Though the local media has been all over the story, I’m not sure how well it is known outside of here that Pittsburgh is once again the City of Champions with the Penguins winning the Stanley Cup last week and the Steelers winning the Super Bowl in February.

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Well, it turns out that we also can lay claim to having a hometown team at the top of another heap. That heap is the healthcare purchasing field.

Pittsburgh-based UPMC (University of Pittsburgh Medical Center) was this week named as one of just nine academic medical centers to receive an “A” grade on the American Medical Student Association’s (AMSA) 2009 PharmFree Scorecard. The PharmFree Scorecard evaluates academic medical centers’ purchasing policies related to conflicts of interest. One hundred and forty-nine academic medical centers had their conflict of interest and purchasing policies rated on the PharmFree Scorecard.

Conflict of interest in healthcare purchasing is a bigger issue than most of us realize. Consider this excerpt from a report entitled “Time for Change” published by The Prescription Project:

The pharmaceutical industry spends more than $25 billion each year in direct marketing to physicians, including more than $7 billion for detailing and journal advertising and $18 billion for samples. Ninety thousand sales representatives are deployed. Many promote new and expensive products that lack clear therapeutic advantage and may have unknown adverse effects. Industry representatives often gain access to doctors by offering meals, drug samples and other gifts. This intense marketing is widely believed to undermine quality of care and increase costs to patients, public programs, health care institutions, health insurers and employers.

Gifts generate conflicts of interest. Physicians who accept company gifts may feel a need, subconscious or otherwise, to reciprocate. Even small gifts change behavior; public records show that many clinicians receive tens of thousands of dollars per year from the industry.

Industry sales representatives frequently provide inaccurate information…Yet contact with sales representatives or acceptance of industry support leads to increased prescribing of the funders’ products, increased requests for formulary inclusion and decreased use of generic medications. Nearly all physicians (more than 90 percent) have some relationship with industry, but many often fail to realize the extent to which these relationships influence their own prescribing decisions.

Scary stuff if you think about being sick and how the doctor arrives at your treatment. The AMSA is seeking to change things and their scorecard highlights those academic medical centers who share the vision and adjust their purchasing policies accordingly.

The PharmFree Scorecard evaluates 11 areas, including:

  • gifts and meals from industry (i.e., suppliers) to doctors
  • paid promotional speaking for industry
  • acceptance of free drug samples
  • interaction with sales representatives
  • industry-funded education

The scorecard has “model policies” for each of the 11 areas. Some of the highlights include:

  • All gifts and on-site meals funded by industry (i.e., suppliers) are prohibited, regardless of nature or value
  • Speaking relationships are prevented from functioning as de facto gifts or marketing. An effective policy must not implicitly permit (a) long-term speaking agreements or (b) industry to have a role in determining presentation content.
  • Personnel are required to disclose past and present financial ties with industry (e.g., consulting and speaking agreements, research grants) on a publicly-available website and/or disclose such relationships to patients when such a relationship might represent an apparent conflict of interest.
  • Industry samples are prohibited, except under certain narrow circumstances approved by the institution that protect the interests of patients and prevent the use of samples as a marketing tool. Where there is a specific program in place, the policy must prevent samples from being given directly to physicians by pharmaceutical sales representatives.
  • Formulary committees and committees overseeing purchases of medical devices should exclude those who have financial relationships with drug or device manufacturers.
  • Pharmaceutical and device representatives are not allowed to meet with faculty regardless of location, or are not permitted to market their products anywhere inside the medical center and associated clinics and offices.
  • Industry (i.e., suppliers) is not permitted to provide direct financial support for educational activities.

Putting in place such policies is certainly a challenge, especially because there is long-term behavior that the organization is trying to change and doing so can ruffle the feathers of doctors who are usually the most revered constituency in such an organization.

So success in this effort surely can’t be easy to come by. But it appears UPMC has captured the spirit of Pittsburgh sports in achieving their success. Here’s what the PharmFree Scorecard had to say specifically about UPMC: “Exemplary. University of Pittsburgh Medical Center has implemented a set of some of the most ambitious conflicts of interest policies in the country. The policies are written clearly and unambiguously, and in many cases include a short preamble that outlines the reasoning for, and spirit of, each policy.”

The Prescription Project has many “Tool Kits” available for healthcare purchasing organizations to refer to when developing their policies. I’m planning on covering some of them here on this blog in the future.

So I close with a hearty congratulations to the team at UPMC. Whether you are in healthcare or another industry, I think that there is a lot to be learned and applied from watching how the healthcare industry is revamping its approach to supplier relations.

To Your Career,
Charles Dominick, SPSM
President & Chief Procurement Officer
Next Level Purchasing, Inc.
Struggling To Get Better Performance From Your Purchasing Team?
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Charles Dominick, SPSM, SPSM2, SPSM3

Charles Dominick, SPSM, SPSM2, SPSM3 is an internationally-recognized business expert, legendary procurement thought leader, award-winning entrepreneur, and provocative blogger. Charles founded the Next Level Purchasing Association in 2000, oversaw its incredible growth, and successfully led the organization to its acquisition by the Certitrek Group in 2016. He continues to blog and provide advisory services for the NLPA on a part-time basis as he incubates his upcoming business innovations. Charles is also the co-author of the wildly popular, groundbreaking book, "The Procurement Game Plan: Winning Strategies & Techniques For Supply Management Professionals."

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