My Tipping Point

Malcolm Gladwell, author of "The Tipping Point," wrote a caustic critique of Marcia Angell's new book in last week's New Yorker. I was so frustrated by his woefully wrong analysis that I sent this letter in today. Let's see if they print it:

To the Editor:

In his enthusiasm to let the pharmaceutical industry off the hook for rising drug prices, Malcolm Gladwell gets many of his facts wrong. Had he relied a bit less on economists who earn substantial fees consulting for drug firms, he might have come up with a more dispassionate analysis.

Gladwell’s core argument -- that more rational behavior by physicians, insurers and consumers will solve the problem -- rests on the claim that drug expenditures are rising rapidly because more people are taking more medications, not because patients are being charged more for prescription drugs. But according to the latest data from IMS Health, the number of prescriptions written in the past year rose by only 3 percent while total retail drug expenditures rose 11 percent. Earlier this year, the AARP conducted a comprehensive survey of the 155 most widely-used drugs and found the average price increase was 6.9 percent, suggesting that rising drug prices accounted for about two-thirds of the nation’s rising drug tab. Further evidence comes from the Kaiser Family Foundation’s latest survey, which estimated that 58 percent of the rise in drug expenditures between 1997 and 2002 came from increased prices and “newer, higher-priced drugs replacing older, less-expensive drugs.”

Suggesting the problem may soon go away, Gladwell highlights the number of drugs going off-patent recently to argue generics are driving a decline in the rate of increase in drug spending. While total drug expenditures at the retail level the past four years rose about 11-12 percent per year compared to about 16 percent between 1997 and 2000, it had nothing to do with rising reliance on generics. Off-brand prescriptions have remained stagnant at about 51 percent of all prescriptions since 2000. Rather, the drug pricing bubble of the late 1990s coincided with the onset of direct-to-consumer advertising, which always pushes the newest, priciest but not necessarily best and most cost effective treatments for chronic conditions. In addition, the current 11 percent rate of increase remains above that of the early 1990s. It appears the one-time explosion driven by ads has settled down into a permanently higher rate of spending.

In championing the drug industry’s penchant for pursuing me-too drugs rather than real innovations (let us not forget that R&D is the ultimate justification for these high prices), Gladwell claims multiple entrants in a drug class drive prices down. If so, it’s hard to spot. Surveys of me-too drug price competition have estimated the benefit of new entrants at around 5 to 10 percent. In an industry with a 30 percent profit margin and a cost of manufacturing around 10 percent of total sales, this is not something to celebrate. It’s justification for an anti-trust investigation. (A New Yorker writer from an earlier era, Richard Harris, wrote a brilliant book documenting the late Sen. Estes Kefauver's investigation into the antibiotic cartel).

Gladwell is correct to highlight physicians’ role in over-prescribing pricey medicines. But it is not cynicism that leads critics like Marcia Angell to blame the pharmaceutical industry for this state of affairs. Most trials, much of the medical literature, a growing portion of continuing medical education, and even government-authorized clinical practice guidelines have been taken over by clinicians on the drug industry’s payrolls. Until these omnipresent conflicts of interests are rooted out of the medical system, the nation will never get accurate information about each drug's legitimate place in health care. And until we do, we will continue paying far too much for medicine.

Merrill Goozner
Director, Integrity in Science project
Center for Science in the Public Interest
Washington, DC

Chemicals and Kids

The Environmental Protection Agency just took $2 million from a chemical industry trade group to study the effects of pesticides and chemicals in children. Environmental Working Group president Kenneth A. Cook, quoted in the Washington Post , justifiably attacked this gross conflict of interest. "This is a government function," he said. "We should be investing government funds to be absolutely sure it's independent."

Paul Gilman, the director of the EPA's Office of Research and Development and a political appointee, defended taking money from the fox to study the chickens. "We're comfortable with the fact that it's our study design."

It was a good story as far as it went. The subtext is that the Bush administration over the past four years has steadily whacked away at the EPA's R&D budget, which has remained frozen at just under $600 million a year. Gilman hasn't uttered a peep. Meanwhile, career scientists inside the agency, whose job it is to discover and measure the environmental hazards jeopardizing our air, water and environment, are left wondering which division will be put on the chopping block next.

In a previous era, an industry-funded study like this children's study would have raised the hackles of numerous scientists inside the agency. Today, they just keep their heads down and allow the corporate takeover of the agency to proceed apace.

Docs and Cholesterol

During August and September, the Center for Science in the Public Interest organized a joint letter from 35 physicians and scientists questioning the accuracy and objectivity of the latest cholesterol guidelines from the National Institutes of Health. Eight of nine scientists on the NIH panel were paid consultants for drug companies that made statins, which lower cholesterol.

CSPI, where I direct the Integrity in Science project, still hasn't received an official response. But the quotes in a major Associated Press story which ran over the weekend suggest that NIH will not follow through on the request for NIH to appoint a non-conflicted panel to reevaluate the evidence and, if warranted, publish new guidelines.

