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Title: The Pharmaceutical Industry Facts, Fiction, Policy and Ethics Martin Donohoe


1
ThePharmaceutical IndustryFacts, Fiction,
Policy and EthicsMartin Donohoe
2
Outline
  • Economics
  • Influences on Physician Prescribing
  • Academia-Industry Connection
  • Ethical and Policy Issues

3
Prescription Drugs
  • 10,000 FDA-approved drugs
  • 70 of all office visits lead to prescriptions
  • 1.5 - 2.0 billion prescriptions/year

4
Prescription Drugs and Health Care Costs
  • gt10 of U.S. medical costs
  • The fastest growing component of the 1.3
    trillion US health care bill

5
Economics of the Pharmaceutical Industry
  • Sales revenues tripled over last decade
  • Prices increased 150 (versus 50 CPI)
  • Spending up 17 from 2000 to 2001

6
Economics of the Pharmaceutical Industry
  • Worldwide sales gt 145 billion/year
  • US Largest market
  • 40 of worldwide sales
  • Average CEO compensation 20 million (1998)

7
Economics
  • 16.4 profit margin in 2000 (24 billion)
  • -Largest of any industry-4 times greater than
    average return of all fortune 500 companies-8
    out of 25 most profitable U.S. companies are
    pharmaceutical companies

8
Economics of the Pharmaceutical Industry
  • Greater than 5000 companies worldwide
  • Less than 100 companies account for over 90 of
    worldwide market

9
Mergers and Acquisitions
  • Drug company mergers
  • - Pfizer-Warner-Lambert
  • - Upjohn-Pharmacia
  • ?Pfizer acquired Pharmacia in 2002 for 60
    billion to become the worlds most powerful drug
    conglomerate

10
Drug Industry Lobbying
  • Pharmaceutical Research and Manufacturers
    Association powerful lobby
  • 623 lobbyists for 535 members of Congress

11
Drug Industry Lobbying
  • 38 million donated to Congressional campaigns in
    the 1990s
  • 84 million in 2000 election (2/3 to Republicans)
  • Orrin Hatch (R-Utah) - 169,000 in 2000 - 1
  • John Ashcroft (Atty. Genl) - 50,000 in losing
    2000 Senate bid
  • GW Bush received 456,000 during his 2000
    election campaign

12
Drug Costs
  • U.S. highest in the world 55 gt Europe 35 to
    80 gt Canada (drug companies still among the most
    profitable in Canada)
  • Cross border pharmacy visits increasingly common
  • Canada vs. Mexico

13
Drug Costs
  • U.S. only large industrialized country which does
    not regulate drug prices
  • Single payer system would dramatically decrease
    drug costs
  • Single purchaser able to negotiate deep discounts

14
Drugs Who Pays?
  • 55 out-of-pocket
  • 25 private insurance
  • 17 medicaid
  • 3 Other (VA, Workmans Comp, IHS, etc..)

15
Where Prescription Dollars Go
  • Research and development - 12-preclinical
    testing - 6-clinical testing - 6
  • Manufacturing and distribution - 24
  • Sales and marketing - 26
  • Administrative / miscellaneous expenses - 12
  • Taxes - 9
  • Net profit - 17

16
The Elderly and Prescription Drug Coverage
  • Elderly represent 12 of U.S. population, yet
    account for 33 of drug expenditures
  • Almost 2/3 of elderly Medicare enrollees have no
    coverage for outpatient drugs
  • sicker and poorer then their counterparts with
    supplemental insurance.

17
The Elderly and Prescription Drug Coverage
  • Drug expenditures increasing up to 10 times as
    fast as SS and SSI benefits
  • 1 out of 6 elderly Medicare patients are poor or
    near poor (incomes less than 7,309 or 9,316
    respectively)

18
Consequences of No Prescription Drug Coverage for
the Elderly
  • Noncompliance, partial compliance
  • Increased ER visits and preventable
    hospitalizations, higher rates of disability, and
    greater overall costs

19
Consequences of No Prescription Drug Coverage for
the Elderly
  • Elderly, chronically ill individuals
  • without coverage are twice as
  • likely to enter nursing homes

20
The Elderly and Prescription Drug Coverage
  • Universal outpatient drug coverage cost-saving
  • -pharmaceutical industry strongly opposed
  • -Citizens for Better Medicare (pharmaceutical
    industry front group) 65 million ad campaign to
    defeat a Medicare prescription drug plan in 2000
  • Bush/Congressional prescription drug benefit
    proposals woefully inadequate

21
Generics
  • Increased market share-1983 15-1993
    40-2000 42
  • Average cost 1/3 of comparable name-brand drug

22
Generics
  • Brand name manufacturers acquiring generic
    producers
  • E.g., Merck-Medco
  • Prices rose almost twice as rapidly as those of
    brand-name drugs in 2002

23
Delaying Generic Competition
  • Nuisance lawsuits against generic manufacturers
  • Lobbying for Congressional Bills Extending Patent
    Protection
  • Schering Plough / Claritin - 20 million lobbying
    campaign
  • Big-name lobbyists (Howard Baker, C Everett Koop,
    Dennis Deconcini, Linda Daschle)

24
Influences on Physician Prescribing Habits
  • Texts
  • Journals
  • Colleagues
  • Formularies
  • Samples
  • Patient requests
  • Personal experience
  • Cost

25
Influences on Physician Prescribing Habits
  • Gifts
  • Drug advertisements
  • Pharmaceutical representatives

26
Gifts from Pharmaceutical Companies
  • Pens, toys and puzzles
  • Household gadgets
  • Food
  • Books
  • Event tickets
  • Travel and meeting expenses
  • Cash

27
Patients Attitudes Toward Pharmaceutical Company
Gifts(Gibbons et al.)
  • 200 patients, 270 physicians
  • 1/2 of patients aware that doctors receive gifts
  • 1/4 believe their doctor(s) accepted gifts
  • 1/3 felt costs passed along to patients
  • Patients felt gifts less appropriate then did
    physicians

28
AMA Guidelines Re Gifts to Physicians from
Industry
  • Gifts of modest value which benefit patients O.K.
  • Pens, notepads, modest meals, textbooks
    acceptable
  • Film, videos, CDs Dinner to Go (Merck) Look
    for a Book GlaxoSmithKline PLC) Palm Pilots
    (Dupont) may be acceptable

29
AMA Guidelines Re Gifts to Physicians from
Industry
  • No cash gifts
  • No gifts with strings attached

30
AMA Guidelines Re Gifts to Physicians from
Industry
  • CME sponsorship money to conference sponsor, not
    participating physicians
  • Meeting expenses for trainees funneled through
    institution

31
Pharmaceutical Company Advertising
  • 15 billion in 2000
  • up to 15,000/U.S. physician
  • over 6 billion - advertising and marketing
  • over 7 billion - sales reps salaries
  • 50,000 salespersons 1/10 prescribing physicians

32
Pharmaceutical Company Advertising Drug Samples
  • 8 billion/year in samples
  • Dispensed at 10 - 20 of visits

33
Drug Samples
  • Only ½ of samples go to patients
  • 60 of pharm reps self-medicate
  • 50 of residents self-medicate, often using
    samples
  • early 1990s - benzos
  • 2000 - SSRIS for depression, antihistamines for
    sleep

34
Truthfulness in Drug AdsWilkes et al.Ann Int
Med 1992116912-9
  • 10 leading medical journals
  • 109 ads and all available references (82)
  • 3 independent reviewers

35
Truthfulness in Drug Ads FDA Requirements
  • True statements-effectiveness-contradictions-si
    de effects
  • Balance
  • Instructions for use
  • Approved uses only

36
Truthfulness in Drug Ads Data
  • 57 little or no educational value
  • 40 not balanced
  • 33 misleading headline
  • 30 incorrectly called drug the agent of choice
  • 44 could lead to improper prescribing

37
Truthfulness in Drug Ads
  • Higher percentage of ads misleading in Third
    World
  • Many agents available OTC
  • Increased FDA oversight and enforcement needed

38
Doctors are Influenced by Pharmaceutical
Advertising and Marketing
  • Prescribing patterns
  • e.g., Calcium channel blockers
  • 1998 Trovan most promoted drug in US sales
    most ever for an antibiotic in one year use
    since limited by FDA due to liver toxicity

39
Doctors are InfluencedFormulary Requestsby P
and T Committee Members(JAMA 1994271684-9)
  • Met with drug rep 3.4X more likely to request
    companys drug
  • Accepted money to speak at symposia 3.9X
  • Accepted money to attend symposia 7.9X
  • Accepted money to perform company-sponsored
    research 9.5X

40
Pharmaceuticals Sales Reps Techniques
  • Appeal to authority
  • Appeal to popularity
  • The red herring
  • Appeal to pity
  • Dryden - Pity melts the mind

41
Pharmaceuticals Sales Reps Techniques
  • Appeal to curiosity
  • Free food/gifts
  • Testimonials
  • Relationship building/face time

42
Pharmaceutical Sales Reps Techniques
  • Active learning reinforcement / change
  • Favorable but inaccurate statements
  • Negative comments re competitors products
  • Reprints not conforming to FDA regulations

43
Relating to Pharmaceutical Reps
  • Awareness of sales tactics
  • Learn about new agents/formulations being
    developed and tested
  • Question them, ask for references
  • Evaluate quality of references

44
Sources of Accurate and Reliable Drug Information
  • The Medical Letter
  • Peer-reviewed studies and reviews
  • Micromedex
  • Prescribers Letter
  • Large databases-The Cochrane Collaboration

45
Sources of Accurate and Reliable Drug Information
  • Textbooks
  • Facts and Comparisons
  • AHFS Drug Evaluations
  • AMA Drug Evaluations
  • Conns Current Therapy
  • The FDA (sometimes)
  • Not PDR

46
Direct to Consumer Advertising
  • Began in 1980, briefly banned 1983-85
  • Expenditures
  • 155 million1985
  • 356 million--1995
  • 1 billion--1998
  • 2.8 billion--2000

47
Direct to Consumer Advertising
  • US and New Zealand only countries to allow prime
    time TV advertising
  • 1989 - one drug achieved gt10 public recognition
  • 1995 - 13 of the 17 most-heavily marketed
  • 2000 Schering-Plough spent more to market
    Claritin than Coca-Cola Enterprises and Anheuser
    Busch spent to market their products

48
Direct to Consumer AdvertisingUse of Celebrities
  • Micky Mantle Voltaren
  • Bob Dole Viagra
  • Joan Lunden Claritin
  • Newman - Relenza

49
Effects of Direct to Consumer Advertising
  • Better educated/informed (?misinformed?) patients
  • Discovery of unrecognized illnesses diabetes,
    hypertension, hep C, ED
  • More proactive patients
  • Diversion from important health issues wasted
    time

50
Pet Pharmaceutical Industry
  • 3 billion market
  • Examples
  • Clonicalm (clomipramine) for separation anxiety
    in dogs
  • Anipryl (seligeline) for canine Cognitive
    Dysfunction Syndrome
  • Sea pet shark cartilage treats for doggie
    arthritis
  • Pet superstores and websites sell multiple
    antibiotics

51
Pharmaceuticals on the FarmAgricultural
Antibiotic Use
  • Agriculture accounts for 70 of U.S. antibiotic
    use
  • Use up 50 over the last 15 years
  • Due to explosion in factory farming

52
Consequences of Agricultural Antibiotic Use
  • CDC Antibiotic use in food animals is the
    dominant source of antibiotic resistance among
    food-borne pathogens.
  • Campylobacter fluoroquinolone resistance
  • VREF (poss. due to avoparcin use in chickens)

53
The FDA Current Issues
  • Nicotine/Cigarette regulation
  • Policies re transgenic foods (GMOs, Frankenfoods)
  • Biopharming
  • Pharmaceutical industry involvement in research
    and production of chemical and biological warfare
    agents and drugs used to facilitate executions

54
Policy Issues Related to Womens Health Care Drugs
  • OCPs available OTC
  • Pharmacist-prescribed emergency contraception
  • reduce number of unintended pregnancies
  • cost saving to patients and health care system

55
Concerns Re Research in the U.S.
  • 22 of new drugs developed over the last 2
    decades new molecular entities
  • Most are me too drugs
  • Examples

56
Concerns Re Research in the U.S.
  • Insurance coverage of clinical trials decreasing
  • Low enrollment causing delays in evaluating
    cancer medications
  • Clinical trials a stop-gap source of care / meds
    for poor and uninsured

57
Unethical placebo-controlled trials
  • anti-depressants
  • anti-psychotics
  • anti-emetics
  • anti-hypertensives
  • anti-inflammatories

58
Pharmaceutical Company Research
  • 90 of health research dollars are spent on the
    health problems of 10 of the worlds population
  • research on major diseases of the developing
    world under-funded, not profitable

59
Pharmaceutical Company Experimentation
  • Third World experimentation with inappropriate
    placebo-controls AIDS drugs/Africa
    Sulfazyme/Brazil
  • Results more beneficial to First World patients

60
Anti-AIDS Drug Availability in Africa
  • 36 million infected with HIV 2/3 in sub-Saharan
    Africa (1.3 of global pharmaceutical market)
  • Only 1/1000 S. African AIDS patients getting
    anti-HIV drugs

61
Anti-AIDS Drug Availability in Africa
  • PHRMA lawsuit vs South Africa (supported by US
    govt)
  • parallel importing
  • compulsory licensing
  • dropped after activist campaign
  • PHRMA continues to lobby against parallel
    importing and compulsory licensing through
    governments and the WTO

62
Third World Donations (Dumping) of
Pharmaceuticals
  • Genuine gifts
  • Dubious gifts
  • clear out stocks of nearly-expired drugs/poor
    sellers
  • tax write-offs (up to 2x production costs)

63
Third World Donations (Dumping) of
Pharmaceuticals
  • Egregious Examples-Expired Ceclor to Central
    Africa-Garlic pills and TUMS to Rwanda
  • -50 of donations to Bosnia expired or medically
    worthless
  • Donation recommendations from WHO-WHO list of
    essential drugs-Expiration date at least 1 year
    away

64
Academia/Pharmaceutical Industry Links
Strong/Growing
  • Industry funds 8-40 of university research (a
    7-fold increase since 1970)
  • ¼ of scientific investigators have industry
    affiliations

65
Academia/Pharmaceutical Industry Links
Strong/Growing
  • 2/3 of academic institutions hold equity in
    start-ups that sponsor research at the same
    institutions
  • Up to 80 of science and engineering faculty
    perform outside consultations

66
Exclusive university - corporate agreements
  • MIT 5 yr, 15 million deal with Merck and Co.
    for patent rights to joint discoveries
  • DFCI Novartis
  • UC Berkeley Novartis
  • Wash U. in St Louis - Pharmacia
  • Univ. of CO Ribazyme
  • BIH - Pfizer
  • MGH - Shiseido

67
Guidelines
  • Majority of authors of Clinical Practice
    Guidelines published in major journals have
    industry ties
  • Authors of NEJM reviews and editorials can accept
    up to 10,000/year in speaking and consulting
    fees from each company about whose products they
    are writing

68
Problems Consequent to Increased
Academia-Industry Partnerships
  • Impaired sharing of knowledge, materials
  • Difficulties in repeating/verifying important
    research
  • Impaired collaboration
  • Driven by usual academic competitive jealousies,
    fears of contract violations and subsequent
    litigation, and desire to protect financial
    interests and keep stock prices high
  • Patents used to inhibit other investigators
    research

