Tuesday, September 07, 2004
In 2003, Dr. Angell delivered an introduction of a national health insurance program. In the PBS interview linked above, she identified herself as "a liberal Democrat." She states, however, that it is her scientific training -- not her political affiliation -- that motivates her:
DR. MARCIA ANGELL: I had a political predisposition to believe that. I’m a liberal Democrat, and I was only too ready to see the companies at fault, but I didn’t have a scientific predisposition to believe that. I’m a scientist, after all, and I don’t believe anything until I see the evidence.
Indeed, her first book essentially exonerated Dow-Corning, the makers of the silicone implants. I mention this to show that Dr. Angell does have credibility when writing about health care issues. She has a political bias, admits it, but still goes where the facts take her.
The publication of The Truth About Drug Companies has led to a great deal being written from pro- and anti-industry folks.
One blogger who writes approvingly of Dr. Angell's criticism of the pharmaceutical industry is brechtje, on brechtje's blog. It's written in Dutch; the translation is from Babelfish.
Woekerwinsten with government support: medecine manufacturers sell especially ventilate.
[...] Terribly, we let grant them that, think you. But the crux of Angell's tale is, which that profit is not gained because the medecine manufacturers develop always new and innovative medecines by means of a lot of research & development (R&D). On the contrary. Weinige the openings in the field of development of medecines, write Angell, have come about on universities - facilities supported with tax money therefore. But and the budget mail at medecine manufacturers for R&D is minimum: the budget for the department marketing is a lot of, a lot of times larger.
No, the profit is gained because the medecine manufacturers at applications on medicines, so that they have many years' the exclusive right. Not really free market forces, you would say. And the government is this way crazy them to that grant patentrecht, itself as a result, in its own flesh cutting: the sickness cost insurance becomes invaluable, and a lot Americans walk around uninsured. [...]
This illustrates one of Dr. Angell's main points: that much of the profit made by pharmaceutical companies results from the fruits of publicly-funded research. Personally, I don't think that it all bad. It's just that we, as a country, need to be aware of that when we grant such funding. If part of the purpose of the funding is to further the cause of private industry, fine. Just be sure that the process is transparent; not subject to any kind of corruption.
Further summation of Dr. Angell's arguments can be found on Prometheus 6. What is posted there appears to be quoted directly from a feature in the New York Review of Books.
See, I told you!
…Before its patent ran out, for example, the price of Schering-Plough's top-selling allergy pill, Claritin, was raised thirteen times over five years, for a cumulative increase of more than 50 percent—over four times the rate of general inflation. As a spokeswoman for one company explained, "Price increases are not uncommon in the industry and this allows us to be able to invest in R&D." [...]
…Second, the pharmaceutical industry is not especially innovative. As hard as it is to believe, only a handful of truly important drugs have been brought to market in recent years, and they were mostly based on taxpayer-funded research at academic institutions, small biotechnology companies, or the National Institutes of Health (NIH). The great majority of "new" drugs are not new at all but merely variations of older drugs already on the market. These are called "me-too" drugs. The idea is to grab a share of an established, lucrative market by producing something very similar to a top-selling drug. For instance, we now have six statins (Mevacor, Lipitor, Zocor, Pravachol, Lescol, and the newest, Crestor) on the market [...]
Third, the industry is hardly a model of American free enterprise. To be sure, it is free to decide which drugs to develop (me-too drugs instead of innovative ones, for instance), and it is free to price them as high as the traffic will bear, but it is utterly dependent on government-granted monopolies—in the form of patents and Food and Drug Administration (FDA)–approved exclusive marketing rights.
The main criticisms mentioned are: extraordinary price increases, lack of innovation, and distortion of free-market economical forces. The first and third arguments are linked. It would be hard to criticize a company for increasing prices, so long as the market can bear the prices AND truly free market forces are at work. But pharmaceuticals are not sold in a free market. Drug companies cannot sell a single pill unless 1) the FDAapproves it, and 2) a physician writes a prescription for it. Also, in most cases, a product will not be successful unless insurance companies decide to cover it AND the general public decides to accept it. Furthermore, pharmaceutical products generally are purchased by people who need them, and who may not have much of a realistic choice about the purchase. Of course, sometimes people who need a drug do not accept it, for various reasons. Therefore, drug companies may resort to direct-to-consumer advertising. The advertisements have to be cleared by the FDA, but the regulations are rather convoluted, and they do not necessarily lead to consumer protection.
