News & Views
Below are excerpts from news articles highlighting troubling issues with the biotech/pharmaceutical industry. See for yourself, and draw your own conclusions.
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AARP Responds to BIO Attack Ad From: AARP Press Center
AARP press Release / July 8, 2009
WASHINGTON — AARP Spokesman Jim Dau released a statement today in response to new advertising by the Biotechnology Industry Organization (BIO), which is advocating for an unreasonable 12-year exclusivity period for brand name biologic drugs. Such a deal would create a windfall for the brand name biologic drug makers and keep needed prescription drugs out of the hands of patients. Dau's statement follows:
"The biologic drug makers are hiding behind the same arguments used by big pharmaceutical companies 25 years ago when they said big pharma would go out of business if they had to compete with generic drugs—and we all know how that turned out. BIO is going even further this time by asking for a protection deal twice as sweet as big pharma got back then, so the real question is, 'How much more money do they think they can wring out of patients and taxpayers?' ...
Biologics in Perspective: The Case for Generic Biologic Drugs Fact Sheet Leigh Purvis
AARP Public Policy Institute / May 2009
Based on U.S. sales alone, many top selling biologic drugs have recouped their manufacturer's initial investment several times over in the past six years, often within a single year.
Spending on biologic drugs is growing nearly twice as quickly as spending on traditionally developed "small molecule" drugs.
Overall biologic drug sales reached $75 billion in 2007, and it is estimated that spending on biologics will continue to increase substantially through 2012.
... Some manufacturers say they must protect their patents because of the costs associated with biologic drug development. However, based on U.S. sales alone, many top selling biologic drugs, have recouped their manufacturer's initial investment several times over in the past six20years; often within a single year.
... given the substantial out-of-pocket costs that can be associated with using biologic drugs, many patients will face impeded access until generic biologic drugs become available.
Drug Makers, Hospitals Raise Prices
By BARBARA MARTINEZ and AVERY JOHNSON
Wall Street Journal / April 15, 2009
Hospitals and pharmaceutical companies have been pushing through hefty price increases aimed at bolstering earnings, even as government and private insurers are struggling to rein in healthcare costs.
Drug makers increased prices on drugs like Viagra and the leukemia pill Sprycel by more than 20% in the first quarter from a year earlier, according to data from Credit Suisse. Meanwhile, one of the largest hospital owners in the country, HCA Inc., said Tuesday it expects to report higher revenue for the first quarter even though it had fewer hospitals and its admissions declined. It also said its income before taxes had nearly doubled...
Higher hospital and drug prices trickle down to consumers in out-of-pocket costs or in the form of higher premiums and copayments. Rising healthcare costs also put pressure on employers that provide health benefits to their workers.
"These kinds of price increases are way out of line with what's being experienced in the rest of the economy," said Ron Pollack, executive director of Families USA, a consumer healthcare advocacy organization...
Among other drug companies, Lilly boosted drug prices by an average of 9.9% and Pfizer by 7.9 % in the first quarter from a year earlier, according to Credit Suisse. Price increases were particularly aggressive in the 2008 fourth quarter, with both Bristol-Myers and Lilly boosting year-over-year prices more than 10%...
New Rx can make new problems
BY SARAH BALDAUF (Premium Health News Service)
amNewYork, p. 24 Thur, Oct. 16, 2008
(Download just the article)
Tom Nesi, author of the new book "Poison Pills: The Untold Story of the Vioxx Drug Scandal" wants you to know what you're getting into when you pop a newly approved, heavily marketed prescription drug. A longtime director of public affairs at the pharmaceutical company Bristol-Myers Squibb, Nesi has more than 30 years' experience in medical communications and strategy. Now a writer and consultant, he comes off as no shill for the industry he once served. His book focuses on the cautionary tale of Vioxx, the prescription painkiller that was pulled from the market after doctors belatedly realized that it caused heart, blood and kidney problems.
You say the most expensive drug you can take is a free sample. How is that?
