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Reforming Big Pharma

Prof. Marcia Angell (Harvard) & M.D.

Random House, NY, 2004, pgs 237-266

This work stands alone:  alone as to exposure of what is wrong with the big pharmaceutical industry, which places profits before lives, which forms an alliance with government to further that goal.  Dr. Angell describes in convincing detail big pharma competes for profits, ways that ought to be legislated against, but aren’t because of political donations.  There is a huge gulf between what Big Pharma puts in the media about themselves and what actually happens.  No work that I have read better details the workings of an industry and its bond with government.  What is said about big pharma, can also be said about big oil, big steel, big insurance companies, big banking, etc.  (Her book is also available as a sound recording).  For chapter 6. 


How to Save the Pharmaceutical Industry— And Get Our Money's Worth  (Chapter 13—the last)

DESPITE ALL ITS  EXCESSES, THIS  IS  AN important industry that should be saved—mainly from itself. The public is dependent on it, and it should be made to carry out its original purpose of developing important drugs and selling them at reasonable prices. I have shown how the industry, corrupted by easy profits and greed, has deceived and exploited the American people. But that is not to say that everyone who works for big pharma is corrupt or deceitful. In fact, it is my im­pression that most pharmaceutical employees, even at the highest levels, accept their own public relations. They honestly believe they are part of an innovative industry whose prices are an accurate reflection of the value of its products and the costs of making them. That is a testament to the effects of compartmentalization in big cor­porations; very few people know the full dimensions of the busi­ness. And it is also a testament to human nature. People want to be proud of their work.


But readers will know by now that the pharmaceutical in­dustry, despite its many dedicated employees, has moved a very long way from its original mission. In this chapter I will propose specific reforms that would restore the industry to its purpose and make prescription drugs not only more affordable but bet­ter and safer. My intention is to show what needs to change to make the industry function as it claims to—as a source of inno­vative and affordable drugs to help people lead longer, better lives.


In doing so, I will be painting something of an ideal, in that I will propose reforms even though I know the obstacles to achieving some of them are formidable. In fact, those barriers would vary greatly. Some reforms, like requiring new drugs to be compared with old ones, could be accomplished virtually overnight if the political will were there. Others, like changing patent law or achieving uniform pricing have all sorts of global ramifications and would face almost insurmountable obstacles. But there is value in trying to define the ideal system, so that we can move toward it in the best way possible—unevenly and in­completely, if necessary—but at least with an understanding of where we want to go.


My proposals address seven broad problems that have been discussed in this book. They are listed here with references to the chapters in which they were discussed, in case you want to refresh your memory. I will not address all the problems dis­cussed in the book or all the reforms one might wish for, only those I consider most important.

1.   Drug companies produce too many me-too drugs and too few innovative ones. (See Chapters 4 and 5.)

2.   The Food and Drug Administration (FDA) is too much in the thrall of the industry it regulates. (Chapter 11)

3.   Drug companies have too much control over clinical re­search on their own products. (Chapters 6 and 9)

4.   Patents and other exclusive marketing rights are undesirably long and too elastic. (Chapter 10)

5.   Drug companies have too much influence over medical edu­cation about their own products. (Chapter 8)

6.  Important information about research and development, marketing, and pricing is kept secret. (Chapters 1,3, and 7)

7.   Prices are too high and too variable. (Chapters 1 and 12)


I will discuss the key reforms needed to deal with each of these problems, but it should be understood that the reforms would often have multiple, overlapping effects. For example, anything that shortens exclusive marketing rights will also affect profits and the ability of the industry to influence government and the FDA. But the end result is that nearly all of the changes I propose would lead to better drugs at lower prices, and would loosen the iron lock of big pharma on public policy and the medical profession.


