crimes and abuses of the pharmaceutical industry

7/30/2019 Crimes and Abuses of the Pharmaceutical Industry

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CRIMES AND ABUSES

OF THE PHARMACEUTICAL INDUSTRY

Teresa Forcades i Vila, MD OSB

1. THE CASE OF FEMALE SEXUAL DYSFUNCTION ..............................................

2. THE CASE OF DRUGS USED TO COMBAT AIDS IN AFRICA .............................

3. WEALTH AND POWER AGAINST THE POOR.......................................................3.1. Current wealth and political power of large pharmaceutical companies ..........

3.2. Ways in which the wealth and power of large pharmaceuticalcompanies is being used? ..............................................................................

4. AN INTERNAL CRISIS: INNOVATIONS IN TREATMENT REPLACED BYADVERTISING ..........................................................................................................

4.1. Current Crisis of Pharmaceutical Companies ................................................

4.2. A Decrease in Innovation and a Rise of Marketing ........................................

5. AN OPPORTUNITY TO DISMANTLE THE SYSTEM .............................................

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In the brief period from 2000 to 2003, almost all the largepharmaceutical companies went before state tribunals in theUSA, accused of fraudulent practices. Eight of these firms were

fined over 2.2 billion dollars. Four of these eight companies TAP Pharmaceuticals, Abbott, AstraZeneca and Bayer- admit-ted criminal responsibility for activities that put the lives andhealth of thousands of people at risk1. What were these activi-ties? And who bore the price? What causes pharmaceuticalcompanies to behave in such a way? What actions have beentaken in response to these abuses, and what actions still needto be taken? This booklet will examine the current strategiesused by the pharmaceutical industry and the direct impact thesestrategies have on the way health and illness are defined and

on which types of resources are available today to promotehealth and to prevent or cure disease.

Translation: Gerarda Walsh and Cheryl Waschenko Printed on ecological paper and recycledcardboard Editors: CRISTIANISME I J USTCIA R. de Llria 13 - 08010 Barcelona (Spain) Tel.

93 317 23 38 Fax: 93 317 10 94 [email protected] www.fespinal.com Printed by: EstiloEstugraf Impresores, S.L. ISBN: 84-9730-152-8 Legal Deposit: M-46906-06 December 2006

Teresa Forcades i Vila is benedictine nun. Medicine doctor, she prepares a docto-rate in theology. She belonged to the first group of young people ofCristianisme iJustcia.


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In 1997, only a few months afterViagra had appeared on the market, ninepharmaceutical companies planned, or-ganized and financed a meeting of medi-cal specialists in Cape Cod(Massachusetts). Plainly stated, their goalwas to create a new pathology (namely,female sexual dysfunction) in order to

suit the economical interests of the phar-

maceutical industry3. Ayear and a half lat-er, in October 1998, the first internationalconference to develop a clinical consensuson female sexual dysfunction took place inBoston4, fully financed by eight pharma-ceutical companies. Eighteen out of the ni-neteen authors of the new internationallyagreed upon definition had direct econo-

mic ties with the companies that financed

1. THE CASE OF FEMALE SEXUAL DYSFUNCTION

In 1998, Pfizer, the largest and most profitable American pharmaceuticalcompany, introduced a drug known as Viagra for the treatment of malesexual dysfunction (defined as erectile dysfunction). By 2001, Viagra hadbecome a blockbuster drug with 17 million prescriptions written and abillion and a half dollars in sales2

. (Blockbuster is the term used by theindustry to describe a drug with annual sales exceeding the billion dollarsmark.) With its stock price soaring, the management of Pfizer turned itsattention to women, hoping to identify some sort of female sexual dysfunc-tion for which another lucrative blockbuster could be developed. The mainobstacle was that while there were seemingly clear and objective criteria todefine male sexual dysfunction (erectile problems), female sexual dysfunc-tion was much more difficult to define and, most importantly, much more dif-ficult to quantify and objectively evaluate.

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the event or with other pharmaceuticalcompanies. One year later, in 1999, an ar-ticle entitled Sexual Dysfunction in theUSA: Prevalence and Predictors appea-red in the Journal of American Medical

Association (JAMA)5. The authors of thearticle asserted, with seeming scientificobjectivity, that 43% of the American fe-male population was suffering from thisnew illness, an illness in fact created anddefined to suit the economic interests ofthe pharmaceutical industry.

Three steps were used to identify theaffected population. (1) A list of seven

symptoms was developed, each ofthem considered significant enough tojustify a diagnosis of the new condition ifa woman were to present it for twomonths or more in the previous year, (2)A questionnaire about these sevensymptoms was answered by a total of1,500 women, (3) Results were evaluatedin such a way that a single Yes response

would be seen as sufficient grounds fordiagnosing the condition. One of the se-ven symptoms was the lack of sexualdesire. In other words, women who re-ported a lack of sexual desire for two suc-cessive months or more over the previousyear not taking into account whetherthey had been mourning the death of a lo-ved one, stressed with too much work,

trapped in an unhappy relationship, enjo-ying a period of solitary creativity etc.were automatically labeled as sexuallydysfunctional, thus increasing the per-centage of potential candidates for thetreatment that the pharmaceutical in-dustry hoped to develop in the near futu-re. Two out of the three authors of this ar-ticle had economic links with

pharmaceutical laboratories. In October

of the same year, a third meeting on theissue took place, organized by theMedical School of Boston University, butpromoted and financed by sixteen phar-maceutical companies. 50% of those

present admitted having direct economiclinks with the pharmaceutical industry6.From this meeting came the Forum onFemale Sexual Function, which held twomore conferences in Boston in 2000 and2001 thanks to the generous financialcontributions of twenty pharmaceuticalcompanies led by Pfizer7.

In 2003, Ray Moynihan denounced

this manipulation of medical criteria toserve commercial interests in the presti-gious British Medical Journal (BMJ)8.Over six weeks, the editors of the maga-zine received a total of seventy responsesto Moynihan's article. Two-thirds of theresponses were in support of the articleand confirmed the growing indignation ofmedical professionals in the face of this

manipulation although, as one of the re-plies made very clear, without the help ofthe same medical professionals, this si-tuation would not have arisen in the firstplace9. If we doctors did not take part inthe exploitative abuse carried out by phar-maceutical companies, such situationswould not arise.

In December of 2004, the U.S. regu-

latory agency (the Food and DrugAdministration (FDA)) prevented thecommercialization of the first drug thatwas developed to treat female sexualdysfunction, a testosterone patch offeredby Proctor and Gamble10. The principalinvestigators of the clinical trials all di-rectly financed and supervised by Proctorand Gamble had presented their results

in such a biased manner, that the doubtful

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benefits and the likely dangerous side-ef-fects (breast cancer and cardiac disease)were instead advertised as clear benefitsand negligible risks.

No other drug has yet been developed

to treat female sexual dysfunction, largelybecause of a growing awareness of all tho-se involved of the detrimental effects thatthe excessive influence of the pharma-

ceutical companies exerts on the practiceof medicine11.

There is no doubt that female sexualproblems exist, but they (like any other me-dical condition) need to be studied in rela-

tion to the medical needs and the personalconcerns of the women affected, and not inrelation to the economic interests of someof the richest companies in the world.

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Under the 1970 law, Indian companieswere also permitted to commercialize the-se (much cheaper) generic medicines inother poor countries. The new internatio-nal patenting system imposed by the

WTO has no mechanism to protectagainst unaffordable pricing nor does itallow for the commercialization of Indiangenerics in poor countries. It should alsobe noted that the generic pharmaceuticalindustry is a major employer in India. In2003, this industry provided work for500,000 people in over 20,000 companiesthat were themselves able to provide work

to another 2.5 million people through sub-sidiary contracts12.

Let us examine the effect that such achange in patent law has upon those suf-fering from HIV in Africa. In 2003 morethan 30 million people infected with HIV(out of a total 40 million worldwide) we-

re living in sub-Saharan Africa. InBotswana, for example, 40% of womenare infected with the HIV virus, and inLesotho a third of the total population areinfected13. Due to the lack of affordableantiretroviral drugs, three million Africansdie from AIDS every year. Until 2005, theIndian pharmaceutical companies thatproduced generic drugs had been able to

grant access to essential drugs to an extre-mely low (less than 1%) but steadily gro-

2. THE CASE OF DRUGS USED TO COMBAT AIDS IN

AFRICA

On March 23rd 2005, the Indian Parliament was obliged to modify itspatent law in accordance with the stipulations of an international agency(the World Trade Organization, WTO), which had been created in 1994 to

defend the interests of wealthy countries confronting the challenges of glo-balization. The new patent law required the commercialization of drugs inIndia be made subject to the international patenting system stipulated bythe WTO. Under increasing international pressure, the Indian Parliamenthad to repeal its own 1970 legislation that had included safeguards to pro-tect against the abusive power of patent holders. For example, if a companyimposed prices that were too high for the Indian population, India could,within its own boundaries, legalize the production of generic versions ofmedicines still protected by patents in other countries.

