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Healthy Skepticism Library item: 5501

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.


Publication type: news

Lexchin J.
Risks and benefits of the profit motive in the pharmaceutical industry
Agora Vox 2006 Jul 11


Ralph Faggotter’s Comments:

Joel Lexchin provides us with a reality check on the extent of the actual achievements of the private pharmacuetical industry in recent years, in contrast to the public relations hyperbole which we are accustomed to hearing from the industry itself

Full text:

Risks and benefits of the profit motive in the pharmaceutical industry
Is the profit motive the best way to encourage the development of new drugs? Do the benefits of the new therapies outweigh the problems associated with the profit motive/ This article looks at the price we pay for new drugs.

Where do new drugs come from?

In almost any publication that comes from pharmaceutical companies or their associations there will inevitably be a statement that over the past 50 years nearly all new drugs have been discovered by drug companies. Just to reinforce this point, this success is often contrasted with the failure of the formerly socialist countries of central and eastern Europe to produce any important drugs.

The message to readers, in case they have missed the point, is that private enterprise, and private profits, is the best way to get newer and better medications. Governments that threaten to do anything about profit levels should take heed of this reality. Right now, the pharmaceutical industry in the United States and its friends in government are using exactly this line of reasoning to push for an increase in prices in other developed countries such as Canada and those in the European Union. Price controls mean less revenue for the companies; less revenue means fewer dollars for research and developemnt; and inevitably fewer “life saving drugs.” Or so the argument goes.

Like many pronouncements from the pharmaceutical industry this one, about who discovers new drugs, has some element of exaggeration. Fifty out of 77 anticancer drugs, including ones such as Taxol ®, that are approved in the United States were developed with help from the National Cancer Institute. Of the 21 most important drugs introduced in the U.S. between 1965 and 1992, 15 were developed using knowledge and techniques from federally funded research. Of these, research from the National Institutes of Health led to the development of 7 drugs used to treat patients with cancer, AIDS, high blood pressure, depression, herpes and anemia.

Despite the hyperbole that comes out of industry, it is still true that the incentives in a system of private enterprise have contributed to the development of many essential drugs. But that does not mean that the private profit incentive results in unalloyed good, or even that the benefits of using a profit driven system outweigh the inequities it leads to.

Industry priorities in the industrialized and Third World

Consider the new drugs that the industry introduces. Figures from the Patented Medicine Prices Review Board (PMPRB), a federal Canadian organization, show that fewer than 10% of new drugs are breakthrough products or significant advances over existing products. Industry will dispute this assessment on the grounds that the PMPRB classifies drugs for pricing purposes and does not revisit the classification even if drugs prove more important than initially thought. Both of these criticisms are true, but the PMPRB assessments are confirmed by figures from the independent French drug bulletin La revue Préscrire.

Why are companies willing to invest up over $800 (US) million to develop drugs for baldness and allergies or to find the sixth drug in a class for lowering cholesterol? (There is a good deal of controversy about the $800 million figure. Interested readers should look at the exchange of articles between Donald Light and Joe DiMasi in the September 2005 issue of the Journal of Health Economics.) Assuming that the $800 million figure is correct, the simple answer is that in developed countries like Canada, the U.S. and western Europe there are huge markets for these products. Do they represent the best use of billions of dollars and thousands of scientists? By any calculation, the answer is no.

If industry’s priorities are distorted in developed countries this distortion is magnified many fold when it comes to choosing between industrialized and Third World countries. According to a recent article in the British journal The Lancet in the past 30 years out of 1556 new chemical entities launched onto the world market, the number targeting the most neglected diseases (diseases mainly affected people in developing countries) is 10, 18 if malaria is added and 21 if tuberculosis is included.

