Latest Drugwonks' Blog
The Priesthood of Pharmaceutical Purists use trial attorney winnings to in part finance their attack on industry. One of their meal tickets is going to three squares behind bars.....
"Milberg Weiss' Bershad Pleads Guilty to Conspiracy in Kickback Plan
Name partner at securities plaintiffs law firm agrees to cooperate and to forfeit $7.75 million"
David J. Bershad, a name partner at securities plaintiffs law firm Milberg Weiss & Bershad, has pleaded guilty to federal charges that he conspired in the payment of illegal kickbacks to individual class action plaintiffs.
The guilty plea by Bershad, entered Monday afternoon in federal court in Los Angeles, raises the stakes for his co-defendants, former fellow name partner Steven G. Schulman and the Milberg Weiss firm itself, as well as the other major Milberg Weiss figures, Melvyn I. Weiss and William S. Lerach, who have so far escaped indictment.
http://www.law.com/jsp/article.jsp?id=1183971987057&rss=newswire
Now Millberg Weiss is part of the Prescription Access Litigation Project (PAL). But PAL conveniently leaves the firm off it's website. But since drugwonks is all about transparency, here is a reminder of their close connection, courtesy of MassPIRG
http://masspirg.org/MA.asp?id2=5318&id3=MA& and PAL itself
http://www.prescriptionaccess.org/press/pressreleases?id=0013
"Milberg Weiss' Bershad Pleads Guilty to Conspiracy in Kickback Plan
Name partner at securities plaintiffs law firm agrees to cooperate and to forfeit $7.75 million"
David J. Bershad, a name partner at securities plaintiffs law firm Milberg Weiss & Bershad, has pleaded guilty to federal charges that he conspired in the payment of illegal kickbacks to individual class action plaintiffs.
The guilty plea by Bershad, entered Monday afternoon in federal court in Los Angeles, raises the stakes for his co-defendants, former fellow name partner Steven G. Schulman and the Milberg Weiss firm itself, as well as the other major Milberg Weiss figures, Melvyn I. Weiss and William S. Lerach, who have so far escaped indictment.
http://www.law.com/jsp/article.jsp?id=1183971987057&rss=newswire
Now Millberg Weiss is part of the Prescription Access Litigation Project (PAL). But PAL conveniently leaves the firm off it's website. But since drugwonks is all about transparency, here is a reminder of their close connection, courtesy of MassPIRG
http://masspirg.org/MA.asp?id2=5318&id3=MA& and PAL itself
http://www.prescriptionaccess.org/press/pressreleases?id=0013
Trevor Butterworth sums up the sad state of Steve Nissen, the NEJM and the media in his post. And the Priesthood of Pharmaceutical Purists, trial attorneys and assorted Whack Packers want to entrust the public health to these sort of people???
http://www.huffingtonpost.com/trevor-butterworth/a-crusading-doctor-stumbl_b_55681.html
http://www.huffingtonpost.com/trevor-butterworth/a-crusading-doctor-stumbl_b_55681.html
I wanted to call attention to my recent piece in the Florida Sun-Sentinel about insomnia, and its related health issues. The piece centers on the recent excellent Alan Berliner documentary Wide Awake on HBO.
I am what i would call a self-induced insomniac, i use it to get my writing done and meet deadlines. Unfortunately, this establishes a pattern of middle of the night wakefulness which persists even when i have no deadline. This is not good for my health. I don't currently take sleeping pills, but many of my patients find them useful - and in fact Ambien is one of those examples of good drugs that to from panacea to panic whenevever a media report focuses on the rare sleepwalker. All drugs should be managed or monitored by the doctors who prescribe them, but they are not good guys or bad guys, they are useful arrows in our medical quiver.
http://www.sun-sentinel.com/news/opinion/sfl-forum06insomnianbjul06,0,5107682.story?coll=sfla-news-opinion
I am what i would call a self-induced insomniac, i use it to get my writing done and meet deadlines. Unfortunately, this establishes a pattern of middle of the night wakefulness which persists even when i have no deadline. This is not good for my health. I don't currently take sleeping pills, but many of my patients find them useful - and in fact Ambien is one of those examples of good drugs that to from panacea to panic whenevever a media report focuses on the rare sleepwalker. All drugs should be managed or monitored by the doctors who prescribe them, but they are not good guys or bad guys, they are useful arrows in our medical quiver.