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wing percentage of the population of poorcountries. Due to the free market compe-tition allowed in India under the 1970 le-gislation, the price of the standard antire-troviral treatment had been reduced (in

2004) from 1,500 dollars to 150 dollars perperson per year14. In addition, the bypas-sing of the patents allowed the generic ma-nufacturers to combine the different drugsinto one single tablet. The astonishing re-duction in price together with the simpli-fication in the treatment protocol were al-ready starting to show dramatic effects inthe possibility of successfully treating the

worldwide AIDS epidemic.On a global scale, some 350,000 peo-

ple undergoing antiretroviral treatmentare dependent on the production of gene-ric drugs in India. This figure representshalf of all those currently undergoing an-tiretroviral treatment in developing coun-tries. That is to say, less than 2.5% of pe-ople who are HIV positive in developing

countries are currently receiving treat-ment. Millions of people die every yearbecause of this. With the move to streng-then international patenting laws, alldrugs developed between 1995 and 2005,as well as all those developed after 2005,are now protected by patent laws and the-refore cannot enter into free competition,meaning that their price is soon likely to

increase (at least) tenfold. This applies todrugs that are essential to treat the HIV vi-rus as well as other very prevalent and po-tentially fatal diseases such as malaria, tu-berculosis, and cancer.

Between 1995 and 2005, 8,926 newpatent applications were made to theIndian regulatory agency. Many of thesewere refused as abusive but now, due to

the new law imposed by the WTO, all the

refused requests will need to be reasses-sed and it will be virtually impossible tolegally refuse them again. More than7,000 of these requests come from largeforeign multinationals, including the

pharmaceutical giant Pfizer. Today, Pfizeris the largest pharmaceutical company inthe world and a key player in the US eco-nomy. Apotent example of Pfizer's powercan be seen in the way it prevailed overthe French government in 2002. After theFrench government opposed its abusiveprices, Pfizer threatened to withdraw itsproducts from the French market. The

French government, after many failed ne-gotiations, ended up yielding to the pres-sure15. If a prominent member of theEuropean Union had to yield in the faceof Pfizer's economic threats, then whatpolitical power could developing coun-tries possibly hope to use to oppose unfa-vorable agreements?

The direct link between the introduc-

tion of patenting laws and the mortality ofthe population can be seen in the case ofBrazil. Since laws were passed that prohi-bited the patenting of drugs that had appe-ared on the Brazilian market before 1997,Brazil was able to locally produce the ge-neric equivalent of eight out of the ten an-tiretroviral drugs currently availableworldwide, with an average reduction in

price of 79%. In 2003 it became clear thatthe Brazilian AIDS epidemic had been sta-bilized and the mortality rate reduced byhalf16. With the new international legisla-tion, however, the production of genericmedicines in Brazil will also be blocked.

Due to its relevant content, we willnow reproduce some extracts of the letterwhich Karim Laouabdia, spokesperson

for Mdecins Sans Frontires (Doctors

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Without Borders), addressed to PascalLamy on September 20th 2005, on the oc-casion of Lamy's election as DirectorGeneral of the World Trade Organization(WTO).

The HIV/AIDS crisis has shown theurgent need to ensure that essential medi-cines are available at affordable prices.Today approximately half of the one mi-llion people in the developing world whoreceive antiretroviral drugs rely on gene-ric production. The fixed-dose combina-tions, produced in India, greatly simplifythe administration of antiretroviral the-

rapy and have been critical to scaling uptreatment in resource-poor settings. The2001 WTO Doha Declaration on TRIPSand Public Health17 was a vital step in in-creasing access to medicines. It providesunambiguous support to any governmentthat needs to protect the health of their

people [because these governments areallowed] to use the TRIPS flexibilities to

overcome the barriers posed by patents,and helps the least developed countries byextending the transition period for enfor-cing and granting pharmaceutical product

patents until at least 2016. Since then, ho-wever, there has been a systematic dis-mantling of the Doha Declaration throughbilateral trade agreements in which muchhigher levels of intellectual property pro-

tection are demanded than [those] requi-red by the WTO. The impact of patent pro-tection on HIV programs will become veryapparent in the coming years when largenumbers of patients currently on treatmentwill need to switch to newer, second-linemedicines. These drugs are at least 4-10times as expensive as first-line treatments,and almost all are patented or are likely to

be patented in those countries that have

capacity to produce them generically suchas India, Brazil and Thailand. (...) In ad-dition, the impact of patents is not limitedto antiretroviral drugs, but will increa-singly be felt across all diseases with all

medicines brought to market from now on.(...) The patent system is intended as a sti-mulus for innovation, but there is nomechanism for directing that innovation,and as a result many diseases are comple-tely ignored. We face the consequences ona daily basis in our projects, for exampleto diagnose TB [tuberculosis] in HIV pa-tients and in children; to treat tropical di-

seases like leishmaniasis, which affects 12million people; to monitor HIV patient

progress, and to treat HIV in children18.

Less than three months after submit-ting this letter, Mdecins Sans Frontiresexposed a new offense: some well-knownpharmaceutical companies, after havingprohibited the production of generic drugsin poor countries, were refusing to com-

mercialize in these same countries thedrugs that, despite being needed by thepopulation, were not lucrative enough forthe producing company19. The exampleused was that of the antiretroviral drugKaletra, marketed by Abbott. Abbott hasintroduced a version of Kaletra that doesnot need to be refrigerated. In spite of theenormous advantages that such a product

would represent to African patients (dueto the high temperatures and the frequentinterruptions in electrical supply whichoccur in the African territory), Abbot re-fuses to market this medicine in Africa.Abbot is not alone. Gilead, the pharma-ceutical company that owns the patent oftenofovir, another antiretroviral medicinerecommended by the WHO, has also re-

fused to commercialize it in Africa.

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3. WEALTH AND POWER AGAINST THE POOR

The extraordinary growth in political and economic power of the largeAmerican pharmaceutical companies began in 1984 with the law on theextension of patents (Hatch-Waxman Law) approved by the Republican-dominated Congress of the Reagan years. This power was then consolida-

ted in 1994 with the World Trade Organization (WTO), whose creation wasintended to prevent the rapidly expanding global economy from hinderingthe economic interests of the world's wealthiest companies20.

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3.1. CURRENT WEALTH AND POWER OF LARGE PHARMACEUTICAL

COMPANIES

The gross profit margins of the phar-maceutical industry range from 70 to 90%and its net income rate is the highest of all

industries. (According to Fortune maga-zine, in the year 2000 the net income rateof the pharmaceutical industry stood at18.6% versus the 15.8% rate of commer-cial banks). In 2004, Pfizer, the largestpharmaceutical company, had a net inco-me rate of 22% of its total sales, whichamounted to 53 billion dollars21. In spiteof these extraordinary profits, the tax rate

imposed on pharmaceutical companies isremarkably below average, standing at

16.2% versus the 27.3% average rate im-posed on other large industries22. Such atax break is shocking when one considers

that annual prescription drug price in-creases routinely outpace the level of in-flation (from 6% to 20% each year)23.

In 2000, the main pharmaceuticallobby in the USA (PhRMA) counted 297professional lobbyists, that is, one foreach two members of Congress24. Thisnumber already vastly exceeding thenumber of any other lobby has tripled

in recent years. In 2002, PhRMAfinancedthe work of 675 lobbyists, which means


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that in Washington that year there weremore people working to promote the in-terests of pharmaceutical companies thanmembers of Congress25. This unrelentingpressure and influence on the legislative

process has allowed the industry to obtainthe advantageous conditions (see section3.2) that have permitted it to progressivelydominate the global market: today 60% ofall drug patents are owned by USA-basedcompanies versus 20% owned by the EU.The USA controls the market of the 50best-selling drugs, all of them blockbus-ters26. In 2002, the total earnings of the

ten largest pharmaceutical companies ex-ceeded the combined earnings of the other490 companies listed in Fortunes top 500most profitable companies: the ten largestpharmaceuticals together made a totalprofit of 35.9 billion dollars and the other490 companies together made a total pro-fit of 33.7 billion dollars27. The dispro-portionate privileges that the pharmaceu-

tical industry is enjoying in the form of taxbreaks and advantageous laws and agree-ments, show clearly that the industryscurrent power and wealth are not the re-sult of a free market but rather of a de-liberate policy designed to protect an in-dustry that is as politically strategic to theUSA as the petroleum industry.

To highlight the current absence offreedom and fair play and the need to bet-ter regulate this market, Marcia Angell,chief editor of the renowned medical re-view The New England Journal of

Medicine for almost twenty years, suc-cinctly affirms: The colossus that is thepharmaceutical industry is today like afive-hundred pound gorilla: it can dowhat it wants28. And Philippe Pignarre,director for seventeen years of a largepharmaceutical company and currentlyProfessor at the University of Paris-VIII,insists that the market is not and has ne-

ver been a natural reality, but is alwaysa cultural or a social one. That is to say,the concept of market necessarily im-plies norms and agreements whose goalis not to regulate some sort of pre-exist-ing natural entity, but instead to createthe reality we call market. The norms areconstitutive of the market. The so-calledfree market (an unregulated market)

cannot exist; instead, what can and most certainlydo exist are the brutalmarket, that is, a market regulated ac-cording to the interests of the five hun-dred pound gorilla, and the less brutalmarket, that is, a market whose normsattempt to temper the avidity of theweightier29.

