Frequently Asked Questions about Medi-Scripts
and the revised PhRMA Code

1. Q:  Does the purchase of advertising space in the Medi-Scripts prescription blank service implicate the voluntary prohibitions of the revised PhRMA Code on Interactions with Healthcare Professionals?
   

A:  No. In reviewing our Medi-Scripts service, outside Washington counsel recently concluded that "The purchase of advertising space in the Medi-Scripts prescription blanks service is in compliance with the PhRMA Code" [as revised to be effective January, 2009].  The main reason is that the service is not provided “on behalf of pharmaceutical companies.”  Rather, the service is an independent entity as defined by the FDA and sells advertising space on a multi-sponsored basis for insertion in its paid circulation service.

2. Q:  Is Medi-Scripts a gift from a pharmaceutical company to physicians?
   

A:  Effective January 2009, Medi-Scripts prescribers will be charged a subscription fee of $72, representing a fair market value for an annual prescription pad service.  Medi-Scripts is therefore not a gift; rather it is a multi-sponsored advertising medium which doctors request and pay for.  Doctors receive their prescription service in quantities regardless of the level of advertising space sold.  If a brand stops advertising in Medi-Scripts, doctors would not get fewer prescription blanks and if a brand is added to our list of advertisers, no additional Rx blanks are sent out.  Medi-Scripts will continue to maintain complete independence and control of: selection of the ads included, ad placement and display, design of the Medi-Scripts product, printing and production, solicitation and selection of subscribers, delivery and all service provided to subscribers.

3. Q:  How will Medi-Scripts work in 2009 as it becomes a paid subscription service?
   

A:  Prior to every month’s production in the first half of the year, a package is sent to the relevant prescribers informing them of our PhRMA Code/regulatory necessity to alter the Medi-Scripts program to a paid subscription.  They are given the opportunity at that point to cancel the service or to sign up to continue as a subscriber.  Then in their first six-month shipment, the change to a subscription is again explained and prescribers are presented with a bill for $36 for the first six months of their subscription.  There will also be a revised Acknowledgement of Receipt form which gets them to sign up for the ongoing Medi-Scripts subscription service.  Failure to sign up as a subscriber and pay $72 per annum for the Medi-Scripts service will require us to remove them from our circulation.  The paying prescribers will be assured of a steady reliable prescription service that meets the relevant state format regulations and is personalized to their requirements, regardless of the level of advertising space sold.

Currently (as of 1.19.09), 28 pharmaceutical companies have approved the Medi-Scripts subscription service for use as a promotional medium in 2009.  Those clients have reviewed our 2009 paid subscription service and determined that advertising in the service is compliant with the revised Code and that the amount charged ($72 per annum) is fair market value. These companies have already or are in the process of renewing their Medi-Scripts advertising investments for 2009.

4. Q:  Is $72 a fair market value price for the Medi-Scripts service?
   

A:  Our approach for developing a price for the prescription pad subscription service was three-fold; review a benchmark price at which similar goods were being offered in the marketplace, review pricing of other services that our prescriber base was accustomed to paying for practice-oriented services and set a price based on the services that we would provide.  We determined that $72 per annum was a ‘fair market value’ price to our prescribers that met all of these criteria.

1. Benchmark pricing – We reviewed several other Rx services and found their prices were not directly comparable because each order was priced on its own and was considered a one-off order.  But we were able to find a range of pricing that included $1.70 per pad for secure paper and $1.40 per pad for plain paper Rx pads of 100 sheets.  In the most recent Nielsen Medical/Surgical Non Journal Media Report dated June 2008, the average Medi-Scripts prescriber uses 82.33 Rx blanks per week.  This level translates to a requirement of slightly less than 42 pads of 100 blanks per year.  Our pricing of $72 per year is a charge to our subscribing doctors of $1.80 per pad of 100 Rxs, exceeding the level found in our benchmarking study.
   
2. Subscription service – We  reviewed several paid subscription services that our prescribers were using related to their practice of medicine.  The level of pricing ran the range from $19 to $149 per year depending on the service and number of potential subscribers involved.  While Internet accessible subscriptions were priced at the low end (with several charging by use only), the higher priced subscriptions were for printed material with peer-reviewed editorial content.  Our level of $72 is right in the mid-range of the pricing for the services reviewed.
   
3. Services provided – When a prescriber signs up for our service they are signing up for two(2) six-month packages to be delivered in a manner consistent with both the prescriber’s needs and with our production process which produces and delivers over 33,000 packages of prescription pads each month. By signing up with our service which delivers over 1 billion prescription blanks per year, doctors are taking advantage of the production efficiencies inherent in this subscription process.

5. Q:  What is Medi-Scripts’ relationship with pharmaceutical manufacturers?
   

A:  Since 1981, major pharmaceutical manufacturers have purchased advertising space for the placement of their FDA regulated advertisements inside the prescription service.  In 2008, over 100 brands placed advertising in the service representing over 30 pharmaceutical manufacturers.

Advertisers purchase a percentage share of advertising space in a designated specialty edition of the service.  Medi-Scripts agrees to deliver brand advertisements to an established number of physicians in that specialty.  No exclusivity of any type is allowed restricting advertising to that brand for any specific doctor’s prescription shipments.  Up to 20 separate sometimes directly competing brands are advertising amongst the same doctor’s prescription blanks.  As with journal advertising, when deemed necessary by the manufacturer and the FDA, accompanying package insert (PI) information has been provided to the prescribers.

Just like any other bona fide advertising medium, the Medi-Scripts service is operated independently from any advertiser because:

1. Medi-Scripts controls the distribution of the service completely. – The service is delivered by common carrier to prescriber offices requiring a signature of receipt.
   No advertiser has ever received any prescriptions for delivery to the prescribers.
   
2. Medi-Scripts controls the solicitation of prescribers and their interactions with the service. – Over 200,000 prescribers requested the audited service in 2008 directly from Medi-Scripts without any input or selection by any advertiser.  Medi-Scripts has a prescriber services department that interacts directly with prescriber offices to ensure that our requesting physicians have a continuous supply of prescription blanks throughout the year.
   
3. Medi-Scripts controls the production of the service. – The design of the service and its production are controlled by Medi-Scripts with each month’s production based on prescribers’ needs and not advertiser requirements.
   

Medi-Scripts is not distributed by or on behalf of any advertiser whether a member of PhRMA or otherwise. Any reduction in advertising does not lead to a diminution of prescription blanks sent to our circulation of prescribers. Similarly any increase in advertising does not lead to an increase in the blanks sent to prescribers.

6. Q:  Isn’t Medi-Scripts a practice-related item such as pens, note pads, mugs, clipboards and similar reminder items as forbidden under Paragraph 10 of the revised Code?
   

A:  While Paragraph 10 concerns the provision of practice-related items by PhRMA members, Medi-Scripts is a paid subscription service in which PhRMA members purchase FDA-controlled advertising space.  According to PhRMA Counsel, the revised PhRMA code was not intended to address advertising which is reviewed and regulated by the FDA.  When Paragraph 10 was written and discussed, the Committee was intending to provide their comments concerning reminder items and the DTC principles that were drafted earlier (voluntarily refraining from reminder advertising).