http://www.sun-sentinel.com/news/opinion/sfl-forum06insomnianbjul06,0,5107682.story?coll=sfla-news-opinion
The Journal of Life Science provides a great weekly brief of health care and medical innovation news and opinion. This week is no different.
http://www.tjols.com/wb/07jul06.html#diabetes
What I find striking is that so many of the incremental advances in medicine -- those that will lead to more predictive and preventive care -- will depend on future investment to both test the validity and reliability of new information as real products. To quote Robert Solow many if not most innovations need to be embodied in new kinds of ..... equipment before they can be made effective. Improvements in technology affect output only to the extent that they are carried into practice either by net capital formation or by the replacement of old-fashioned equipment by the latest models…â€
Of course, that process of commercialization requires profit, risk taking, marketing, industrial-academic relationships, patent protection. In short, everything need to make this world a better place through technological advancement most of what I will call the Whack Pack either opposes, makes money critcizing or suing.
Now nothing's perfect and change is constant. Compassion, trust and honesty should inform all social relations. But to suggest ridding science of commercialism will bring about a better and brave new world is...in a word, whacky and dangerous.
http://www.tjols.com/wb/07jul06.html#diabetes
What I find striking is that so many of the incremental advances in medicine -- those that will lead to more predictive and preventive care -- will depend on future investment to both test the validity and reliability of new information as real products. To quote Robert Solow many if not most innovations need to be embodied in new kinds of ..... equipment before they can be made effective. Improvements in technology affect output only to the extent that they are carried into practice either by net capital formation or by the replacement of old-fashioned equipment by the latest models…â€
Of course, that process of commercialization requires profit, risk taking, marketing, industrial-academic relationships, patent protection. In short, everything need to make this world a better place through technological advancement most of what I will call the Whack Pack either opposes, makes money critcizing or suing.
Now nothing's perfect and change is constant. Compassion, trust and honesty should inform all social relations. But to suggest ridding science of commercialism will bring about a better and brave new world is...in a word, whacky and dangerous.
That oft repeated question by the proponents of drug importation. Sadly, today's answer is, in Vancouver.
Here's the news from Canada's newspaper of record, the Toronto Globe & Mail.
ONLINE PHARMACIES
Counterfeit drugs caused woman's death, coroner concludes
ARMINA LIGAYA
July 6, 2007
VANCOUVER -- Shoddy pills from a bogus online pharmacy are to blame for the death of a 58-year-old woman from Vancouver Island, a coroner's report says.
Yesterday's conclusion makes Marcia Bergeron the first clear-cut case of a death stemming from counterfeit drugs bought on the Internet, but it likely won't be the last, said Rose Stanton, regional coroner for Vancouver Island.
"The quantity of seized counterfeit medication is huge," she said. "And so, what we have is the first person [for whom] we have all the facts, who we know died as a result of these drugs.
"But what we also know is lots of people are buying these drugs. So the potential for more deaths is high."
Ms. Bergeron was found by a friend on Dec. 28, 2006, in her bed in a normal sleeping position. Emergency services were called, but it was clear she had been dead for some time.
Three types of pills were found at Ms. Bergeron's home. One contained Zolpidem, a powerful hypnotic not available in Canada. Another contained the anti-anxiety medication Alprazolam, which is available with a prescription, and the third contained acetaminophen.
These drugs were later determined to be laced with extremely high quantities of metal. The acetaminophen pill had 15 times the amount of aluminum that would be fatal, Ms. Stanton said.
An autopsy showed that Ms. Bergeron died of cardiac arrhythmia stemming from metal toxicity.
In the weeks and months leading up to her death, she complained of flu-like symptoms. Ms. Bergeron said, in e-mails to a friend, that her hair was falling out, and she suffered from nausea, diarrhea, aching joints and blurry vision.