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3.2. WAYS IN WHICH THE WEALTH AND POWER OF LARGE

PHARMACEUTICAL COMPANIES IS BEING USED

Today large pharmaceutical compa-nies use their extraordinary wealth andpower to defend their own interests at thecost of the well-being, health and in some

cases even the lives of others. That is whythey are accused ofcriminalbehavior.

According to the report issued last ye-ar (2005) by a committee of experts of the


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British House of Commons, it is obviousthat the interests of the pharmaceutical in-dustry and those of the general public donot coincide. This committee concludedthat it is therefore (1) essential to set up

an effective regulatory regime to ensurethat the industry works in the public in-terest, (2) the present regulatory systemis failing to provide this and (3) as aconsequence of lax oversight the indus-trys influence has expanded and a num-ber of practices have developed which actagainst the public interest30.

The authors of the report also pointed

out that the aim of new drugs should beto provide a real therapeutic benefit for

patients31. What does this mean? If theyare not working towards producing realtherapeutic benefits now, then what arepharmaceutical companies spending theirtime doing? As the third most profitableindustry in the country (after tourism andbanking), this very same report called the

pharmaceutical industry a jewel in theEnglish crown32. Whence come the ex-traordinary profits of this industry if notfrom producing useful medicines?

The main strategies employed todayby the pharmaceutical industry to createtheir wealth include: (1) orchestrating ag-gressive and often misleading advertising

campaigns and emphasizing propagandain relation to the drugs they develop, whe-ther or not they are useful, and in spite ofthe fact that some may be harmful or even

fatal, (2) seeking to monopolize the mar-kets by exploiting their medicines (inclu-ding the essential ones) in increasinglyabusive conditions that do not take intoaccount the objective needs of patients nor

their purchasing power, (3) greatly redu-cing or in some cases completely elimi-

nating their research into illnesses that pri-marily affect the poor so they can focustheir resources on profitable markets andproblems that affect populations with ahigh degree of purchasing power, even

when that research does not involve actualdiseases (for example, the proliferation ofanti-aging medicines), (4) forcing na-tional and international laws and agree-ments even if it is at the expense of mi-llions of lives.

3.2.1. Marketing of useless

medicines that might proveharmful or even fatal

Statistics from the FDAshow that bet-ween 1998 and 2002, eight suicides werereported in the USA among sufferers ofepilepsy that were taking the drug gaba-

pentin made by Pfizer (its commercial na-me is Neurontin)33. During the first sixmonths of 2003, the number of reportedsuicides was 17. A private law firm madethese facts public and opened their owninvestigation of the incidents. During the12 months from September 2003 toAugust 2004 they documented 2,700 sui-cide attempts among patients that were ta-king gabapentin, 200 of which ended withthe death of the patient. In November2004 theBritish Medical Journal (BMJ)reported that since this issue had come tolight, neither Pfizer nor the FDA had ta-ken any action not even by indicating onthe leaflet the increased risk of suicide34.As of the writing of this booklet, the riskof increased suicide caused byNeurontin is noted on Pfizers webpa-ge35.

As for the anti-depressant sertraline(Zoloft), also produced by Pfizer, the sa-

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me issue of the BMJ reported that thecompany had hidden information on pos-sible side effects that included suicide at-tempts and aggressive behavior36. The ca-se of Christopher Pittman (a 12 year-old

boy who began to display highly aggres-sive behavior within a few weeks of ta-king sertraline and who, two days afterhaving his dosage doubled, murdered hisgrandparents and set fire to their house),together with an accumulation of less dra-matic evidence along the same lines, wasenough to convince the European regula-tory agency for medicines to prohibit its

prescription to patients under 18 yearsold37.

Unnecessary medicines are known inpharmaceutical slang as me-too drugs.These drugs are designed and marketedwith the aim of substituting a previousdrug whose patent is about to expire. Thetherapeutic qualities of me-too drugs areessentially the same as those of the pre-

vious drug, but because they are introdu-ced as new drugs into the market, phar-maceutical companies have the right toobtain a new patent. The success of suchunnecessary medicines can only be ex-plained through the power of advertisingto doctors and patients (see section 4.2).One example of this type of drug is ceri-vastatin made by Bayer (its commercial

names are Baycol, Lipobay,Cholstat and Staltor). Cerivastatin isan anti-cholesterol medication that had tobe taken off the market in 2001 after ha-ving been shown to cause 1,100 cases ofsevere rhabdomyolysis (a muscular was-ting condition that can be irreversible) aswell as one hundred deaths38.

Another more recent example is that

of the anti-inflammatory drugs Vioxx

(made by Merck), and Bextra andCelebrex (made by Pfizer). These drugshad shown no therapeutic benefits in theclinical trials that compared them to otheranti-inflammatory drugs already on the

market39. In 1998 and 1999, the manu-facturers were nevertheless given the goahead by regulatory agencies because itwas hoped that these drugs would produ-ce milder side effects than the older anti-inflammatories. In September 2004,Vioxx (Merck) was taken off the marketafter it became clear that its side effectswere not only not milder but potentially

fatal (stroke and heart attack). The FDAreported that Vioxx was likely to be res-ponsible for 27,785 deaths from heart at-tack between 1999 and 200340. In April2005 Bextra and Celebrex (Pfizer)were also taken off the market followinga long and difficult struggle between theFDA and Pfizer. That such a prolongedstruggle ensued for a drug that had shown

little or no potential benefit but rather gre-at risk, highlights just how much politicalpower this giant of the pharmaceutical in-dustry really wields41.

Whenever a new drug is developed,there is always a risk of unwanted side ef-fects that could not be detected at the re-search phase. This cannot be avoided. Butif every medicine has a risk of causing se-

rious side effects and in some cases death,why are new medicines developed that of-fer no real therapeutic advantage over tho-se already on the market? Why do phar-maceutical laboratories produce them?Why do regulatory agencies approvethem? Why do doctors prescribe them?

On the topic of unnecessary medica-tions, we shall mention the drugs that are

designed to cure illnesses such as fe-

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male sexual dysfunction as defined abo-ve that the pharmaceutical industry la-bels as such according to their own inter-ests. Some examples of non-pathologicalhuman conditions that are labeled as ill-

ness so that drugs can be sold to cure theminclude: menopause (allegedly cured withhormone replacement therapies that haverecently shown unacceptable side-ef-fects), appropriate sadness (labeled as de-pression and allegedly cured by anti-de-pressants that we have already seen arecapable of causing suicide or even mur-der42), and memory loss among the eld-

erly (labeled as incipient cognitive defi-cit and treated with anti-dementiamedicines; it is to note that on learningthat they might have incipient dementia,the elderly often feel sad and become sui-table candidates for anti-depressant the-rapy).

There is a popular English expressionused to denounce this abusive intrusion of

the medical model (and the medical busi-ness) into non-medical aspects of humanlife: a pill for every ill.43 The 2005 re-port by the committee of experts of theHouse of Commons notes that in 2003,650 millionprescription drugs were soldin England. This number (to which weshould add the blossoming business of theover the counter sales of drugs) reflects an

increase of 40% in relation to the amountof prescription drugs sold in the ten yearsprior to 2003 and means that each Englishcitizen takes an average of 13.1prescrip-tion medicines each year44. The same re-port remarks that while the pharmaceu-tical industry cannot be blamed forcreating unhealthy reliance on, and over-use of, medicines, it has certainly exacer-

bated it. There has been a trend towards

categorizing more and more individualsas abnormal or in need of drug treat-ment45.

According to the French network ofregional centers of drug-vigilance, every

year 1.3 million French citizens are hos-pitalized due to side effects of medicinesthey are taking. This figure represents10% of all hospitalizations per year. Athird of this total figure (ca. 400,000) isadmitted in a serious condition and 18,000of them end up dying. This means that, inFrance, the mortality rate per year due toside effects of medicines is double that of

road accidents46.

3.2.2. Exploitation of essential

drugs in abusive conditions

In the discussion on the marketing ofantiretroviral drugs in Africa, we saw thebrutal effect that the new international pa-tent law is having on access to essential

drugs in poor countries. According toPignarre, in the face of direct accusationsfrom humanitarian organizations, the bigpharmaceutical companies defend them-selves in this way:

The pharmaceutical industry explainsthat any move against the right to uphold

patents in the Third World, and particu-larly in Africa in relation to drugs used to

combat AIDS, would signify the end of theresearch into such drugs, for nobody willbe willing to fund research into drugs thatwill not be able to be protected by patents.(...) This reasoning implies thattomorrows theoretical progress can onlybe pursued at the cost of sacrificing mi-llions of todays lives it implies a choicein favor of improving the quality of life of

the privileged populations of the North at

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the cost of immediately cutting short, byseveral decades, the life expectancy in theSouth. It is equivalent to condemning todeath 90% of those who need essentialmedicines, in order to maintain the high

prices that only the privileged 10% areable to pay. This obscene dialectic intowhich the pharmaceutical industry of ri-cher countries unanimously wants to trapus is the beginning of a reign of terror47.

