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