Pharmaceutical Industry Ethics

8/3/2019 Pharmaceutical Industry Ethics

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The

PharmaceuticalIndustryFacts, Fiction, Policy and Ethics

Martin Donohoe


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Outline

Economics

Influences on PhysicianPrescribing

Academia-Industry Connection

Ethical and Policy Issues


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Prescription Drugs

10,000 FDA-approved drugs

70% of all officevisits lead toprescriptions

1.5 - 2.0 billionprescriptions/year


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Prescription Drugs and HealthCare Costs

>10% of U.S. medical costs>10% of U.S. medical costs

The fastest growing component of the $1.3trillion US health care bill


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Economics of the PharmaceuticalIndustry

Sales revenues tripled over lastdecade

Prices increased 150% (versus50% CPI)

Spending up 17% from 2000 to2001


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Worldwide sales > $145 billion/year

US = Largest market40 % of worldwide sales

Average CEO compensation = $20million (1998)


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Economics 16.4% profit margin in 2000 ($24

billion)

-Largest of any industry

-4 times greater than averagereturn of all fortune 500companies

-8 out of 25 most profitable U.S.companies are pharmaceuticalcompanies


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Greater than 5000 companiesworldwide

Less than 100 companiesaccount for over 90% ofworldwide market


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Mergers and Acquisitions

Drug company mergers

- Pfizer-Warner-Lambert- Upjohn-Pharmacia

Pfizer acquired Pharmacia in 2002 for$60 billion to become the worldsmost powerful drug conglomerate


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Drug Industry Lobbying

Pharmaceutical Research andManufacturers Associationpowerful lobby

623 lobbyists for 535 members ofCongress


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Drug Industry Lobbying

$38 million donated to Congressionalcampaigns in the 1990s

$84 million in 2000 election (2/3 toRepublicans)

Orrin Hatch (R-Utah) - $169,000 in 2000 - #1

John Ashcroft (Atty. Genl) - $50,000 in losing2000 Senate bid

GW Bush received $456,000 during his2000 election campaign


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Drug Costs

U.S. highest in the world

55% > Europe35% to 80% > Canada (drug companiesstill among the most profitable in Canada)

Cross border pharmacy visits increasingly

commonCanada vs. Mexico


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Drug Costs

U.S. only large industrialized countrywhich does not regulate drug prices

Single payer system woulddramatically decrease drug costs

Single purchaser able to negotiatedeep discounts


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Drugs: Who Pays?

55% out-of-pocket

25% private insurance

17% medicaid

3% Other (VA, Workmans Comp, IHS,etc..)


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Where Prescription Dollars Go

Research and development - 12%-preclinical testing - 6%

-clinical testing - 6% Manufacturing and distribution - 24%

Sales and marketing - 26%

Administrative / miscellaneous expenses -

12% Taxes - 9%

Net profit - 17%


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The Elderly and Prescription DrugCoverage

Elderly represent 12% of U.S. population,yet account for 33% of drug expenditures

Almost 2/3 of elderly Medicare enrolleeshave no coverage for outpatient drugs

sicker and poorer then their counterparts

with supplemental insurance.


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Drug expenditures increasing up to 10times as fast as SS and SSI benefits

1 out of 6 elderly Medicare patientsare poor or near poor (incomes less

than $7,309 or $9,316 respectively)


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Consequences of No PrescriptionDrug Coverage for the Elderly

Noncompliance, partialcompliance

Increased ER visits andpreventable hospitalizations,higher rates of disability, and

greater overall costs


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Consequences of No PrescriptionDrug Coverage for the Elderly

Elderly, chronically ill individuals

without coverage are twice aslikely to enter nursing homes


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Universal outpatient drug coverage cost-saving

-pharmaceutical industry stronglyopposed

-Citizens for Better Medicare (pharmaceuticalindustry front group) $65 million ad campaign todefeat a Medicare prescription drug plan in 2000

Bush/Congressional prescription drugbenefit proposals woefully inadequate


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Generics

Increased market share

-1983 = 15%-1993 = 40%-2000 = 42%

Average cost 1/3 of comparable

name-brand drug


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Generics

Brand name manufacturers acquiringgeneric producers

E.g., Merck-Medco

Prices rose almost twice as rapidly as

those of brand-name drugs in 2002


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Delaying Generic Competition