During the international controversythat followed the obligation imposed onpoor countries to respect at the expenseof the lives of their citizens the abusive

patents on essential antiretroviral drugs,the UN World Intellectual PropertyOrganization (WIPO) developed a propa-ganda document in favor of the pharma-ceutical companies, in which the six mainaccusations leveled against the patentsystem by humanitarian organizationsfrom all over the world were labeled asmyths and were refuted with false ar-

guments.Here is a summarized version of the

six accusations that the WIPO discardedas myths (underlined), followed by somecritical comments by Philippe Pignarre48.

1. The difficulties of access to healthcare and the restricted availability of es-sential drugs are a consequence of the ac-tual patent system. If this is a myth, whyhave countries that up until now have notrespected the patent system (like India)been able to combat the AIDS epidemicmuch more successfully than countriesthat were forced to accept these regula-tions from the beginning?

2. The high market price of drugs ismainly caused by a patent system that

allows the industry to fix artificially highprices. If this is a myth, why does fluco-

nazol, a drug used by AIDS patients, ha-ve a market price that ranges from $18 to32 in the countries where Pfizer has main-tained its monopoly, and a price of only$1 in countries where a generic equivalent

exists? Why does the Indian companyCipla that makes generic drugs offerMdecins Sans Frontires (MSF) an an-nual charge of $450 per patient for anti-AIDS treatment in contrast to the $13,300demanded by western laboratories?

3. The actual patent system favors theinterests of private companies at the ex-

pense of the common good. It is clear that

there is a conflict of interests between thepharmaceutical companies and the com-mon good and it is as well clear that themarket in general and very particularlythe drug market is not free, but rathersubject to legislation in every country. Atthe present time, this legislation is aimedat favoring private interests.

4. The actual patent system prevents

real competition. Nobody claims this. Theactual patents system does allow compe-tition, but its rules are not aimed at favo-ring the common good..

5. The actual patent system is particu-larly unfair for developing countries thatare facing very complex social and eco-nomic situations, and so should thereforebe made exempt from such obligations asare linked to the international intellectual

property, particularly in relation to cer-tain drugs. Not only is this not a myth, buta growing large-scale health emergency.An international forum with no right toveto allowed to the US nor to any othercountry should be immediately set upto deal with this question.

6.Actual international treaties on theprotection of patents prevent the exercise

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of the fundamental human right to haveaccess to available drugs that can saveones life. As we have seen, this is indeedthe case today. We need a new, more just,international patents system.

The abuse of the current patentssystem does not solely affect Third Worldcountries. In richer countries, increasingnumbers of patients are facing difficultiesin paying for the treatments they are pres-cribed. In order to reduce expenses, somepatients take their daily medications everyother day or share them with other mem-bers of the family. In the USA the cost of

taking one drug can reach as high as$1500 per year. On average, elderly UScitizens take regularly six different drugs.This represents a total average annual ex-pense for prescription drugs of roughly$900049.

3.2.3. Research driven exclusively

by economic profit

In 2001, the group set up by MdecinsSans Frontires (MSF) to study neglectedillnesses published a report called FatalImbalance. The report concluded that, inspite of the fact that certain illnesses af-fect millions of people in a significant wayand in spite of the fact that they can po-tentially be cured: a) hardly any researchis done into illnesses thatprimarily affectthe poor, and b) illnesses that only affectthe poor are not investigatedat all.

The name of the report, FatalImbalance, refers to the fact that only10% of the worlds health research pro-jects (including all those undertaken bygovernments and universities) is dedicated

to illnesses that affect 90% of patientsworldwide. The scandalous imbalance of

wealth in our world is well known: 20%of the global population enjoys and was-tes 80% of the planets wealth, while 80%of the global population struggle and diewith the remaining 20% of global resour-

ces. One could imagine that with regard toessential medicines, this imbalance couldat least be partially ameliorated becausethis is a sensible topic that moves many tocompassion and because of the many in-ternational agencies involved. Howeverthe opposite is true; the imbalance betwe-en rich and poor in our world is mademuch worse by the inequities involved in

the allocation of resources and the availa-bility of essential medicines: 90% of allhealth resources are committed to resear-ching diseases that affect 10% of patients(those living in the developed world), and10% of all health resources are committedto researching diseases that affect 90% ofpatients (those living in the developingworld). This is known as the 10/90 gap50.

Tropical diseases belong to the cate-gory of neglected diseases. Out of a totalof 1,393 drugs that were marketed betwe-en 1975 and 1999, only 13 (1%) were de-veloped for the treatment of a tropical di-sease. The forgotten illnesses include:malaria, tuberculosis, sleeping sickness(African Trypanosomiasis), Chagas disea-se (South American Trypanosomiasis),

Buruli ulcer disease, Dengue fever, leish-maniasis, leprosy, filariasis and schistoso-miasis. Apart from the first two, the ill-nesses in this list almost exclusively affectthe poor. Of particular note is Chagas di-sease, currently affecting 16-18 million pe-ople, with some 100 million (25% of theLatin American population) at risk of ac-quiring it51 and 50,000 people dying an-

nually from it52.

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The authors of the MSF report, in co-llaboration with the Harvard School ofPublic Health, sent a questionnaire to thetwenty largest pharmaceutical companiesof the world requesting information on

their research programs. Only elevencompanies replied, including six out ofthe ten largest companies. Out of the ele-ven companies that responded, none we-re researching sleeping sickness and onlythree had invested some money intoChagas disease and leishmaniasis.

One could argue that private compa-nies have the right to invest their money

as they please, but the remarkable pointhere is the fact that the money that fundsthe health research carried on by the phar-maceutical industry comes largely fromthe public: six out of the eleven compa-nies studied by MSF had financed theirstudies primarily through agreementswith public health organizations. A studyby The Boston Globe on the 50 most wi-

dely sold drugs between 1992 and 1997concluded that 45 of these had receivedpublic funding53. The public pays first tofund the research and then again to buythe product. It is no surprise then that theearnings of the industry be so spectacular.Of the 17 final clinical trials that led to theapproval of the five most widely solddrugs in 1995 (Zantac, Zovirax,

Capoten, Vasotec and Prozac), onlyone was financed entirely by the pharma-ceutical industry. Of all the research in-volved in the development of these fivedrugs, only 15% was financed by thepharmaceutical industry; 55% of the rese-arch work was carried out by the NationalInstitute of Health (the public govern-mental institution of the USA that is fi-

nanced through tax revenues), and the re-

maining 30% of the work was carried outby academic institutions outside of theUSA almost entirely financed with publicmoney54.

The MSF report makes clear that res-

ponsibility for thefatal imbalance lies notonly with the pharmaceutical industry butalso with all the public and private insti-tutions that participate in a system see-mingly driven exclusively by profit withlittle or no regard for the suffering of pa-tients55. According to the same MSF re-port, in 2001 the majority of financial andintellectual resources invested in health

research throughout the world were com-mitted to investigating impotency/erectiledysfunction, obesity and insomnia56.

In addition to not being taken into ac-count when deciding the priorities ofpharmaceutical research, the patients ofpoor countries particularly those inAfrica are often used as experimentalsubjects in unethical clinical trials. In

Kenya, for example, towards the end ofthe 1990s and under the responsibility ofthe University of Washington, clinicaltrials were carried out to observe the na-tural progression of AIDS. What that me-ans is that, with the excuse that these pa-tients would have died anyway, hundredsof Africans were submitted to comple-mentary tests in order to document and

study how they deteriorated until their de-ath. As the infection advanced they werenever offered any of the treatments thatcould have stopped it57. In his 2000 reportThe Shame of Medical Research, DavidRothman exposed the fact that in 15 of 16clinical trials that were being carried outin developing countries to study the mostcost-effective way to prevent the trans-

mission of the AIDS virus during preg-

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nancy, the women enrolled in the controlgroup received a placebo drug (a sugarpill) instead of the AZT treatment that hasbeen shown to reduce the maternal-fetaltransmission of the virus. According to the

Helsinki Convention on ethical protocolsfor medical research, a new treatmentshould always be compared with the mosteffective treatment available on the mar-ket. The study of the Harvard School ofPublic Health in Thailand was the onlyones who honored the HelsinkiConvention. The other 15 studies enrolleda total of 17,000 women and allowed half

of these women (those in the controlgroups) to go through multiple blood ex-tractions and through the additional testsrequired by their study protocol, while gi-ving them daily a useless sugar pill anddocumenting how their health deteriora-ted and how the virus infected the childthey were carrying58.

