Testimony in Support of:
HB 109/SB 17 An Act Prohibiting the Use of Health Data for Marketing Purposes,
SB19 An Act Protecting the Confidentiality of Patient Prescription Records, &
HB 110 An Act to Prevent the Sharing of Prescription Data
Before the Joint Committee on Health Care Financing
MASSPIRG appreciates this opportunity to offer testimony in support of HB 109/SB 17 An Act Prohibiting the Use of Health Data for Marketing Purposes, SB19 An Act Protecting the Confidentiality of Patient Prescription Records, HB 110 An Act to Prevent the Sharing of Prescription Data, which seek to implement a ban on the use of prescription data for marketing purposes.
MASSPIRG is a statewide, member supported, non-profit, public interest organization working to protect consumers, promote public health and reduce the cost of health care. Last year we worked with many of you to pass Chapter 305, the Health Care Cost Control bill to help reduce the cost of health care. Banning the practice of prescription drug data mining will continue our efforts to reduce the cost of health care by reining in some of the aggressive marketing tactics by drug companies which have contributed to the rise in cost of health care.
Unless the new Congress and Administration act to reduce health care costs, and if the recently passed cost reforms are not aggressively implemented the yearly cost of the average employer-paid family health policy in Massachusetts is projected to more than double from $12,290 in 2006 to $26,069 by 2016 even after adjusting for inflation. If recent trends continue, wages and household incomes will simply not keep up with these high costs. Nor will the business sector be immune to this crisis. Unchecked, this cost epidemic could also severely impact the small businesses that drive job creation in the Massachusetts’s economy.
Unfortunately, too much of these astronomic costs are going to enrich special interests, and not towards providing consumers with the best health care. The Congressional Budget Office estimates that nationally as much as one third of health care spending is wasted and does not improve outcomes. That means that, in 2007, one out of every three dollars that Americans spent on health care, or $730 billion, went to the insurance bureaucracies, drug companies, medical device manufacturers, and providers without improving a single person’s health. In Massachusetts, one third of health spending amounts to $14.34 billion.
H. 109/S. 17 will help lower our health care costs by curbing the dangerous marketing practice known as “data-mining.” Data mining is part of a larger pharmaceutical industry strategy to market to physicians. Pharmaceutical companies use data-mining techniques to create physician profiles that are used by sales representatives, or detailers. Health Information Organizations purchase data from pharmacies and combine it with physician lists purchased from the American Medical Association, which maintains a master file of nearly 850,000 U.S. physicians. These profiles allow detailers to determine exactly which drugs a physician prescribes and to design a marketing strategy including targeted materials, often biased in favor of the company’s product.
Allowing data mining companies to track prescribing choices and sell this data to pharmaceutical companies who use it to tailor marketing and target gifts to prescribers exaggerates the undue influence of the pharmaceutical industry in our health care system. The industry spends an average of $13,000 per physician each year in marketing and employs a sales force of nearly 90,000 detailers or sales reps. The drug companies are using their aggressive marketing tactics to promote their newer and most lucrative drugs.
The cost of marketing is passed along to patients and other payers. Further, the effects of using prescription data are far reaching and considerable in the health care industry. The influence of pharmaceutical companies on prescribing choices, amplified by the availability of data mining, promotes irrational drug selection, raises health care costs, threatens professional integrity, compromises patient privacy and increases the prevalence of excessive marketing practices. Regulating the marketing practices of pharmaceutical companies is a necessary step in controlling the skyrocketing costs of health care in the Commonwealth.
I hope you pass the data mining bill quickly.