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This just in from the London Daily Telegraph, “Illegal sales of counterfeit medicines are booming, fuelled by a combination of the arrival of lifestyle drugs for ‘embarrassing’ conditions such as impotence, hair loss and obesity and their easy marketing on the internet, Britain’s drugs watchdog said yesterday.” Is this the first step towards blaming pharmaceutical companies for the frightening increase in global ethical drug counterfeiting? I’m sure there are some who will make that argument (hello Marcia!), but that’s not going to help address the problem. It’s like the old story about the police asking famous bank robber Willy Sutton why he robbed banks. His reply, “Because that’s where the money is.” The solution to drug counterfeiting isn’t fewer medicines, it’s increased vigilance. But, somehow I feel there are will be others who are ready and willing to blame pharmaceutical firms. How about this for a solution, no new drugs.Read More & Comment...
FDA Commissioner Lester Crawford has just announced that he and other members of senior agency management will travel to Miami, Boston, and Phoenix to hold open public meetings, according to the Wall Street Journal, “on any area the agency regulates, which includes drugs, medical devices, dietary supplements and most food products.” Well, that should certainly make for an interesting trip. Hopefully Les and crew will hear from some real people and not just politicians, “advocates,” and other sundry usual suspects. If you’d like to get on the agenda, visit http://www.grad.usda.gov/vision.Read More & Comment...
When Pfizer Vice Chairman Karen Katen appeared alongside Billy Tauzin at PhRMA’s recent announcement of the trade organizations DTC “Guiding Principles,” there was a lot of doubt as to whether her comments were anything more than supportive rhetoric. Well, today Pfizer proved they are willing, ready and able to really make a difference to DTC advertising and, more importantly, to truly advancing the public health.
At present risk information in DTC ads is neither designed nor delivered to be user-friendly. At present it is designed to be “in compliance” — and to truly advance the public health these things cannot be mutually exclusive. One of the things that Pfizer announced today is that they will undertake research (with input from the FDA and third parties) to help improve risk communication in DTC TV advertising, and will adjust risk communications accordingly. And, as far as the so-called “brief summary” is concerned, Pfizer has submitted to the FDA for review a new consumer-friendly and consumer-tested print brief summary. I hope they share their concepts more broadly, because if it works, there are broader public health communications lessons to be learned. And it’s about time because, as folks within FDA are fond of saying, the current brief summary is like the Holy Roman Empire. It is neither brief nor a summary. And it most certainly is not a useful public health tool. If Pfizer can help change this, more power to them — and to all of us.
And when it comes to disease awareness, the world’s biggest pharmaceutical company is stepping up to the plate and putting their money where their mouth is. In 2006, Pfizer will invest on par with what it spends on a branded advertising to create more disease awareness with advertisements that do not mention a product; address crucial public health issues such as health literacy, compliance and improving the patient/physician relationship through additional non-product advertising; and continue a dedicated advertising campaign to promote their “Pfizer Helpful Answers” program that helps people who need help affording the medications they need.
These announcements are more than programs inoculating Pfizer against the anti-DTC desperados. It’s about saving lives and saving our health care system big bucks. Improving disease awareness, treating people appropriately and promoting compliance with medical treatments helps eliminate the costs associated with under-diagnosis, under-treatment and untreated conditions, which often lead to more surgeries and expensive hospital care. Understandable and accessible information, in the form of direct-to-consumer advertising (disease awareness as well as branded messages) also helps with other costly factors, such as low health literacy (which costs our health care system approximately $58 billion annually) and noncompliance (estimated at more than $100 billion a year in increased emergency room visits, hospital and nursing home admissions, and lost productivity).
The debate over FDA’s new Drug Watch plan is a bellweather for how the FDA views both the pharmaceutical companies it regulates and the public it must keep informed. PhRMA’s position is that “Plans by U.S. regulators to release preliminary information about potential drug side effects could lead to unnecessary confusion and irrational fears about medicines.” And, according to Reuters, “PhRMA also voiced concern that the FDA may not provide companies with adequate notice of new information for the Web site or a chance for input.” These are all rational concerns. Where’s Aristotle when you need him? Where is the moderation? Does the public deserve to know about potential risks earlier? Of course. But what does that mean? It should not mean scaring people with the results of early, often ambiguous studies. Unfortunately, the media and some politicians jump on these FDA postings to bash drugs that are, overwhelmingly, safe. Precipitous postings only magnify the media’s thirst for “the next Vioxx,” and magnify the unintended consequences of non-compliance. And unintended consequences are not in the best interest of the public health. But this does not mean that swifter release of appropriate science isn’t a crucial goal. It most certainly is and on this both sides agree. The proper answer, the “how to,” is somewhere in the middle — but seeking that out through dialogue and debate is exceedingly hard in today’s highly-charged political environment. It’s time for politics to take a back seat to science and the public health. It’s time to abandon the Precautionary Principle for the Aristotelean Mean.Read More & Comment...