3.2.4. Manipulation of legislation in

their own countr ies and with

regard to international agreements

In 2002, 26 of the 675 pharmaceuticallobbyists on payroll wereformer membersof Congress, and 342 of them were formeremployees of Congress (20 of whom hadheld management roles)59. Each lawma-

ker has assigned to her/him one or morelobbyists who have the time and financialbacking to study their psychological pro-file, personal and employment history, andtheir weaknesses. This information is usedto exert as much pressure as possible uponeach lawmaker so as to garner support forlegislation favorable to the interests of thepharmaceutical industry and to curtail any

measures that would inhibit these inter-

ests. As we have seen, these interests arecontrary to the common good.

In addition to attempting to directly in-fluence the highest levels of the govern-ment, pharmaceutical companies in the

US have begun to develop a parallel stra-tegy meant to manipulate public opinion.They promote organizations that appear tobe spontaneous initiatives and are in rea-lity supported and run by citizens thatwork for the pharmaceutical companiesand are paid to promote their interests onthe ground as it were, without being no-ticed60. These associations are especially

useful when pressure is being exerted toremove a new drug from the market be-cause of its harmful side effects. As thepressure begins to build, these spontane-ously formed organizations recruit peo-ple to loudly and publicly complain and tobombard the media with an avalanche ofglowing patient testimonials about thewonderful improvements they have expe-

rienced on the new drug.Today, neither the FDA, nor any other

regulatory agency in the world, requiresthat in order to approve a new drug for sa-le, proof that this new drug is betterthanthe drugs already available on the marketbe demonstrated. Taking into account thatas we have seen there is always a pos-sibility that hitherto unknown side effects

of a new drug prove fatal, this demandseems only too logical and reasonable. Allover the world, however, all that is neces-sary for a new drug to be approved for sa-le is that it be shown to be better than ta-king nothing at all.

The fact that patenting a new medicinedoes not require proof that this drug re-presents an improvement over similardrugs already on the market explains the

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proliferation of the so-called me-toodrugs, drugs that, as well as being unne-cessary, are capable of causing death orother serious or irreversible illnesses. Fora pharmaceutical company it is much mo-

re profitable to minimally modify an olddrug and sell it with a new patent when thepatent of the first is about to expire, thanto pour money into researching a new drugfrom scratch. Between 2000 and 2004, 314new drugs were approved in the USA ofwhich only 32 could actually be conside-red new61. As we shall see, this possibi-lity of making the industry profitable by

producing drugs that are simply copies ofothers already in existence is the key fac-tor of the crisis that this industry is cur-rently facing (see section 4.1).

The demand that new drugs prove theirworth before being allowed to enter themarket is reasonable enough, but morereasonable still would be for drugs to beevaluated by independent organizations

rather than by the same companies thatwill be economically benefiting fromthem. Today, none of the democratic go-vernments of the world requires that an in-dependent body assess the effectivenessand safety of drugs. The existing regula-tory agencies evaluate the data providedby pharmaceutical companies, but do notcarry out any research of their own.

Pharmaceutical companies make thedrugs, validate them, and sell them. Theonly task left out of their direct control isthe approval necessary for the sale of theproduct. This is the responsibility of the re-gulatory agencies. The question is: havepharmaceutical companies used their im-mense power and clout to influence andmanipulate the regulatory agencies meant

to ensure the safety of the public? The ans-

wer is yes. And did they succeed in doingso? Again the answer is largely yes, at le-ast with regard to the USA. Let us exami-ne how this occurred.

In 1992, the US Congress approved a

law allowing pharmaceutical companiesto accelerate the process of obtaining newpatents in exchange for economic com-pensation62. The pharmaceutical companywanting to patent a new drug can if it sowishes pay a considerable sum to theFDAso that they hire more workers and inthis way decide more speedily whether anew drug should be approved. Of course

this is not supposed to be a matter of buy-ing governmental approval, but rather aquestion of economically contributing tothe improved functioning of the regulatoryagency. In practice, however, what occursis that the very salary of some of the FDAemployees responsible for evaluating anew drug comes ultimately from the phar-maceutical company interested in obtai-

ning its patent63. Under these conditions,it is not surprising that since this law waspassed, there has been a marked increasenot only in the total numberof patents ap-proved (a logical consequence after ha-ving increased the number of workers), butalso in thepercentage of patents approved(i.e., other things being equal, if 10 wor-kers reject 5 patents and approve 5, 100

workers should reject 50, and approve 50,not more than 50; the total number of ap-proved patents should increase, the per-centage should remain stable).

This irregular situation that compro-mises the neutrality of the FDA, would nothave been allowed to arise had the phar-maceutical industry not controlled the no-mination of the director of the FDA. In

2002, the candidacy of the respected pro-

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fessor of pharmacology Alastair Woodwas blocked in favor of Mark McClellan,who, besides being the brother of the presssecretary of the White House, had as hisgreater asset the fact of being unreservedly

in favor of the politics of the pharmaceu-tical lobby PhRMA and its fraudulentpractices. McClellan held the highest po-sition in the FDA between the years 2002and 200464.

There are more irregularities. In 1997,Congress passed a law allowing a com-pany known as Drugdex to develop anddistribute an official list of recommended

uses for medicines much broader than thatapproved by the FDA. One might wonderwhether it is ever possible to prescribe amedicine to treat a condition for which ithas not been approved by the regulatoryagency. The answer is yes, because physi-cians are entitled to make use of medicinesin the way and at the doses they deem ap-propriate for they patient, always under

their direct responsibility and understan-ding that they can be sued if their use ofthe medicine proves wrong. Wrong useis not the same as use not sanctioned bythe regulatory agency. Physicians need tohave leeway in prescribing and this is ack-nowledged and respected by all. However,it is one thing to allow a physician to useher/his clinical judgment as she/he sees fit,

and it is another very different thingto create, with the support of government,a second much longer list of official usesof a medication parallel to the list given bythe regulatory agency.

The benefit to the pharmaceutical in-dustry is clear: the more conditions a drugcan treat, the greater its potential market.Not being directly part of the pharmaceu-

tical industry, Drugdex (a subsidiary of

Thomson Corporation, a company whichoffers courses and training to physicians)serves their interests in the following way:(1) a pharmaceutical company wants to in-crease the list of conditions that can be

treated by one of their drugs (drug X), (2)it contacts Drugdex to request that certainconditions be included in their official listof indications for drug X, (3) Drugdex in-cludes them without too strictly assessingthe information submitted by the pharma-ceutical company, (4) in return, the phar-maceutical company finances a conti-nuous education course offered by the

professionals from Thomson Corporationto which Drugdex belongs, and (5) thesubject of the course offered is, naturallyenough, New indications of drug X. Asthe course is being offered in more andmore medical centers, ThomsonCorporation benefits because it is offeringa course and is being paid for it, and thepharmaceutical company benefits because

the physicians trained by Thomson startprescribing drug X to treat the new set ofailments, thus increasing its sales and itsprofits. Another convenient consequenceof this cooperation is that physicians whoprescribe drugs for the additional ailmentslisted by Drugdex are legally covered,should any complications arise. And, lastbut not least, Medicare, the public program

in the USA that helps the elderly pay formedical care and prescriptions, is obligedby law to at least partially reimburse pres-criptions if the conditions for which theyare written are listed in Drugdex65. Thisabuse of the Medicare system translates in-to a substantial and direct transfer of pu-blic money to pharmaceutical companies.

The dangers of such an indiscriminate

broadening of the medical indications of a

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drug cannot be underestimated. The drugNeurontin, for instance, in addition tobeing used to treat epilepsy, which is theofficial condition recognized by its patent,can also according to Drugdexs list

be appropriately prescribed to treat 48other conditions. Its additional indicationsinclude conditions as common as hiccups,migraines, and smoking cessation. In sec-tion 3.2.1, we have seen that Neurontin isa me-too drug with a potential risk forinducing suicide66. How is it possible thata drug with such a profile be officially ap-proved in the US to treat 48 different me-

dical conditions including hiccups?To avoid such abuses, the committee

of experts of the English Parliament re-commended that their public healthsystem be funded to carry out independentstudies on drugs and also be given the ne-cessary authority to compel pharmaceuti-cal companies filing for patents to carryout clinical trials comparing their new

drug with the drugs already on the mar-ket67.

With regard to international politics,the influence of the large pharmaceuticalcompanies is mediated in two ways: (1)through the pressure the US governmentexerts on other countries by threateningthem with economic sanctions if theydont accept devastating bilateral agree-

ments contrary to their national interestsand favorable to the American pharma-ceutical industry, (2) through theWTO68, one of whose first agreementswas the TRIPS69, which, apart from im-posing an abusive patent system to allcountries including developing coun-tries lengthened the validity of phar-maceutical patents from 17 to 20 years.

