For those recently back from wintering in Florida, the Pharmaceutical Cost Management Council has spent a year trying to pass a legislative rule specifying criteria for disclosure of advertising, marketing, and promotional expenses by prescription drug manufacturers. In a dramatic gesture, the governor withdrew the proposed rule just prior to the legislative session, promising to get the pharmaceutical effort back on track with fresh legislation.

The governor’s bill proved less than groundbreaking. It did address unresolved problems of coordination between the state pharmaceutical advocate and the council. And it did call for reporting “all expenses associated with the advertising, marketing and direct promotion of prescription drugs through radio, television, magazines, newspapers, direct mail, telephone communications, and the Internet.” But it included a number of provisions that seemed to doom the effort from the start.

The House of Delegates corrected the problems; the Senate rejected the House version. The governor then withdrew his bill and announced he would submit a new disclosure rule. Go figure!

It is time, then, to remind ourselves why we needed a disclosure rule in the first place. We can then see what a meaningful disclosure rule must contain.

The original pharmaceutical bill, passed in 2004, recognized that the price of prescription drugs is inflated by, among other practices, direct-to-consumer advertising and extensive lobbying (detailing) of doctors. These practices lead to over-prescribing of new drugs, especially at the expense of generics. They foster a rise in prescription drug costs with no discernable medical benefit.

We’re not talking small bucks. The promotional budget of drug manufacturers is estimated variously around $12 billion to $15 billion a year. In 2001, one company, Novartis, reported spending 36 percent of its revenues on marketing alone. And it’s not as though commercials for the “Pink Pill” and its fuzzy animated brethren are necessary. America and New Zealand are the only developed nations that allow direct-to-consumer advertising of prescription drugs on television — and New Zealand is considering banning the practice. Somehow, everyone else gets the message!

The 2004 law, which remains in effect, seeks to avoid unwarranted costs of advertising, promotion and marketing. It opens the way to negotiating on the basis of a reference price, a price reflecting only the basic research, manufacturing and distribution costs of the drug, allowing for costs of marketing essential to bringing a drug to market and reasonable profit.

This is not a matter of price-fixing. Manufacturers are free to seek a higher price via a waiver process — but they may not invoke the costs of advertising, marketing or promotion. That’s why the state needs data on those expenditures.

Requiring data on industry marketing practices is not an academic exercise, a matter of perverse curiosity, an effort to restrain trade, or an attempt to embarrass the manufacturers. The purpose of reporting is to effect open negotiations on specific drugs. The data must therefore be drug-specific. Aggregate figures are meaningless.

The data requirement must be wide-ranging. It should cover all of the various modes of advertising, promotion and marketing employed to influence patients to request a particular drug or to influence doctors to prescribe a particular drug. The Vermont Pharmaceutical Marketing Act requires drug manufacturers to report “the value, nature and purpose of any gift, fee, payment, subsidy or other economic benefit provided in connection with detailing, promotional, or other marketing activities.” Reporting must indicate specific payments to specific doctors — who gets how much to prescribe what.

Since manufacturers also woo physicians through support of continuing medical education and free samples, that data should also be included. The president of the CME accreditation board estimated about 90 percent of the $1 billion spent on CME conferences yearly is provided by the drug industry. Roughly half of all promotional dollars go to free samples, samples that doctors often dispense and subsequently prescribe even though equally effective (or perhaps more effective, less expensive — and possibly less hazardous) medications are available.

Finally, the pharmaceutical advocate and the council and the attorney general should all have access to the raw data, not just aggregate reports. Aggregate reports are useless if policy-makers are to utilize that data in negotiating the price of specific drugs.

Pharmaceutical industry ads opposing the House version echoed the governor’s proclamation that West Virginia is “open for business.” One can only hope that the forthcoming disclosure rule is crafted to enable the pharmaceutical advocate and council to finally proceed in their efforts to reduce the cost of prescriptions for the citizens of the state.

Kurland is health action coordinator of Covenant House.