The original letter pointed out there was no evidence to suggest middle-aged women with slightly elevated cholesterol levels will benefit from these drugs. Moreover, at least one trial in older persons showed statins increased their risk of cancer.

Despite the gap in the evidence, the most recent advertising campaigns by some statin makers have prominently featured middle-aged women. Thousands of seniors are taking these drugs.

In the wake of the Vioxx and anti-depressant controversies, there is a burgeoning movement demanding that drug companies register all clinical trials. The goal is to keep companies from hiding negative data, which almost never gets published and is often withheld from regulatory authorities.

Registering trials is only a first step on the road to reform. The entire system for generating medical information needs overhauling. Drug companies should not be running clinical trials. They should be required to contract with an independent agency to test their new products. And when new evidence gets generated, physicians who are completely free of industry conflicts of interests should write the clinical practice guidelines that other physicians follow.

Patients have the right to know that the treatments they are receiving are best for their health, not best for somebody else's bottom line.

Unintended consequences

Has the entrepreneurial gene at the nation's universities gone mutant?

Since passage of the Bayh-Dole Act in 1980, the licensing of faculty inventions to industry has become a well-oiled machine. The most recent Association of University Technology Managers survey revealed the nation's higher education institutions are generating over $1.2 billion in annual licensing revenues from their government-funded inventions.

But a front page story in this morning's Wall Street Journal highlighted one of the unintended consequences of this commercialization fever. A former Duke University professor, after building an experimental laser on campus with government Star Wars funds, sued his former employer because it wasn't paying him royalties on the university's use of the invention.

Duke claims it is only using his laser for research. Academics that are engaged in purely scientific endeavors traditionally do not pay royalties because they're not trying to commercialize anything.

But former Duke physicis professor John Madey scoffs at that claim. He argues Duke is a corporate entity like any other, seeking to use his invention to land more government grants, charge high tuition to students and, if it's lucky, to commercialize other inventions that come from using his machine. The 60-foot-long laser isn't just a research tool, he says. It's a machine for making money.

The irony is that Madey is only doing to Duke what Duke, many other universities and many corporations and doing to everyone else. In recent years, universities and private companies have patented all types of research tools, especially in the biosciences. Some legal scholars and not a few scientists worry this fencing of the intellectual commons will shut down critical basic research.

Once upon a time, researchers would readily send reagents, cell lines or experimental molecules to their colleagues at other universities. Companies did the same since they recognized that basic science at the universities was where they got most of their best leads for new products like drugs.

But today, patent lawyers at both the corporate and university level insist on the recipient signing draconian material transfer agreements. These MTAs often require the researcher to turn over patent rights on any subsequent invention. Sometimes the owner insists on first rights to data or limits on publication, the lifeblood of scientific exchange.

The result? Many researchers are refusing to sign and do without some research tools. Instead of the free exchange of ideas, the individual biotech start-up companies, which are usually spun out of universities, maintain their exclusive lock on bits of government-funded knowledge that in another era would have been freely shared.

This past summer, I received an angry email from a National Institutions of Health researcher who had been denied access to one company's exciting new drug candidate. He refused to sign an MTA because the company put tight restrictions on publication as the price of access to the molecule. He moved on to other research.

The Madey v. Duke case illustrates where patent fever at the nation's universities has led us. More and more patents are being sought on "technologies" that a few decades ago would have simply been called basic science. More and more restrictions are being placed on material transfers that are key to exploratory research.

At the least, universities and companies are using these patents to nickel and dime each other to death. At worst, they're being used to make outrageous ownership claims on the output of future scientific endeavors.

That doesn't foster innovation, which was the ostensible purpose of the Bayh-Dole Act. That retards innovation. Maybe it's time to revisit that law and tear down the fences it has erected on the intellectual commons.

Columbia University's Ignoble Prize

This year's Nobel Prize for Medicine was shared by Columbia University's Richard Axel, who in the early 1990s helped uncover the genes responsible for our sense of smell. Columbia -- my alma mater -- justifiably should be proud of Dr. Axel's achievements.

On the other hand, Columbia and Dr. Axel should be ashamed of the way they have abused the other great achievement of Dr. Axel's career. Not only did the molecular biologist discover the smelling genes, but way back in 1980 he was the first scientist to splice genes in a way that enables mass production of proteins.

His patent No. 4,399,216 was assigned to Columbia and soon became one of the mainstay technologies of biotechnology research and biotechnology commercial production. The patent has generated over a quarter billion dollars -- that's right, over $250 million -- for Columbia with, presumably, a cut for Dr. Axel.

The patent expired in 2000. But that didn't stop Dr. Axel or Columbia's patent lawyers. Back in 1995 they filed a patent application very similar to the original invention. In the patent legal trade this strategy is called a submarine patent because it lays dormant for years before surfacing as a way to make new royalty claims.