Nuisance lawsuits against genericmanufacturers

Lobbying for Congressional BillsExtending Patent Protection

Schering Plough / Claritin - $20 millionlobbying campaign

Big-name lobbyists (Howard Baker, CEverett Koop, Dennis Deconcini, LindaDaschle)


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Influences on PhysicianPrescribing Habits

Texts

Journals

Colleagues

Formularies

Samples

Patient requests Personal experience

Cost


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Influences on PhysicianPrescribing Habits

Gifts

Drug advertisements

Pharmaceutical representatives


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Gifts from PharmaceuticalCompanies

Pens, toys and puzzles

Household gadgets

Food

Books

Event tickets

Travel and meeting expenses Cash


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Patients Attitudes TowardPharmaceutical Company Gifts(Gibbons et al.)

200 patients, 270 physicians

1/2 of patients aware that doctorsreceive gifts

1/4 believe theirdoctor(s) accepted

gifts 1/3 felt costs passed along to patients

Patients felt gifts less appropriatethen did physicians


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AMA Guidelines Re Gifts toPhysicians from Industry

No cash gifts

No gifts with strings attached


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AMA Guidelines Re Gifts toPhysicians from Industry

CME sponsorship money toconference sponsor, notparticipating physicians

Meeting expenses for trainees

funneled through institution


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Pharmaceutical CompanyAdvertising Drug Samples

$8 billion/year in samples$8 billion/year in samples

Dispensed at 10%Dispensed at 10% -- 20% of20% ofvisitsvisits


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Drug Samples

Only of samples go to patientsOnly of samples go to patients

60% of pharm reps self60% of pharm reps self--medicatemedicate

50% of residents self-medicate,often using samples

early 1990s - benzos

2000 - SSRIS for depression,antihistamines for sleep


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Truthfulness in Drug AdsWilkes et al.

Ann Int Med 1992:116:912-9

10 leading medical journals

109 ads and all available references(82%)

3 independent reviewers


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Truthfulness in Drug Ads:FDA Requirements

True statements-effectiveness-contradictions-side effects

Balance

Instructions for use

Approved uses only


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Truthfulness in Drug Ads:Data

57% little or no educational value

40% not balanced

33% misleading headline

30% incorrectly called drug the agent

of choice 44% could lead to improper

prescribing


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Truthfulness in Drug Ads Higher percentage of ads misleading

in Third World

Many agents available OTC

Increased FDA oversight and

enforcement needed


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Doctors are Influenced byPharmaceutical Advertising and

Marketing

Prescribing patterns

e.g., Calcium channel blockers 1998: Trovan most promoted drug

in US; sales most ever for anantibiotic in one year; use since

limited by FDA due to liver toxicity


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Doctors are Influenced:

Formulary Requestsby P and T Committee Members(JAMA 1994;271:684-9)

Met with drug rep 3.4X more likely torequest companys drug

Accepted money to speak at symposia 3.9X

Accepted money to attend symposia 7.9X

Accepted money to perform company-sponsored research 9.5X


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Pharmaceuticals Sales RepsTechniques

Appeal to authority

Appeal to popularity

The red herring

Appeal to pity Dryden - Pity melts the mind


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Pharmaceuticals Sales RepsTechniques

Appeal to curiosity

Free food/gifts

TestimonialsTestimonials

Relationship building/face timeRelationship building/face time


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Pharmaceutical Sales RepsTechniques

Active learning reinforcement /change

Favorable but inaccurate statements

Negative comments re competitorsproducts

Reprints not conforming to FDAregulations


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Relating to Pharmaceutical Reps

Awareness of sales tactics

Learn about new agents/formulationsbeing developed and tested

Question them, ask for references

Evaluate quality of references


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Sources of Accurate and ReliableDrug Information

The Medical Letter

Peer-reviewed studies and

reviews Micromedex

Prescribers Letter

Large databases

-The Cochrane Collaboration


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Sources of Accurate and ReliableDrug Information

Textbooks

Facts andComparisons

AHFS DrugEvaluations

AMA Drug Evaluations

Conns Current

Therapy The FDA (sometimes)

Not PDR


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Direct to Consumer Advertising

Began in 1980, briefly banned 1983-85

Expenditures:$155 million1985

$356 million--1995

$1 billion--1998

$2.8 billion--2000


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Direct to Consumer Advertising