When the pills were tested, they were of such poor quality, the ingredients seemed "mashed together" Ms. Stanton said. The mixture of drugs and metal in each pill would vary depending on which portion was examined, she said.
The metal contaminants were likely part of the filler materials used to make the pills, the coroner's report said.
On Ms. Bergeron's computer, records showed she had been visiting websites from which medication could be purchased.
When U.S. Food and Drug Administration investigators examined her hard drive, it showed Ms. Bergeron bought Zolpidem - a powerful sedative available by prescription in the U.S. but not in Canada.
The website she used, which purported to be Canadian but has since gone offline, was previously flagged by the FDA concerning counterfeit Zolpidem.
Because of all these elements - computer records, e-mails, drugs found on scene and a subsequent autopsy - investigators were able to definitively link the online drugs to Ms. Bergeron's death.
It's an FDA first, Ms. Stanton said.
She said the website Ms. Bergeron used is one of thousands that claim to be reputable pharmacies.
"The site that she purchased from is one of a group of sites that the FDA says use the tactic of phoning people after they get the first order," she said. "They phone for the renewal so there isn't a computer record."
Marnie Mitchell, CEO of the B.C. Pharmacy Association said that Canada has a very regulated and monitored pharmacy system, and stepping away from it has risks.
"Online sources are very difficult to assess their legitimacy and their safety," she said. "This is a very tragic episode and illustration of the problems that stem from going to those kinds of places."
Cracking down on these websites, however, would be a difficult endeavour, she said, because they change and shift very quickly and are hard to trace.
Instead, she recommended the federal government launch a public-awareness campaign to warn people of the potential dangers.
Alain Desroches, spokesperson for Health Canada said the agency regularly flags counterfeit products and issues public advisories. It also works with RCMP in investigating counterfeit drugs. However, he could not comment on any policy changes that would stem from the coroner's findings.
"We welcome the report and it's going to be reviewed carefully," he said.
Here's the news from Canada's newspaper of record, the Toronto Globe & Mail.
ONLINE PHARMACIES
Counterfeit drugs caused woman's death, coroner concludes
ARMINA LIGAYA
July 6, 2007
VANCOUVER -- Shoddy pills from a bogus online pharmacy are to blame for the death of a 58-year-old woman from Vancouver Island, a coroner's report says.
Yesterday's conclusion makes Marcia Bergeron the first clear-cut case of a death stemming from counterfeit drugs bought on the Internet, but it likely won't be the last, said Rose Stanton, regional coroner for Vancouver Island.
"The quantity of seized counterfeit medication is huge," she said. "And so, what we have is the first person [for whom] we have all the facts, who we know died as a result of these drugs.
"But what we also know is lots of people are buying these drugs. So the potential for more deaths is high."
Ms. Bergeron was found by a friend on Dec. 28, 2006, in her bed in a normal sleeping position. Emergency services were called, but it was clear she had been dead for some time.
Three types of pills were found at Ms. Bergeron's home. One contained Zolpidem, a powerful hypnotic not available in Canada. Another contained the anti-anxiety medication Alprazolam, which is available with a prescription, and the third contained acetaminophen.
These drugs were later determined to be laced with extremely high quantities of metal. The acetaminophen pill had 15 times the amount of aluminum that would be fatal, Ms. Stanton said.
An autopsy showed that Ms. Bergeron died of cardiac arrhythmia stemming from metal toxicity.
In the weeks and months leading up to her death, she complained of flu-like symptoms. Ms. Bergeron said, in e-mails to a friend, that her hair was falling out, and she suffered from nausea, diarrhea, aching joints and blurry vision.
When the pills were tested, they were of such poor quality, the ingredients seemed "mashed together" Ms. Stanton said. The mixture of drugs and metal in each pill would vary depending on which portion was examined, she said.
The metal contaminants were likely part of the filler materials used to make the pills, the coroner's report said.
On Ms. Bergeron's computer, records showed she had been visiting websites from which medication could be purchased.
When U.S. Food and Drug Administration investigators examined her hard drive, it showed Ms. Bergeron bought Zolpidem - a powerful sedative available by prescription in the U.S. but not in Canada.