Before the creation of the WTO and the

imposition of the TRIPS (both took pla-ce in 1995), the majority of countries inthe world did not even acknowledge thepatenting of medicines, given that theywere not considered commercial pro-

ducts but rather items of first necessitythat should be made available to all pa-tients, regardless of their economic sta-tus.

The WTO regulations regarding gene-ric drugs were approved in 1995, but poo-rer countries were given until 2005 to pre-pare for these new laws. The South Africangovernment, realizing that the introduc-

tion of the new legislation would make itimpossible to treat their population due toa lack of funds, and that this in turn wouldbring about an increase in the AIDS epi-demic, announced at the end of the nine-ties that they would begin producing ge-neric antiretroviral drugs in their ownlaboratories. In response, the pharmaceu-tical industry pressured the American go-

vernment, and the Clinton administrationthreatened South Africa with cripplingcommercial sanctions if they dared to pro-duce their own drugs in order to fight the

AIDS epidemic.

Where is thefree marketin all this?

On February 17th 2006, the EnglishnewspaperThe Independentpublished anarticle which further illustrates the extentto which the actions of pharmaceuticalcompanies are abusive towards poorercountries, and in particular towardsAfrica70. The article denounced the factthat pharmaceutical companies are pros-pecting the African continent to obtainnatural resources that could be used to be-nefit their own industry, with a completedisregard for the UN convention on bio-diversity that establishes the inviolable

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sovereignty of a country over its own nat-ural resources71. The pharmaceuticalcompany SRPharma used a micro-bacte-ria discovered in Uganda in the seventiesin order to develop a drug that would tre-

at chronic viral illnesses, includingHIV/AIDS. The Managing Director ofSRPharma acknowledged that his com-pany had offered no economic compen-sation to Uganda in return for this disco-very. SRPharma did not respectinternational law and did not compensa-te Uganda for using the countrys naturalresources for their own benefit. Neither

did they allow Uganda to use the drug thatwas made from this discovery to treatUgandan patients. In the same article, theManaging Director of SRPharma com-plained that the drug had not broughtabout the anticipated benefits, and yet re-mained silent about the 20 million dollarsthat had been received to finance its de-velopment. For its part, the Bayer

Company benefited from the discovery of

a bacterial strain found in Lake Ruiru inKenya, from which it was able to createa drug used to treat diabetes (Precose orGlucobay). This drug generated morethan 380 million dollars in sales. The

Bayer group flouted the same internatio-nal conventions as SRPharma and did notoffer Kenya anything in return for thisdiscovery. Bayer acknowledged this, butdefended itself by saying that in spite ofthe fact that the origin of the drug lay inthe bacterial strain found in Kenya, itsbiotechnological development meant thatthe end product was completely different,

concluding that we patented the end pro-duct, and not the bacterial strain.However, the investigators responsiblefor studying the violations to the con-vention on biodiversity in Africa72 rea-ched a very different conclusion: Wefind ourselves facing a new form of co-lonialism. International agreements areforced upon the poor and are flouted by

the wealthy.

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4. AN INTERNAL CRISIS

INNOVATIONS IN TREATMENT REPLACED BY ADVERTISING

Between 1994-96, the large pharmaceutical companies were willing topay up to 59 million dollars to smaller companies for a new molecule thathad successfully completed pre-clinical trials, so that they could then carry

on the required clinical trials and hopefully end up reaping the benefits ofpatenting a new medicine and introducing it into the market. Between 2000-02, the figure that these same companies were willing to pay had risen to148 million dollars73.

22

4.1. CURRENT CRISIS OF PHARMACEUTICAL COMPANIES

The information above brings tosharp light the hidden cause of the cur-rent crisis of the pharmaceutical in-dustry: its innovatory capacity has prac-

tically disappeared. And withoutcapacity for innovation the industry hasno future. The alarm was first sounded byThe Wall Street Journal in 2003 whenconsultants at IBM studied the twentylargest pharmaceutical companies andrevealed a dramatic decline in sharehol-der return74: The return that the twentylargest pharmaceutical companies were

able to offer to their shareholders, whichhad averaged 28% from 1993-1998, fell

to an average 4-5% in the following fiveyears, 1998-200375.

Another significant fact is the growingfrequency and volume of mergers taking

place between larger pharmaceutical com-panies in recent years. In 2002, Pfizer be-came the largest pharmaceutical companyafter merging with Warner-Lambert andPharmacia (not long after Pharmacia hadbought Upjohn and Monsanto). Followingthis merger, Pfizer controlled 11% of theglobal market. Five years earlier, Merckhad been the No. 1 pharmaceutical com-

pany, but theirs was only a 5% share of theglobal market76.


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This extraordinary concentration ofcapital creates gigantic corporations thatare very difficult to manage and more im-portantly, breaks up consolidated researchgroups and places their leading-scientists

under non-scientific administrators thatinterfere with their research projects.Jrgen Drews, an ex-researcher withHoffmann LaRoche, states:All in all, the

pharmaceutical industry is replacing itsold investigative structure with a techni-cal apparatus that is still able to carry onanalysis, animal research, and chemicalsynthesis of molecules, but that is proving

utterly unable to develop new ideas. Theresearch departments of the large labora-tories are not any more autonomous andthe scientists working for them cannot ma-nage their own affairs; their creativity isbeing curtailed by lawyers, economists,businessmen and top-ranking administra-tors unable to imagine the future otherthan as a lineal development of what we

already have (...). The pharmaceutical in-dustry has created conditions that destroyoriginality, creativity and freedom and fa-vor consensus, imitation, submission andrepetitiveness77.

In 1990, an efficient researcher couldtest the reactive capacity of 2,000 mole-cules per year. In 2000, a robot, like theones that are currently used in large rese-

arch laboratories, could test 6,000 mole-cules in a single day78. But this excitingquantitative increase has not broughtabout an increase in innovation; rather itseems to have caused the opposite. In thefive years between 1998 and 2002, a totalof 415 new drugs were approved in theUSA. Out of these, only 133 (32%) werebased on new molecules and of these 133,

only 58 were new molecules that produ-

ced new effects (effects different fromthose of the drugs already available on themarket). The yearly distribution of these58 genuinely new drugs was as follows:16 were developed in 1998; 19 in 1999;

only 9 in year 2000, and only 7 each in2001 and 2002. This is the real producti-vity of the up to now most profitableindustry in the US. Such meager produc-tivity is particularly shocking consideringthe money invested during this period(around 30 billion dollars), and the size ofthe 35 companies involved (in 2003 Pfizeralone owned more than 60 laboratories in

32 different countries)79.The consequences of the industrys

misguided politics are becoming evidentto all involved. The patent controversyover antiretroviral drugs in Africa hasdrawn attention to the policies and privi-leges enjoyed by pharmaceutical compa-nies, and these are now being questionedat an international level. In the US, the two

most important factors that have raised theawareness on this issue have been: (1) thegrowing difference in prices between USand Canada with regard to drugs that areprotected by patents, and (2) the super-fluous and potentially hazardous nature ofme-too drugs. Lets have a look at the-se two factors in a little more detail.

The price of a medicine protected by

a patent is in Europe or in Canada one halfor even one third the price of the samemedicine in the US. Since1987, it is ille-gal in the US to import medicines fromCanada. Despite this prohibition, in 2002over a million American citizens were re-gularly buying their medication fromCanadian pharmacies. In several areasclose to the border buses were even or-

ganized to transport them. By 2003, 7%

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of American citizens were buying theirmedication from Canada over the Internet(the number of on-line Canadian pharma-cies rose between 1999-2003 from 10 to140). The city of Springfield, Massa-

chusetts, in an open act of defiance meantto denounce the unfair price differential,decided to lower its administrative costsby purchasing all drugs for its public offi-cials through Canadian pharmacies. Thecity of Boston and governmental repre-sentatives from 12 other states followedthe protest made by Springfield and arecurrently seeking alternative ways of buy-

ing drugs at more reasonable prices80.With regard to the growing awareness

of the unnecessary character and potentialdangers of the me-too drugs, it shouldbe noted that the largest insurance com-

panies and a growing number of states ha-ve developed and approved formulariesthat exclude them. These insurance com-panies will not reimburse the prescriptionexpenses of their clients if they are pres-

cribed drugs that are not included in theirlist of useful medications. On their part,some states have begun to pass legislationruling that their Medicare program (theprogram that partly covers the cost of me-dication for those over 65 years of age)will only cover the cost of those drugs in-cluded in their state formulary, and notthose that appear in the official Drugdex

list (ultimately controlled, as we have se-en, by the pharmaceutical companiesthemselves). In 2001 only 2 states had en-acted this legislation; by 2003, half of allAmerican states had81.