US and New Zealand only countries toallow prime time TV advertising

1989 - one drug achieved >10% publicrecognition

1995 - 13 of the 17 most-heavily marketed

2000 Schering-Plough spent more to

market Claritin than Coca-Cola Enterprisesand Anheuser Busch spent to market theirproducts


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Direct to Consumer Advertising:Use of Celebrities

Micky Mantle Voltaren

Bob Dole Viagra

Joan Lunden Claritin

Newman - Relenza


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Pet Pharmaceutical Industry

$3 billion market

Examples:

Clonicalm (clomipramine) for separation anxietyin dogs

Anipryl (seligeline) for canine CognitiveDysfunction Syndrome

Sea pet shark cartilage treats for doggie

arthritis Pet superstores and websites sell multiple

antibiotics


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Pharmaceuticals on the Farm:Agricultural Antibiotic Use

Agriculture accounts for 70% ofU.S. antibiotic use

Use up 50% over the last 15years

Due to explosion in factory

farming


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Consequences of AgriculturalAntibiotic Use

CDC: Antibiotic use in food animalsis the dominant source of antibiotic

resistance among food-bornepathogens.Campylobacter fluoroquinolone

resistance

VREF (poss. due to avoparcin usein chickens)


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The FDA: Current Issues

Nicotine/Cigarette regulation

Policies re transgenic foods (GMOs,

Frankenfoods) Biopharming

Pharmaceutical industry involvementin research and production of

chemical and biological warfareagents and drugs used to facilitateexecutions


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Policy Issues Related to WomensHealth Care Drugs

OCPs available OTC

PharmacistPharmacist--prescribed emergencyprescribed emergencycontraceptioncontraception

reduce number of unintendedreduce number of unintended

pregnanciespregnanciescost saving to patients and health carecost saving to patients and health care

systemsystem


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Concerns Re Research in the U.S.

22% of new drugs developed overthe last 2 decades new molecular

entitiesMost are me too drugs

Examples


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Concerns Re Research in the U.S.

Insurance coverage of clinical trialsdecreasing

Low enrollment causing delays inevaluating cancer medications

Clinical trials a stop-gap source ofcare / meds for poor and uninsured


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Unethical placebo-controlledtrials

anti-depressants

anti-psychoticsanti-emetics

anti-hypertensives

anti-inflammatories


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Pharmaceutical CompanyResearch

90% of health research dollars arespent on the health problems of 10%

of the worlds populationresearch on major diseases of the

developing world under-funded, notprofitable


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Pharmaceutical CompanyExperimentation

Third World experimentation withinappropriate placebo-controls:

AIDS drugs/Africa;Sulfazyme/Brazil

Results more beneficial to First

World patients


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Anti-AIDS Drug Availability in

Africa

36 million infected with HIV; 2/3 insub-Saharan Africa (1.3% of

global pharmaceutical market)Only 1/1000 S. African AIDSpatients getting anti-HIV drugs


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Anti-AIDS Drug Availability in

Africa

PHRMA lawsuit vs South Africa (supportedby US govt)

parallel importingcompulsory licensing

dropped after activist campaign

PHRMA continues to lobby against parallel

importing and compulsory licensingthrough governments and the WTO


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Third World Donations (Dumping) ofPharmaceuticals

Genuine gifts

Dubious gifts

clear out stocks of nearly-expireddrugs/poor sellers

tax write-offs (up to 2x productioncosts)


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Third World Donations (Dumping)

of Pharmaceuticals

Egregious Examples:-Expired Ceclor to Central Africa-Garlic pills and TUMS to Rwanda

-50% of donations to Bosnia expired ormedically worthless

Donation recommendations from WHO:

-WHO list of essential drugs-Expiration date at least 1 year away


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Academia/Pharmaceutical Industry

Links Strong/Growing

Industry funds 8-40% ofuniversity research (a 7-fold

increase since 1970) of scientific investigators have

industry affiliations


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Academia/Pharmaceutical Industry

Links Strong/Growing

2/3 of academic institutions holdequity in start-ups that sponsor

research at the same institutions Up to 80% of science and

engineering faculty perform

outside consultations


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Exclusive university - corporate

agreements

MIT 5 yr, $15 million deal with Merck and Co.for patent rights to joint discoveries