While that was pending, the university enlisted Sen. Judd Gregg (R-NH and another Columbia alumnus) to sneak a rider onto legislation that would have given Columbia another 15 months of exclusivity on the original patent. It died once it was exposed that a prestigious university was playing patent extension games with a technology that had been financed by taxpayers. (All of Dr. Axel's work has been NIH-funded).

But the Patent and Trademark Office soon rode to their rescue. In 2002, the PTO, whose motto appears to be, "who cares about originality; we'll grant the patent and let the courts sort it out," issued patent No. 6,455,275 to Dr. Axel and two colleagues. It was again assigned to his employer. Columbia promptly filed new royalty claims against all the biotech companies that had stopped paying on the old patent. They, of course, sued.

According to today's Columbia Spectator, the PTO announced in May of this year that it would review the second Axel/Columbia patent.

Dr. Axel is obviously a brilliant scientist. His work has enriched mankind and he deserves all the kudos he's received in the past 24 hours. But his employer would do the world a favor if they'd call their patent lawyers and tell them to stop levying their tax on the global health care system.

Permanent U.S. Bases in Iraq? An Update

I'm not the only one who picked up on John Kerry's pledge not to establish permanent bases in Iraq. For a complete discussion, including an excellent review of the media's lousy coverage of this critical issue, see TomDispatch.com.

Redux Vioxx

In the wake of Merck's decision to recall Vioxx because it caused heart problems in an unacceptably high percentage of patients, one can only hope doctors and the millions of people on similar drugs will begin asking serious questions about their need for this class of drugs. Vioxx is a COX-2 inhibitor, a drug class that's no better at providing pain relief than over-the-counter ibuprofen or naproxen.

The promise of the COX-2 inhibitor class was that it would eliminate the gastrointestinal side effects associated with taking some painkillers. About two to four percent of chronic users (many elderly arthritis sufferers pop pain pills all day long) get ulcers, GI bleeding and other problems with their digestive tracts. That's about twice the rate of the rest of the population.

According to studies funded by the drug industry, anywhere from 7,500 to 16,500 people a year die from peptic ulcers and other side effects of these so-called non-steroidal anti-inflammatory drugs (NSAIDs). This statistic was duly reported in today's New York Times (log-in required). In theory, the COX-2s did not have such side effects.

However, neither Merck nor Pfizer, the two companies that have brought COX-2s to market, have proved that assertion. The Food and Drug Administration requires Pfizer's Celebrex and Bextra to carry the same warning on their labels as the older generation of NSAIDs. And while Merck's Vioxx proved somewhat less dangerous than naproxen in a 2002 clinical trial (it was the same trial that provided early warning that the drug caused heart problems), the reduction in side effects wasn't so much better than it could shake the GI bleeding warning for seniors.

Moreover, by looking beyond the drug industry-funded studies, one discovers that pain reliever-caused ulcers may not be the huge problem the industry claims it is. This morning, I visited the Centers for Disease Control's National Center for Health Statistics, which publishes annual data on what Americans die from. In 2001, the last year for which data is available, about 2.4 million Americans died.

Guess how many of those died from all forms of gastro-intestinal distress, including severe peptic ulcers? Under 5,000. And there can be no doubt that a few of those exploding stomachs were caused by something other than painkillers -- like binge drinking, for instance. (It is said that Alexander the Great died at 33 from a peptic ulcer that burst after an all night party.)

So it turns out that the drug industry's vaunted R&D labs turned out a non-solution to a minor problem. But COX-2 inhibitors worked as well as ibuprofen for pain relief. So the drug companies' marketers swung into action. They turned Celebrex and Vioxx into two of the biggest selling drugs on the market.

The result? Many seniors now pay nearly $3 a pill for the same pain relief they used to get for ten cents. And who could blame them? After watching a full evening of commercials showing frisky seniors frolicking through fields of flowers after taking this new pain reliever, no wonder they "asked their doctor" for the pricey wonder drug.

So, what a few years ago cost the health care system and seniors a few hundred million dollars a year has been turned into a $6 billion a year market. It's so lucrative that there are no less than seven new COX-2 inhibitors in the industry pipelines.

And you know who's paying for all that R&D? Current drug consumers like you and me, our insurers and all those seniors who spend too many nights watching too many commercials promising them something the drug companies can't deliver. And in 2004, Medicare will start picking up part of the tab.

What a colossal waste.

One overlooked point from the debate

John Kerry sent an important signal to the Arab world and the Iraqi people last night. Unfortunately, it was largely overlooked by the commentariat. He pointed out that the Bush administration is already building long-term military bases in Iraq. Kerry pledged to end that program if elected to office.

Kerry looked presidential. Bush looked worried. Instant polls declared a winner. The most readable parts of the morning press focused on style, not substance.

I think Kerry's pledge to eliminate the permanent base option was the most important thing to come out of last night's debate. It tells the Iraqis, the Arab world and the American people that at least one of the two candidates on stage last night has a vision for how to end our long national nightmare Iraq.