Remember when Wrong-Way Rod Blagojevich said he was going to buy flu vaccine from non-FDA approved sources? Well, now it seems that he doesn’t want to pay for the roughly 700,000 doses because of a provision that allows termination for “unforeseeable circumstances beyond its reasonable control, including governmental regulation.” Last time I looked, the FDA told the Governor NOT to buy the vaccine in the first place BECAUSE IT WAS ILLEGAL.
But that’s never stopped Wrong-Way Rod before. Somehow I don’t think the “savings” earned from his embarrassing drug importation schemes are going to cover the cost of this latest fiasco.
Well, at least the White Sox are winning.Read More & Comment...
A welcome breath of sanity from from the leader of the Utah State Senate …
Preferred drug lists come with problems
Last week, the Utah Legislature’s Executive Appropriations Committee
declined to institute a Preferred Drug List policy that would require
Medicaid recipients to use drugs on a discount list or go through a prior authorization process. A few reporters and editors were quick to broadcast their assumption that this decision was driven by political contributions. That assumption is wrong. In 2001, the state of Maine implemented a PDL policy — one of the first in the nation. Six months ago, it issued a report which scrutinized Maine’s system and found what it characterized as “disturbing trends.” According to the report Emergency room visits have increased; Hospital admissions and patient referrals to specialists have increased;Many patients experience a worsening of their medical conditions as they jump through the hoops to get medications not on the PDL; Many patients are forced to go to the doctor multiple times to get the right medicine; Medical staff time and attention is diverted from patient care to handle “voluminous paperwork” and increased calls from patients; Doctors are cutting off or limiting the number of Medicaid patients they accept due to the increased administrative burden; and Quality of care has decreased and patients have suffered painful consequences. They reported, “while (a PDL) is an important cost containment tool, aspects of its implementation have adverse consequences directly affecting the health care of thousands.” Other PDL states are also experiencing serious problems. I found these concerns to be compelling. As a taxpayer and legislator, I would like nothing more than to save money in our Medicaid program. The bottom line for me, however, is that I am unwilling to conduct medical experiments on our most vulnerable residents. Some have asked why we don’t just approve a limited program to see how it would work. The answer is simple. We imagine that we might well save a significant amount of money in the short term, as have Maine and the other PDL states. Short-term savings, however, are only part of the equation. Let’s look at the dynamics that would be set in motion. A limited program is
likely to generate quick positive numbers while the long term impact and human cost would remain unquantifiable for several years.
Stories of frustration and tragedy would have a difficult time competing with clear financial data that would build political momentum in favor of PDLs, to the injury of a population that is already striving to overcome immense challenges. In other words, this train has no brakes. I do not want it to start rolling down the mountain when we know there are people on the tracks below.
Maine is currently investigating the administrative problems caused by its PDL program. At some point in the future, Maine plans to try to quantify the human damage caused by the program to determine if the money it saved was worth the cost. At this point, I am unwilling to plunge Utah into a similar experiment.Perhaps we can revisit the issue when the bugs are worked out of the PDL system. Seven legislators on Utah’s Executive Appropriations Committee voted for a
Utah PDL; nine voted against it. Each was lobbied fiercely from all sides of the issue. Each has their own reasons for the judgment call they had to make. They are all good legislators. They did their job.
You will find your representatives to be far more informed, far more
sincere, and more compassionate than the two-dimensional caricatures
portrayed by recent media accounts.
John L. Valentine is president of the Utah State Senate.Read More & Comment...
The one thing I got out of Gardiner Harris’ story in Saturday’s NY Times is that the current drug label isn’t a terrific public health tool. Just like its crainial cousin, the “brief summary,” it’s written more for liability protection than for physician/patient utility. And that’s a shame — especially now that the FDA is adding so many more warnings to already crowded spaces. While approprite language is crucial to responsible use, more and more black boxes won’t make the label any more used today than it was before the Grassley Inquisition. In fact, it might even lead to a hideous unintended consequence of “label fatigue,” where a black box is no longer viewed as an extraordinary thing. What a shame to cry wolf and only end up with Sid Wolfe.Read More & Comment...