They're very seductive — they're free. Merck distributed 17 million samples to 25,000 physicians and 375,000 patients. The problem is that if you've been doing fine on a 20-cent pill, you get the free sample for a month or two, then you have to go to the drugstore to fill the prescription and then it costs you $3 a pill.
You argue that in the context of pharmaceuticals, new is not always better. Why?
It's extremely important that people understand that, as extensively as a drug is tested before it's approved (by the U.S. Food and Drug Administration), it's still tested on a very small population. It's also tested on a very select population. Drug companies don't go out to try to find the sickest patients to test their drugs on.
(With older drugs), not only is there more data but more usage experience. Doctors know how to use it — they become familiar with it.
As a veteran drug marketer, you warn consumers to beware of huge marketing campaigns for new drugs, urging people to ask their doctors for proof that new drugs are superior to older ones.
I would say the larger the marketing campaign, the more you should use caution. I would also say if there are good drugs in a category — in a type of illness that you suffer from — that have been out there for a while, there's no reason not to use those first.
How long should a drug be on the market before you try it?
I don't think it hurts to wait a few years. If you are in acute need, if you're just suffering horrible pain, you've tried everything under the sun and you need a new drug, well, that's entirely different than if you're satisfied. I would say, if you're satisfied with your current therapy, stay with it.
You caution women, in particular, to find out about a new drug's safety before taking it.
We know that some drugs interfere with reproduction. Any woman who is planning to get pregnant, or who potentially could get pregnant, should definitely discuss that with her doctor.
How often do doctors actually recommend their patients stop taking a prescription that works for them and start a newer drug instead?
It happens all the time. There are whole huge campaigns based on what they call switching behavior.
A Hurdle for Health Reform: Patients and Their Doctors
By TARA PARKER-POPE
The New York Times / March 2, 2009
Recently, I went to the drugstore to fill a prescription. Instead, I left with a costly lesson in health care economics.
At the checkout, I was surprised when the clerk billed me for $100 instead of my usual small co-payment. It was only then that I realized my doctor had traded me up to a costly branded migraine drug, even though the old drug had worked just fine. And I had allowed it.
"Doctors believe the industry propaganda that new drugs are better than old ones, and that for every ailment there is a drug," said Dr. Marcia Angell, a senior lecturer in social medicine at Harvard Medical School and the author of "The Truth About the Drug Companies: How They Deceive Us and What to Do About It" (Random House, 2004). "They learn to practice a drug-intensive style of medicine."
Massachusetts Union Is Set To Challenge Big Pharma/Biotech "Fat Cats"
IBEW Local 103 / February 23, 2009
CLICK to download the Press Release in .pdf
Mass. co. to settle over doc payoffs
Boston Herald / Tuesday, February 10, 2009
Waltham-based Neurometrix Inc. agreed to a deferred prosecution deal regarding the illegal payment of kickbacks to physicians, according to the U.S. Attorney's Office.
The company agreed to pay a criminal penalty of $1.2 million and change its business practices to prevent any future payment of kickbacks through marketing programs, authorities said. Neurometrix has also agreed to pay $2.5 million in civil damages and penalties.
From August 2004 through October 2006, Neurometrix gave physicians free products in exchange for recommending the company's NC-stat System nerve-testing device to other physicians, authorities said.
Neurometrix also caused Medicare to be overbilled for tests using the NC-stat System, authorities said…
FTC Sues in 'Pay-for-Delay' Pact
Drugmaker Paid Rivals to Withhold Generic, Agency Says
By Lyndsey Layton
Washington Post / February 3, 2009; Page A04
The Federal Trade Commission has filed suit in federal court in an attempt to block a deal in which a manufacturer of a brand-name testosterone-replacement drug paid three competitors to delay rolling out cheaper generic versions.
The FTC said the "pay-for-delay" agreement violates antitrust laws, robs consumers of less-expensive alternatives and allows the brand-name drugmaker an unfair monopoly. The state of California joined the federal agency in its complaint, which was filed last week in U.S. District Court in the Central District of California.
FTC officials are hoping the case will ultimately reach the U.S. Supreme Court. "We want to stop these unconscionable pay-for-delay deals that force consumers to overpay for much-needed drugs," said Jon Leibowitz, an FTC commissioner.