The Drugs for Neglected Diseases Working Group and the Harvard School of Public Health sent written questionnaires to the world’s top 20 pharmaceutical companies to assess the level of R&D activity in five neglected diseases (sleeping sickness, leishmaniasis, Chagas disease, malaria and tuberculosis). Thirteen companies responded, 11 of which completed the questionnaire. In fiscal 2000, 8 of the 11 spent nothing on R&D for sleeping sickness, leishmaniasis and Chagas disease; only 2 spent anything on malaria research and 7 spent less than 1% of their R&D budgets on any of the five diseases or failed to respond to the question.

Decisions about the allocation of resources-industrialized countries versus Third World countries, areas of high medical need versus areas with large markets-are perfectly reasonable in an industry driven by private profit. If companies chose otherwise then their shareholders would desert them in droves. And that is the problem from the perspective of the health community, consumers and patients. Choices driven by a market economy often do not meet the health needs of society.

The health care team

The industry’s focus on the bottom line also puts the lie to its claim to be part of “the health care team.” True, doctors like me do not work for free, but when there is a conflict between my financial well being and the health of my patients, my patients come first. Not so with drug companies. Companies value their economic health above the health, in a physical sense, of the individuals in society. Vioxx ® is just the most recent example that illustrates the priorities of pharmaceutical companies. For the five years, until it pulled Vioxx off the market, Merck consistently rejected the contention that its drug could increase deaths from cardiovascular causes and stuck to the claim that any differences between Vioxx ® and other traditional nonsteroidal anti-inflammatories were due to the cardiovascular protective effects from these other medications. Merck was unwilling to jettison a drug selling billions of dollars a year until it had no choice.

Put simply, drug companies make a product that can be used to improve people’s health; the same way that construction companies build hospitals that can be used to improve people’s health. Neither are part of a health care team.

Acts of commission: going to court

If the profit motive has driven companies to acts of omission-failure to do research and develop drugs for the Third World, failure to use its resources properly in industrialized countries-it has also produced acts of commission. In an effort to preserve profits in Canada, Bristol Myers Squibb (BMS) took the Canadian Coordinating Office for Health Technology Assessment to court over its report stating that the risk:benefit ratio of all of the statin class of cholesterol lowering drugs was equal. BMS was worried that the report would undercut the market for its statin Pravachol ® In Spain, Merck sued the editor of Bulleti Groc, an independent drug bulletin, over an article it had published highlighting methodological flaws in the VIGOR study on Vioxx ®.

In both instances when the cases reached the courts the judgements went against the companies. However, winning and losing is probably not uppermost in the companies’ minds when they initiate these suites. If companies have protected their drugs for an extra year, as Bristol Myers Squibb did, then that’s another year of larger sales. Merck’s actions likely sent a message to other journals to back off or face a potential costly court battle.

Acts of commission: suppressing and rewriting research

Besides going to court or threatening to go to court, companies take other measures to preserve the sales of their products. GlaxoSmithKline did not publish results that showed that paroxetine (Paxil ®) was ineffective for the treatment of depression in children and adolescents because according to an internal company memo “It would be commercially unacceptable to include a statement that efficacy had not been demonstrated, as this would undermine the profile of paroxetine.” Researchers who knew of the results of these unpublished studies were prevented from speaking publicly because of confidentiality clauses that they had signed.

When companies need to convince doctors of the value of one of their drugs, some turn to ghost writers. These are people retained by the drug companies to write medical articles. The companies then search for well known academics who may or may not have had anything to do with the original research, who would be willing, for a fee, to sign their names as authors of these articles. David Healy, a psychiatrist from Wales, investigated this phenomenon as it applied to the antidepressant Zoloft ® made by Pfizer, the world’s largest drug company. He compared a series of articles on the drug that were ghost-authored with ones that were not and found that the profile of the former in the medical literature was much higher. He speculates that the profile of the authors found to sign the ghost written pieces may have increased the chances that the articles would appear in more prestigious journals.

Increasing profits by selling more drugs

In a market economy, there are two ways to increase the amount of money you make-price your products higher or sell more of them. The first option is restricted by some form of price controls in virtually every developed country except the U.S. and even there important market segments like the Department of Veterans’ Affairs, have to be offered drugs at steep discounts. The second option, to increase sales volume or at least to sell more higher priced drugs is the path that companies take.

