmacies for prescribing data. This is data in aggregate without specific identifiers. Sure you can assume that the pharmacy is serving only people from a defined geographic area, but this does not not tell you anything about the prescribing practices of individual physicians. That is where the American Medical Association comes in:


About 16% of the AMA total income comes from providing that last link - providing data from their physician Masterfile so that pharmaceutical companies can link DEA license numbers and state medical license numbers to individual practitioners.

So, in essence, every single expensive non-generic drug prescribed has a little bit of a kick back built into the cost of the medication. Brought to you by your slimy no-good pharmaceutical company and the good people at the American Medical Association.

I feel like I am channeling my inner John Stossel.