Shift the Emphasis from Me-Too to Innovative Drugs


A number of steps could be taken to stanch the flow of me-too drugs. By default, that would force drug companies to put more of their efforts into developing truly innovative drugs. To start with, U.S. patent law should be enforced in its original form. Courts have progressively weakened the requirement that new discoveries or inventions be useful, novel, and non-obvious. There is no possible justification, for instance, for a new patent on Prozac to treat premenstrual tension. Examiners in the U.S. Patent and Trademark Office should not receive bonuses based on how many patent applications they handle. Since it is easier to grant a patent than to deny it, the current payment practice encourages quick approval, whatever the merits. Patent reviewers should be salaried for their time, with appropriate managerial supervision to prevent unreasonable delays.


Food and Drug Administration regulations should require that new drugs be compared not just with placebos but with old drugs for the same conditions. Approval should depend on whether the new drug adds something useful in terms of greater effectiveness, greater safety, fewer side effects, or substantially greater convenience. The FDA should be allowed reasonable flexibility in its judgments, but it should not approve drugs that

on balance offer trivial or no advantages over drugs already available, and may even be worse. Overnight, that reform alone would force the industry to concentrate on innovative drugs in­stead of me-too drugs. If I could choose only one of the reforms I am suggesting, it would be this one. This change would have multiple beneficial ripple effects. And this is one that could be accomplished easily by congressional legislation.


There is an ethical issue here, too. It is wrong to compare a new drug with a placebo if there is an effective drug already on the market, because doing so means some human subjects are denied treatment during the trial. For that reason, drug trials for serious diseases, like cancer or HIV/AIDS, almost never have placebo groups. Instead, the new drug is compared with what­ever is currently being used. But most new drugs are not for se­rious diseases. They are for minor conditions, or for conditions that may be precursors to serious diseases, like high blood pres­sure or high cholesterol levels. Here placebo-controlled trials are the order of the day. I have heard one high-ranking FDA of­ficial justify them by implying that he didn't really believe the old drugs were effective anyway. If we don't know whether Prozac works, he seemed to be saying, why test Zoloft against it? But that is an argument for higher standards of proof, not for placebo-controlled clinical trials. If there is really doubt about whether a standard treatment is effective, the FDA should re­quire that clinical trials of new treatments have three compari­son groups—new drug, old drug, and placebo.


Let's look a little more at the benefits of requiring new drugs to be compared with old ones. First, few me-too drugs would be approved, since it is highly unlikely that each new one is better than the last at comparable doses. Second, as mentioned, drug companies would be forced to concentrate on innovative drugs. Third, they could trim their vast marketing budgets, since most of those expenditures are to convince doctors and the public that one me-too drug is better than another in the absence of ev­idence. If evidence were required, there would be far less need for marketing, and we wouldn't have to pay the steep markup in prices it adds. Fourth, there would be far fewer clinical trials. A great many clinical trials are now designed to get FDA approval for me-too drugs, to find new uses for them, or (in the case of most Phase IV studies) to jockey for position in a crowded me-too market. In other words, these trials are really marketing tools. If drugs were approved only when they were clearly supe­rior in some way to drugs already on the market, the number of clinical trials would plummet, but each one would be far more important. They would serve the purpose that they are intended to serve and that human subjects are led to believe they serve— to answer a medically important question: Does this drug add something of value to our ability to treat this condition? Not, "Can I create a big market for this drug?"


Strengthen the Food and Drug Administration


The FDA needs to be strengthened as an independent agency. It is now so dependent on the pharmaceutical industry that it has become big pharma's handmaiden. Industry apolo­gists and antiregulatory conservatives still beat up on the FDA publicly (check The Wall Street Journal's editorials on the sub­ject), but that is mainly just an ideological gesture. In fact, the FDA has become extremely accommodating to the industry, as evidenced by the former commissioner's speech (discussed in Chapter 11) urging other countries to allow drug prices to rise. I once heard another high official in the agency say publicly that the job of the FDA's Center for Drug Evaluation and Research is to "facilitate" drug development—something quite different from regulating it. It would seem that the industry, not the pub­lic, has become the FDA's client. What should be done to restore the FDA's proper role?


