Earlier this year, the UK media carried three stories about the pharmaceutical industry. The first was based on an article in the open access journal PLoS Medicine that confirmed what many scientists and clinicians had long suspected: while modern antidepressants make massive profits for the drug companies, for most patients they are no more effective than placebos. In the second, it was reported that a loophole in the law meant that the UK-based drug giant GlaxoSmithKline was not to be prosecuted for its alleged failure to reveal the results of trials that had shown the antidepressant Seroxat caused some children to become suicidal. The third story concerned the ploys that another UK based company Reckitt Benckiser had been using to delay for as long as possible the appearance of a generic version of Gaviscon, its highly profitable treatment for indigestion.
These arent just isolated incidents. There have been serious concerns about the pharmaceutical industry for a long time, and the two books reviewed in this issue of SiS give other examples of similar practices and worse. Pharmaceuticals are necessary; many of us owe our health or even our lives to them. There are thousands of people working in the drug companies who genuinely want to help combat diseases and reduce suffering. As long as the industry is organised in the way it is, however, these practices are bound to continue.
Pharmaceuticals are not generally very costly to produce. The justification for the high prices they command is that it takes lots of money to develop a drug and take it through clinical trials, especially because those that make it to market have to pay for those that do not. The price also has to cover the cost of marketing; pharmaceutical companies typically spend far more on marketing than on research and development. All those representatives calling on doctors, all the lavish meetings doctors are invited to, all those American TV commercials telling you to pester your doctor for the latest wonder drug, all add significantly to the price of the drugs we buy.
Unfortunately, the heavy investments in drug development especially in marketing and the high marginal profits militate against the interests of those who use and pay for the drugs. Pharmaceuticals rank as the second most profitable industry, just behind mining and well ahead of tobacco.
One obvious consequence is that companies are very reluctant to abandon a drug if problems appear late in development or after it is on the market. The lawsuits that have been filed against Merck claim that they did not react quickly enough to reports that people who were taking the painkiller Vioxx had an increased risk of heart attacks and strokes. The issue in the Aubrey Blumsohn story (see Actonel: Drug Company Keeps Data from Collaborating Scientists, SiS 30) is whether Proctor & Gambles osteoporosis drug Actonel is at least as effective as Mercks Fosamax. If it is not, more precisely if it is widely believed that it is not, Proctor & Gamble have a lot to lose.
The relatively low unit cost of producing a drug means that pharmaceutical companies are always looking for blockbusters, drugs that are will sell in vast quantities and so make vast profits. There is a strong incentive to take a drug that has been shown to be useful for a limited number of people and use aggressive marketing to get it prescribed more widely. Anti-depressants, which are among the most profitable of modern drugs, are generally acknowledged to be effective for many people with severe depression, but the evidence is growing that they are no more helpful than placebos for the majority of people for whom they are prescribed. They may not do these patients much good, but they do wonders for the profits of the companies that make them.
We might hope that these pressures would be countered by regulation, but just as in the worlds of banking and insurance, the regulators are massively outgunned by the companies they are supposed to be regulating. They do not have the staff or the resources to do their jobs properly. They depend on the companies to supply them with data and even to analyse it, and they have no way of knowing of data that the company chooses not to supply. If a problem starts to appear after a drug is on the market and the company chooses to ignore it, there is typically very little a regulator can do. It cannot compel the company to investigate, it does not have the resources to carry out its own investigation, and it cannot intervene without an investigation. Even if a regulator felt strong enough to do that, which the past performance of most of them suggests is unlikely, it could lay itself open to legal action if subsequent harm to patients was held to be due to the withdrawal of the drug in question.
The companies also have large legal departments to look for loopholes in the regulations and to defend them against claims for compensation from private individuals. And because they are so large, they can threaten to damage the economy by moving their businesses to where regulation is even less strict. Many clinical trials, for example, are already carried out in third world countries for that reason
Defenders of the industry might argue that while there may be drawbacks to having such large pharmaceutical companies, we still need them because only large companies have the resources to do the speculative research that is necessary to discover novel drugs. Even if this was true in the past, it is less so today because more and more of the innovation is being done in universities or small companies, as is happening in other industries as well. Because many of the small companies are spin-outs from universities, the taxpayer is already subsidising the early stages of drug development.
Small enterprises do not have the resources to take their successes forward, but there are other ways of proceeding. For example, two drugs for the treatment of black fever, a serious disease that affects about half a million people a year in the Third World, have been developed largely under the auspices of the World Bank, the WHO, the UN Development Program and the San Francisco based charity, the Institute for OneWorld Health.
Pharmaceuticals are not consumer goods but an integral part of healthcare. Different countries organise and pay for healthcare in different ways but in almost all of them the state plays a central role. The only developed country that leaves it largely to private enterprise and the market is the USA, and as everyone knows, the Americans pay far more and get far less for their money. In pharmaceuticals, we are all using the American system, and not surprisingly, we are all paying more and getting less than we should. Even worse, we are not being adequately protected against drugs that are unnecessary or hazardous or both.
Article first published 17/02/16
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