Another blog, à Gauche, comments on the economic aspects of pharmaceutical marketing, alluding to the role of CEO salaries:
Marcia Angell (Social Medicine, Harvard) has published an excerpt from her forthcoming book, The Truth About the Drug Companies: How They Deceive Us and What to Do About It. This selection answers by far the most common explanation for outrageous drug costs.
First, research and development (R&D) is a relatively small part of the budgets of the big drug companies—dwarfed by their vast expenditures on marketing and administration, and smaller even than profits. In fact, year after year, for over two decades, this industry has been far and away the most profitable in the United States. (In 2003, for the first time, the industry lost its first-place position, coming in third, behind "mining, crude oil production," and "commercial banks.") The prices drug companies charge have little relationship to the costs of making the drugs and could be cut dramatically without coming anywhere close to threatening R&D.
What a killer argument! Publicly-funded and start-up operations largely responsible for innovation! Prediction: the major pharmaceutical companies, which in recent history have contributed mostly to Republican candidates, will even out their contributions over the next few months as everyone begins to notice Kerry's inevitability.
Well, as it turns out, big pharmaceutical companies are not likely to jump on the Kerry bandwagon anytime soon. Still, this raises a point: drug companies are publicly-traded companies. As such, there is a strong profit motive for the CEO's. This is compounded by the widespread use of stock options as a part of the compensation packages. The financial success of key decision-makers can be influenced by the perceived need to keep the stock price high. This, is turn, can lead to decisions that are not necessarily in the best interest of the general public.
The blog, Subdued Citizen, also comments upon the pre-publication feature (in the New York Review of Books) about Dr. Angell's book. This raises an interesting political angle, that is not related directly to the points that Dr. Angell raises:
Big Bad Pharma & Its Lawyers
A fine piece by Marcia Angell in the July 15 issue of the New York Review, based on a forthcoming book about the pharmaceutical industry. [...]
The Republicans are already attacking Edwards for his background as a trial lawyer, claiming that trial lawyers are costing the country huge amounts of money through supposedly harassing lawsuits, etc. Certainly the way we manage medical malpractice needs improvement. But it may be that the lawyers who do the most damage to the commonweal in the area of public health are corporate lawyers who litigate and lobby for the drug companies, helping them expand and maintain their monopolies so that they can gouge Americans for life-saving drugs.
Admittedly, that quote is a bit of a rant tangent, but it is a good point nonetheless.
Neil, on New Opera Blog, is both critical of Dr. Angell, and admits she has some good points:
Marcia Angell takes on big pharma in the latest New York Review of Books. In general, she’s difficult to take seriously, mostly because the piece is laced with prim disapproval of financial success--that secret handshake of mediocre socialists. But she makes a couple of provocative claims that seem plausible. [...]
Second, she suggests the patent system is broken, and I’m sympathetic to that idea. The odd two-tiered system of patents and marketing exclusivity seems perniciously redundant, for example. So why not rationalize the system (so big pharma can spend less time and money chasing extensions, say, and devote that money to research), first, then experiment with tweaking patent law to promote the public good—longer patents for cancer drugs, shorter ones for allergy meds, say? [...]
The comment about mediocre socialists is a cheap ad hominem attack, but the notion of changing the patent law is a reasonable idea. The patent laws for pharmaceutical products are pretty screwy. It would make sense, for example, to start the patent clock when a drug is first approved for marketing, rather than starting from when the drug is first synthesized. That way, there would not be so much of a financial incentive to get the drug to market quickly. The company would not loose so much money if they take their time with premarketing testing.
Chris Martin, at Intelligent life, comments on the book. Mostly, he lists the main arguments in the book. He also provides a link to a (208KB) PDF version of an earlier article by Dr. Angell (and Dr. Arnold Relman). This may be of interest to readers who want to see what she has to say, but who don't want to buy the book.
Ragout Chef, writing on Ragout, objects to Dr. Angell's criticism of me-too drugs.
Angell makes one particularly wrong-headed proposal:
We need to get the industry to focus on discovering truly innovative drugs instead of turning out me-too drugs...The me-too business is made possible by the fact that the FDA usually approves a drug only if it is better than a placebo...
The me-too market would collapse virtually overnight if the FDA made approval of new drugs contingent on their being better in some important way than older drugs already on the market. Probably very few new drugs could meet that test. By default, then, drug companies would have to concentrate on finding truly innovative drugs.
