Latest Drugwonks' Blog
Disconcerting news from the subcontinent. “Right or wrong, we’re going to commercialize and make oseltamivir,” (Oseltamivir is the generic name of Tamiflu) said Dr. Yusuf K. Hamied, chairman of Cipla of Bombay. Well, since you asked, it’s wrong. It’s IP theft. It’s trading profit today for health care innovations tomorrow. It’s profiteering. According to Roche, making the drug involves 10 complex steps and would take another company “two to three years, starting from scratch,” to produce it. Dr. Hamied dismissed that claim, saying that he initially thought it would be too hard but that his scientists had finished reverse-engineering the drug in his laboratories two weeks ago. Dr. Hamied said he would sell generic Tamiflu “at a humanitarian price” in developing nations and not aim at the American or European market. I wonder if this includes Illinois?
Here’s a new and insightful piece by Benjamin Zycher, Ph.D.
The greater the power to redistribute wealth wielded by government, the stronger the private-sector incentive to circumvent it, and so ever-expanding is the power that government must grasp. Nowhere is that eternal truth clearer than in the ongoing debate over the importation of pharmaceuticals subject to price controls overseas. Such legalized importation would be one way for those favoring such price controls — a blatant wealth transfer from the future to the present — to have that cake without actually having to vote for it, and thus having to bear responsibility for the ensuing adverse effects on current and future human suffering.
Under a system of reimportation of price-controlled medicines, the pharmaceutical producers, understandably seeking to protect the economic value of their investments and thus their ability to develop new medicines for the future, would have incentives to limit sales into the various foreign markets, so that foreign governments in effect would not determine pharmaceutical prices in the U.S. And the foreign governments, interested in preserving adequate supplies of medicines for their own populations, have made it clear that they cannot serve as pharmacies for Americans.
And so having shunted aside both the serious counterfeiting/safety issues attendant upon the drug importation system now contemplated, as well as the implicit, but huge, erosion of intellectual property rights inherent in the price controls, the Congressional proponents of such importation now must confront the unwillingness of the foreigners to serve as the price control middlemen for the U.S. market.
And confront it they have. The current proposals to allow the importation of pharmaceuticals subject to foreign price controls include provisions forcing the producers to sell to the foreign governments all the drugs demanded at the controlled prices.
Where to begin? This means that foreign governments —- or more specifically, the foreign governments imposing the tightest price constraints — will be given the power to set prices in the U.S. Do we want the future of U.S. medical technology to be determined by political pressures overseas and/or by bureaucrats in Ottawa or Brussels or Brasilia? Apparently, some in the U.S. Congress do indeed. And precisely what is the economic value of any given pharmaceutical patent when that economic value in the U.S. can be confiscated by foreign politicians, whether elected democratically or not? So much for the future of pharmaceutical investment and innovation — the research and development process takes over a decade, and what investor wants to bet on political outcomes not only in the U.S., but anywhere in the world? — and thus for the future development of cures.
And let us have no nonsense about the importation of pharmaceuticals subject to price controls as a manifestation of “free trade.” Forced sales at controlled prices are no more consistent with the principles of free trade than the purchase of stolen merchandise from the back of a truck would be consistent with the principles of free enterprise. Thus is the forced sales approach a blatant violation of the Takings Clause of the 5th Amendment, as the price controls would transfer the property rights inherent in patents from pharmaceutical producers and future patients to current interest groups (a blatantly private use) without any compensation whatever, whether just or not.
The last time I read the 13th Amendment to the Constitution, it said something rather sharply unfavorable about involuntary servitude. The forced sales proposals would mandate that pharmaceutical producers sell all that is demanded at the prices dictated overseas, without recourse to the ordinary processes of negotiation, let alone legal institutions. Thus would American firms be forced to serve foreign masters — literally — on terms dictated by foreigners. And let us not forget the “nondiscrimination” dimension of the forced sales gambit: If, say, the German Sickness Funds buy 30 million doses of a drug at a given price, would the pharmaceutical firm be forced to sell an identical quantity at the same price to anyone else in Germany? That the answer is not clear — it might very well be “Yes” — reveals a good deal more about the forced sales idea than its proponents would like us to know.