Really superior medications will generally sell themselves (there are sometimes exceptions) as knowledge of them spreads amongst the medical community through journal articles and continuing medical education courses. As we have already seen, there just are not that many of these drugs. So how do the companies try to increase sales of products that are as good as, but no better than, those from the competition? The answer to that question is simple, they spend more money promoting them; usually to doctors but in the United States and New Zealand also increasingly directly to consumers. In fact, in many countries the pharmaceutical industry as a whole spends more on promotion than it does on research and development. In Canada R&D amounts to just over $1.2 (CAN) billion while the figure for promotion is estimated at $1.4 billion.

What does promotion do to prescribing?

What we know about the consequences of spending billions upon billions of dollars on promotion to doctors is not reassuring. Since the early 1970s, there have been over a dozen 10 studies from Belgium, Finland, the Netherlands, the United Kingdom and the United States that have looked at how well doctors prescribe and have correlated that to where they get their information about drugs. In every case, except one, the conclusion has been the same, the more doctors rely on information that they get from the pharmaceutical industry the worse they prescribe.

As any good epidemiologist will tell you, correlations are not the same as cause and effect. However, when you have more than 12 studies telling you one thing and one saying the opposite then you have to start thinking that something is really going on.

The usual reaction from doctors to the results from these studies is “I’m not affected, it’s the person down the hall.” Fair enough, because when you ask doctors what they think about drug company promotion the answer is mostly negative. If you dig a bit deeper though and look at what are the most frequently used information sources, then ones from industry, especially sales representatives, are usually high on the list. Moreover, sometimes doctors may be unaware of being influenced. They say that they go to scientific sources for their information, but when the message about a drug’s safety and effectiveness in scientific and commercial sources differs there are documented cases where doctors side with the message in the advertising.

How many doctors are out there who are negatively influenced by industry? No one really knows exact numbers but academics, the medical profession and especially the industry all know that they exist. Industry argues that it is foolish for doctors to prescribe just on the basis of information in promotion, that doctors should consult other sources. And industry is right, we should. But this is the real world, and in the real world a sizeable number of doctors are foolish and stop looking after they hear what the sales representatives have to say or after they have read the advertising in the journals. Companies know this will happen but they do not take any responsibility. Why? Because if they made their promotion more accurate, more objective, it would affect sales.

Promoting drugs directly to consumers

Before leaving the topic of promotion, just a few words about the phenomenon of direct-to-consumer advertising in the United States. In 2005, a total of $4.2 (US) billion was spent on this type of advertising and the amount is rising yearly. Companies say that its purpose is to make consumers more aware of treatment options and to “empower” them.

If promotion does not help doctors it is unclear how it is going to help consumers but let us leave that aside. What sorts of drugs were companies most interested in informing consumers about in 2004? Out of the top 20 most heavily advertised drugs there were three for erectile dysfunction, two antihistamines and one each for toenail fungus, insomnia and eczema. Granted all these drugs have some value but erectile dysfunction and hay fever and hair loss are not at the top of the list of diseases that medical science is out to conquer. But drugs for these conditions do bring in big sales.

Changing health care priorities

Finally, there is the very real chance that the profit motive is changing some of the fundamental priorities in the way that we look at health care. The pharmaceutical industry is the single largest funder of medical research in the United States and Canada and given the nature of the industry it is primarily product oriented in its research priorities. As scientists increasingly turn to industry for money they will naturally tailor their research interests to fit the goals of the drug companies. There is no point in asking drug companies to fund research into behavioural modification or nondrug therapies for problems such as sexually transmitted diseases. Certain questions will just go unasked; health problems that cannot be solved with patented medications will not be investigated.

Think of the profit motive as a drug. There are benefits and side effects. Do the benefits outweigh the risks? logo DOCUMENT 269


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