Drug Store Cowboys

By Dan Frosch, AlterNet. Posted November 16, 2004.

A pharmaceutical company gets sued for bribing doctors to promote a particular drug. An HIV-positive New Yorker sues a drug store chain for buying and entering his medical records in a database without his consent. Two companies get sued for sending out unsolicited free samples of prescription drugs like Prozac. And on and on.

Manufacturing legal drugs is a growth industry and the latest twist in the multi-billion dollar drug-pushing game is that your local pharmacy may be turning into a marketing agency for the big drug companies.

The Privacy Rights Clearinghouse (PRC), a consumer advocacy group, filed a lawsuit in September against supermarket giant Albertsons in California Superior Court, for allegedly selling the private prescription drug information of its customers to pharmaceutical companies. PRC also named 17 pharmaceutical heavyweights, like AstraZeneca, Eli Lilly and GlaxoSmithKline, as co-defendants, claiming that the companies use the information to promote their drugs through unsolicited phone calls and letters.

According to PRC, the drug companies have been paying Albertsons between $3.00 and $4.50 for every promotional letter written and between $12.00 and $15.00 for every phone call made to unwitting customers. Albertsons, the group maintains, stands to make millions in the process. PRC says both Albertsons and the drug companies are breaking California law because customers are never given the option of signing up to receive the calls or letters as mandated by the state's privacy regulations.

"What Albertsons is doing interferes with the patient-physician relationship and it visits terrible harm on people who rely on prescription drug notices and don't realize that they're being paid for by drug companies," says Jeffrey Krinsk, an attorney for PRC. "Perhaps most pernicious is the potential harm of third parties learning the existence of an underlying condition if the mail is mistakenly sent to the wrong address."

The drug companies footing the bill are equally culpable, adds Beth Givens, director of PRC. Though the actual letters and phone calls may come from Albertsons and appear to inform patients of the benefits of a particular drug or remind them to refill a prescription, the drug companies are clearly involved. A form letter and a training phone call transcript from Albertsons, provided by PRC, include clauses stating that the letter or phone call was "provided with financial support" or "sponsored by" a particular drug company, but that no information would be shared.

That, says Givens, is proof enough that information has indeed been exchanged between Albertsons and the drug companies, especially given the potential money both parties can make in the process. Further, Givens alleges that the refill reminders Albertsons sends on behalf of the drug companies are sometimes to customers whose doctors have not actually authorized a refill – a frightening charge.

Says Givens: "Albertsons wouldn't have any drug marketing program unless willing pharmaceutical companies signed on the dotted line."

Indeed, it's the ostensibly cozy relationship between pharmacies and drug companies that's raising eyebrows in this particular case. Prescription drug costs have risen sharply over the past decade – up an average of 7.3 percent annually from 1992 to 2002, according to the Kaiser Family Foundation, a non-profit health research organization. During that same time, the foundation reports, the number of prescription drugs purchased by Americans exploded by 74 percent. Subsequently, pharmaceutical companies have become the beneficiaries of a $400 billion a year business – more than enough incentive to keep their marketing machines running full steam.

Drug companies spend billons each year promoting their wares, in the form of television and print ads, as well as giveaways to physicians. A 2001 lawsuit against TAP Pharmaceuticals for bribing doctors to promote Livapro, a prostate cancer drug, has led to increased scrutiny, but the drug companies have invariably refined their techniques. The alleged backdoor scheme highlighted in the PRC suit seems to indicate a more nuanced marketing approach.

"Albertsons is acting as a vehicle for the drug companies," says Meredith Rosenthal, assistant professor of health economics and policy at Harvard University. "There have always been very worrisome ethical implications on the physician side in terms of pharmaceutical companies paying doctors, and I think this is similar in that consumers trust their pharmacies to be their unbiased advocate."

There is some precedent to what's happening in California. In 2001, two Massachusetts men, also represented by Jeffrey Krinsk, sued CVS Pharmacy, Glaxo Wellcome pharmaceuticals and Elensys, a marketing company, for mailing out promotional drug information based on a patient's particular condition. CVS agreed to stop the practice.

Similar suits have been filed over the past few years against local pharmacies and drug companies in other states as well. In 2001, an HIV-positive New York man sued CVS for buying his medical records and allegedly logging them into a database without his consent after it took over operations of his local pharmacy. In 2002, the Clearwater, Fla.-based Eckerd pharmacy chain paid $1 million in legal fines for using the medical information of its customers for marketing purposes. That same year in Florida, Walgreens and Eli Lilly were sued for sending out unsolicited, free samples of prescription drugs like the anti-depressant Prozac.

Lawyers like Krinsk are filing claims state by state because the federal Health Insurance Portability and Accountability Act (HIPAA) of 1996, while giving patients control over medical records, doesn't completely protect their prescription drug information. What's more, many states have privacy laws which go beyond HIPAA and actually prohibit using medical information for marketing without first getting consent from the patient. California, as it happens, passed such a law in 2002.

Daniel Solove, a professor at George Washington University law school and an expert in privacy law, called the letters and phone calls from Albertsons legally "deceptive" because patients think they're from the pharmacist when really, it's the drug companies speaking. Solove referred to one letter from Albertsons which warns customers to renew their prescription of Plavix, a heart disease medicine, as "scare tactics."

"The letter basically implies that you're at an increased risk for a heart attack if you don't keep taking this drug," he says. Solove adds that if customers have not given their permission to Albertsons first, then both Albertsons and the drug companies are in violation of California privacy law. "There are some big problems with this kind of marketing," he says.

For their part, the pharmacies and the drug companies deny any wrongdoing. Albertsons spokeswoman Stacia Levenfeld emailed AlterNet a statement released by the company after the lawsuit was originally filed: "We highly value and respect the privacy of our pharmacy customers and do not sell, nor have we ever sold, their private information. We consider the allegations in this complaint to be false and totally without merit – and we will vigorously defend ourselves against them."

Albertsons operates 2,000 pharmacies in 37 states, including Osco, Jewel-Osco and Sav-On Drug Stores.

As for the drug companies, AstraZeneca spokeswoman Rachel Bloom says: "It is our policy not to comment on ongoing litigation. However, in the matter you are referring to, we will defend ourselves vigorously."

(Incidentally, on Oct. 18, the AFL-CIO and two consumer groups filed suit against AstraZeneca for misleading patients into switching to a more expensive ulcer medication through a promotional campaign.)

Eli Lilly spokesman Phil Belt also declined to comment directly on the lawsuit. "We obviously feel very good about our privacy policy," he said. "We've got a privacy officer dedicated to making sure systems are in place that respect patient and customer privacy."

GlaxoSmithKline did not return repeated phone calls from AlterNet.

Jeffrey Krinsk says he's considering expanding the lawsuit to include other drug companies and pharmacies he believes also engage in illegal marketing. Regardless of the outcome, it's become disturbingly clear that in the astoundingly lucrative and increasingly cutthroat world of prescription drugs, people's personal medical information is being bought and sold without their knowledge.

Says Larry Sasich, a pharmacist of 20 years and a research analyst for Public Citizen, a consumer advocacy group in Washington D.C.: "This is a reprehensible practice. The fact that you are using confidential medical information to a very real extent and that you're promoting expensive drugs to a patient that they might not need ... It's unethical professional behavior."

Dan Frosch is a New York-based journalist whose work has appeared in the Los Angeles Times, The Source and the Santa Fe Reporter.

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