Androgel is a synthetic testosterone gel prescribed to men who have low levels of the hormone due to aging, cancer, or HIV/AIDS, among other conditions. Solvay Pharmaceuticals was granted a 17-year patent for Androgel in 2003, and it has become the drug company's second-highest grossing drug, earning about $400 million in annual sales.
Several other drugmakers — Watson Pharmaceuticals, Par Pharmaceuticals and Paddock Laboratories — applied to manufacture a generic version of Androgel and challenged Solvay's patent, saying they could produce a version of the drug that did not impinge on the patent. When the U.S. Food and Drug Administration granted approval, Solvay made a deal with the would-be competitors: They would get a share of Solvay's profits in return for 20 not marketing a generic version until 2010, the FTC complaint said.
Known as "reverse payments," the deals have become increasingly common. The FTC found that nearly half of all settlements between generic drugmakers and brand-name manufacturers in fiscal 2006 and 2007 resulted in some kind of payment to the generic maker in exchange for a pledge to stay out of the marketplace.
Generic manufacturers pose a significant threat to brand-name drugmakers because they can price their versions of drugs as much as 80 to 90 percent lower than the brand-name price.
The FTC says that such payments, also called "exclusion payment settlements," stymie the intent of the Hatch-Waxman Act of 1984, which was meant to speed generic drugs to market. The FTC has tried unsuccessfully to persuade the Supreme Court to hear two cases challenging such agreements in recent years, but each time, the Department of Justice argued that the high court should not take the case.
Leibowitz said he believes the Justice Department under President Obama will be more supportive of the FTC's position. "There seems to be a growing recognition, especially by this administration, that these deals need to be stopped," he said.
Sen. Herb Kohl (D-Wis.) and others, including then-Sen. Barack Obama, filed legislation last year that would prohibit reverse payments.
The bill, which faces strong oppo sition from the pharmaceutical industry, is expected to be filed again this week.
• Specialty drugs are a lifeline for the chronically ill.
• They can cost thousands of dollars a dose.
• No wonder many patients go without.
By: Barbara Basler
Source: From the AARP Bulletin print edition / October 1, 2008
Jeanne Sather of Seattle, who is fighting metastatic breast cancer, orders her cancer drug, Tykerb, through the mail. Every time the small package arrives with her three-month supply of pills, she says, "I look at that little box, and it's just hard to believe that I'm holding $10,000 worth of medicine."
Even with the help of a special state health insurance plan, the 53-year-old freelance writer is struggling to afford the expensive new drugs that are helping her in her battle.
"I've been borrowing against my house to make ends meet, and that can't go on," Sather says. "I'm so afraid these drugs will cost me my home."
Anna Burdi of Bartlett, Ill., who was diagnosed with multiple sclerosis in 2000, has faced that desperate choice, too. The 53-year-old former office manager was about to start a new job when she was hit with MS symptoms that left her too sick to work, and thus uninsured. She exhausted her retirement savings and lost her home because she couldn't balance her everyday expenses after paying more than $12,000 out of pocket for her MS medications.
Now, Burdi lives in one room in the basement of a friend's house. "I'm destitute. Really, I've lost everything," she says.
…the drugs are costly, commanding prices 10 to 100 times higher than other prescription drugs because patients have few alternatives and there are usually no competing medications.
"The largest factor in producing any drug is what the market will bear," says Steve Findlay, health care analyst at Consumers Union. "The industry approach is to price the drugs as high as possible and see if the world is willing to go along with that..."
The challenge, [Stephen] Schondelmeyer [expert in drug pricing at the University of Minnesota] says, is to "bring pressure to bear on these companies to find reasonable prices for these drugs. That would be good for all parties involved."
Bringing Down the Cost
Biologics, used to treat diseases such as cancer and multiple sclerosis, are engineered in the laboratory from living cells rather than chemicals.
The annual cost of these specialty drugs can run to tens, or even hundreds of thousands of dollars. Yet there is no regulatory process set up for companies to bring cheaper generic copies to market, so manufacturers of biotech drugs hold virtual monopolies and charge accordingly.