The website she used, which purported to be Canadian but has since gone offline, was previously flagged by the FDA concerning counterfeit Zolpidem.
Because of all these elements - computer records, e-mails, drugs found on scene and a subsequent autopsy - investigators were able to definitively link the online drugs to Ms. Bergeron's death.
It's an FDA first, Ms. Stanton said.
She said the website Ms. Bergeron used is one of thousands that claim to be reputable pharmacies.
"The site that she purchased from is one of a group of sites that the FDA says use the tactic of phoning people after they get the first order," she said. "They phone for the renewal so there isn't a computer record."
Marnie Mitchell, CEO of the B.C. Pharmacy Association said that Canada has a very regulated and monitored pharmacy system, and stepping away from it has risks.
"Online sources are very difficult to assess their legitimacy and their safety," she said. "This is a very tragic episode and illustration of the problems that stem from going to those kinds of places."
Cracking down on these websites, however, would be a difficult endeavour, she said, because they change and shift very quickly and are hard to trace.
Instead, she recommended the federal government launch a public-awareness campaign to warn people of the potential dangers.
Alain Desroches, spokesperson for Health Canada said the agency regularly flags counterfeit products and issues public advisories. It also works with RCMP in investigating counterfeit drugs. However, he could not comment on any policy changes that would stem from the coroner's findings.
"We welcome the report and it's going to be reviewed carefully," he said.
In today's New York Times, Paul Krugman calls for universal health care in the United States, calls those who oppose it all sorts of nasty names, and points to SiCKO as his proof of concept.
Note to Paul: Read the ads for SiCKO in your own paper -- it's billed as a comedy.
To get a feel for his general position, consider this statement, "Medicare ... is being undermined by privatization."
What he doesn't say is that ... it's working. Every poll shows that seniors are very pleased with the Part D benefit-- and by huge margins. And every government report shows that the program is coming in significantly below cost projections.
Imagine that, a government program that people like and comes in under budget. Privatization may seem like a frightening concept to Mr. Krugman, but it sure works.
But why let facts get in the way when you've got an agenda to pursue?
And here's the agenda, summed up in one sentence:
"Universal health care would save thousands of American lives each year, while actually saving money."
Really? All the statistics from Europe and other nations with government-run health care say different. Having just returned from a conference of European health care experts, regulatory officials, and legislators, I can attest to the many problems European government are facing as they try to reinvent their own national systems for the 21st Century.
Paul -- come with me to Europe and let's film a documentary of not only care denied but care unavailable. I'm sure we could make it as "entertaining" as SiCKO. It's easy to prove an argument when you cherry-pick the facts. We can call our movie "MaLADE-O."
Ooh-la-la!
Mark Twain wrote, "For every complex problem there is a simple solution -- and it is usually wrong."
Alas, there is no perfect, easy solution to the American health care miasma. That only happens in the movies.
For a more balanced view of how to advance the cause of health care in America, read what HHS Secretary Mike Leavitt has to say ...
http://www.washingtontimes.com/article/20070709/EDITORIAL/107090020/1013
And -- see you at the movies.
Note to Paul: Read the ads for SiCKO in your own paper -- it's billed as a comedy.
To get a feel for his general position, consider this statement, "Medicare ... is being undermined by privatization."
What he doesn't say is that ... it's working. Every poll shows that seniors are very pleased with the Part D benefit-- and by huge margins. And every government report shows that the program is coming in significantly below cost projections.
Imagine that, a government program that people like and comes in under budget. Privatization may seem like a frightening concept to Mr. Krugman, but it sure works.
But why let facts get in the way when you've got an agenda to pursue?
And here's the agenda, summed up in one sentence:
"Universal health care would save thousands of American lives each year, while actually saving money."
Really? All the statistics from Europe and other nations with government-run health care say different. Having just returned from a conference of European health care experts, regulatory officials, and legislators, I can attest to the many problems European government are facing as they try to reinvent their own national systems for the 21st Century.
Paul -- come with me to Europe and let's film a documentary of not only care denied but care unavailable. I'm sure we could make it as "entertaining" as SiCKO. It's easy to prove an argument when you cherry-pick the facts. We can call our movie "MaLADE-O."
