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Iowa Health Freedom Coalition
| © 2008 by Iowa Health Freedom Coalition. All rights reserved. |
The article below is from NYTimes.com
"A Doctor Puts the Drug Industry Under a Microscope"
September 14, 2004
By CLAUDIA DREIFUS
WASHINGTON - In many ways, Dr. Marcia Angell is an unlikely muckraker. A pathologist by training, she is the
former editor in chief of The New England Journal of Medicine. She
is also a senior lecturer at Harvard Medical School.
But just days short of her 65th birthday and her first Social Security check, Dr. Angell is taking on the American
pharmaceutical industry with a new book, "The Truth About the Drug Companies: How They Deceive Us and
What to Do About It" (Random House)."I don't worry about labels," Dr. Angell said in an interview at the Hotel
Monaco, where she stopped during a book tour.
In a 1996 book, she noted, she argued "that there wasn't a shred of evidence that the breast implants were
causing all the disease they were said to."
"I was said to be a tool of the pharmaceutical and device companies," Dr. Angell recalled. "I call them as I see
them."
Q. Why produce an investigative book on the pharmaceutical industry?
A. Because everyone knows that prescription drug prices are sky-high. Americans pay far more for our drugs
than people in other countries. The drug companies say, "We need high prices to cover our staggering
research and development costs, and if you do anything to squeeze our prices, it
will stifle innovation." The book was written to examine that argument.
Q. The pharmaceutical companies say their prices are steep because they spend somewhere in the
neighborhood of a billion dollars per drug bringing them to market. Did your research support this assertion?
A. A group of economists - mainly funded by the drug companies - came up with the widely quoted figure on
this. They said that it cost $802 million to bring a drug out. They, however, were looking at the most expensive
drugs to develop: new chemical compounds developed entirely in
house. Most new drugs aren't that at all. Most are what people call "me too" drugs, which are slight variations
of older drugs already being sold.
According to these economists, the real cost of bringing out those rare original drugs is actually around $403
million. But they doubled it by factoring in how much money the companies might have earned if they'd
invested that $403 million. Moreover, the economists did not figure into
their total the many generous tax breaks these companies receive for doing research and development. This
is a highly inflated figure.
The fact is that for the last two decades the drug companies have been hugely profitable. Last year there was
a little wiggle downward, but in 2002, the 10 biggest American drug companies had a median profit of 17
percent of sales compared to a median of 3 percent for the other Fortune 500 companies. In the 1990's,
profits ran between 19 and 25 percent. Prices are high to keep profits high.
Q. Exactly what are these "me too" drugs you argue against?
A. They are minor variations of old drugs already on the market. Sometimes a company creates a "me too"
drug as a way of extending a patent on an older one. For example, AstraZeneca created Nexium to replace the
virtually identical Prilosec when its patent was about to expire. By
putting out these me-too's, the companies can get new exclusive marketing rights on what are essentially the
same old drugs.
Other companies come in with their own me-too's because markets are expandable. It's been shown that
when you advertise one me-too drug, you increase the sales of all of them.
Q. Why do you have a problem with this?
A. The prevalence of the me-too's really says an awful lot about the lack of innovation within the
pharmaceutical industry. If you look at the new drugs marketed over the last six years, 78 percent weren't even
new chemical compounds. They were just new combinations or different
formulations of old drugs. And 68 percent were classified by the F.D.A. as unlikely to be improvements over
drugs already on pharmacy shelves.
At the same time, there are shortages of some important drugs that the pharmaceutical companies aren't
much interested in making because they are not as profitable as the me-too's. But the companies don't have
to turn out needed drugs, if they are not lucrative. And they don't.
Q. How much of the high cost of drugs is the result of marketing and sales expenditures?
A. The companies spend over 30 percent of their revenues on marketing and administration. Their marketing
budgets are so enormous because they have to persuade doctors and patients to prescribe one me-too drug
over another. If you had a truly innovative drug - a cure for cancer, for
instance - you wouldn't have to market it much. The world would beat a path to your door.
Q. Was there anything in your life that pushed you to write this book?
A. As a journal editor, I witnessed a disturbing trend in pharmaceutical research. Twenty years ago, most drug
trials were conducted at academic medical centers and the pharmaceutical companies tended to stand back
during the testing period. However, in recent years, the companies
have succeeded in attaching strings to research contracts, often designing the studies themselves, keeping
the data in-house and deciding whether or not to publish the results. They also began to contract with private
research companies for testing. Moreover, the medical schools and
even individual researchers began to enter into entrepreneurial arrangements with the drug companies.
