The pharmaceutical industry hereafter referred to as Big Pharma is a

major factor in the continued and uncontrolled rising costs of health

care. Big pharma is a $550 billion per year industry. It is a

business that has taken the marketing and distribution of drugs to

staggering profits for its shareholders. It has done this through

myths, deceptions, corruption, co-opting of physicians and medical

education, questionable advertising, governmental lobbying,

controlling the FDA,, and even creating and marketing disease.

There are nine pharmaceutical companies on the Fortune 500 list. In the

year 2002, these companies had profits greater than all of the other

companies combined.

There are several good books in which the topics are discussed in

more depth. I would like to give special credit and acknowledgment to

Marcia Angell, M.D. and her book, "The Truth About the Drug

Companies". She is a former editor of the New England Journal of

Medicine, and has spoken and written extensively about the

pharmaceutical industry. She has used and coined many of the phrases

that I will be using. Two phrases in particular I love to use are "me

too drugs" and "blockbuster drugs"
.

I have spoken of a paradigm shift. As patients, we have participated

in taking too many medications at times, physicians certainly often

prescribe too many medications, insurance companies have in the past

too willingly paid for medications, and our government has stood by

doing nothing to help. While we have all participated in various

ways, we need to understand how Big Pharma seized its position.

 

THE MYTHS

The industry would like us to believe that the high prices are

necessary for research and development of new drugs. The exact amount

that the drug companies spend on various activities is sometimes

difficult to calculate. We know however, that the drug companies

spend three to 10 times as much money on marketing compared to research.

Historically, much of the research on pharmaceutical products has been

done by public institutions including universities and the National

Institute of Health. One of the biggest blockbusters of all time,

Taxol, which is a cancer drug derived from the bark of a tree was

discovered with public money. Merck captured the patent rights and

went on to make billions and billions of dollars from this drug.

One of the early antiviral drug treatments for AIDS was an old drug

that had been around for some time. It was captured and sold at

exorbitant prices as are many other drugs, especially in the area of

cancer. Many of the new drugs which come out every year are actually

not new, but rather a slight minimal molecular change on a previous

drug. These drugs are essentially the same. They are referred to as

"me too" drugs. For example, Prilosec was the original purple pill.

As its patent approached the end, a slight molecular change was made.

The "new" drug that appeared was named Nexium. In recent years,

these" me too" drugs account for about 74% of the new drugs. When the

new drug is marched out, advertising on television is accelerated,

promotion to physicians and samples are initiated, and health care

costs continue to rise.

 

The public is led to believe through such methods as emotional

television advertisements by celebrities that the pharmaceutical

companies are good guys trying to make our lives better and the price

is justified.

 

MARKETING

The marketing of new drugs is one of the most clever and sophisticated

activities of big pharma. Direct marketing to consumers via the media

is certainly becoming a topic of discussion. The marketing and

promoting of drugs to physicians, medical schools, professional

organizations, hospitals, medical journals, etc. is an area I find

more disturbing.

Exactly how much money is spent on marketing to physicians is

difficult to determine. This is partly because much of the marketing

is disguised as education. It is estimated that the drug

companies spend $30,000 per year per doctor with direct office

promotions. It is believed that the drug companies spent at least $13

billion per year on physician advertising and many think it is closer

to $35 billion per year. Sales representatives visit physician

offices with literature and studies (often done by the companies),

gifts, and other enticements. There are laws and rules to try to limit

this, but the interpretation and application of such guidelines is

vague.

The initiation of this pharma/doctor relationship is in medical school

with new medical students. I recall many of my classmates traveling

to Indianapolis for a weekend of education and fun provided by big

pharma. Gifts such as medical textbooks are showered upon students.

This relationship continues through training and extends into

practice. A few years ago, a colleague of mine spent a weekend of fun

in Palm Springs, California to receive education about a new drug.

 

More recently the tactic is to invite a group of physicians to a

meeting at an expensive restaurant where fine food and beverages are

served. It is done in the name of education because a physician

expert is brought in to discuss a medical condition. The medical

condition just happens to be treatable by the drug company sponsoring

the dinner. The dinners are expensive and the speaker is compensated

generally $3-$5000 for his talk. At one time, physicians were even

given an additional stipend from $100-$500 to simply attend these

meetings as "consultants" to review and comment upon the information

presented. I believe this practice has stopped.

Pharmaceutical companies advertise heavily in medical journals. They

also contribute large amounts of money to have advertising booths at

medical meetings and conferences. They have established subsidiary

companies to sponsor medical meetings and programs for educational

purposes. To me, it is such a major conflict to have the seller of a

product provide the education on its needs. The majority of

physicians swear the pharmaceutical advertising does not influence

them. Studies show the influence is profound and confirmed that

pharma is not a charity. Organized medicine needs to address this

issue.