Ooh-la-la!
Mark Twain wrote, "For every complex problem there is a simple solution -- and it is usually wrong."
Alas, there is no perfect, easy solution to the American health care miasma. That only happens in the movies.
For a more balanced view of how to advance the cause of health care in America, read what HHS Secretary Mike Leavitt has to say ...
http://www.washingtontimes.com/article/20070709/EDITORIAL/107090020/1013
And -- see you at the movies.
Word on the Hill is that Rahm Emanuel is going to try to tag sound FDA reform legislation with an unsound amendment on -- yes, you guessed it -- drug importation. Is anyone out there shocked? Probably not. After all, for Mr. Emanuel politics is more important than the public health.
Here's a new Chicago Tribune op-ed on why drug importation is a bad idea:
http://www.chicagotribune.com/news/opinion/chi-oped0708taintjul08,0,1697228.story?coll=chi-newsopinioncommentary-hed
You can't be for drug safety one day and against it the next. You can't rant against counterfeit tainted toothpaste and embrace the importation of foreign drugs. It's intellectually dishonest and contrary to the best interests of the public health.
Here's a new Chicago Tribune op-ed on why drug importation is a bad idea:
http://www.chicagotribune.com/news/opinion/chi-oped0708taintjul08,0,1697228.story?coll=chi-newsopinioncommentary-hed
You can't be for drug safety one day and against it the next. You can't rant against counterfeit tainted toothpaste and embrace the importation of foreign drugs. It's intellectually dishonest and contrary to the best interests of the public health.
When Rezulin was removed from the market several years ago, the top endocrinologist I worked with was quite upset. Of course he knew about the few cases of severe liver failure and the rare death, but he also knew how many patients benefited directly from the drug. "Avandia will be next," he predicted.
Thiazolidinediones (TZDs) are a class of drugs which improve insulin receptor sensitivity and reverse the insulin resistance typically seen in type 2 diabetes. Since most type 2 diabetics have too few receptors per body surface area, the TZDs are very useful drugs.
The fact that patients ont he remaining two TZDs (Avandia and Actos) can gain weight on these drugs is not news. The question of whether they can cause or worsen heart failure has long been discussed. Unfortunately the current raging debate and targeting of the FDA and the drug manufacturers doesn't directly address this question. The existing information is based on mathematical analyses of previously published data and is weak.
Prospective randomized trials are necessary, but what should a clinician do? All too often, as the pendulum swings from panacea to panic, a perfectly good medication has its reputation damaged or destroyed based on limited or overblown results, all in the name of drug safety.
To give just one example as it relates to TZDs, it is clear that controlling blood sugar is important in preventing diabetic end organ damage. Among these crucial organs we try to protect is the heart. Everyone agrees that Avandia and Actos help to significantly lower blood sugar. But as their reputations are damaged in the media, how many safety-driven zealots have stopped to consider what uncontrolled sugars mean to the heart? Now that patients - and doctors - will be running from these drugs with their new "black box" warnings, what will be the clinical results? In other words, which will cause more heart damage; the drugs themselves, or stopping them?
Thiazolidinediones (TZDs) are a class of drugs which improve insulin receptor sensitivity and reverse the insulin resistance typically seen in type 2 diabetes. Since most type 2 diabetics have too few receptors per body surface area, the TZDs are very useful drugs.
The fact that patients ont he remaining two TZDs (Avandia and Actos) can gain weight on these drugs is not news. The question of whether they can cause or worsen heart failure has long been discussed. Unfortunately the current raging debate and targeting of the FDA and the drug manufacturers doesn't directly address this question. The existing information is based on mathematical analyses of previously published data and is weak.
Prospective randomized trials are necessary, but what should a clinician do? All too often, as the pendulum swings from panacea to panic, a perfectly good medication has its reputation damaged or destroyed based on limited or overblown results, all in the name of drug safety.