24

4.2. A DECREASE IN INNOVATION AND A RISE OF MARKETING

A study carried out by a committee ofexperts selected by the US Congress esti-mated that the cost of producing a newdrug in 1993 stood at 802 million do-llars82. The center for the Study of

Responsible Legislation in Washingtonreleased a counter-report calling this figu-re into question after assessing the cost ofproducing the so-called orphan drugs.Orphan drugs are drugs that having apotential market too small to motivate theinvestors are co-financed by pharma-ceutical companies and public funds.They represent 20% of the US drug mar-

ket. The total cost of production of co-fi-nanced drugs is three times lowerthan the

cost of drugs financed by pharmaceuticalcompanies alone. How is it possible? Thisdisparity arises because under productionexpenses, the pharmaceutical companiesroutinely include the greatest proportion

of their marketing expenses. In the case oforphan drugs, the companies are obligedto make available and correctly differen-tiate theirproduction expenses from theirmarketing expenses in order that the go-vernment can pay its share. That marke-ting and not research or productionis the greatest investment of todays phar-maceutical companies is not a fact openly

acknowledged because only the disguiseof marketing costs as research and pro-


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duction costs, allows the pharmaceuticalcompanies to pass the enormous cost ofadvertising to the consumers in the formof higher drug prices.

Pharmaceutical marketing is directed in

the first place to physicians. In 2001,American doctors were regularly visited bya total of 88,000 representatives of the phar-maceutical industry. These drugs repre-sentatives distributed a total of 11 billiondollars worth of free samples of new medi-cations to doctors so that they could testthem on their patients. In addition, they of-fered personal gifts, all-expenses paid holi-

days and other forms of remuneration.The advertising ofprescription drugs

is also increasingly being directed to thepatients themselves, in the hope that physi-cians can and will be persuaded to writeprescriptions if pressured to do so by theirpatients. The USAand New Zealand allowthe direct advertising of prescription drugsto patients. All the other industrialized na-

tions despite being pressured by thepharmaceutical industry still explicitlyprohibit such advertising, recognizing thevulnerability and susceptibility of patientslooking for relief from serious condi-tions83.

The following are two examples ofhow a patients vulnerability can be ex-ploited: (1) advertising directly to hospi-talized patients through thepatient chan-nel. The patient channel is a US TVchannel only transmitted in hospitals.Patients lying in their hospital bed, may-be severely ill, are targeted for the deli-very of biased information on new drugsthat promise them relief or even a cure.These ads are presented by famous tele-

vision and sports figures that give moving(usually false) testimonies; (2) targetingcollege and university students for massi-ve promotion campaigns of anti-depres-sants. In return for large sums of money,

some educational centers have allowedphysicians paid by pharmaceutical com-panies to give conferences to their stu-dents with the goal of encouraging themto ask their doctors for prescription anti-depressants that couldcure sorrows andmood-swings common among normal he-althy adolescents and young people.

By way of personal testimony, I re-

member the impact that one of these con-ferences had on medical interns. It wasoffered a few months after our arrival atBuffalo, New York, where we were tocomplete our three-year medical resi-dency. We were told that the suicide rateamong first-year residents was very high,and that we should look for treatment forour depression as soon as possible (we

were all quite logically exhausted fromour long shifts). They also told us that anew treatment had just come out that se-emed to prevent depression. I was luckyenough to have a medical tutor who war-ned me about the economical interestshidden behind this academic act. Icould have become ill or died from the si-de effects of a drug that I did not need and

that had been: (1) produced solely withthe intention of making money, (2) testedand approved too hastily, and (3) pro-moted to me at a very vulnerable mo-ment. I didnt take the medicine and no-thing happened to me, but other peoplethousands of other people have notbeen so lucky.

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1. Pharmaceutical companies are produ-cing too many me-too drugs and toofew drugs that are genuinely new.

2. The most influential regulatory agencyin the world (the American FDA) is tooclosely linked to the industry that it issupposed to be regulating.

3. Pharmaceutical companies have toomuch control over the clinical tests thatassess the effectiveness and safety oftheir own products.

4. The current 20-year period of validityof drug-patents is unjustified and itspresent regulation is detrimental to the

5. AN OPPORTUNITY TO DISMANTLE THE SYSTEM

The sources consulted in preparing this booklet agree that the pharma-ceutical industry is in urgent need of immediate and substantial reform.Such reform is possible and necessary above all in the interest of patients(be they in the first or third world countries), but also to ensure the future of

the industry itself. Below is a summary of the conclusions of the main sour-ces consulted.

MAIN CONCLUSIONS OF M. ANGELL, 2005*

26

* Marcia ANGELL. A The Truth about Drug Companies, Random House, 2004. For almost 20 years Marcia

Angell has been editor-in-chief of the most influential medical review, the New England Journal ofMedicine.


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MAIN CONCLUSIONS OF P. PIGNARRE*

27

In order to achieve the necessary re-form of the pharmaceutical industry(see below), citizens have to be invol-ved in:

1. The establishment of priorities for re-search and for the allocation of re-sources.

2. The development of research (particu-larly on the design of clinical trials)and,

3. the commercialization of drugs (patentrights and pricing policy)

Objectives of the reform of the pharma-ceutical industry:

1. Setting up democratically agreed natio-nal and international priorities (highlylucrative rewards / sales conditionscould then be offered to those advan-cing research in those areas).

2. Highlighting the active principle of adrug rather than its commercial name

(medical packaging should show thegeneric name of the drug clearly visi-ble and the commercial brand name insmaller print, the reverse of the currentsituation).

3. Rewarding the real worth of a drug ra-ther than its promotional value (a 5%

quality of clinical research. Drugs to-day are patented before having com-pleted the clinical tests necessary toprove their effectiveness and safety.This means that the 20-years period of

validity of a drug-patent includes theyears necessary for its clinical testing.To avoid the pressure to shorten clini-cal studies, the law should be modifiedso that the clock starts ticking once adrug can be sold and not before. Thetotal length of the patent could then bereduced to 6 years. Legislation shouldalso be enacted to eliminate the current

legal loopholes used by pharmaceuti-

cal companies to block the arrival ofgeneric drugs on the market for 30months following the expiry of theirown patent.

5. Pharmaceutical companies have an un-

due influence over medical schoolscurricula (2/3 of US university hospi-tals have direct economical links to thisindustry).

6. Important information on research, de-velopment, marketing, and pricing ofdrugs is kept secret from the public.

7. Drug prices are too high and too in-

consistent.

* Philippe Pignarre worked as director of a large pharmaceutical company for seventeen years and iscurrently working as a Professor at the University of Paris-VIII.


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MAIN CONCLUSIONS OF THE MSF REPORT FATAL IMBALANCE , 2001

increase in therapeutic effect does notneed to imply a 10, 15 or even 100 foldincrease in price).

4. Reconsidering the length of patents;

they could be extended in richer coun-tries in return for eliminating them inpoorer countries.

5. Creating a research observatory tomaintain an independent registry of allthe processes leading to the discoveryof each new drug in order to be able torationalize investment and avoid dis-honesty. This could be easily done be-

cause this information is already avai-lable in specialized magazines.

6. Taking decisions democratically. Thisshould be at the heart of all economic

practices, but is particularly feasible inthe case of drug development becauseno new drugs can be developed withoutclinical trials and no clinical trials canbe carried on without the written con-sent of the patients. As the associationAct Up has demonstrated in the caseof AIDS, the power to stop the currentabuses is in the hands of the citizens.

28

1. Diseases that mainly affect poor peopleare not researched because they are notprofitable for the pharmaceutical in-dustry.

2. The WHO should develop an effectiveplan to solve this problem.

3. The governments of rich and poorcountries should redress the unfairness

of the current global market.4. Acomplete and independent analysis of

the real cost of producing a new drugshould be carried out.

5. In return for the investment of publicmoney poured into the research anddevelopment of new drugs, they should

be made accessible and economicallyavailable to all patients.

6. The capacity for drug-research and pro-duction in poor countries should befostered.

7. An independent assessment of the long-term impact on global health of currentpatent policies should be urgently car-

ried out.8. A new international body needs to be

created to address the problem of ne-glected diseases (MSF have already in-itiated the process with the DND NfPI(Drugs for Neglected Diseases Non-for-Profit Initiative)).


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29

1. Me-too drugs are a real problem.

2. An independent center to carry out cli-nical research should be set up, becau-se the current system is too biased.

3. The aggressive direct marketing cam-paigns that accompany the launch of anew drug, the avalanche of informationthat is distributed, and the disguising of

this information as medical fact allcontribute to the fact that medicines areinappropriately prescribed.

4. The falsification of scientific reportsand the hiding of unfavorable resultsgained in clinical research by the in-dustry bring about the proliferation ofthese inappropriate prescriptions.

5. The responsibility for inappropriate

prescriptions does not lie with the phar-maceutical industry alone, but alsowith doctors and other professionalswho show too much willingness to ac-cept gifts from pharmaceutical compa-nies and to take at face value the clini-cal information they provide.

6. The marketing strategy of the pharma-ceutical industry is relentless and per-

vasive and is not directed at professio-nals alone, but also at patients and thegeneral public.

7. A leaflet for patients should be develo-ped containing general and compre-hensive information clarifying the im-portant but limited role drugs play inthe treatment of illnesses. Drugs are notthe only therapeutic alternative availa-

ble and patients should know it.