While all this was occurring, I began to see bias creep into medical research. And I saw a lot of it. The most
obvious example were studies comparing a new drug to a placebo. That may be enough to get a drug F.D.A.
approval, but it should not be enough for The New England Journal of
Medicine. Doctors don't want to know whether a drug is better than nothing. They want to know if it's better than
what they are already using.
Q. You've written that "because most medical journals are dependent on drug ads for their survival, it probably
also influences what they publish." Were you speaking of The New England Journal of Medicine there?
A. No. That's because the Journal was virtually unique. We had a real wall between the advertising people and
the editorial offices. But many other medical journals - and there are thousands of them - are little more than
vehicles for advertisements. Still others, while they are not quite that, will put out occasional sponsored
supplements, which I wouldn't have any confidence in whatsoever.
Q. You left the editor's chair at The New England Journal of Medicine in 2000. Have there been any big
changes there since your departure?
A. There's only one I know of - we had a policy that review articles and editorials could not be written by anyone
with any financial connection to a company whose product was featured in that article. We said that disclosing
the connection was not enough.
When we printed papers on original research and there were often conflicts of interests, we published those
articles with disclosures. It's my understanding that the policy on reviews and editorials is no longer in place.
I'm sorry they made that change. But they say it's too hard to find a
prominent author who doesn't have a conflict of interest.
Q. The first phase - the discount card phase - of the new Medicare drug benefit is about to go into effect. Do
you, as a newly minted senior, believe it will make prescription drugs more affordable?
A. It's not going to have a major effect. These discounts are very small, maybe 10 to 15 percent. At the rate of
inflation of drug prices, they'll be overtaken in a very short time.
Now, the main Medicare drug benefit that goes into effect in 2006 is designed to funnel billions of dollars to
the pharmaceutical industry. It's an absolute bonanza for it. The pharmaceutical industry's lobbyists made
certain that the legislation contained a provision barring Medicare from
negotiating drug prices.
Interestingly, the federal government negotiates drug prices for the Veterans Affairs system and gets very low
prices because it is a bulk purchaser. And Medicare would have been the biggest bulk purchaser of all - so it
could have negotiated very low prices. That provision allows the drug companies to continue raising their
prices faster than the inflation rate, and the drug benefit will soon become unaffordable.
http://www.nytimes.com/2004/09/14/health/policy/14conv.html?ex=1096163228&ei=1&en=a147cdcb05049416
"A Doctor Puts the Drug Industry Under a Microscope"
September 14, 2004
By CLAUDIA DREIFUS
WASHINGTON - In many ways, Dr. Marcia Angell is an unlikely muckraker. A pathologist by training, she is the
former editor in chief of The New England Journal of Medicine. She
is also a senior lecturer at Harvard Medical School.
But just days short of her 65th birthday and her first Social Security check, Dr. Angell is taking on the American
pharmaceutical industry with a new book, "The Truth About the Drug Companies: How They Deceive Us and
What to Do About It" (Random House)."I don't worry about labels," Dr. Angell said in an interview at the Hotel
Monaco, where she stopped during a book tour.
In a 1996 book, she noted, she argued "that there wasn't a shred of evidence that the breast implants were
causing all the disease they were said to."
"I was said to be a tool of the pharmaceutical and device companies," Dr. Angell recalled. "I call them as I see
them."
Q. Why produce an investigative book on the pharmaceutical industry?
A. Because everyone knows that prescription drug prices are sky-high. Americans pay far more for our drugs
than people in other countries. The drug companies say, "We need high prices to cover our staggering
research and development costs, and if you do anything to squeeze our prices, it
will stifle innovation." The book was written to examine that argument.
Q. The pharmaceutical companies say their prices are steep because they spend somewhere in the
neighborhood of a billion dollars per drug bringing them to market. Did your research support this assertion?
A. A group of economists - mainly funded by the drug companies - came up with the widely quoted figure on
this. They said that it cost $802 million to bring a drug out. They, however, were looking at the most expensive
drugs to develop: new chemical compounds developed entirely in
house. Most new drugs aren't that at all. Most are what people call "me too" drugs, which are slight variations
of older drugs already being sold.
According to these economists, the real cost of bringing out those rare original drugs is actually around $403
million. But they doubled it by factoring in how much money the companies might have earned if they'd
invested that $403 million. Moreover, the economists did not figure into
their total the many generous tax breaks these companies receive for doing research and development. This
is a highly inflated figure.
The fact is that for the last two decades the drug companies have been hugely profitable. Last year there was
a little wiggle downward, but in 2002, the 10 biggest American drug companies had a median profit of 17
percent of sales compared to a median of 3 percent for the other Fortune 500 companies. In the 1990's,
profits ran between 19 and 25 percent. Prices are high to keep profits high.