To give just one example as it relates to TZDs, it is clear that controlling blood sugar is important in preventing diabetic end organ damage. Among these crucial organs we try to protect is the heart. Everyone agrees that Avandia and Actos help to significantly lower blood sugar. But as their reputations are damaged in the media, how many safety-driven zealots have stopped to consider what uncontrolled sugars mean to the heart? Now that patients - and doctors - will be running from these drugs with their new "black box" warnings, what will be the clinical results? In other words, which will cause more heart damage; the drugs themselves, or stopping them?
If you think it's easy for Al Gore III to score Vicodin and Aderall without a prescription, ask Zach Goldberg (aka his dad) just how quick and convenient it is to buy roids, Vicodin, ritalin, etc. online using his age (19) or any age for that matter. I did it, no problem using two different credit cards.
http://news.yahoo.com/s/ap/20070706/ap_on_he_me/gore_s_son_drugs;_ylt=AjKNKTx3L_N9zjupcFNwSgER.3QA
Note to Rahm Emanuel: Most fake drugs will come through the Web. They will be bought by kids who will use them recreationally or to resell them. Organized crime will profit and kids will suffer.
At what point will your concern for the welfare of kids overtake your politically motivated hatred of drug companies?
http://news.yahoo.com/s/ap/20070706/ap_on_he_me/gore_s_son_drugs;_ylt=AjKNKTx3L_N9zjupcFNwSgER.3QA
Note to Rahm Emanuel: Most fake drugs will come through the Web. They will be bought by kids who will use them recreationally or to resell them. Organized crime will profit and kids will suffer.
At what point will your concern for the welfare of kids overtake your politically motivated hatred of drug companies?
From the American Spectator:
If iPhones Were Pharmaceuticals
Prescription drugs cost too much! Or at least that's what we hear, day-in and day-out, on television, in the news, and, of course, in Sicko.
Some health-care activists have rallied around high drug costs to agitate for more government regulation of the pharmaceutical industry and more government involvement in health care. Hoping to stoke public anxiety over prescription bills, these activists often point to "cheaper" foreign drug prices to garner support.
Fortunately, prescription drug price controls aren't coming to the United States. But now activists have turned to a new tactic: proposing to force American drug companies to sell their wares to foreign governments at whatever price and in whatever amounts those governments demand. American companies would also be unable to contractually bar those drugs from being imported back to the U.S. -- leading, in essence, to the imposition of foreign price controls and all their attendant safety complications.
Needless to say, this idea -- that the government should require an American industry to play cowering "yes-man" before the whims of foreign nations -- would be devastating to any of America's top industries. Imagine if a different sector of the economy -- say, a high-tech firm like Apple -- had to cope with such constraints.
Apple might schedule a meeting with a foreign distributor, but instead of haggling over bulk discounts and special deals on excess pink iPods, its representatives would find the terms of the sale already structured. The foreign buyer would be able to name its price and quantity, and it would demand permission to resell everything it purchases back to U.S. consumers.
In the background, the U.S. government would nod approvingly.
In other words, what used to be a process of negotiation would instead be a process of submission. Apple would have no way to protect its product or its revenues. It would certainly end up in deals that it would otherwise never agree to. And investment into the next generation of iPods, iPhones, and other products would decline.
Apple's domestic operations would suffer, too. Having just gotten a steal of a deal from Apple, the foreign distributors would be able to undersell domestic firms in the U.S. by reselling Apple products at a significant mark-up. Who benefits? The middlemen, of course. Consumers would only see a tiny price break and Apple and its domestic distributors would see a nosedive in sales. This isn't an example of market forces at work; it's the unfair exploitation of domestic firms.
Initially, Apple might find a way to adjust to forced sale. But in losing control over the terms of sale and distribution of its products, it's almost a certainty that the company's bottom line would take a massive hit.
In response to the loss in revenue, budgets would be slashed, with research and development into new products an early casualty. And with the threat of price controls destroying the prospect of new financial success, the next product would take longer to get to market and be far less innovative. Developing the next big computing device is a costly, time-intensive, and risky undertaking, so the stakes for a successful new product would be much higher.
With no margin for error, following up the iPod with the commercial equivalent of Betamax could be fatal. And that death would stand out as a blow not only to the American computing industry, but to broader American economic competitiveness as well.
