Physicians and the Pharmaceutical Industry: A Reappraisal of Marketing Codes of Conduct

• DOI: http://doi.org/10.1111/j.1467-8594.2006.00275.x
• Published date: 01 September 2006
• Date: 01 September 2006
• Author: THOMAS A. HEMPHILL

Business and Society Review

111:3

323–336

© 2006 Center for Business Ethics at Bentley College. Published by Blackwell Publishing,

350 Main Street, Malden, MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.

Blackwell Publishing, Ltd.Oxford, UKBASRBusiness and Society Review0045-3609© 2006 Center for Business Ethics at Bentley College1113Original ArticleBUSINESS and SOCIETY REVIEW

THOMAS A. HEMPHILL

Physicians and the

Pharmaceutical Industry:

A Reappraisal of Marketing

Codes of Conduct

THOMAS A. HEMPHILL

I

n the last few years, the issue of rising consumer prescription

drug costs has galvanized the American public’s attention.

Results of a Blue Cross Blue Shield Association survey reveal that

64 percent of healthcare benefits purchasers cite prescription drugs

as the main driver of U.S. healthcare costs.

1

Furthermore, of those

healthcare benefits purchasers surveyed, 62 percent said that increased

direct-to-consumer advertising is the main cause for the continued

dramatic rise in pharmaceutical costs. But what do the facts show?

According to data compiled by the Centers for Medicare and

Medicaid Services (CMMS), an agency of the U.S. Department of

Health and Human Services (HHS), as of 2002, prescription drugs

accounted for 10.5 percent of total health care spending (at the

retail level) in the United States;

2

in 1960, prescription drugs

accounted for 10 percent (at the retail level) of all health spending.

3

Yet results from another CMMS study reveals that during the 1996–

2000 period, increases in spending on prescription drugs accounted

for 21.1 percent, or approximately one-fifth of all national healthcare

spending increases.

4

This spending trend continues, as the

U.S. General Accounting Office estimates that prices for the most

prescribed drugs increased by nearly 22 percent over the last three

Thomas A. Hemphill is an assistant professor in the School of Management, University of

Michigan-Flint.