Stephen Schondelmeyer, an expert in drug pricing at the University of Minnesota, says brand-name biologics are so high-priced that even with the cost of research, competitors could sell their generics at a lower price.
A bipartisan bill now in Congress, the Access to Life-Saving Medicine Act, would give the Food and Drug Administration the authority to approve safe copies of biologics. Many groups, including AARP and the generic drug industry, support the bill. The trade group for the biotech industry opposes it, saying that the complexity of these biologics and development costs make it hard to duplicate them.
Psychiatric Group Faces Scrutiny Over Drug Industry Ties
By Benedict Carey and Gardiner Harris
The New York Times / July 12, 2008
It seemed an ideal marriage, a scientific partnership that would attack mental illness from all sides. Psychiatrists would bring to the union their expertise and clinical experience, drug makers would provide their products and the money to run rigorous studies, and patients would get better medications, faster.
But now the profession itself is under attack in Congress, accused of allowing this relationship to become too cozy. After a series of stinging investigations of individual doctors' arrangements with drug makers, Senator Charles E. Grassley, Republican of Iowa, is demanding that the American Psychiatric Association, the field's premier professional organization, give an accounting of its financing.
The association is the voice of establishment psychiatry, publishing the field's major journals and its standard diagnostic manual.
"I have come to understand that money from the pharmaceutical industry can shape the practices of nonprofit organizations that purport to be independent in their viewpoints and actions," Mr. Grassley said Thursday in a letter to the association.
In 2006, the latest year for which numbers are available, the drug industry accounted for about 30 percent of the association's $62.5 million in financing. About half of that money went to drug advertisements in psychiatric journals and exhibits at the annual meeting, and the other half to sponsor fellowships, conferences and industry symposiums at the annual meeting...
One of the doctors named by Mr. Grassley is the association's president-elect, Dr. Alan F. Schatzberg of Stanford, whose $4.8 million stock holdings in a drug development company raised the senator's concern...
An analysis of Minnesota data by The New York Times last year found that on average, psychiatrists who received at least $5,000 from makers of newer-generation antipsychotic drugs appear to have written three times as many prescriptions to children for the drugs as psychiatrists who received less money or none. The drugs are not approved for most uses in children, who appear to be especially susceptible to the side effects, including rapid weight gain.
Senator Grassley's investigations have not only detailed how lucrative those arrangements can be but have also shown that some top psychiatrists failed to report all their earnings as required...
In early June, the senator reported to Congress that Dr. Joseph Biederman, a renowned child psychiatrist at Harvard Medical School, and a colleague, Dr. Timothy E. Wilens, had reported to university officials earning several hundred thousand dollars apiece in consulting fees from drug makers from 2000 to 2007 when in fact they had earned at least $1.6 million each.
Another member of the Harvard group, Dr. Thomas Spencer, reported earning at least $1 million after being pressed by Mr. Grassley's investigators. The Harvard psychiatrists said they took conflict-of-interest policies seriously and had abided by disclosure rules...
Studies have shown that researchers who are paid by a company are more likely to report positive findings when evaluating that company's drugs. The private deals can directly affect patient care, said Dr. William Niederhut, a psychiatrist in private practice in Denver who receives no industry money.
The Great Biotech Giveaway
By Jim Stergios
Boston Globe / February 27, 2008
"Getting caught up in competitions with other states to land companies like Shire puts the Commonwealth at risk of being gamed by firms who already know where they plan to go. Massachusetts supposedly beat out North Carolina, South Carolina, and Rhode Island to land Shire. But after several attempts to contact the company, a Rhode Island economic development official concluded that it wasn't really serious about the Ocean State...
"...Not one company responded that more giveaways would make a state more competitive. Instead, they talked about poor infrastructure; high housing costs; unpredictable permitting and regulation; high unemployment insurance rates, and the need for clear, consistent corporate tax policies.
"Using public money to provide corporate welfare invites corruption. Lobbyists or others representing the chosen firms are more likely to hold fund-raisers or otherwise assist elected officials who helped provide them with public subsidies."