69
Educational Concerns Regarding Industry-Funded
Research
  • Diversion of faculty away from teaching, towards
    more remunerative consultations
  • Faculty change research direction
  • Fellows/post-docs diverted to industry-related
    topics
  • Patent- and profit motive-related-publication
    delays affect trainee and junior faculty career
    development

70
Withholding of Data / Publication Delays /
Harassment of Researchers
  • JAMA Celebrex (Pharmacia) study fewer ulcers
    than ibuprofen at 6 months, but no difference at
    one year (only 6 month data submitted and
    published
  • Synthroid study Betty Dong, UCSF, Boots/Knoll
    Pharmaceuticals
  • Deferipone Nancy Oliveri, University of Toronto,
    Apotex

71
Issues in Drug Company Research
  • 60 of industry-sponsored trials are contracted
    out to for-profit research firms, which in turn
    may contract with for-profit NIRBs for ethical
    review
  • Conflict of interest

72
Proliferation of Physician Researchers
  • 3-fold increase in the number of physicians
    conducting research in the last decade
  • Investigators can make from 500 to 6000 per
    enrolled subject
  • Active recruiters can make from 500,000 to 1
    million per year

73
Seeding Trials
  • Sponsored by sales and marketing dept., rather
    than research division
  • Investigators chosen not for their expertise,
    but because they prescribe competitors drug
  • Up to 25 of patients enrolled in clinical trials

74
Seeding Trials
  • Study design poor
  • Results rarely published
  • Disproportionate amount paid for investigators
    work (writing a prescription)

75
Recommendations for Industry-Sponsored Research
  • Written agreements with university, not
    researcher
  • Alternatives therapies selected based on clinical
    relevance
  • Stepwise project results not provided to sponsor
    until study is funded and open publication
    guaranteed

76
Recommendations for Industry-Sponsored Research
  • Full disclosure of conflicts of interest
  • No gag clauses regarding publication
  • Investigator not to act as consultant during
    study
  • National/international database of clinical trials

77
The Pharmaceutical Industry and Medical Ethics
  • Funding of conferences, Centers of Ethics,
    individual investigators
  • E.g., 1 million gift from SmithKline Beecham to
    Stanford University Center for Biomedical Ethics
  • Rapid growth of for-profit non-institutional
    review boards (NIRBs)
  • Ethicists for hire

78
The Pharmaceutical Industry and Medical Ethics
  • Ethics consultants serving on corporate boards
  • E.g., Harold Shapiro continued to draw annual
    directors salary from Dow Chemical while serving
    as Chair of NBAC
  • Loss of appearance of independence damage to
    credibility
  • Most bioethics journals do not require conflict
    of interest disclosures

79
Increasing Involvement of Industry in Provision
of Continuing Medical Education
  • 1/2 of the 1.1 billion spent on CME in 1999 from
    industry
  • Medical Education and Communication Companies
  • Sponsored/paid mainly by drug companies
  • Provide educational materials gratis

80
Guidelines for Speakers at Industry-Sponsored
Events
  • Educational, not promotional
  • Content based on scientific data and clinical
    experience
  • Full disclosure of relationship with company and
    honoraria
  • Travel expenses not lavish
  • Few mechanisms for surveillance/guideline
    enforcement

81
Enhancing Cooperation Between Physicians and the
Pharmaceutical Industry
  • Improve compliance
  • Decrease adverse events
  • Promote and fund of open, freely-shared basic
    science and clinical research, with appropriate
    but not excessive compensation to the sponsoring
    investigator, institution and company

82
Conclusion
  • Pharmaceuticals and Biotechnology
    Industries-Tremendous contributions to
    health-Motivation alleviate
    suffering-Primary responsibility make money
    for shareholders

83
Suggestions
  • Be aware of worrisome trends in the business of
    drugs, research and health care
  • Thoughtfully consider your relationship with
    pharmaceutical companies
  • Advocate locally and nationally for solutions

84
Contact Information
  • Public Health and Social Justice Website
  • http//www.phsj.org
  • martindonohoe_at_phsj.org
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