There are at least two problems with this plan. First, there's no reason to think that banning me-too drugs would spur more research into innovative drugs. There isn't some fixed pot of industry research money. The drug industry, and its investors, are presumably already doing all the research into breakthrough drugs that they think will be profitable. If they can't put their money into me-too drugs, they're just as likely to invest in Las Vegas casinos, Hollywood movies, or maybe munitions, as in truly innovative pharmaceutical research.
Second, banning me-too drugs would raise drug prices. Me-too drugs, by definition, are close substitutes for drugs already on the market. Hence, they increase competition and lower drug prices. It may not be the optimal way to set drug prices, at least if the me-too drugs are really identical to the old ones, but it could well be a second-best solution.
Personally, I also object to some of the details in Dr. Angell's argument against me-too drugs. However, I do not agree totally with the Chef's second objection. If you look at what actually happens in the pharmaceutical marketplace, you see that competition among similar drugs does not have a dramatic effect upon the prices. In fact, when the Prozac patent expired, and generic fluoxetine became available, the makers of other SSRI's did not lower their prices. And Eli Lilly, the manufacturer of Prozac, did not lower their price when five other SSRI's were introduced. This is an illustration of the fact that economic forces in the pharmaceutical industry do not act as free-market economics would predict.
As an aside, I would add that it is common for people to make this kind of error when discussing economic policy. Advocates of various kinds of economic policy often base their arguments on predictions, which in turn, are based upon false notions of free-market economics. Remember the tagline: observations are gold. Theories often aren't worth the pixels they are printed on.
The Chef is right about one thing: we do need me-too drugs. To illustrate, here is a brief case history: I once had a patient who had both hypercholesterolemia, and major depression. He was started on a statin drug, and his depression became much worse. He was tried on two other statins before he found one that lowered his cholesterol and did not worsen his depression. Indeed, there are many studies that show that some patients who do not improve when treated with one drug will improve when treated with a me-too drug.
This does not invalidate Dr. Angell's proposal that companies should have to demonstrate a real advantage to a new drug in the same class as one that is already on the market. To satisfy that standard, a company could show that the new drug can produce clinical improvement in some patients who do not do well on the older drug, or who have intolerable adverse effects from the older drug. I suspect that such a standard would not be difficult to meet, in most cases.
The Chef raises another good point, although, in my opinion, he does not articulate it particularly well:
I've always been puzzled: why do public interest organizations spend so much time criticizing the drug industry for "wasteful" research and marketing, and so little time criticizing the billions spent on the development and marketing of marketing of movies, casinos, candy, and all the other products that are a lot less valuable than new pharmaceuticals?
The counterargument is that pharmaceutical companies are supposed to act in the public good, because they are entrusted with a lifesaving mission. The burden of that trust is that they should respect the common interests of the public who supports them. In other words, the companies profit from public trust, so to repay that profit, they should act for the public good. This, of course, is an argument for social responsibility in general; it does not apply only to pharmaceutical companies, but to all companies that produce products intended for the enhancement of health and safety. That would not include the entertainment industry, or the snack-food industry.
Even so, The Chef does have a point. There are many industries that produce products intended for the enhancement of health and safety. Oil companies, automobile companies, electric power utilities, and many others are valid examples. They all spend money on marketing. Auto companies spend/waste a lot of money producing a zillion models that change every year, yet we depend upon them to make good products that protect us from harm. Why not criticize them for spending so much on frivolities? Aventis Pharmaceuticals sponsors Sarah Fisher's Indy car race team. We could criticize them for that apparently wasteful practice, but could we not level the same criticism against Raybestos, the makers of automobile brakes?
and Raybestos brakes, (right).
Matthew Holt, writing at The Health Care Blog, offers some advice to pharmaceutical companies:
To my mind pharma companies need to understand two very important points here. First, while a few academics have been complaining about pharma company practices for several years, this is the first time that I remember one book about pharma having such a sustained impact. Angell has already been on 60 Minutes, this interview is not in some minor blog or academic journal, it's in the main paper in the nation's second largest metro area, and she's also had a recent column in the Financial Times. And this is at a time when the reputation of pharma companies is already heading into uncharted low territory amongst the public.
Second, pharma needs to both start making some new arguments about what it's doing and how it's trying to improve. Big pharma also needs to consider what life might be like in a world where HHS officials have not only decided that they can bargain about the price of the drugs Medicare is paying for, but one in which they've read Angell's book. This is not necessarily a doomsday scenario, but a little bit of "what if" scenario planning wouldn't hurt big pharma right now.
I suspect that they are well aware of this, but a little advice never hurt anyone. Also in the advice category, Otterman, writing at Otterman Speaks, reiterates some advice for patients:
Former New England Journal of Medicine editor Marcia Angell, now a senior lecturer at Harvard Medical School, has written a scathing critique of the pharmaceutical industry, "The Truth About the Drug Companies: How They Deceive Us and What to Do About It", (Random House 2004) - read the review in The New York Review of Books, 51(12), 15 Jul 2004. Buy at Amazon.com
In this interview with LA Times, she criticizes costs, research and marketing of drug companies. And a significant solution lies with patients.
"Q: Is there anything patients can do?
A: Ask questions. If your doctor prescribes a medication, ask about the evidence that shows it is effective. Ask why your doctor is prescribing this particular drug. Ask if there are older, less expensive drugs that might work just as well. A few questions from patients might begin to make [doctors] think about what they're doing. Finally, ask your doctor whether you really need a drug at all. Maybe a lifestyle change would be better, or maybe the illness is mild and will go away on its own."
Christopher L. Walton, at Philocrites, chimes in with some quotations from a Boston Globe review of Dr. Angell's book. I won't quote Walton's post, since it consists almost entirely of quotes from the Globe. I do credit him with the link, however. From the Globe:
How does the drug industry deceive us? Let us count the ways. It deploys an army of 88,000 sales representatives to stalk the hallways of clinics and hospitals, bribing doctors with food and trinkets to listen to sales pitches. It plies attending physicians with expense-paid junkets to St. Croix and Key West, Fla., where they are given honoraria and consulting fees to listen to promotional presentations. [...]
Angell proposes a number of sensible policy changes. The FDA should require that new drugs be tested against currently available standard treatments (and not just placebos) so that clinicians know how newly approved treatments compare with what they are currently prescribing. (This would also help discourage the development of ''me-too" drugs.) The Prescription User Fee, which drug companies pay the FDA to expedite approval of drugs, should be repealed and the FDA should be made financially independent of the pharmaceutical industry (which currently provides a hefty proportion of its funding). Exclusive marketing rights should be rolled back to open up competition from generic drugs. Drug prices should be transparent and as uniform as possible to all purchasers. The pharmaceutical industry should have no place at all in medical education -- no matter how much money it puts up. And the federal government should set up an institute to oversee the design and analysis of clinical trials, so that the industry cannot manipulate and withhold scientific data to suit its own marketing needs. [...]
Much of the review is an overblown recitation of Dr. Angell's criticisms of the industry. I cut out most of that, since the main points have been covered already. But the second paragraph summarizes the regulatory changes the Dr. Angell recommends. There are some that I agree with. Specifically, it would be good for the FDA to have no financial incentive to alter their behavior to suit the needs of the industry in ways that might not be in the best interest of the consumer. I'm not sure that abolishing the Prescription User Fee (which is a misnomer) is the way to do that. Rather, the fee schedule should be scrutinized to be sure that there are no opportunities for anyone to profit directly from any kind of abuse of the system. The fact is, proper oversight costs money, and that money has to come from somewhere. If the fees are abolished, the money would have to come from general taxes. Although that might produce some benefit, it also would subject the operation of the FDA to the rather indiscriminate budget-cutting axe that gets flailed around every election year. I don't think that would be a good thing.
The role of drug company financing of medical education has been controversial for some time now. Most often, the education is funded by unrestricted grants, which are supposed to be independent of any commercial bias. There are some safeguards in the system, although they are not foolproof. Also, you start to get into first amendment issues if you put too much restriction on what drug companies can say.
The best idea here is to have a separate institute to oversee the design and analysis (and reporting) of clinical trials. I would extend that to include preclinical trials as well. As it stands, the FDA already exerts considerable control over the trials. For example, they do not have to accept the results of every trial submitted to them. They can reject the trial results, if the study does not meet their standards. Also, any study that is done on human subjects (i.e., people) have to be approved in advance. It would make more sense, though, to have oversight at every step of the process. This would be expensive, though, and would raise concerns about the possible disclosure of proprietary information. Still, the benefits would be considerable.
The remainder of the material that pertains to Dr. Angell's book is on the pro-industry side. I will cover that later, when I get around to it.
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