8. Advertising that is directed specificallyat patients is inappropriate and unne-cessary in the UK. This sort of adver-tising has a highly emotional content.The laws that prohibit it should be rein-forced.

9. Indirect advertising made through so-called educational campaigns is not

sufficiently regulated.10. Often, the remuneration offered bypharmaceutical companies to patientsgroups is not revealed. This informa-tion should be made public.

11. The monitoring of drugs already onthe market is insufficient.

12. The government should finance thestudy of alternative forms of non-phar-

macological treatment that are cur-rently being ignored by the pharma-ceutical industry because they are notprofitable.

13. Doctors and other professionals whocan prescribe medication should ack-nowledge their responsibility for theproblems caused by the inappropriateprescriptions of SSRI anti-depressants

and COX-2 anti-inflammatories.These drugs have been prescribed in-discriminately on a large scale. Thiswas due in part to the huge promotionthey received, particularly at theirlaunch onto the market, but is also dueto the fact that important informationwas kept secret while the propagandaof the pharmaceutical companies was

taken at face value without much hesi-

MAIN CONCLUSIONS OF THE COMMITTEE OF EXPERTS SET UP BY THE

BRITISH HOUSE OF COMMONS, 2005:


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tation. Aggressive marketing cam-paigns have led too many health pro-fessionals to prescribe inappropriately.No effective mechanism exists to mo-derate the explosion of prescriptions

that follows the launch of a new pro-duct. As well as being the most crucialtime to promote a product, it is also thetime at which the least is known aboutthe drugs potential side effects.

14. We recommend that an independentbody keep a record of all clinical trialsand that the results of all trials relatedto a given drug whether favorable or

not be made public, as a preconditionto its being launched on the market.

15. The number of free samples receivedby professionals should be reduced,particularly during the first six monthsof the appearance of the product on themarket.

16. The decisions of the regulatory agencyand the information and criteria used toreach conclusions should be made pu-blic. Ordinary citizens should be in-volved at the clinical research stageand should be offered training and suf-ficient support so that they can play anactive role in the making of decisions.

17. Improved research into side effects ofmedication should be carried out. The

observations made in clinical trials priorto launching a drug are insufficient.

18. The regulatory agency should employmore people in the monitoring of newdrugs during their first six months onthe market. We recommend that allnew drugs be systematically andthroughly re-assessed five years aftertheir original launch on the market.

19. We recommend that the regulatoryagency, besides authorizing the sale of

a drug, also be made responsible and gi-ven due authority for restricting its uses.

20. We recommend that an improvedsystem of registering the side effects ofdrugs be set up throughout the country,

that all these cases should be duly in-vestigated and that this should be car-ried out with transparency and withoutgiving false assurances.

21. We recommend that public procee-dings should always take place when adrug is withdrawn from the market dueto its side effects.

22. Excessive marketing leads to inappro-priate prescriptions. Current strategiesto provide unbiased information to thepublic are insufficient. We recommendthat the regulatory agency should havethe right to veto any promotional mate-rial belonging to a new medicine as wellas limiting (by specialty for instance)the right to prescribe new drugs duringtheir first two years on the market.

23. We recommend better coordinationand promptness in the area of investi-gating complaints on illegal advertis-ing. Illegal advertising is a criminal of-fense and the punishment shouldreflect this. In cases where it is neces-sary to correct false information, thecorrection such receive as much publi-

city as the initial information.24. The existing market of generic drugsis useful and important. Large pharma-ceutical companies should be prevent-ed from damaging this market by ma-nipulating the legislation in order tounduly lengthening patent rights.

25. We recommend that medical studentsbe better taught to critically evaluate

the results of clinical trials, to recogni-ze the side effects of medications, and

30


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to have an appropriate relationshipwith the representatives of the pharma-ceutical companies. Obligatory post-graduate courses should exist for allhealth professionals allowed to pres-

cribe drugs so that they are always upto date. The prescription practices ofthese professionals should be morestrictly regulated.

26. We recommend that professional asso-ciations keep a public record of any gifts,money, honors or other benefits that the-se associations and their members mayhave received from pharmaceutical

companies. Each member should be res-ponsible for keeping this record up to da-te. The professional associations shouldclearly and publicly state the level of fa-vors that they consider acceptable for itsmembers to receive.

27. The standards of health campaignspromoted by laboratories should betoughened so that it is always required

to clearly state which company is fi-nancing these campaigns and whichare the medications commercialized bythis company.

28. Patients groups should make publictheir sources of funding as well as all

the favors they receive from pharma-ceutical companies.

29. The incidence, cost and implicationsof illnesses caused by medicationshould be investigated in a systematic

way by the Department of Health alongwith the regulatory drug agency.

30. The government should create a newprogram that grants all patients accessto medication, and that adequately gua-rantees the safety and effectiveness ofthese medications as well as their ap-propriate use. Comparative studies ofpharmacological versus non-pharma-

cological treatments should routinelybe carried out.

31. The national health system should mo-dify their current legislation so that ef-fective non-pharmacological treatmentsare considered in the same category aspharmacological treatments.

32. The responsibility of representing the

interests of the pharmaceutical in-dustry should be transferred to theDepartment of Trade and Industry sothat the Department of Health can com-mit itself exclusively, as is its obliga-tion, to dealing with the regulation ofdrugs and the promotion of health.

31

* * *The study of the current crimes and abuses of the pharmaceutical industryshould have helped us move beyond the fallacious discussion between those whofavor the free-market and those who favor greater government regulations. It isclear that without the unduly favorable laws of the US Congress and without theunduly favorable agreements of the WTO, the pharmaceutical industry would nothave thrived the way it has. The market is always necessarily regulated by poli-cies. What is needed is that the policies that today regulate the pharmaceutical mar-ket be reassessed and brought into line with the above recommendations, so that

the industry can survive its present crisis and, most importantly, so that the patientscan be better served by it.


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1. Angell, Marcia. The Truth about the Drug

Companies: how they deceive us and what to

do about it. Is the Party Over?pp. 217-36.

2. Pfizer. Annual report 2001. www.pfizer.comquoted by Moynihan, R. The making of a

disease: female sexual dysfunction. BMJ

2003; 326: 45-47.

3. Special Supplement. Int J Impotence Res 1998;

10 (supl 2): S 1-142 (The Cape Cod conferen-

ce: sexual function assessment in clinical

trials, 30-31 May, 1997. Hyannis,

Massachusetts, USA), quoted by Moynihan

2003.

4. Basson R, Berman J, Burnett A, Derogatis L,

Ferguson D, Fourcroy J, et al. Report of theinternational consensus development confe-

rence on female sexual dysfunction: defini-

tions and classifications. BMJ 2005; 330:

192-94.

5. Laumann E, Paik A, Rosen R. Sexual dysfunc-

tion in the United States: prevalence and pre-

dictors. Urology 2000; 163: 888-93.

6. Kaschak E, Tiefer L, eds.A new view of wome-

n's sexual problems. Binghamton, NY:

Haworth Press 2001: 70, quoted by Moynihan2003.

7. Moynihan, 2003: 45.

8. Moynihan, Ray. The making of a disease:

female sexual dysfunction. BMJ2003; 326:

45-47.

9. Tonks, Alison associated editorBMJ. Summary

of electronic responses. The making of a dise-

ase. www.bmj.com 2003.

10. Moynihan, Ray. The marketing of a disease:

female sexual dysfunction. BMJ2005; 330:

192-194.

11. Many articles and books have been recently

published on this topic. Besides the excellent

reviews by Pignarre and Angell frequently

quoted in this booklet, see also: The $800Million Pill by M Goozner; Powerful

Medicinesby J Avorn; Overdo$ed Americaby

J Abramson orOn the Takeby J Kassirer.

12. Pignarre, p. 124.

13. Pignarre, Philippe. El gran secreto de la indus-

tria farmacutica. Barcelona: Gedisa, 2005

(original in French, 2003), p.117.

14. Press release from the coordinators of the

Mdecins Sans Frontires (MSF) Campaign

for Access to Essential Medicines. Prognosis:

short term relief, long-term pain. The future ofgeneric medicines made in India. April 21

2005.

15. Pignarre, p.140.

16. Pignarre, p.127.

17. In response to stark international criticism, the

Doha's Declaration (Qatar, 2001) modified the

scandalous 1994 WTO agreement on the rein-

forcement of patents (Trade-Related Aspects

of Intellectual Property Rights, TRIPS). Some

of the most abusive clauses from TRIPS are:an obligation on the part of the laboratory wis-

hing to produce generic drugs to buy not only

the patent right of that medication but also of

any other products chosen by the patent owner

as "linked sales"; the right of the patent owner

to determine the way in which the laboratory

buying the product must produce the generic

drug; the obligation on the part of the buyer to

inform the patent owner of any improvements

carried out on the product; the limitation or

prohibition of exporting the

crimes and abuses of the pharmaceutical industry

Documents