Direct consumer advertising of drugs is allowed only in the United

States and New Zealand. Billions of dollars are spent every year and

the amount is continually increasing. In 1994, $265 million was spent

on direct advertising. 10 years later in the early months of 2004

this amount was spent on erectile dysfunction drugs only. Drug

companies contend the advertisements are educational and informative.

The advertisements generally show happy people and happy lifestyles

because of these drugs. It is impossible to convey safety information

in a thirty second ad.

 

Recall the Vioxx advertisements. Vioxx was marketed on television while the company had information about its dangers. It is estimated that 160,000 people died of heart attacks and or strokes from this drug. The companion of Vioxx, Celebrex stayed on the market partly because reviewing FDA officials had financial interests and connections to Celebrex. The position of Celebrex today as a potentially dangerous drug is being diminished by its maker as it points to the fact that other similar drugs are dangerous too.  Information on bad reactions to drugs and even deaths is not shared by the drug companies as it is considered proprietary information.

In the fall of 1982 in the Chicago area seven people died after taking extra strength Tylenol capsules that had been laced with cyanide. Johnson and Johnson produced Tylenol capsules.  With aggressive advertising  Johnson and Johnson increased the market share of Tylenol from 4% to 35%.  They sold an estimated  $400 million worth of nonprescription  painkiller a year.  A drug company representative was telling me about the Tylenol capsules.  I was puzzled as to why they put out capsules with codeine in them too for prescription  use.  He explained that their research told them people perceived capsules as being more powerful. I was encouraged to prescribe more expensive Tylenol capsules with codeine.  Over the counter sales of extra strength Tylenol told another story too.  They sold more capsules with the same ingredient than tablets, and they sold them at a higher price.

 

The other part of the tragedy is that the family was gathering after the death of a member, and the deceased's brother found a bottle of Tylenol in the  kitchen.  He gave his wife a capsule and took one himself, and they both died.  Again, a tragedy because Johnson & Johnson set the situation up, and consumers think of taking pills in times of grief and for other unjustified reasons.

 

New drugs have a patent life giving the companies the opportunity to maximally exploit. If a new use for a drug is approved, the patent is extended. Many years ago when Prozac neared the end of its patent, it obtained approval for the treatment of pre-menstrual mood dysphonic disorder (PMDD). The chemical was placed into a pink capsule and sold to many unsuspecting women who did not know even what they were taking.  Today, a month of treatment with brand Prozac can cost over $400 while the same generic treatment for one month can cost 10 or $15.

 

The process of creating and marketing new diseases and treatments is known as disease mongering. The most recent example of this is restless leg syndrome. Most everyone has experienced this at one time or other, and while treatment is seldom necessary, there are suitable low-cost generic treatments available.  People are encouraged to take an expensive and potentially risky drug for a disease they just learned affected them. I am of the opinion that many of the more modern  diseases and treatments fall into this category.

 

Drug companies have another way of creation of disease and selling the medications which is accomplished with the help of the FDA and physicians. With scientific studies often sponsored by the drug companies, the incidence of a certain disease can be increased by changing its definition. For example, redefining high cholesterol can instantly result in numbers of new customers. The definition of high blood pressure has changed many times over the years and the recent changes have substantially increased the number of people needing medications. It is wrong to have the people who are making and selling the drugs to be doing the studies and providing information and recommendations. However, the control of the FDA by the drug companies is significant. I again recommend the book by Marcia Angell MD, "The truth about the Drug Companies".

 

The emphasis on pharmaceutical products affects our approach to illness and our attitudes and expectations regarding treatment. I reviewed the FDA treatment recommendations for hypertension a few years ago which was totally oriented towards drugs. There was not an adequate discussion of other modalities of treatment including diet weight loss exercise salt restriction and so on.

 

BIG DEALERS

After convincing the patient and physician to use a certain drug, the drug companies still found themselves in the position sometimes of having to convince a third-party payer to cover the costs. In recent times, the insurance companies have found themselves paying for more medications. To somehow control costs, the idea of an approved a drug list or formulary arose. Most all people now know that certain insurance companies have distinct lists for distinct problems which are often different. That is, one drug company might demand a Lipitor for the treatment of elevated cholesterol while another might demand treatment with Crestor.

 

The original formulary deals to have a drug on a list were made directly between big pharma and insurance companies. The payoff on these deals occurred at the end of the year when the drug company gave what some call rebates and others kickbacks to the insurance company for each prescription written. The conflict is apparent. Therefore a new middleman arose called the pharmacy benefit manager (PBM). These companies make the deals. For a brief while, the companies were subsidiaries of big pharma. More recently, there have been attempts to appear to have separation.

