Big Pharma

The pharmaceutical industry has transformed our world. We have been using plants and plant substances to treat all kinds of diseases and medical conditions going right back to prehistoric times. But it was only in the late 19th and early 20th centuries that most of today’s major pharmaceutical companies were founded.The period between 1930 and 1975 approximately was the golden age of the discovery of medicines. It is difficult to appreciate the sheer scale of this revolution. A doctor starting to practise medicine in the 1930s would have had a dozen or so proven remedies to treat his patients’ illnesses. By the time that same doctor was reaching retirement age he would have had some 2000 remedies at his disposal.

You would think that this incredible progress would have made pharmaceutical companies very popular. Nothing could be further from the truth. In her book The Truth about Drug Companies Marcia Angell, the first woman to serve as editor-in-chief of the New England Journal of Medicine provided the following damning critique of the industry:

1. Pharmaceutical companies are producing too many “me-too drugs” and too few drugs that are genuinely new.

2. The most influential regulatory agency in the world (the American FDA) is too closely linked to the industry that it is supposed to be regulating.

3. Pharmaceutical companies have too much control over the clinical tests that assess the effectiveness and safety of their own products.

4. The current 20-year period of validity of drug-patents is unjustified and its present regulation is detrimental to the quality of clinical research. Drugs today are patented before having completed the clinical tests necessary to prove their effectiveness and safety. This means that the 20-years period of validity of a drug-patent includes the years necessary for its clinical testing. To avoid the pressure to shorten clinical studies, the law should be modified so that the clock starts ticking once a drug can be sold and not before. The total length of the patent could then be reduced to 6 years. Legislation should also be enacted to eliminate the current legal loopholes used by pharmaceutical companies to block the arrival of generic drugs on the market for 30 months following the expiry of their own patent.

5. Pharmaceutical companies have an undue influence over medical schools curricula (2/3 of US university hospitals have direct economical links to this industry).

6. Important information on research, development, marketing, and pricing of drugs is kept secret from the public.

7. Drug prices are too high and too inconsistent.

Pharmaceutical companies are certainly no saints. They are not NGOs and their ultimate responsibility is to maximise the profits for their shareholders. They are not above hiding tests or distorting research findings. As they fund a lot of research, they will often downplay tests that are not convenient for them. This clearly happened with some of the SSRI inhibitors. Twenty-two studies that had negative or unclear results were simply not published at all, and eleven were written up and published in a way that described them as having a positive outcome. Pharmaceutical companies may have to deal with a more knowledgeable audience – doctors but that just means that they have to employ more sophisticated manipulation.

The industry’s critics often rail against the abusive prices charged by drug companies. But it is very easy to confuse the cost of physical ingredients, which may be a few cents with the real cost of developing a drug. And of course the most expensive ingredient is knowledge. It is a question of science but it also involves trial and error. It is very easy to overlook how many failures there were before they actually came up with a safe and effective drug. These costs must be included in the price of the drug. If the cost of research, testing and failed drugs are taken into account, the price tag for developing a successful new drug has been estimated at about $1 billion.

Drug approval, which attempts to protect the public from new and untried medicines, makes us face some significant trade-offs. In particular we have to consider the balance between safety and getting the medicine onto the market as soon as possible so that it can save lives. For example in the United States the testing process tends to be stricter than in Europe. They may well have saved them from the thalidomide disaster that afflicted the old continent in the 1960s. Clearly the longer the trial, the greater the confidence we can have that the drug is safe. But you can never have a 100% guarantee. And you should not assume that there are no costs in making the process longer. Once again we see the seen and the unseen. Drug regulators face a particular set of asymmetric incentives when deciding whether to approve a drug or not. If a drug gets the green light and then 1,000 people die, you have a very visible problem and someone to blame. But not approving a drug has costs but they are more hidden; we are not so aware of the people who die before the approval process has been completed. In the USA AIDS activists were able to get the FDA to relax its restrictions so that AIDS victims could be given treatment before the approval process had finished.

The relationship between innovation and profits is one we have to seriously consider. I am not a big fan of patents but a strong patent system is positive in that it encourages research. Having said that Switzerland apparently had a strong record of medical innovation despite the fact that they had no patent system until 1978. The big downside is that these medicines are prohibitively expensive for developing countries. One key battleground has been HIV and AIDS drugs.Governments and companies in countries like Brazil, and Uganda have started to challenge pharmaceutical patents, arguing that saving human lives justifies the breach of patent law. In 2007 the Brazilian government declared Merck’s Efavirenz anti-retroviral drug a “public interest” medicine. They challenged Merck to negotiate lower prices with the government, or, if not Brazil would issue a compulsory license. So we have a delicate balance to maintain here. We want affordable medicine especially when you are dealing with health emergencies. But we don’t want to kill off innovation.

Medicines are also subject to absurd scare stories. What is interesting is though we live in an increasingly globalised world, these stories tend to be quite localised. In Britain we had the ridiculous case of the MMR vaccine and its alleged links to autism. In France it was about a hepatitis vaccine. The role of the media in the British case was quite shocking. But health scares are what sell papers. One would like to think that lessons would have been learned from this debacle. But the reaction seems to be put the blame on the doctor whose original report the media were so keen to promote. They don’t want to look at their own role in this sorry episode.

These stories though can be considered anecdotes. However in the developing world they can be the recipe for health disasters. Two cases immediately spring to mind. The first is South Africa, where President Mbeki denied the connection between AIDS and HIV. Anti-retroviral drugs were out and vitamin pills were in. Secondly we have the case of polio, which was on the verge of being eradicated, when a bizarre conspiracy theory took hold of the Muslim population in northern Nigeria. This theory seems to come from the same line of reasoning that argues that no Jews were killed on 9/11 or that Israel has been distributing libido-increasing chewing gum in Gaza The polio vaccine conspiracy seems to be a  product of the demented mind of the physician and the president of Nigeria’s Supreme Council of Sharia Law, Ibrahim Datti Ahmed, Dr. Ahmed, an Islamist, accused Americans of lacing the vaccine with an anti-fertility agent that sterilizes children (or, in an alternate version, it infects them with AIDS). Kano state Governor Ibrahim Shekarau was quoted as saying:

 “It is a lesser of two evils to sacrifice two, three, four, five, even 10 children (to polio) than allow hundreds of thousands or possibly millions of girl-children likely to be rendered infertile,”

It may be uncomfortable to realise that so much medical innovation is the product of profit-seeking private firms. This doesn’t sit easily with our idea of the public good. However there is an intellectual fallacy that you can have all the medicines we have now but at a much cheaper price. Ultimately we are dealing with tradeoffs here. Maybe we would be better off with fewer but more affordable medicines.  I certainly have no illusions about the pharmaceutical industry. They are out to get what they can. But I have tried to show that some of the criticisms against them do not stand up to scrutiny. Although it may be fashionable to bash the pharmaceutical companies, I do feel that they have, on balance, made the world a better place.


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