And is there any reason to believe that such forced sales would be limited to drugs? If U.S. politicians can transfer wealth to their constituencies in the form of “cheap” pharmaceuticals, why not do the same for a myriad of other goods that require massive up-front investments?
So there we have it. Fewer medicines. U.S. markets held hostage to foreign political pressures. A wholesale destruction of the Bill of Rights. Government of, by, and for the People — Sovereignty — cast to the winds. Such are the inexorable outcomes yielded by politicians and bureaucrats in hot pursuit of wealth redistribution, the larger adverse implications be damned.
Having just returned from Geneva, all I can say is that, as far as health care policy is concerned, it’s HQ for EuroDisney. During my brief sojourn in the city of chocolate, private banks, fine watch movements and Jean-Jacques Rousseau, UN Secretary-General Kofi Annan dropped in for a surprise visit at the World Health Organization. While at WHO he said that the UN would be “encouraging pharmaceutical companies and others to be helpful, making sure that we do not allow intellectual property to get in the way of access of the poor to medication.” Since there is unanimous global agreement that every corner of the globe deserves access to avian flu vaccine, what about a statement from the UN chief reminding the world that it is precisely because of IP protection that we have a treatment at all? It’s truly frightening that the SecGen, his fellow travelers at WHO and the other bureaucratic ticket-takers at acronym-laden EuroDisney/Geneva are willing to not only condone attacks on IP as the great divide of the 21st century, but to promote a siphoning off of the fuel that drives the engine of pharmaceutical innovation for a few column inches. It is short-term thinking of the most dangerous kind — the kind with consequences. Perhaps it’s time for Kofi Annan to take a refresher Econ101 course. Perhaps it’s time that he talks to the invisible hand.
Over a year ago Tom Perez, president of the Montgomery County, MD County Council (and better known as the David Catania of Silver Spring) introduced a resolution that would allow the county to purchase “drugs from Canada.” According to The Washington Post, Perez “anticipated offering the benefit to 85,000 employees and retirees, including 27,000 affiliated with the school system. But the plan suffered a setback last month when the county school board declined to pursue a contract with Canusa, a privately held health benefits company based in Windsor, Ontario, largely because of concerns that the program would violate federal law. So now, Perez is focusing on the county government, with 12,500 workers and retirees, in part because it is the entity over which the council has direct control.” Now Mr. Perez is going to make the local police and fire forces and the other hard working members of the Montgomery County civil service guinea pigs in his lab experiment designed for blatant political ambitions. And, as far as the county retirees are concerned, I wonder how much time (oops — times up) he’s spent educating them on the Medicare Part D benefits to which they are entitled. Meanwhile, the Canadian Health Minister has made it clear that he will not allow his nation to become America’s drug store. That’s why Canadian internet marketers — profiteers masquerading as pharmacists — now need to get their drugs from Europe. And that means Latvia as well as Great Britain and Portugal as well as Germany. Mr. Perez’s plan would not deliver “the same” drugs that Canadians get at their local pharmacies. That’s a fallacy proven 100 times over and conveniently and irresponsibly ignored by the County Council president. And since the Council of Europe just released a new study revealing the bad news about the European Union’s fast growing problem of counterfeit drugs — it’s good news that the Montgomery County school board did their homework and sent Mr. Perez and his foolish notions to detention.
Just read the NY Times interview with Thomas Ryan, the CEO of CVS. The topics he discussed were interesting — the impact of generic drugs on his bottom line, legal liability, and his acquisition strategy. What was even more interesting (and disturbing) was what he didn’t discuss — anything to do with health care affordability, access, or Medicare Part D. And the article was in the health section. Sounds disturbingly familiar.
This is a story of two prime numbers. The first prime number is 779. That’s the number of Google “news” hits for today’s announcement that final-stage testing shows Merck’s Gardasil vaccine to be 100% effective over the short term in preventing infection with two strains of human papillomavirus, a sexually transmitted disease that is the leading cause of cervical cancer, during a Phase III study of more than 12,000 young women in 13 countries. The drug was genetically engineered to block HPV types 16 and 18, which cause 70% of cervical cancers. 779 hits for an announcement of truly global significance. Coming in a distant second is the second prime number, 219. That’s the number of Google hits for the headline, “Merck opens its defense in Vioxx trial.” My rough math shows, therefore, that the media feels that an almost complete defeat of cervical cancer is about three and a half times more newsworthy than Merck’s defense in the second Vioxx trial. TGIF.