 

To further tighten down on drug spending, the insurance companies have become more strict on uses for many medications. When a drug is approved, its use is a specified on the product label. It occurs in some times that a drug works quite effectively for the label use, but also works for other problems. For example, a drug such as a beta blocker might be used quite successfully for treating high blood pressure, and also be used for preventing migraine headaches. If the drug is relatively inexpensive, the insurance companies frequently will allow use for "off label problems" . If the drug is expensive, then the "off label" rule is invoked and the medicine is not covered. Occasionally, strong argument and literature can sometimes convince the companies to pay for the medications. To assist physicians and submitting appeals, the drug representatives will help bolster arguments by supplying data and even drafting template letters. This process of promoting a drug for off label use by drug companies is extremely illegal but goes on every day.

 

The drug companies have extensive and sophisticated administrative and legal support for their operations. They have the largest lobby of any industry in Washington, DC. They calculate quite well the costs and profits of potentially dangerous medications. Sometimes it is worthwhile to continue with a risky drug, raking in the profits, and quietly settle lawsuits later. Tapp Pharmaceutical did this recently for $750 million.

 

THE GOVERNMENT, RULES, AND RULERS

Big pharma has been the master at influencing legislators, and obtaining a variety of favorable laws and regulations. The most valuable asset of a drug company is its ownership of the patent. A patent gives the company a monopoly and allows it to market and set prices for maximum profit. When a drug loses its patent, a generic company may produce it and experience good profits at a much lower selling price. Big Pharma has influenced the patent laws.

 

Another way drug companies slow down and generic competition is by suing the generic manufacturer. This occurs near the end of the patent time when a generic company is preparing to produce the medication. The very act of the lawsuit serves to automatically extend the patent and profits for six months to one year.

 

The pharmaceutical lobby is huge and big dollars flow to legislators for support of big Pharma. In the year 2002, the industry had the largest lobby in Washington, DC when it employed over 600 lobbyists. The estimated costs of the lobbyists was over $90 million. An example of the control by big Pharma was seen recently with the new Medicare laws. With the expansion of drug benefits, simultaneously, the Medicare purchasers were banned from being able to negotiate prices for the drugs. This was a windfall. Also, shortly before the new Medicare went into effect big pharma raised prices about 5% across board. The close ties between the FDA, and the government is apparent simply by looking at the names of many of the participants. Many people with significance significant pharmaceutical interests sit on the FDA boards and panels as drugs are reviewed.

 

Drug company lobbyists included 26 former members of Congress and another 342 with other congressional or government connections. Before going to the White House, Donald Rumsfeld was CEO of G.D. Searle. The first president Bush was on the Eli Lilly board of directors. The FDA receives a substantial amount of funding from the drug industry. A review of the FDA hearing records recently showed that at 92% of the meetings, at least one member had a financial conflict of interest, and at 55% of meetings over half of the FDA advisers had conflicts of interest. I was always of the belief that the government role was to protect and advocate for the citizens of. It is apparent that big pharma and big business substantially control the FDA. Once again, refer to the book by Marcia Angell for further and in more depth review of the complex industry government influence relationships. There are also several other good books that discuss these topics.   

 

FLASH:  THE BEAT GOES ON

This weekend as I cleaned up the Pharma post, I learned the Purdue Pharmaceutical "chiefs" pled guilty to criminal charges.  The settlement was for just a little over $600 million.  This is small change to these guys.

 

I really see this as a business as usual and similar to that discussed above.  The very disturbing part is that former New York Mayor Rudy Giuliani represented Purdue pharmaceutical. He raised money for the DEA for a project of the theirs.  He met personally with the head of the DEA,  and negotiated the price of the settlement much lower than many people thought it should have been.  The incestuous relationship between government and Pharma continues.  Do you think big Pharma will give him financial support in his presidential bid?

 

When I say the beat goes on, I am not speaking of Sonny and Cher, nor of Michael Jackson, but of beating the consumer.  

 

WHAT TO DO

The above has led us to our current situation with which many people are familiar. There are people who suffer because they are unable to get the necessary medications. This is particularly tragic in the area of AIDS and cancer. While some people cannot get necessary medications others are induced or seduced into taking medications they don't need.  This is because the marketing is about profits and is not associated with doing what is best for people.

 

We clearly need major reform in the area of drug regulation, FDA operations and approvals, patent lives, Congressional corruption and oversight. At the same time we need to take a look at our own lives and lifestyles. We need to learn to do what we can do to avoid or minimize our need for drugs.

 

Finally, health reform is a current hot topic. More than anything else we need to keep an eye on our legislators. As reforms and systems are discussed, we need to make sure that compromises are not made by the legislators at our expense.