Q. Exactly what are these "me too" drugs you argue against?
A. They are minor variations of old drugs already on the market. Sometimes a company creates a "me too"
drug as a way of extending a patent on an older one. For example, AstraZeneca created Nexium to replace the
virtually identical Prilosec when its patent was about to expire. By
putting out these me-too's, the companies can get new exclusive marketing rights on what are essentially the
same old drugs.
Other companies come in with their own me-too's because markets are expandable. It's been shown that
when you advertise one me-too drug, you increase the sales of all of them.
Q. Why do you have a problem with this?
A. The prevalence of the me-too's really says an awful lot about the lack of innovation within the
pharmaceutical industry. If you look at the new drugs marketed over the last six years, 78 percent weren't even
new chemical compounds. They were just new combinations or different
formulations of old drugs. And 68 percent were classified by the F.D.A. as unlikely to be improvements over
drugs already on pharmacy shelves.
At the same time, there are shortages of some important drugs that the pharmaceutical companies aren't
much interested in making because they are not as profitable as the me-too's. But the companies don't have
to turn out needed drugs, if they are not lucrative. And they don't.
Q. How much of the high cost of drugs is the result of marketing and sales expenditures?
A. The companies spend over 30 percent of their revenues on marketing and administration. Their marketing
budgets are so enormous because they have to persuade doctors and patients to prescribe one me-too drug
over another. If you had a truly innovative drug - a cure for cancer, for
instance - you wouldn't have to market it much. The world would beat a path to your door.
Q. Was there anything in your life that pushed you to write this book?
A. As a journal editor, I witnessed a disturbing trend in pharmaceutical research. Twenty years ago, most drug
trials were conducted at academic medical centers and the pharmaceutical companies tended to stand back
during the testing period. However, in recent years, the companies
have succeeded in attaching strings to research contracts, often designing the studies themselves, keeping
the data in-house and deciding whether or not to publish the results. They also began to contract with private
research companies for testing. Moreover, the medical schools and
even individual researchers began to enter into entrepreneurial arrangements with the drug companies.
While all this was occurring, I began to see bias creep into medical research. And I saw a lot of it. The most
obvious example were studies comparing a new drug to a placebo. That may be enough to get a drug F.D.A.
approval, but it should not be enough for The New England Journal of
Medicine. Doctors don't want to know whether a drug is better than nothing. They want to know if it's better than
what they are already using.
Q. You've written that "because most medical journals are dependent on drug ads for their survival, it probably
also influences what they publish." Were you speaking of The New England Journal of Medicine there?
A. No. That's because the Journal was virtually unique. We had a real wall between the advertising people and
the editorial offices. But many other medical journals - and there are thousands of them - are little more than
vehicles for advertisements. Still others, while they are not quite that, will put out occasional sponsored
supplements, which I wouldn't have any confidence in whatsoever.
Q. You left the editor's chair at The New England Journal of Medicine in 2000. Have there been any big
changes there since your departure?
A. There's only one I know of - we had a policy that review articles and editorials could not be written by anyone
with any financial connection to a company whose product was featured in that article. We said that disclosing
the connection was not enough.
When we printed papers on original research and there were often conflicts of interests, we published those
articles with disclosures. It's my understanding that the policy on reviews and editorials is no longer in place.
I'm sorry they made that change. But they say it's too hard to find a
prominent author who doesn't have a conflict of interest.
Q. The first phase - the discount card phase - of the new Medicare drug benefit is about to go into effect. Do
you, as a newly minted senior, believe it will make prescription drugs more affordable?
A. It's not going to have a major effect. These discounts are very small, maybe 10 to 15 percent. At the rate of
inflation of drug prices, they'll be overtaken in a very short time.
Now, the main Medicare drug benefit that goes into effect in 2006 is designed to funnel billions of dollars to
the pharmaceutical industry. It's an absolute bonanza for it. The pharmaceutical industry's lobbyists made
certain that the legislation contained a provision barring Medicare from
negotiating drug prices.
Interestingly, the federal government negotiates drug prices for the Veterans Affairs system and gets very low
prices because it is a bulk purchaser. And Medicare would have been the biggest bulk purchaser of all - so it
could have negotiated very low prices. That provision allows the drug companies to continue raising their
prices faster than the inflation rate, and the drug benefit will soon become unaffordable.
http://www.nytimes.com/2004/09/14/health/policy/14conv.html?ex=1096163228&ei=1&en=a147cdcb05049416
NEW YORK TIMES