A new WHO study reports that India, China and Russia will suffer losses of billions of dollars in national income over the next decade unless investments are made to prevent rising levels of chronic diseases. A March 2005 research synthesis from HHS’ Agency for Healthcare Research and Quality estimates that the United States could save nearly $2.5 billion a year by preventing hospitalizations due to severe diabetes complications. But the global debate shouldn’t be primarily about the money — it should (indeed must!) be about saving lives. And the debate needs to begin at home.
In 1979, 31,691 Americans had a foot amputated because of undiagnosed and untreated diabetes. Last year that number grew to over 80,000. And hundreds of thousands of heart attacks and strokes, caused by high blood pressure and high cholesterol, cost the American health care system billions of dollars. The cost in terms of human suffering cannot even begin to be measured.
The argument that health care is “too expensive” is too broad. The proper argument is that waiting for Americans to get seriously ill and then intervening is too expensive. Earlier diagnosis and earlier, continuing care is crucial to the future health of both Americans and of the American health care system.
We cannot afford, in terms of either dollars or lives, to continue playing the health care “blame game” — because disease is the enemy and the cost of disease is staggering. One part of the blame game is about health care prices — for hospitals, insurance, drugs, and doctors. Rather than looking for a villain, it’s time to start asking the hard questions and finding the right answers — and focusing on how to reduce the price of a diabetic amputation is the wrong approach. We need to do the things that can be done to prevent it in the first place, because that’s the best way to save money and improve lives. And we need to do this now, because we also want to be able to invest in and afford better treatments for other conditions — cancer, Parkinson’s, etc. that are so desperately needed and that hold so much promise.
The first step in this process is an honest, broad-based dialogue. In order to revitalize our health care system we must refocus the debate about health care. In order to save lives, reduce costs, enhance quality and deliver on the promise of robust health to all groups of Americans, all of the players in the health care debate — including government must work together as a team, as a unit, as a public health defense force armed and ready to advance the pubic health.
Is “The Day” (the daily newspaper of New London, CT) on your morning “must read” list? Well if it’s not, you missed the report that Pfizer has a new public Web site with information from hundreds of clinical trials. According to the story, Pfizer now has data posted on the site from 314 studies for its drugs that subsequently reached the market. Beyond “The Day,” not one Google hit. Why no media interest on the clinical trials database of the world’s largest pharmaceutical company? There was certainly an ocean of ink spilled excoriating Big Pharma over the black cloak of secrecy previously surrounding such data. Sadly, it’s another case of Anorexia Newvosa — a disease evidenced by a media feeding frenzy (aided and abetted by self-serving politicians and special interest groups) over perceived misdeeds, followed by a total lack of interest in how the problem is addressed. There’s a Japanese proverb that is relevant here — “Don’t fix the blame, fix the problem.” Those members of the media and Congress suffering from Anorexia Newvosa, binge on the bad news and then purge themselves of interest in the solution. But this is, fortuantely, a treatable disease and the front-line therapy is intellectual honesty. Unfortunately, this treatment is currently considered off-label for too many elected officials and members of the Fourth Estate.
Because of the sincere desire of Senator Charles Grassley and others to play a more active role in health care, an article of possible career interest —
Oct 3, 2005 — CHICAGO (Reuters) — A clown in the operating room may relax anxious children who are about to undergo surgery, but the entertainer has to learn to keep out of the way, Italian researchers said on Monday. A study of 40 children between 4 months and 3 years old who were accompanied by at least one parent prior to minor surgery found having a clown present significantly reduced anxiety levels for both child and parent. Three out of five children suffer anxiety before surgery, according to the report published in the journal Pediatrics. Clowns succeeded in distracting the children until the administration of anesthesia, but apparently annoyed doctors and nurses.
Here’s a piece from today’s (October 3, 2005) Wall Street Journal. As we ponder drugs from foreign nations and increasingly aggressive counterfeiters, we would do well to remember what life was like before “safe and effective” was the order of the day.
How Elixir Deaths Led U.S. to Require Proof of New Drugs’ Safety
Only 70 years ago, American companies could legally sell poison in a medicine bottle.
