The Wild West Days of Pharmaceutical Sales Are Coming To an End

For indispensable reporting on the coronavirus crisis, the election, and more, subscribe to the Mother Jones Daily newsletter.


Pharmaceutical sales reps used to spend all their time inviting doctors to Hawaii for “conferences” and giving out lots of free samples. But the times, they are a changing:

Kendall French used to pitch drugs to doctors who could prescribe them.

But many of those doctors now work for hospitals that don’t give them final say over what is on the menu of medicines they can pick. So when the GlaxoSmithKline PLC saleswoman began plugging two new lung-disease drugs to a big San Diego hospital system this spring, it was to an administrator who doesn’t see patients but helps write the menu, also called a “formulary,” of approved medications.

….Ms. French’s sales calls are part of a shift that is rewriting the drug-marketing playbook. As hospital systems get bigger, they are putting distance between their doctors and drug sellers, making it harder for pharmaceutical companies to get quick acceptance of newly approved medicines and putting pressure on profits.

Today, 42% of doctors practice as salaried employees of hospital systems, up from 24% in 2004, according to Cegedim Relationship Management, a marketing consultant.

This is yet another example of how the health care market should be viewed as a competition between buyers and sellers. In some cases, this means that a region with a small number of powerful insurers might have lower overall costs because the insurers (buyers) have a lot of bargaining power with doctors and hospitals (sellers). In the case above, it means that hospital consolidation can reduce costs because it gives hospitals (buyers) a lot of leverage with pharmaceutical companies (sellers).

In other words, it’s complicated. Hospitals are responsible for some of the most egregious billing practices in the entire health care industry, but at the same time, they can also be responsible for helping to contain costs. This is because powerful hospitals are both sellers (when they’re dealing with insurance companies) and buyers (when they’re dealing with pharmaceutical companies). Sometimes they’re the good guys and sometimes they’re the bad guys. It might not be the greatest way of running a health care system, but it’s what we’ve got.

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

payment methods

We Recommend

Latest

Sign up for our free newsletter

Subscribe to the Mother Jones Daily to have our top stories delivered directly to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate