Hype, Not Hope, From Big Pharma

The following article appeared today on the Center for American Progress website.

Big Pharma is revving up its propaganda machine to ward off challenges to high drug prices. Talk about false advertising.

Two issues are pressing in on the drug makers. First, legislation allowing Americans to buy medicine from abroad is gaining ground with members of both parties in Congress. Second, Medicare beneficiaries and their families are pushing the government to use its negotiating power to get them the best deal possible on prescription drug prices. Both issues are an attempt to turn the Bush administration's inadequate senior drug benefit into something more than a down payment on future price hikes when it goes into effect in 2006.

To counter both threats, the industry and its apologists have launched a national advertising campaign and released some new studies that trot out the standard claim: Pharmaceutical research and development will dry up if anything is done to reduce drug companies' corporate revenue, which has been rising by better than 10 percent in recent years. By suggesting it is the sole source of medical miracles, the industry asserts that any reduction in price through cheaper imports or Medicare negotiating clout will slow the delivery of cures for Alzheimer's, cancer, heart disease and diabetes. In their dystopian future, once fertile R&D research parks will turn into high-tech ghost towns.

The latest study to peddle these claims was unveiled earlier this month in the battleground state of Michigan. According to a University of Michigan study funded by Pfizer Inc., the Senate bill allowing imported medicines will cut industry support for R&D by 75 percent and cost Michigan every single one of its biotechnology and pharmaceutical industry R&D jobs as the shrunken sector consolidates on the coasts. These outrageous claims generated uncritical TV coverage and headlines across the state.

In order to reach this conclusion, the study assumed that all drug prices would fall immediately to generic drug price levels as a result of unlimited importation. Oh really? Is it possible for all Americans to get all their drugs from abroad? One reason some analysts think the importation issue is a red herring is because the distribution channels simply aren't there to allow massive imports. Under this view, import legalization will only benefit a handful of drug consumers who live in border states or can tap into the limited supplies available over the Internet. Pharmaceutical companies like Pfizer are working hard to make this outcome a reality by threatening to cut off supplies of their drugs to Canadian pharmacies that export medicines to U.S. patients.

But even if millions of Americans could get drugs from abroad, they wouldn't be getting ultra-low prices. Canadians, Europeans and other potential exporters are not paying generic prices for drugs. They are paying discounted prices negotiated by their national or provincial health authorities – something specifically prohibited in last year's Medicare prescription drug bill. If the U.S. joined the party, a bill allowing drug imports would be unnecessary.

But what is most disturbing about these industry-funded pseudo-studies is the assumption that R&D will take the biggest hit if the U.S. government takes steps to hold down drug prices.

R&D is the lifeblood of any high technology industry. It currently takes about 20 cents of every drug industry dollar. Compare that to marketing and profits, which each take over 30 cents, while overhead and manufacturing split the rest. Isn't it possible that this supposedly forward-looking industry will cut back on its television commercials, its 70,000 salespersons or physician junkets before whacking away at R&D?

Indeed, a more intelligent response to reduced revenue would be for industry R&D to become more focused on legitimate medical advances. Currently, the industry wastes more than half of its $35 billion R&D budget on drugs that add nothing to physicians' armamentarium for fighting disease. They develop drugs that mimic others already on the market; they develop slightly altered versions of drugs that are coming off patent; they enroll physicians and their patients in clinical trials for already approved drugs, which are thinly veiled marketing stunts designed to get more physicians using their drugs. If Medicare were allowed to negotiate drug prices, these so-called me-too drugs would be a likely starting point. Why should seniors or taxpayers pay top dollar for drugs that are therapeutically no different from generic drugs or cheaper drugs in the same or another class that accomplish the same thing?

Ironically, the Michigan study, although funded by Pfizer, was released by the state's biotechnology industry trade group. As Big Pharma's labs have declined as a source of innovation, the companies have turned to the biotech sector for promising new drug candidates. Virtually the entire sector is the product of the tens of billions of dollars that taxpayers have poured into medical research over the past 30 years. Most biotechnology products are invented by government-funded researchers who either start their own companies or transfer their therapeutics to start-ups that use venture capital funding to carry them through the early stages of development. When one of these firms comes up with a potential breakthrough, it is usually licensed to a larger firm for final clinical trials.

Efforts to limit drug expenditures won't affect that process. If these start-ups come up with something new and truly effective against diseases for which we currently have no cures, they will be able to command high prices all over the world. Precisely because biotechnology products have that potential, venture capitalists will stay involved. Big Pharma will continue knocking on innovators' doors.

Alas, breakthroughs in medicine are rare. But as long as biotechnology firms are pursuing legitimate breakthroughs, neither imports nor Medicare price negotiations pose a threat to their continued development.

The $800 Million Pill: Fact or Fiction?

The following were my opening remarks to the AARP forum, “The $800 Million Pill – Fact or Fiction,” held on September 21 in Washington:

If you’ve read at least the subtitle of my book, you know I come down firmly on the fiction side of this equation. But before I get into the particulars of why I know that to be the case, allow me to start by offering a few words of praise for the pharmaceutical industry. When drug companies are on their best behavior, they play an important role in bringing new drugs to market. They have extraordinary skills in the design, formulation and manufacturing of chemicals and proteins that can do extraordinary things for human health. At times its scientists have played crucial roles in understanding the biology of disease and the ways that disease can be effectively – and allow me to underline the word effectively – treated. They also play a large role in financing important – and I underline the word important – clinical trials.

But, alas, that describes less than half of what the pharmaceutical industry does with its research and development budgets, which take about 20 percent on average of every drug consumer dollar. And in recent years, that good portion of that 20 percent – the Dr. Jekyl portion of industry R&D – has been declining as R&D departments have been taken over by Mr. Hyde – the companies’ marketing arms and the marketing imperative dictated by what it takes to remain the nation’s most profitable industry.

Every one of those skills can be used for purposes that add absolutely nothing to physicians’ armamentarium for fighting disease. Science can unearth new ways of treating diseases that are already well controlled. Chemistry can develop new molecules that are minor variations of molecules already on the market but threatened by patent expiration and going generic. Clinical trials can be deployed not as a powerful tool for understanding treatment but as thinly disguised marketing stunts, to encourage physicians to prescribe a particular drug; to prompt them to prescribe drugs for off-label uses; to gin up barely scientific observational studies published in second-tier medical journals that can then be handed out by the tens of thousands of drug salespersons knocking on doctors’ doors every day. That, ladies and gentlemen, describes our drug marketplace today.

When university economists funded by the drug industry came up with the $800 million number, they never took any of those factors into account. To economists, any economic activity is a net social positive. The idea that there might be what I like to call corporate waste never enters into their equations. But it seems to me that when we have seniors climbing on buses to buy drugs in Canada and Tijuana; when the Medicare system faces bankruptcy in part because of its escalating drug bill; when last year’s drug benefit will pay for less than half of the projected increase in senior citizen drug expenditures (largely because the drug industry succeeded in prohibiting the government from negotiating on price), then it is critical that policy makers and every citizen understand where new drugs – significant new drugs – really come from and what they really cost to make.

I looked for answers to those questions by looking at what many people consider to be some of the more significant medical breakthroughs of the last quarter century. They included leading biotechnology drugs like recombinant erythropoietin (Epogen and Procrit on the market) and the triple cocktail for AIDS, which was the greatest new threat to human health we’ve faced in recent times. What we see in these cases is that the key scientific understandings that led to these drugs began and were developed in the public sector – by scientists working on public payrolls or at universities on government grants. What we also see is that the evolution of understanding that leads to medical innovation almost always took decades, and was the product of dedicated scientists who very often were not just close to the laboratory bench, but had intimate involvement with patients at the bedside. Industry almost never funds those kinds of careers. It can’t. Its scientists move from project to project depending on what holds the most promise for the bottom line in the short run.

When the government gets involved in directed research campaigns – such as the effort to come up with a treatment for HIV/AIDS – we can see this dynamic at work. All the work to understand this new pathogen was conducted by government-funded scientists. All the early drugs, even the ones nominally owned by industry, were shepherded through their trials by government-funded clinicians. As I document in the book, the government spent over $10 billion between 1985 when it got seriously involved in fighting the disease and 1996, when the triple cocktail emerged and dramatically lowered the death rate from AIDS. Total industry spending – and I reviewed the entire industry – did not equal even a third of that. Yet because the drug cocktail allowed patients to live, AIDS therapy became a $7 billion a year global market – dwarfing the amounts industry spent on R&D during all of the early years of development.

Allow me to conclude my initial presentation with what I believe should become our common sense understanding of medicine and this industry. What will it cost to develop a successful Alzheimer’s drug? Well, we could say that the cost is infinite. Why? Because we don’t understand that disease yet, at least not in a way that allows scientists to come up with a successful therapy. So the common sense I think we should have about medical progress as we debate issues like drug industry pricing is that medical progress is rare; it is almost always the product of prolonged investigation by dedicated scientists who have devoted their careers to understanding the pathways of disease and identifying possible ways for intervening; that those careers are almost funded by the government or non-profit institutions; and that then and only then can the skills that reside not just in industry but also in many academic and non-profit labs be deployed to develop therapies that may successfully intervene in that disease.

The idea that we can only get medical innovation by pouring endless amounts of senior citizen dollars into industry coffers like some chemical in a beaker defies both historical experience and common sense. When science arrives at a point where it has identified a way to successful intervene in a disease state, there will be no shortage of companies ready and willing to pounce on such discoveries and bring them through the development process to the market – no matter what we do in the short run on drug pricing.

We're Number 48!

The U.S. spends more on health care than any country on earth -- nearly 15 percent of its overall economy. That's nearly a half again as much as other countries and on a per capita basis, no one else is even close. Yet if one looks at the performance of our health care system, we're clearly not getting what we pay for.

USA Today last week published a list of the top 50 countries in terms of life expectancy. The US ranked third from the bottom. That's right. We're number 48. This year, Americans can expect an average life span of 77.4 years, nearly four years behind the Japanese.

Of course, our longevity has been rising every year by a small amount. But many countries that spend nowhere near our levels on doctors, hospital stays, drugs and sophisticated tests are clearly getting a lot more for their money.

Take the oppressed citizens of the British isles, for instance. We're constantly told they are suffering under the yoke of an incompetent national health care system. Yet they live nearly a year longer on average than Americans.

How about those beer swilling, sausage stuffing Germans? They live 14 months longer on average.

Just over the border in Canada, the press constantly claims that our northern cousins are suffering endless waits for basic procedures that we take for granted. Surely they must be dying off at a faster clip. Uh-uh. They have two-and-a-half more years than the average American. Perhaps they spend it waiting on lines for their health care.

Among large industrialized countries, the life expectancy leaders -- all with an average life expectancy over 80 years -- were Japan, Switzerland and Sweden. What do they have in common? They have national health care plans. But more importantly, they have a high degree of income and social equality across their societes -- which, more than any other single factor, correlates with superior health outcomes.

A quick look at the Centers for Disease Control website at health disparities in the U.S. gives a few clues about why our health care system performs so poorly despite outlandish costs. While the overall U.S. life expectancy rate is 77 years, the rate for blacks is about 72 years with black males at a Third World level of 68 years.

Infant mortality -- a prime indicator of how well health care services are distributed in a society -- is another area where the U.S. lags sadly behind its industrialized rivals. The CDC rankings of selected countries showed the U.S. at 28th out of 37 countries.

Who fell below us in safe and healthy childbirths and infant care through the first year of life? Virtually all the laggards (other than the U.S.) are countries of the former Soviet Union and Eastern Europe. How can it be that we not much better off than Romania in this vital statistic? It's not middle-class moms in suburban hospitals losing babies. It's poor mothers without prenatal care. It's teenagers who hide their pregnancies, deliver low birthweight babies and have few support systems to help them care for their newborns.

The health effects of race and class are America's hidden health care story. Low wage work leads to lousy diets because the foods that are plentiful and cheap happen to be the worst for you. Fear of unemployment and economic decline defines America's large lower middle class today and this produces tremendous psychic stress -- an unreported epidemic. We spend billions on drugs to lower blood pressure, reduce cholesterol and treat diabetes, but almost nothing on social programs to offset the income-related lifestyles that lead to these conditions.

In this election season, by all means let's have a debate about how to provide health insurance to the 43 million Americans without it. But let's also talk about who in this society suffers from ill-health, why they suffer and what can be done about the social and economic disparities that lead to ill-health. It will take more than universal insurance coverage to tackle those issues.

Registering Clinical Trials Doesn't Go Far Enough

The New York Times on Saturday editorialized in favor of mandatory registration of clinical trials that test drugs. The industry has agreed to a voluntary registration system in the wake of revelations that drug makers failed to reveal that most antidepressants A) didn't work in kids; and B) led a few kids to attempt suicide.

This week, a Food and Drug Administration advisory committee will consider whether the U.S. should ban the use of most antidepressants in kids, like they've done in Great Britain. I'm guessing they will make a half-hearted gesture in the direction of greater scrutiny -- perhaps adding warning to physicians to keep close tabs on their teenage patients for the first few weeks after prescribing drugs like Paxil and Zoloft.

This weak response to the potential dangers of these marginally effective drugs (the trials revealed that the difference in the recovery rate between depressed kids on placebo and depressed kids on drugs is virtually indistinguishable) shows why clinical trial registration -- the reform du jour -- doesn't get at the root problem of the drug testing system in the U.S.

As long as the drug industry is sponsoring and conducting clinical trials, it's not likely that the public will ever get straight information about the usefulness of drugs. Before the 1980s, independent academic investigators conducted most clinical trials. Today, industry funds nearly two-thirds of all trials. The physicians who enroll patients in these trials not only get financial support for the tests, but often wind up landing lucrative consulting and speaking gigs with the firms when the trials turn out positive.

It's a structural bias that skews the information supplied to the public, an effect that has been well documented in the medical literature. Trials funded by industry are much more likely to turn up positive results than trials funded by independent investigators.

I tested this theory on my own last February. A colleague at the Center for Science in the Public Interest and I conducted a study that pulled the two dozen placebo-controlled clinical trials on the use of antidepressants in kids that had been published in the past decade in the medical literature. We separated the studies into those funded by industry and those funded by independent investigators and compared the results.

Better than 90 percent of the industry-funded trials showed the drugs were "safe and effective" in children. Only five of nine trials conducted by independent researchers came to the same conclusion.

And when one looked at the dozen trials submitted to the FDA by industry (but never published) to get patent extensions for these drugs, only three of 12 had positive results and at least one of those positives was in fact an after-the-fact combination of two failed trials into a single data set. That enabled the industry-funded researcher to statistically show marginal effectiveness.

The FDA and industry kept those results hidden from the public for several years. Only after Britain banned the use of the drugs in kids and the FDA began considering the question here did that information finally become available. A registry would have made that information known much sooner.

But it wouldn't have changed the fact that industry-funded researchers still conducted most of the trials. These researchers got to pick the patients; they got to judge the effectiveness of the drugs (for antidepressants, this can be quite subjective); they got to interpret the data. Even in situations where the clinicians were double-blinded (they don't know which patients are on drug or placebo nor do the patients), the subtle bias generated by their desire to see their sponsor's drug work could have influenced all those decisions and ultimately the conclusions drawn from the trial.

The only way to eliminate this bias entirely is to have totally independent researchers conduct clinical trials. Former New England Journal of Medicine editor Marcia Angell calls for this reform in her new book, The Truth about the Drug Companies, which is getting widespread attention now. It's a reform that is long overdue. Only then will we get a truly objective view of the value of new drugs.

Islam's Long Twilight Struggle and Us

During the war in Vietnam, alternative papers connected to the antiwar movement occasionally dipped into conspiratorial mode by printing a map of the South China Sea showing how Mobil, Esso (in those days) and the other oil giants wanted to carve up South Vietnam’s coastal waters.

The war wasn’t about oil, of course. Vietnam evolved into America’s greatest foreign policy blunder of the 20th century for ideological reasons. Americans were misled by leaders whose rigid anti-communism blinded them to the true nature of the Vietnamese people’s nationalist yearnings. Peasant nationalism, to use Chalmers Johnson’s formulation, had united under the banner of Communism, just as it had two decades earlier in China.