Today’s words of wisdom from Nobel Prize-winning drug researcher and United States Senator Charles Grassley, “The F.D.A. should not be slowing things down or speeding them up depending on how the wind blows.” That certainly carries a lot of weight from a man who wears a weathervane on top if his head and, during Commissioner Crawford’s confirmation vote, needed to be reminded that the FDA doesn’t have the authority to mandate label changes. The answer, my friend, is not bloviating in the wind. Rather than commenting on the prevailing winds (which certainly seems a classic case of projection) perhaps Mr. Grassley should work to increase the FDA’s budget.Read More & Comment...
I’m sorry, did somebody say that counterfeit drugs are a “red herring” of the global pharmaceutical industry? The only comment I can make is, WHO’s on first.
LONDON - Worldwide, the WHO believes counterfeits make up between 5 and 8 percent of the $550 billion of medicines sold each year. But WHO spokeswoman Daniela Bagozzi said this was based on incomplete information and the actual amount could be higher.
“It represents a huge number of people who are suffering and in some case dying,” she said. “A lot of deaths could be avoided if the drugs being taken were not substandard counterfeits.”Read More & Comment...
Here’s a thoughtful article from a doctor who’s having a hard time “donating” staff time to helping patients navigate the often difficult paperwork problems of patient assistance programs. He’s trying to do the right thing. How can we help? URL for this article:
Do we now have to start referring to “Big Generics?” As reported today,Teva agreed to buy Ivax in a $7.4 billion cash-and-stock deal that will restore the Israeli company’s No. 1 position in the market for generic medicines. Used to be that those little ‘ol generic companies were the poor country cousins of the “real” pharmaceutical companies. But it seems as though the sides are evening up and, with a big assist from Uncle Sam, “Big G” is ready to make its move to prime time. Will this move presage a more aggressive legal posture by the purveyors of off-patent in general and towards biologics in particular? Don’t bet against it. G-Wiz!Read More & Comment...
Remember that wild ad? The one that got your hackles up and made you ask your 8-year old to leave the room? Well, it’s gone goodbye — if the members of PhRMA follow #10 of the new voluntary DTC guidelines —and they’re (mostly) on record saying they will abide. As such, reminder ads are history. #10 guideline, the only one of the 15 with real teeth, is the first real move towards having responsible adults at pharmaceutical companies reign in their purposefully aggressive marketing brand folks. Good work Billy! A “perfect 10.”Read More & Comment...
PhRMA’s new voluntary guidelines for DTC advertising say a lot about what Big Pharma is ready to do — and that’s not much more than what they’re doing right now. That means being “in compliance.” That’s nice. But what they’re missing is that the problem is the status quo. Doing the wrong thing the right way is a very questionable strategy. Okay, maybe not the “wrong” thing, but not the best, most forward-looking thing. The real problem is that “long-term” thinking, relative to marketing, needs to shift from the end of the quarter to somewhat further down the pike. If not, it will end up being decided down another pike — Rockville Pike.Read More & Comment...
William Osler said “the young physician starts life with 20 drugs for each disease, and the old physician ends life with one drug for 20 diseases.” That’s a nice aphorism, but it has a deeper meaning. Dr. Osler recognized that while young physicians start their career on the cutting edge of medical science, they ultimately learn, through trial and error that the practice of medicine isn’t primarily about medicine, it’s about the patient.
Let me tell you about another famous physician, one who has influenced millions of people around the world, Dr. David Zorba, chief of neurosurgery at the renowned County Medical Hospital during the 1960s. You might remember him better if I remind you of his often-repeated mantra, Man, woman, birth, death, infinity. If we understand the need to make today a foundation for tomorrow, then infinity is a concept we should consider.
Dr. Zorba was mentor, father confessor, friend and teacher to Dr. Ben Casey, the star of the television series of the same name that ran from 1961 until 1966. In Ben Casey the limits of medicine, the ethics of physicians, and the role of medicine in society were thoughtfully examined. Dr. Zorba’s hospital functioned as a microcosm of the larger society it served. The professionals presented in Ben Casey were a tight group sworn to an oath of altruistic service. The majority of physicians in the employ of County General were not terribly inflated with self-importance. Their world was not so far removed from the world inhabited by those they helped. The problems that plagued the world outside the walls of County General could often be found within as well.
During their work at County General, Dr. Zorba and his colleagues came into contact with representatives from every level of society. Part of that contact was learning about and making judgments on certain societal issues and problems. Racial tension, drug addiction, the plight of immigrants, child abuse, and euthanasia were a few of the issues treated in Ben Casey. Medical malpractice wasn’t one of them.
How far we have come in just under half a century. Today, as in the time of doctors Zorba and Casey, physicians are often viewed as subjects of admiration. But, unlike those halcyon days at County General, physicians are more and more viewed with disdain as spendthrift by insurance providers, potentially liable by the tort bar, as in the pocket of big pharmaceutical companies by the media, and as heartless cogs in a malfunctioning health care system by our patients. Today, rather than making judgments about society, society is making judgments about us. We have moved from the leadership of Dr. Zorba to that of Dr. Phil.Read More & Comment...
When Thomas Edison was asked why he was so successful he responded, “Because I fail so much faster than everyone else.” Think about the millions of dollars, pounds and Euros that would be saved by all types and sizes of companies and governments if publicly discussed and vetted biomarkers could be used and used predictably in the drug approval process.
In partnership, regulators, industry and academia can apply modern engineering and cutting-edge scientific knowledge to medical product manufacturing. In partnership we can improve standardization and automation of clinical research. And in partnership we can develop novel and improved clinical trial designs and analytical methods for evaluation of safety and effectiveness that can reduce costs. Currently, 50% of drugs that undergo large scale Phase 3 trials turn out to be too unsafe or not effective enough for marketing. That is not a sustainable model for the 21st century.
Consider the implications if FDA could help companies to fail faster. Using the lower end of the Tufts drug development number …
* A 10% improvement in predicting failure before clinical trials could save $100 million in development costs.
* Shifting 5% of clinical failures from Phase 3 to Phase 1 reduces out of pocket costs by $15-$20 million.
* Shifting 1/4 of failures from Phase 2 to Phase 1 would reduce out of pocket costs by $12-$21 million.
FDA’s critical path activities and research must complement, not compete with, what industry and other regulatory agencies in the US and around the world and are already doing.
I believe that FDA should assume an organizational role, because FDA is at the crossroads of the translational process.
FDA is uniquely suited to take a major role in this effort because of their unique cross-industry and cross-cutting knowledge of the hurdles companies and products encounter that are causing them to fail in late stage clinical trials.
FDA has the technical expertise that can draw together stakeholders, help prioritize research that is most needed, and to partner with others to conduct this research. Obviously solutions will have to come from sources with the greatest expertise. This could entail contracting with academic organizations, private industry and other global translational research groups.
FDA’s Critical Path initiative will enable innovative growth companies to better and more efficiently attack the steep hurdles facing them, allowing them to compete more effectively against the bigger, better-funded players in the market on a more level playing field. That means a real change in the risk/benefit equation for both emerging growth companies and the public health.
Consider FDA’s critical path initiative as a revised game of Shoots and Ladders. Rather than relying on a roll of the dice, FDA can be a bridge over the shoots and a guide to the ladders.
The most important tool is collaboration. Regulators must embrace stakeholders as partners in the public health process.
In the Los Angeles Times of July 25, Michael Hiltzik decried the fact that drug makers have budgeted $50 million to support one of two competing pharmaceutical pricing intitiatives (Proposition 78) that will be on the ballot at this November’s special election in California. Put very simply, Prop 78 encourages drug makers to reduce prescription prices for low-income patients voluntarilly, whereas the competing initiative, Prop 79, gives the state government almost complete control over drug prices. Mr. Hiltzik concludes his article with this invitation: “just consider how many indigent and elderly patients would be helped $50 million in discounts.”
I can’t answer the question precisely, but the answer is surely “very few.” US sales of prescription drugs run about $178 annually. About 10 percent of these sales are of generic drugs (not relevant to the question), leaving about $160 billion. Let’s say about 10 percent of US sales are in California: $16 billion. $50 million of $16 billion is a vanishingly small amount: about $1.47 for each Californian. Even if there’s a significant skewness to the distribution (as there surely is), $50 million is a tiny number. Let’s say one in ten Californians has “catastrophic” drug costs, such that they must trade off prescriptions for groceries: $50 million divided by these 3.4 million patients is still less than $15 per patient.
When looked at in perspective, $50 million is a tiny amount for this remarkably unpopular industry to invest in buying some breathing room from the relentless growth of government intervention in its affairs.
Excuse me Senator, about that bill you want a vote on that would allow imported drugs from a multitude of nations including Great Britain, this just in …
Counterfeit cholesterol drug alarm
The UK’s medicines watchdog is recalling a batch of a cholesterol-lowering drug after fake tablets were discovered. The Medicines and Healthcare products Regulatory Agency (MHRA), in conjunction with Pfizer, is recalling packs of Lipitor 20mg tablets. Only those bearing the batch number 004405K1 are affected. The MHRA said patients were not at any immediate risk from the fake drugs, which should be returned to chemists. Patients will then be given new supplies of the prescription-only drug. Fake tablets can be identified because they do not come in sealed packets in which the genuine drug is provided. Tip-off Pfizer said hundreds of batch numbers were released each year, and the recall only applied to this one. There were around three million prescriptions for Lipitor issued in 2004. Seventy-three packets of counterfeit Lipitor have so far been discovered after a tip-off from customs officers in Rotterdam, Holland. It is the third time since the beginning of 2004 that fake drugs have entered the pharmaceutical supply chain in the UK. Last year, counterfeit batches of Cialis, used to treat impotence, and Reductil, used to treat obesity, were discovered. Nimo Ahmed, head of intelligence at the MHRA, said: “It is the vigilance of the MHRA that has led us to identify the counterfeit Lipitor and recall this product. “Although the quality of counterfeit medicines cannot be guaranteed, our testing of the counterfeit product indicates that there is no immediate risk to patients. If patients have any concerns about possible side-effects they should discuss them with their doctor.” Pfizer called for more effort to be made by authorities in the UK and Europe to ensure the safety of medicines Barcode Kate Lloyd, medical director of Pfizer UK, said: “Patient safety is our top concern and we are seriously alarmed at the discovery of counterfeit medicine in the UK. “Patient safety is at risk if counterfeit products can easily be introduced into the supply chain through cross-border trade, as patients will not gain the benefits their doctor intended when selecting their medicine.” She said measures including outlawing the repackaging of original manufacturers’ medicines, supporting the introduction of tamper-resistant medicine packaging, and introducing a standardised European barcode for medicines could all help to protect medicine supplies. “We would urge any patients who have this particular batch number on their packet to follow the MHRA’s advice and return the product to where they obtained it and seek a replacement of the genuine drug.”Read More & Comment...
Remember the movie “Brazil?” It’s one of those surreal Terry Gilliam creations where up is down and down is up and Robert DeNiro stars as a subversive HVAC repairman. Anyway, it’s time to revisit the world’s largest Portuguese-speaking nation — and this time it’s not for fun. Have a look at what CMPI advisory board member Doug Bandow (of the Cato Institute) has to say.
The American Spectator
Bad Boys From Brazil
By Doug Bandow
Drugs offer incredible medical benefits. Everyone wants to take them. Drugs cost a lot to develop. No one wants to pay for them, as Brazil has demonstrated in preparing to steal several pharmaceutical patents.
The tension between access to existing medicines and creation of new ones is particularly stark in poor nations. The regular price of HIV/AIDS treatment regimens exceed per capita incomes in some countries.
Although activists routinely vilify the pharmaceutical companies, only their extensive R&D activities generate the products that keep tens of millions of people alive. Leading companies widely discount and donate their drugs in the Third World and work with charitable groups to build health infrastructure and distribute antiretrovirals.
No good deed goes unpunished, however. Even residents of rich countries don’t want to pay for life-saving medicines. Most industrialized states impose one or another set of price controls on drugs, blatantly free-riding on the scientific creativity of American firms.
Other states make even less pretense of respecting the property rights of U.S. drugmakers. Such as Brazil. Despite its manifold economic and social woes, it has the largest economy in Latin America, ranking 11th in the world. Per capita GDP runs about $8,100 — behind the U.S., but ten or more times that of the dozen poorest African states.
Yet Brasilia believes that other nations — or, more accurately, companies from other nations — owe it a medical free lunch. The government wants to save money in its health budget (what country does not?), so it expects to buy AIDS drugs at fire sale prices. Brazil backs up its demands by threatening to steal the makers’ patents.
International intellectual property rules allow use of compulsory licensing of patents, but only in public health emergencies. Brasilia, however, has never let juridical niceties stand in the way of forcing down drug prices.
IN 2001 BRAZIL BEGAN THE process of issuing a compulsory license for Viracept (nelfinavir), an AIDS drug, unless Hoffman-La Roche lowered the price. The company accepted a 40 percent cut on its already discounted price.
Two years later Brazil was back, demanding price cuts from Roche, again, as well as Bristol-Myers Squibb and Merck. To back its ultimatum, Brasilia threatened to confiscate the drug patents.
Brazil prepared a formal decree to authorize importation of “any generic medication in case of a national emergency or in the interest of public health.” Even more ominously, Health Minister Humberto Costa indicated that Brazil would provide discounted AIDS medications to its Latin American neighbors, opening the international floodgates.
Brasilia’s extortion caused the companies to slash the prices of their anti-AIDS drugs. The final cost of Merck’s STOCRIN ended up little above that in Sub-Saharan Africa.
Despite its debt problems, Brasilia was not broke. It simply wanted to save cash. Alexandre Grangeiro, coordinator of the Ministry of Health’s AIDS program, explained: “We need a price reduction now, because of our budget limitations.” Similarly, said Dr. Paulo Roberto Teixeira, Director of the Brazilian National STD/AIDS Programme: “In previous negotiations, we managed to get the prices of these drugs reduced, but now we want to lower the costs even further.”
Brazil is wielding the same weapon yet again. Only this time Brazilian officials are demanding that Abbott Laboratories, Gilead Sciences, and Merck turn over their knowledge through “voluntary licensing,” allowing Brazil, either through government operations or private manufacturers, to produce generic copies.
Brazil might be a major economic player, but why pay for what you can steal? “Even with recent price reductions that we obtained from drug producers, the total cost of retroviral drugs is growing in an unbearable way,” explained Jarbas Barbosa, a health ministry official. (Ironically, early in May Brazil rejected a $40 million U.S. grant for AIDS treatment in protest of the accompanying conditions.)
These are “negotiations” in name only, since Brasilia will accept only one result. Said Barbosa: “We’re interested in a fast negotiation. But if we’re obliged to use the compulsory licensing we will do so as a last resort.”
Brazil’s lower house has since voted to suspend patents for AIDS drugs. At the end of June the government announced that it was going to appropriate Abbott’s Kaletra. Brasilia announced that the company had two weeks to make a counter-offer.
Understandably, the company caved, agreeing to provide ever-increasing amounts of its drug at the amount expenditure, and to yield its technology in 2015. But these concessions were like blood in the water for sharks. Brazil’s health minister, Correio Braziliense, announced that the tentative accord wasn’t enough: “The process of a compulsory license is still ongoing and breaking the patent has not been discarded as a final alternative.”
Which means Abbott will have to give more or lose its patent. Then next on the target list are Gilead Sciences and Merck, with whom Brasilia is conducting Don Corleone-like “negotiations.”
THE U.S. GOVERNMENT SHOULD punish Brazil economically — “as a last resort,” of course.
Washington generally has no duty to protect the profits of American firms that operate overseas. But in this case firms have no opt out — Brazil simply says, give us your product or we will seize it, irrespective of where you conduct business.
The consequences are potentially dire. Antiretrovirals exist only because profit-minded drugmakers have invested billions of dollars in R&D. Roberto Gouvelo, a legislator from the governing Workers’ Party, complained that one AIDS drug purchased by the government costs ten times its production cost. Unfortunately, however, industry investments must cover not only the successes, but also the failures, which are many. Even larger outlays are likely to be necessary to develop a vaccine for HIV/AIDS, as well as cures for a multitude of other serious diseases.
Should countries take new medicines whenever they want to pay less, pharmaceutical manufacturers will turn their attention to less important but less risky endeavors (most notably the “me-too” drugs routinely denounced by industry critics). It would be bad enough if Brazil stole American medicines for its domestic market. But if Brasilia begins exporting generic substitutes, it could destroy pharmaceutical innovation.
Brazil’s threats highlight another problem. By artificially driving down prices, such controls increase the gap between domestic and foreign prices, creating the perception that drugmakers are treating American consumers unfairly. That, in turn, increases pressure for so-called reimportation of the very drugs being sold under foreign price controls.
Washington should attempt to educate Brasilia. India serves as a good example: once a celebrated patent-breaker, New Delhi now sees pharmaceuticals as an emerging industry and has instituted a legal regime to protect intellectual property.
The U.S. also should indicate that Brazil’s behavior risks disqualifying it from joining any free trade system including America. The de facto theft of U.S. patents is inconsistent with open access to the American market.
Since Brasilia continues to misuse patent provisions intended to resolve a health care emergency, Washington should file a complaint before the WTO. Washington should consider direct sanctions as well.
Brazil certainly does not deserve preferential access to the U.S. market under the generalized System of Preferences (GSP) program. Brasilia’s ability to export $2.5 billion worth of goods to America duty-free already is undergoing a special review while the USTR considers the effectiveness of a Brazil’s system to combat copyright privacy. The Bush administration also should use a Special 301 investigation and penalize Brazilian exports.
Moreover, Congress should empower the U.S. Trade Representative to suspend recognition of intellectual property rights for companies headquartered in countries that violate American copyrights and patents. Retaliatory sanctions obviously should be a last resort, since a trade war is in no one’s interest. But if Brazil hopes to become a significant economic power, it should stop looking at U.S.—made pharmaceuticals as a free lunch.
If people won’t pay for their medicines, drugs won’t be created. Washington must protect the intellectual property which has created a medical boon for the entire world.
Doug Bandow is a Senior Fellow at the Cato Institute.
The American health care system is undermined, underserved, and undervalued when labeling is written more for corporate liability protection than as a valuable tool for health care providers. Today, labeling includes excessive risk information and exaggerated warnings. And this has set into motion a dangerous dynamic — labeling that does not accurately communicate to either the health care professional or the patient the conditions in which any given product can be used safely and effectively. This is nothing less than a grave menace to the public health. Labeling for liability is health care terrorism.Read More & Comment...
I really wanted to link to Dr. Marcia Angell’s July 15, 2004 temper tantrum article in The New York Review of Books — but I couldn’t get permission. So, rather than infuriate you further with her dangerously slanted views, let me share a more useful debate.
Imagine American health care spending as a dollar bill divided into a hundred pennies. How many pennies do you think represent spending on prescription drugs? 60? 80? Wrong. 10 1/2. The rest (otherwise known as 85%) represent everything else — from doctor visits and hospitalization to administrative charges, and insurance.
What’s a better bargain: time spent in the hospital, or drugs that keep Americans healthy and productive? The answer is clear. Fewer cents make the most sense.
More Americans are using more prescription drugs and for good reason. New medicines are increasingly the first, most effective, and most cost efficient treatment options. Ask any doctor. Ask your doctor. Is spending on pharmaceuticals up? It is, because more drugs are being prescribed. And the result is a healthier America and a reduced burden on the American health care system.
ItÃ¢s also true that insurance companies have been increasing their monthly premiums — but not because prescription drugs costs are busting their budgets. That is, as they say, a lie Ã¢ but an often repeated one. Prescription drugs account for only a small part of monthly insurance-premium increases. Consider this, from 1998 to 2003, insurance companies increased their premiums by an average of $104.62 per person. During that same time period prescription-drug costs increased by $22.48. What about the other $82.14? That’s a good question. And America deserves an answer.
What about Medicaid? In 2002, prescription drugs accounted for only 11.4 percent of Medicaid spending, and from 1997 to 2002 Medicaid prescription drug increases accounted for less than 20% of the total increase in spending.
Are the majority of Americans with private health insurance spending more for drugs? Yes — because their insurance companies are paying less. In 2000, people under 65 with private health insurance paid 37.2 percent of the cost of their prescription drugs costs out of their own pockets. (Not surprisingly, this leads many Americans to believe that their increased out-of-pocket expenses is because of higher drug costs.) The truth is that the growth in prescription-drug co-payments outpaced the growth rate of prescription drug prices four to one.
This imbalance has had a devastating impact on the health of Americans and the American health care system. Out-of-control out-of-pocket expenses have caused many patients to stop using prescription drugs for controllable chronic conditions like high cholesterol, high blood pressure, ulcers and depression. The unfortunate result among patients with diabetes, asthma, and gastric acid diseases is that visits to emergency rooms have increased 17 percent and hospital stays have risen 10 percent.
ItÃ¢s not about the price of drugs Ã¢ itÃ¢s about the cost of health care. And the American pharmaceutical industry is committed to being a part of the solution. As Disraeli said, Ã¢it is easier to criticize than be correct.”