The pharmaceutical industry and its e-healthcare allies are pulling out the stops in an effort to use technology as a prescription marketing tool.
They want to use the technology to get their message to physicians and reduce sales expenses by what is called e-detailing. Drug companies could use the data generated by these devices, broadening existing channels of drug marketing information and thereby lowering their costs to obtain the information.
The effort is creating concern among physicians and privacy advocates about how all this data will be used. Meanwhile, dozens of e-health companies hope providers' response won't be a death sentence for them.
In October, WR Hambrecht + Co. stock analyst Josh Fisher profiled 13 e-health companies with now-familiar names such as Allscripts and iScribe.
"I would say there are about 10 companies calling themselves e-detail," Fisher says. "There are a lot of other companies calling themselves educational. Some offer CME for their presentations. Those presentations are very similar to the presentations for detailing."
Most of the vendors offer some form of prescription writing service as well as a drug reference and a checker for drug-to-drug and drug-to-allergy reactions, all loaded onto personal digital assistants. These devices are typically connected via the Internet to the vendors. The vendors use the Internet links to send data to their doctor customers, keeping the drug references and other data accessed by the devices up-to-date. But data from the new devices also flows back to the e-healthcare companies and, in many cases, is sold to drug marketers and the drug companies themselves.
According to the drug market researcher Scott-Levin, a unit of Quintiles Transnational of Triangle Park, N.C., the number of prescriptions written grew 7% during the first half of 2000 compared with the first six months of 1999 while retail prescription sales rose 19% to $64 billion for the same period.
Meanwhile, drug sales reps visited doctors 14.8 million times in the third quarter of 2000 alone, an average of more than 20 visits per doctor. Drug companies spent $4.3 billion on physician detailing in 1999, up 6.5% over 1998 outlays, according to drug data marketer IMS Health of Westport, Conn.
Not surprisingly, many of the e-healthcare companies have forged links with the drug companies.
Recently, Bristol-Myers Squibb of New York City cut a deal with ePocrates of San Carlos, Calif., to buy an undisclosed number of Palm Pilots for cardiologists. In return, the drugmaker will get an exclusive two-way communication channel to reach doctors.
To get the free Palm Pilots and keep the service, doctors must agree to do a number of marketing surveys each month. ePocrates offers a drug reference now, but a spokesperson says it will add a formulary checker and an advisor for infectious diseases soon. ePocrates also plans to sell drug data that is aggregated so individual doctors won't be identified.
Express Scripts, a pharmacy benefits manager based in St. Louis, agreed last summer to sponsor free handheld prescribing services from PocketScript of Cincinnati to 15,000 physicians. Express Scripts also has a revenue-sharing deal with Allscripts of Libertyville, Ill., targeting physicians who use the Allscripts TouchScript tool and see a large volume of Express Scripts patients. Allscripts also has a deal with IMS Health.
Drug companies Pfizer, Eli Lilly, Johnson & Johnson, Glaxo Wellcome, AstraZeneca, Searle, Novartis and Merck also have pacts with various e-healthcare companies to get information to physicians.
Stuart Weisman, M.D., founder of ePhysician of Mountain View, Calif., says it's an open question whether the bulk of e-health firms like his can survive without contracts with pharmaceutical companies. ePhysician loads a prescription writer and a drug reference on Palm and Handspring PDAs.
Weisman says he turned down a contract from a major drug company because it insisted that ePhysician glean and hand over data that would identify both the physician and the patient. He says he now is negotiating with another drug company to provide detailing and drug sample ordering services on the devices, but those services would be available only when and if the physician requests them. He declined to name either company.
Weisman says e-health companies must be wary of striking "the Faustian bargain" with pharmaceuticals. Some will want to push banner ads or extract sensitive data, rendering the devices and services unacceptable to physicians.
"Taking a free product is easy," Weisman says. "Using it every day is at issue here."
Weisman says ePhysician subscriptions ($20 a month) and revenues from prescriptions written (about $1 each) have grown every month since the company launched its product in April, but he concedes it is hard to compete against companies that tout free products and services subsidized by drug companies.
Flexibility is the main selling point of the new online communications systems, says Aaron Gerber, M.D., who heads the physician interactive division of Allscripts, which offers an e-detailing service as well as a prescription writer. Gerber says the number of drug reps doubled in the last four years, but a doctor's free time keeps shrinking.
"Physicians are having an increasingly difficult time getting the information they need to stay current," Gerber says. "It's not that it's not available, but they have limited time to access that information. I have one doctor that I know who is a high-volume prescriber, the one drug reps want to see. He received 18 drug reps in one day."
Allscripts works with pharmaceutical companies to develop what Gerber says is "a substantive detail" sent over the Internet. Each session takes about 10 minutes to watch. Physician viewers can show up any time they want and anywhere they want wherever they have an Internet connection. (Allscripts also has a phone-based detailing program.)
In return for their participation, physicians receive a $25 certificate good toward any of thousands of medical items, Gerber says. So far, Allscripts has 40 different programs with 14 different clients and has conducted 40,000 e-details, most in the last 12 months, Gerber says. Admitting he can only make a rough estimate, Gerber says there probably haven't been more than 100,000 e-details industrywide. "It's still very early."
Scott-Levin tracks traditional detailing to physicians but hasn't begun e-detailing because it is still too new, according to spokesperson Dave Johnson.
Allen Pocinki, M.D., an internist in Washington, D.C., says he is visited by at least one drug rep every day.
"Yesterday there was just a deluge of them," Pocinki says. "There were six or eight of them."
Pocinki says he takes in stride their demands on his time and thinks there is no future for e-detailing.
"It's part of the business," he says. "I'm not embarrassed about telling them to go away."
Pocinki has made a first step into e-healthcare communication, however. He has signed up to work with Jstreetdata.com, a medical marketing company based in Washington. Jstreetdata.com pays doctors to participate in marketing studies via the Internet.
"It's almost like an online focus group," Pocinki says. "I got an e-mail saying they were having something. I logged in and answered questions for 12 to 15 minutes."
The most recent survey was on cholesterol-lowering medications and when he might prescribe them, Pocinki says. With Jstreetdata.com, doctors are under no obligation to participate.
"You can do it at your own convenience," he says. "If it's some topic you're not interested in, or if you're busy that week, you don't do it." Pocinki says he was paid $40 for doing the survey.
Another marketing company, iPhysician Net, of Scottsdale, Ariz., arranges two-way video conferences between doctors and drug companies. The company supplies participating doctors with free computers and high-speed Internet connections. In return, the doctors agree to one e-detailing session a month with each of eight drug companies signed up for the service.
Shawn Patterson, vice president of the point-of-care division at Express Scripts, says investing in e-health technology isn't primarily a way to obtain more data or gain an entree into the doctor's office.
What Express Scripts wants, Patterson says, it to increase customer satisfaction, a key metric for a company that sells its services to 41.5 million people through 10,000 managed care companies, third-party benefits administrators and self-insured employers.
"The overarching umbrella is we're a service business, and what has the greatest ramification is if we can provide excellent service to our customers," he says. Boosting the use of computerized prescription writing tools will reduce annoying callbacks by pharmacists and prescriptions written off formulary. It also will increase mail order business at Express Scripts, he says.
"If the doctor uses the tool, we see significant benefits."
Johnson of drug marketer Scott-Levin says this is the year of truth for e-detailing.
"I think in 2001, you'll know whether it's going to fly or fail," Johnson says. "One company told us they have two reps doing this exclusively, but that's only two out of a field force of a thousand."