First, the Prescription Drug User Fee Act should be re­pealed—or allowed to expire in 2007. This act, you will re­member, authorizes drug companies to pay "user fees" to the FDA for every drug reviewed. That practice puts the FDA on the industry's payroll, drug by drug. The more drugs the agency reviews, the more money it gets from industry. It's analogous to the incentive of the U.S. Patent and Trademark Office to grant patents. This arrangement creates a powerful conflict of interest for the FDA. Moreover, the very notion that private companies "use" a public regulatory agency is wrong, since the FDA is there to serve the public, not drug companies.


Second, public support should be increased—not just to make up for the loss of user fees but over and above that amount. The FDA is vital to public health, and it needs to be adequately funded. Giving it the resources to do its job properly would pay for itself many times over. Public funding would also restore balance within the FDA. The Prescription Drug User Fee Act required the agency to put too much of its resources into speeding up drug approvals, at the expense of other important functions, like monitoring drug safety, inspecting manufactur­ing plants, and ensuring truthful advertising. Furthermore, in the rush to approve drugs, the agency is taking shortcuts that lower the standards for safety and effectiveness. Shortcuts may be justified in certain cases—as at the beginning of the HIV/ AIDS epidemic—but they should be rare. There is now far too much emphasis on speed at the FDA.


Third, the FDA's advisory committees should not include experts with financial ties to industry. The notion that they are somehow indispensable is not credible. No one is indispensable. The truth is that experts are being co-opted by these deals, just as the FDA is co-opted by user fees.


Create an Institute to Oversee Clinical Testing of Drugs


Drug companies should no longer be permitted to control the clinical testing of their own drugs. There is too much evi­dence that this practice biases the research in favor of the spon­sor's drug. It also distorts the type of research done, since companies are more interested in increasing sales than in ob­taining medical knowledge. We really don't need one more study of whether a new drug is better than a placebo for some slightly different use, but drug companies sponsor them because they help to expand the market.


To ensure that clinical trials serve a genuine medical need and to see that they are properly designed, conducted, and re­ported, I propose that an Institute for Prescription Drug Trials be established within the National Institutes of Health (NIH) to administer clinical trials of prescription drugs. Drug companies would be required to contribute a percentage of revenues to this institute, but their contributions would not be related to partic­ular drugs (as is the case with the FDA user fees). The institute would then contract with independent researchers in academic medical centers to conduct drug trials. The researchers would design the trials, analyze the data, write the papers, and decide about publication. The data would become the joint property of the NIH and the researchers, not be controlled by the sponsor­ing company. The FDA now assigns responsibility for the con­duct of clinical trials to sponsors. That practice would end. Responsibility would lie exactly where it should—with inde­pendent researchers and their institutions.


Others have also called for a special NIH institute to evaluate prescription drugs, but they have generally suggested that it would compare drugs that are already on the market (as was done in the ALLHAT study discussed in Chapter 6). While that would be helpful, it would address only the effects of the under­lying problem, not the cause. There would be nothing to stop the FDA from continuing to approve large numbers of me-too drugs that were compared with placebos. My proposal is different. It would have the Institute for Prescription Drug Trials oversee clin­ical trials before FDA approval, not afterward. Since drugs would have to be compared with older treatments, many fewer drugs of dubious benefit would come to market in the first place. Impor­tant comparisons of drugs already on the market could be done within existing NIH institutes, as was true of the ALLHAT study.


How the institute would administer the trials would have to be worked out carefully. It might prioritize trials on the basis of unbiased expert advice, just as the other institutes at the NIH have expert panels to decide which research to give priority. But the expectation would be that all trials of scientific merit would be carried out, and there would have to be some mechanism to appeal decisions not to carry out a proposed trial. This is not a perfect process, and there may be better alternatives, but the point is that an independent, public agency should administer all clinical trials to ensure that they are properly conducted— both scientifically and ethically. This is too important a matter to leave to private contract research organizations, whose only clients are the drug companies.


Because of reductions in the number of me-too drug trials, there would be many fewer trials altogether, and they could eas­ily be conducted entirely in nonprofit academic settings. There would be no need for a private research industry, which inher­ently has a conflict of interest. But if academic centers perform the trials, it would be essential that they and their faculty re­searchers be free from their own financial conflicts. To receive funding, academic institutions should not have equity interest in

the pharmaceutical industry, and researchers should have no financial ties to companies whose drugs they evaluate. Simi­larly, expert advisers to the Institute for Prescription Drug Trials should have no conflicts of interest.


These reforms would eliminate most of the abuses I de­scribed in Chapter 6. Unfavorable research results could no longer be suppressed, and papers could not be manipulated to emphasize favorable findings. All clinical trials would be pub­licly registered, and their results available to everyone.


Curb Monopoly Marketing Rights


The period of exclusivity for brand-name drugs is too long and too easily stretched. That is a major reason for the high costs of prescription drugs and the inordinate profits of big pharma. There is no legitimate reason for generic competition to be delayed so long.


Paradoxically, the first reform I would suggest to curb mo­nopoly marketing rights allows drug companies more time to complete their clinical trials. / propose that even if patents are granted before clinical testing starts, the clock on the patents should not begin ticking until the drugs come to market. In other words, a company could patent a new drug before launch­ing clinical trials to protect it from competition, but only after the drug is approved by the FDA and comes to market would the patent's time line begin. Then it might have a duration of, say, six years from the time the drug came to market, instead of twenty years from the time the patent was filed. That way, clin­ical testing would not eat into sales time, so companies would not be in such a rush to complete it and the research could be done more carefully and thoroughly. (Here I'm assuming there is no National Institute for Prescription Drug Trials.) I am aware that such a change would be difficult to achieve, given the current move to harmonize patent law internationally. But as I said earlier, I am sketching an ideal system, and this change would certainly be an improvement.


The law granting drug companies an extra six months of ex­clusive marketing rights for testing drugs in children should be repealed. That law is virtual bribery, and it doesn't even accom­plish its stated purpose. Drug companies take advantage of the law to test blockbuster drugs in children whether the drugs are meant for this age-group or not. For an investment of a few mil­lion dollars or less, they can increase their revenues by hundreds of millions. But, they can opt not to test less profitable drugs in children even though they are more likely to be used in this age-group. The FDA now has the authority to require pediatric test­ing as a condition of approval. But it rarely uses it. It should. Imagine the uproar if the FDA let drug companies get away with testing drugs just in men, even though they would probably be used in women as well.


The loopholes in the Hatch-Waxman Act should be closed so that exclusivity cannot be stretched out for years. You will re­member from Chapter 10 that drug companies may file for many additional patents on an already patented and approved drug. By suing generic companies for infringement of these sec­ondary patents, they can trigger successive thirty-month stays on generic competition. This should not be possible. The way to stop it is clear. First, Hatch-Waxman restrictions should be en­forced. Only patents listed in the FDA Orange Book can be the basis for such lawsuits, and these are supposed to be restricted to patents that pertain to the original drug and its approved use. The FDA completely ignores that restriction and permits drug companies to list whatever secondary patents they wish—no matter how frivolous or far removed from the original drug. That should be stopped, as the Federal Trade Commission urged. It should be the FDA's responsibility to make sure patents are eligible for listing in the Orange Book. Of course, if patent law were strictly enforced, so that patents were granted only for discoveries or inventions that are truly useful, novel, and non-obvious, there wouldn't be so many secondary patents.


There is no reason for a thirty-month stay on generic com­panies entering the market just because brand-name companies sue them. Even if a brand-name company genuinely believes that a relevant patent would be violated, it could sue the generic company without an automatic extension of exclusive market­ing rights. Generic companies would be very wary of violating a valid patent, since they would be liable for the brand-name company's loss of sales. Hatch-Waxman should also be re­formed to make it impossible for brand-name companies to make sweetheart deals with generic manufacturers to delay entry into the market. The first generic company to win approval after a lawsuit is given six months' exclusive marketing rights. That exclusivity should be contingent on the generic company bringing a drug to market as quickly as possible. The 2003 Medicare prescription drug benefit law contained some provisions for modifying Hatch-Waxman, but how they will work is still unclear.


Get Big Pharma Out of Medical Education


We need to end the fiction that big pharma provides medical education. Drug companies are in business to sell drugs. Period. They are exactly the wrong people to evaluate the products they sell. I am not saying that all of the information drug companies provide to doctors is false. Some of it is useful and valid. But in­formation from companies comes mixed with hyperbole, bias, and misinformation, and there is often no way to tell which is which. Good education about prescription drugs, like all educa­tion, needs to be as objective and critical as possible.


Yet drug companies pour money into medical schools and teaching hospitals, they support most continuing medical edu­cation, and they subsidize professional meetings. Wherever clin­icians are educated, big pharma is there to help. There is no question that it influences educational content. The result is that doctors not only receive biased information but learn a very drug-intensive style of medicine. They come to believe that there is a drug for everything and that new drugs (of which they have many free samples) are always better than old ones. Once and

for all, we should clarify a simple fact: Drug companies are not providers of education, and they cannot be. No laws, regula­tions, or guidelines should be based on the idea that they are.


The medical profession needs to take full responsibility for educating its members. There are a few simple steps to make this happen. First, medical schools should teach students about drugs, not leave such education to industry-sponsored pro­grams and teaching materials. Many of our best schools have virtually eliminated the pharmacology courses that used to teach the basic principles of drug actions and uses. Second, teaching hospitals should regard drug company representatives just as they do other salespeople, who are not allowed to traipse around at will, promoting their wares and offering gifts and meals to medical students and doctors in training. Third, the profession needs to take responsibility for continuing medical education. Just as there should be no private clinical research industry, there should be no private medical education industry hired by the drug companies. This would mean that continuing medical education would be less well financed, but it can be made much less expensive without any loss of quality. Finally, professional associations should be self-supporting. If breaking their dependence on drug companies means increased member­ship dues, so be it. Meetings would benefit by being more mod­est, serious, and purposeful. But if doctors want to go to a resort in Hawaii for a meeting, let them pay for it.


Many doctors would agree that drug companies should have no input into the content of medical education but argue that it is acceptable for them to support it at arm's length. I disagree. The industry's immense marketing expenditures are tacked on to the prices of prescription drugs. Much of that increased sales in­come goes toward "education"—remember the missing $35 bil­lion (see Chapter 8)? I believe the public, if asked, would not want to provide such handsome subsidies to doctors. Of course, if educational grants from industry really had to be completely at arm's length, such grants would soon largely disappear. These companies are not charities. They expect a return on investment, and they get it—precisely because what they call education is designed to increase sales. As concern grows about marketing masquerading as education, some companies may create sepa­rate education budgets. But no matter what you call it, the over­all purpose is the same—to sell drugs.


Drug companies sometimes contend that direct-to-consumer advertising is also educational, but it is even less educational than company-sponsored meetings for doctors in Hawaii. There is no way consumers can evaluate clinical claims in a thirty-second TV advertisement. The purpose and the effect of these commercials is to increase pressure on doctors to prescribe the latest, most expensive me-too drugs. Direct-to-consumer adver­tising should be prohibited in the United States just as it is in other advanced countries. At the very least, it should be regu­lated more stringently. Big pharma and the advertising agencies, which have a huge financial stake in the ads, would strongly re­sist, so any such action would probably require a congressional mandate. For reasons of public health and safety, however, the FDA is acknowledged to have authority over pharmaceutical advertising, so there is no question of an unfettered "right to commercial free speech" in this case. The issue is how, and how much, it should be regulated.


Open the Black Box


Big pharma badly needs some transparency. It gets away with exploiting the public in part because of its extraordinary secrecy. Drug companies reveal very little about the most crucial aspects of their business. Yet, unlike other businesses, they are dependent on the public for a host of special favors—including rights to NIH-funded research, long periods of market monop­oly, and multiple tax breaks that almost guarantee a profit. Be­cause of these special favors and the importance of its products to public health, as well as the fact that government is a major purchaser of its products, the pharmaceutical industry should be regarded much as a public utility. Its books should be open.


We ought to know exactly what drug companies spend on R & D and how it is broken down, not only by function but by individual drugs once they are patented and enter clinical trials. We should know the relative amounts spent on preclinical, clin­ical, and market research. Expenditures on clinical trials for each drug should be separated into their various phases, includ­ing Phase IV studies. And we should know how much drug companies spend on marketing research, and where that money is budgeted. 


The enormous black box known as "marketing and admin­istration" also needs to be opened. Where do those tens of billions of dollars really go? How much for top executive com­pensation? How much for lawyers? How much for "educating" doctors and the public? All of these categories should be broken down into their components. These expenditures produce a huge markup on drugs, and the public is entitled to know the details about them.


Price reform is discussed in the next section, but prices are also a big part of the industry's secrets. It is extremely difficult to find out what various purchasers actually pay for their pre­scription drugs. Drug companies publish their average whole­sale prices, supposedly the prices they recommend wholesalers charge pharmacies. But in practice, the average wholesale price means little. In fact, AWP is sometimes said to stand for "Ain't What's Paid." Different customers are charged very dif­ferent prices, and exactly what any given customer pays is often obscured by discounts and rebates. Those who pay something close to the average wholesale price are mainly peo­ple with no insurance, although prices may still vary from pharmacy to pharmacy. Most prosecutions of drug companies have had to do with defrauding Medicaid or Medicare by in­flating prices, sometimes in conjunction with offering kick­backs to doctors or pharmacy benefit managers. It is only by virtue of the secrecy, complexity, and great variability of pric­ing arrangements that drug companies can get away with bilking their biggest customer—the government—and exploiting individuals without bargaining power.


Establish Reasonable and Uniform Pricing


Drug prices should be not only transparent but reasonable and as uniform as possible for all purchasers. The great dispar­ities that now exist, with the most vulnerable people paying the highest prices, are unfair. Prices need to be regulated in some way to make them generally affordable. Pharmaceutical profits could still be very high, even with significantly lower prices, es­pecially if marketing expenditures were greatly reduced. Since the biggest single purchaser of prescription drugs is the govern­ment, it could negotiate or regulate prices on behalf of everyone, much as the governments of other advanced countries do. For people who are too poor to afford needed drugs, there could be subsidies, but prices should not vary, only the payer. Uniform prices would prevent the current chaos that serves as a cover for fraud, kickbacks, and price gouging. It would also be desirable if prices were roughly the same in all developed countries, as well as within the United States, since big pharma is a global in­dustry and great disparities create problems across borders (as we are now seeing with Canada).


That does not mean other developed countries should allow prices to climb to match U.S. prices, which former FDA Com­missioner Mark McClellan seemed to recommend, apparently with the backing of the Bush administration. Instead, based on full knowledge of the industry's profits and expenditures, we should try to converge toward a reasonable price. The industry and its apologists claim that the higher prices Americans pay are to cover R & D costs, but that ignores the fact that the big drug companies are profitable all over the world and their total prof­its actually exceed their total R & D expenditures. They are not just squeaking by, as industry apologists imply, but in recent years are making three to six times the profits earned by other Fortune 500 companies. One might just as well argue that Americans should pay higher prices to cover marketing costs, or to ensure that the top ten U.S. drug companies continue to make their extraordinary profits—more total profits than all the other Fortune 500 companies put together in 2002.


Unfortunately, with the passage of the Medicare reform bill in 2003, public policy has moved in exactly the opposite direc­tion from any reasonable brake on pharmaceutical prices. The prescription drug benefit expressly forbids Medicare to use its purchasing power to bargain for lower prices. That provision was tantamount to writing a multibillion-dollar check—signed by taxpayers—to big pharma. (Not for nothing does this indus­try have the largest lobby in Washington.) Expenditures on drugs will quickly rise to exceed the value of the benefit. Worse, the money diverted to drug companies, pharmacy benefit man­agement companies, and private insurers will have to be squeezed out of taxpayers, and the most likely way that will be done is by cutting other Medicare services or raising premiums and charging higher deductibles and co-payments. This bill should be repealed, and replaced by a simple measure that guarantees all Medicare beneficiaries appropriate coverage of their drug costs, with government-negotiated payments to in­dustry and a medically based formulary.


The Medicare bill also stipulated that prescription drugs can­not be imported from Canada without the approval of the De­partment of Health and Human Services, something that has so far not been forthcoming, although there are some signs that that position may be softening. Yet there is no reason to believe that drugs imported from Canada are any less safe than other drugs, and some reason to suppose they are safer than those bought in the United States, since the high-profile counterfeiting cases have occurred here. But importation is best seen as a temporary mea­sure, pending other reforms that would lead to more uniform pricing across borders. It treats the symptoms, not the disease.


Some Final Thoughts


Prescription drugs are an essential part of modern medical care. Americans need good new drugs at reasonable prices. Yet the pharmaceutical industry is failing to meet that need. There is a widening gap between its rhetoric and its practices. Driven by its lust for profits, it seems almost bent on eventual self-destruction. Its current way of doing business is not sustainable. Both the federal government and the medical profession have been co-opted by big pharma's wealth and power, but sooner or later that will have to change. The Medicare prescription drug benefit will give the industry a huge boost, but it cannot last. Those who pay for drugs—government, insurers, and individu­als—simply do not have the money to continue to support the industry in its present form. And the public is angry.


In thinking about reform, it is useful to consider the indus­try in terms of its functions. Which does it do well, which badly, and which shouldn't it be performing at all? The industry sup­posedly discovers, develops, tests, manufactures, distributes, and promotes drugs. We have seen that it contributes much less to discovery and early development than it claims but instead feeds off the NIH, and universities and smaller companies in the United States and abroad. Maybe we should simply accept that fact. But then it makes no sense to continue to reward big pharma as though it were the major source of innovation. Clin­ical testing could continue to be the industry's responsibility, but it should be conducted at arm's length, preferably through an Institute for Prescription Drug Trials. The industry should play no role whatsoever in medical education. What remains is what this industry could do very well, if it redirected its efforts—the development of promising drug candidates, manufacturing, dis­tribution, and a reasonable amount of marketing. This would bring the industry into line with reality, which is very different from its pretensions.


We need to remember that much of what we think we know about the pharmaceutical industry is mythology spun by the in­dustry's immense public relations apparatus. In this book, I have set out to expose the most important of those myths—the claims that big pharma's prices reflect its R & D costs, that it is innovative, and that it is a shining example of American free en­terprise. As we have seen, this industry actually spends far more on marketing and administration than on R & D. It is not in­novative. And it lives on government favors and shrinks from competition. If you know that, you should be immune to the kind of threat the pharmaceutical industry specializes in: "Give us everything we want, or we might have to stop producing mir­acle drugs."


Finally, in this chapter, I suggested how the industry could be reformed. Those suggestions were not meant to be compre­hensive but to deal with what I believe are the most important problems. As I said at the outset, nearly all would lead to better drugs at lower prices. Most of the changes could be achieved with simple congressional legislation. That is where you come in. Your representatives in Congress will not deviate much from the industry script unless you force them to. We saw a sad demonstration of that fact with the 2003 Medicare reform bill, which was made to order by and for big pharma. Your repre­ sentatives will stand up to the industry only if you demand that they do. I have tried to arm you with the facts. Yes, the phar­maceutical industry has enormous clout, but what finally mat­ters most is concerted public pressure.

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