Obviously, no drug maker would knowingly kill its customers — the free market would punish that kind of bad business. But a company that inadvertently sold a drug resulting in multiple deaths faced no legal penalties.
In 1937, however, the consequences of Americans’ unfettered right to buy and sell medicine became disastrously clear. An antibacterial syrup called Elixir Sulfanilamide killed at least 75 people, some of them young children who had been suffering from nothing more serious than a sore throat. “Even the memory [of our 6-year-old daughter, Joan] is mixed with sorrow, for we can see her little body tossing to and fro and hear that little voice screaming with pain,” wrote a grief-stricken Tulsa, Okla., mother to President Franklin Roosevelt.
The elixir’s manufacturer, S.E. Massengill of Bristol, Tenn., wasn’t expected to test its drugs for safety, and it didn’t. The company’s owner later said he and his chemists “regret the fatal results,” but “do not feel there was any responsibility on our part.” The company eventually paid a fine, but only for misbranding: Under existing federal law, the term “elixir” was restricted to solutions containing alcohol.
Massengill, like other drug companies of the time, had been doing a brisk business in the newly discovered miracle drugs known as sulfa, which were manufactured in tablets or powder. But many of Massengill’s customers, particularly young children, preferred their medicine in liquid form. A Massengill chemist found that sulfa could be suspended in water, raspberry flavoring and diethylene glycol, an industrial chemical sometimes used to make antifreeze.
The company’s laboratory “tested the mixture for flavor, appearance and fragrance and found it satisfactory,” wrote Carol Ballentine in a 1981 article in FDA Consumer magazine. Some 240 gallons of the syrup were shipped across the country. Even if customers had wanted to check the ingredients, they couldn’t. The drug companies had the right to keep their formulas secret.
At the time of the elixir debacle, the food and drug industries were still regulated by a 1906 law that was stuffed with loopholes and mostly unenforceable. In 1933, a new bill was introduced in Congress. Among other provisions, it proposed to outlaw the sale of medicines that might kill someone who ingested them. For the next five years, the bill and its successors were stalled and gutted by the brawny proprietary-medicine lobby, with help from friends in the newspaper industry, which had become addicted to advertising revenue from wonder drugs like Paw-Paw Pills and Cherry Pectoral.
“Your pocketbook is about to be filched,” wrote a medicine maker to newspapers in which he had placed advertising. “We ask you to take an active, aggressive stand against this bill, not as a matter of cooperation to us but for your own business interests … An isolated editorial or two will not suffice in this matter.”
The opponents of new drug and cosmetic regulation, nicknamed the “pain and beauty boys” by the press, argued that Americans’ belief in their right to self-medicate was as deeply held as their belief in the right to free speech or worship. People wanted the convenience of buying their medicines over the counter, the critics argued. Under the new law, a simple headache would mean a costly trip to the doctor. And why should the federal government play gatekeeper to private citizens’ medicine cabinets?
It was frightening, said the head of an advertising agency that specialized in patent medicines, to see “such a sweeping grant of autocratic power being placed in the hands of any bureau or department of government.”
Added the general counsel of a drug industry trade group in congressional testimony, “I have never in my life read a bill or heard of a bill so grotesque in its terms, evil in its purpose and vicious in its possible consequences.”
Elixir Sulfanilamide provided the emotionally wrenching case history the bill’s supporters needed to mobilize public opinion. By the time anyone realized the elixir was poison, it had been distributed in at least 15 states and bought over the counter by many customers unknown to the pharmacists.
The Food and Drug Administration put almost its entire staff of 240 agents on the trail of the elixir, and their attempts to trace every pint provided a dramatic running narrative for the press. Based on the death rate of those who took the medicine, if all 240 gallons had been consumed, more than 4,000 people would have died.
In 1938, Congress passed the Food, Drug and Cosmetic Act, under which, for the first time, pharmaceutical manufacturers would have to prove the safety of their products before putting them on the market. That year, the FDA also decided that sulfanilamide, among other powerful drugs, should be taken only under the direction of a doctor, putting another nail in the coffin of some pain and beauty boys.
Write to Cynthia Crossen at cynthia.crossen@wsj.com
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.