Apple and the rest of the American high-tech industry may not have to worry about foreign governments dictating the prices they may charge while the U.S. government looks on approvingly. But advocates of forced sale are pushing for precisely this kind of absurd policy on pharmaceutical companies. The class of good may be different, but the effect is the same -- financial disaster and reduced innovation.
In fact, because drugs save our lives rather than simply entertain us, such stifling of the next round of research may be fatal not only to pharmaceutical companies, but to us as well.
Instituting a forced sale policy on any other industry would result in a great deal of outrage. It's high time that we treat such dressed up price controls on pharmaceuticals with similar looks of consternation.
Peter J. Pitts is President of the Center for Medicine in the Public Interest and a former Associate Commissioner of the FDA.
If iPhones Were Pharmaceuticals
Prescription drugs cost too much! Or at least that's what we hear, day-in and day-out, on television, in the news, and, of course, in Sicko.
Some health-care activists have rallied around high drug costs to agitate for more government regulation of the pharmaceutical industry and more government involvement in health care. Hoping to stoke public anxiety over prescription bills, these activists often point to "cheaper" foreign drug prices to garner support.
Fortunately, prescription drug price controls aren't coming to the United States. But now activists have turned to a new tactic: proposing to force American drug companies to sell their wares to foreign governments at whatever price and in whatever amounts those governments demand. American companies would also be unable to contractually bar those drugs from being imported back to the U.S. -- leading, in essence, to the imposition of foreign price controls and all their attendant safety complications.
Needless to say, this idea -- that the government should require an American industry to play cowering "yes-man" before the whims of foreign nations -- would be devastating to any of America's top industries. Imagine if a different sector of the economy -- say, a high-tech firm like Apple -- had to cope with such constraints.
Apple might schedule a meeting with a foreign distributor, but instead of haggling over bulk discounts and special deals on excess pink iPods, its representatives would find the terms of the sale already structured. The foreign buyer would be able to name its price and quantity, and it would demand permission to resell everything it purchases back to U.S. consumers.
In the background, the U.S. government would nod approvingly.
In other words, what used to be a process of negotiation would instead be a process of submission. Apple would have no way to protect its product or its revenues. It would certainly end up in deals that it would otherwise never agree to. And investment into the next generation of iPods, iPhones, and other products would decline.
Apple's domestic operations would suffer, too. Having just gotten a steal of a deal from Apple, the foreign distributors would be able to undersell domestic firms in the U.S. by reselling Apple products at a significant mark-up. Who benefits? The middlemen, of course. Consumers would only see a tiny price break and Apple and its domestic distributors would see a nosedive in sales. This isn't an example of market forces at work; it's the unfair exploitation of domestic firms.
Initially, Apple might find a way to adjust to forced sale. But in losing control over the terms of sale and distribution of its products, it's almost a certainty that the company's bottom line would take a massive hit.
In response to the loss in revenue, budgets would be slashed, with research and development into new products an early casualty. And with the threat of price controls destroying the prospect of new financial success, the next product would take longer to get to market and be far less innovative. Developing the next big computing device is a costly, time-intensive, and risky undertaking, so the stakes for a successful new product would be much higher.
With no margin for error, following up the iPod with the commercial equivalent of Betamax could be fatal. And that death would stand out as a blow not only to the American computing industry, but to broader American economic competitiveness as well.
Apple and the rest of the American high-tech industry may not have to worry about foreign governments dictating the prices they may charge while the U.S. government looks on approvingly. But advocates of forced sale are pushing for precisely this kind of absurd policy on pharmaceutical companies. The class of good may be different, but the effect is the same -- financial disaster and reduced innovation.
In fact, because drugs save our lives rather than simply entertain us, such stifling of the next round of research may be fatal not only to pharmaceutical companies, but to us as well.
Instituting a forced sale policy on any other industry would result in a great deal of outrage. It's high time that we treat such dressed up price controls on pharmaceuticals with similar looks of consternation.
Peter J. Pitts is President of the Center for Medicine in the Public Interest and a former Associate Commissioner of the FDA.
Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.