DFCI Novartis

UC Berkeley Novartis

Wash U. in St Louis - Pharmacia

Univ. of CO Ribazyme

BIH - Pfizer MGH - Shiseido


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Guidelines

Majority of authors of Clinical Practice

Guidelines published in major journalshave industry ties

Authors of NEJM reviews and editorialscan accept up to $10,000/year in speakingand consulting fees from each companyabout whose products they are writing


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Problems Consequent to Increased

Academia-Industry Partnerships

Impaired sharing of knowledge, materials

Difficulties in repeating/verifying importantresearch

Impaired collaboration

Driven by usual academic competitivejealousies, fears of contract violations andsubsequent litigation, and desire to protectfinancial interests and keep stock prices high

Patents used to inhibit other investigatorsresearch


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Educational Concerns RegardingIndustry-Funded Research

Diversion of faculty away from teaching,

towards more remunerative consultations

Faculty change research direction

Fellows/post-docs diverted to industry-related topics

Patent- and profit motive-related-publication delays affect trainee and juniorfaculty career development


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Withholding of Data / Publication

Delays / Harassment of Researchers

JAMA Celebrex (Pharmacia) study: fewerulcers than ibuprofen at 6 months, but nodifference at one year (only 6 month datasubmitted and published

Synthroid study: Betty Dong, UCSF,Boots/Knoll Pharmaceuticals

Deferipone: Nancy Oliveri, Universityof Toronto, Apotex


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Issues in Drug Company Research

60% of industry-sponsored trialsare contracted out to for-profit

research firms, which in turn maycontract with for-profit NIRBs forethical review

*Conflict of interest


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Proliferation of Physician

Researchers

3-fold increase in the number ofphysicians conducting research in

the last decade

Investigators can make from $500to $6000 per enrolled subject

Active recruiters can make from$500,000 to $1 million per year


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Seeding Trials

Sponsored by sales and marketingdept., rather than research division

Investigators chosen not for theirexpertise, but because they prescribecompetitors drug

Up to 25% of patients enrolled in

clinical trials


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Seeding Trials

Study design poor

Results rarely published

Disproportionate amount paid forinvestigators work (writing aprescription)


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Recommendations for Industry-

Sponsored Research

Written agreements with university, notresearcher

Alternatives therapies selected based onclinical relevance

Stepwise project results not provided tosponsor until study is funded and openpublication guaranteed


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Recommendations for Industry-

Sponsored Research

Full disclosure of conflicts of interest

No gag clauses regarding publication

Investigator not to act as consultant duringstudy

National/international database of clinicaltrials


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The Pharmaceutical Industry and

Medical Ethics

Funding of conferences, Centers ofEthics, individual investigators

E.g., $1 million gift from SmithKlineBeecham to Stanford UniversityCenter for Biomedical Ethics

Rapid growth of for-profit non-

institutional review boards (NIRBs) Ethicists for hire


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The Pharmaceutical Industry and

Medical Ethics

Ethics consultants serving on corporateboards

E.g., Harold Shapiro continued to drawannual directors salary from DowChemical while serving as Chair of NBAC

Loss of appearance of independence;damage to credibility

Most bioethics journals do not requireconflict of interest disclosures


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Increasing Involvement of Industry in

Provision of Continuing MedicalEducation

1/2 of the $1.1 billion spent on CME in 1999from industry

Medical Education and CommunicationCompanies

Sponsored/paid mainly by drugcompanies

Provide educational materials gratis


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Guidelines for Speakers at

Industry-Sponsored Events

Educational, not promotional

Content based on scientificdata and clinical experience

Full disclosure ofrelationship with companyand honoraria

Travel expenses not lavish

*Few mechanisms forsurveillance/guidelineenforcement *


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Enhancing Cooperation Between

Physicians and the PharmaceuticalIndustry

Improve compliance

Decrease adverse events Promote and fund of open, freely-

shared basic science and clinicalresearch, with appropriate but not

excessive compensation to thesponsoring investigator, institutionand company


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Conclusion

Pharmaceuticals andBiotechnology Industries

-Tremendous contributions tohealth-Motivation = alleviate suffering-Primary responsibility = makemoney for shareholders


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Suggestions

Be aware of worrisome trends in thebusiness of drugs, research and

health care Thoughtfully consider your

relationship with pharmaceuticalcompanies

Advocate locally and nationally forsolutions


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Contact Information

Public Health and Social JusticeWebsite

http://www.phsj.org

[email protected]

Documents

Pharmaceutical Industry Ethics