What we should have learned from that debacle is simple. People do yearn for democracy, but it can’t be imposed from outside. It certainly can’t be imposed by force of arms. Under those circumstances, democracy has about as much chance of putting down roots as an alien religion spread by the same means.

I couldn’t help but think about Vietnam last night while listening to President George Bush’s acceptance speech at the Republican convention. The first half of his speech, devoted to his domestic agenda, sounded flat. Even the delegates seemed uninterested.

But when he turned to his war in Iraq, the speech and Madison Square Garden came alive. “Our mission in Afghanistan and Iraq is clear: We will help new leaders to train their armies and move toward elections and get on the path of stability and democracy as quickly as possible. And then our troops will return home with the honor they have earned.”

He then made the obligatory (and false) link to the war on terror by offering an emotional quote from a soldier. This valiant if misled young man said that his opponents in Iraq were terrorists, and if he were not fighting them there, he (and the American people) would be fighting them here at home.

A few minutes later, John Kerry gave a rambling speech in Springfield, Ohio. I stayed up to listen. Lord, the man is a poor public speaker. But he hit on the two themes that in starkest terms best illustrate the choice confronting the American people this fall.

First, he said that Bush and the neo-conservatives around him have “misled” us into Iraq. This is objectively true (note that Osama Bin Laden, the world’s most notorious outlaw still at large, did not get mentioned by the president even once last night).

The other significant theme was his tying the Bush administration’s Middle East policy to our dependence on Middle Eastern oil. Kerry attacked the Saudi royal family while pledging to put this country on track to the environmentally necessary shift to a non-oil based energy system.

Unlike Vietnam, this war really is about oil. In the past week, several Republican leaders have admitted they foresee a permanent and very large military garrison in that part of the world. They point to our military presence in Japan and Germany after World War II. Do they not recall Osama’s stated reasons for attacking the U.S.? The number one reason on his list was the 5,000 U.S. soldiers based in Saudi Arabia – the home of Islam’s most holy shrines.

Over the next several decades, the Middle East’s oil reserves will become more crucial to those parts of the world economy still dependent on oil. At the same time, the corrupt regimes that now control those reserves will be engaged in a long, twilight struggle to hold onto power. What has happened over the past few years (really going back to the Ayotollah Khomeini’s ousting of the Shah of Iran) are nothing but battles in the long civil war raging throughout the Islamic world.

The American people have a clear choice this fall. Do we want to permanently intervene in this civil war? Do we want to garrison several hundred thousand troops smack in the middle of that conflict? Do we want to perpetuate our dependence on their resources that makes such unwinnable military folly inevitable?

Or do we want a world where our children and grandchildren at least have a chance of growing up under something that you or I might recognize as peace?

If we reelect Bush, the American people will in essence be throwing our support behind the most reactionary elements of our society – religious fanatics in league with oil barrons fighting against the environmental imperative – who have forged an alliance with some of the most reactionary elements of their societies – oil-soaked sheikhs, CIA collaborators and faction fighters in religious garb.

In the long run, I can’t believe that’s the winning side.

Where did Henry and Nancy eat?

As a former employee of the newspaper trade, I read today's accounts of the "Kleptocracy" at Conrad Black's Hollinger International (owner of the Chicago Sun-Times and other publications) with sorrow and amazement. How many journalists lost their jobs so that one of the Bush administration's military geniuses, Richard Perle, could buckrake $5.4 million from the firm?

Anyone who has ever filled out an expense report might be interested in this tidbit about Perle's behavior on the company's board of directors. After describing how he signed off on millions of dollars in fellow board members' transactions without reading the documents, the report stated "it is difficult to imagine a more flagrant abdication of duty than a director rubber-stamping transactions that directly benefit a controlling shareholder without any thought, comprehension or analysis."

Sounds like a description of Perle's involvement in planning for the war in Iraq.

Meanwhile, fellow board member Henry Kissinger and his wife Nancy, who live in New York City, enjoyed three dinners on the firm at a cost of $28,000. Hmmm. Nearly $10,000 for dinner for two. Where might that have been? If it was in New York (there aren't many places in the world where you can drop ten large on dinner), I wonder which Republican delegates are dining there tonight?