The Economist: A survey of the Pharmaceutical Industry

The Economist June 18th-24th, 2005 14page pull-out section starting on page 47

PRESCRIPTION FOR CHANGE
Jun 16th 2005

The pharmaceutical industry is ailing. Shereen El Feki (interviewed
here[1]) takes its pulse and predicts a partial recovery

AS A boy in the 1930s, your correspondent's father lived in fear of
pneumococcal pneumonia. With good reason: one of his young friends had
died of it. It caused coughing, chills and fever, leading to a crisis
in which the patient either suddenly expired or miraculously recovered.
Today, there are drugs to tip the balance in favour of survival, and a
vaccine to prevent the disease altogether. But the pharmaceutical
industry, which has been responsible for bringing such drugs to the
market, is passing through its own crisis. Research and development
(R&D) is spluttering, earnings have weakened, its public image is
tarnished.

This survey will examine the global drug industry, probe some of the
patient's sorer spots and offer a diagnosis. Treatment is far trickier,
but the following articles will suggest ways in which all those with an
interest in its success--pill-makers and pill-takers--can hasten the
recovery.

The global pharmaceutical industry consists of thousands of companies,
including biotech firms, generic drugmakers, contract research
organisations, wholesalers and retailers. On top of them all sits "Big
Pharma"--a dozen or so multinational firms with headquarters in Europe
or America (see table 1). Their sales account for roughly half of the
world's $550 billion retail drug market. But the pharmaceutical
industry is relatively fragmented, with the biggest company, Pfizer,
holding less than 10% of the global market.

On the face of it, Big Pharma firms are in a business to die for.
Populations in rich countries--and increasingly developing ones
too--are getting older, and many people suffer from chronic conditions.
Global drug sales have almost doubled since 1997, and will rise to more
than $700 billion by 2008. By the standards of other industries, most
big pharmaceutical companies are hugely profitable: operating margins
are more than 25%, against 15% or so for consumer goods.

TALES OF WOE
But behind the healthy glow, a more worrying picture emerges. In the
past few years large drug companies have had trouble getting new drugs
out of their pipelines and into the market. At the same time, several
high-profile medicines have been withdrawn because of safety concerns.
Recently a whole group of drugs, anti-inflammatory medicines both old
and new, have run into trouble. And several firms have suffered
manufacturing problems.

Moreover, many so-called "blockbuster" drugs--those with more than $1
billion in global annual sales--have had their patents, and their
market share, challenged by cheaper generic rivals. Over the next five
years, a record $70 billion-worth of drugs will face generic
competition in America alone. Drug-company sales, which increased by
10-15% a year for most of the 1990s, have slowed to single-digit
growth. As a result, investors have shifted their attentions away from
pharmaceutical firms, particularly in America, where drugmakers are
currently in a worse state than their European peers.

The internal travails of the world's leading drugmakers have been
compounded by a broader social debate about the purpose and practices
of the industry, again mostly in America. This is the world's largest
drug market, accounting for over 40% of global sales. American drug
prices are largely set by the market, which has prompted pharma firms
to invest there on a large scale. As a result, they have become a
highly visible target for criticism. Europeans are far less exercised
about the industry, in part because their drug bills are paid for
mainly by their governments, and in part because they are shielded from
pharmaceutical marketing.

Last year, health-care spending in America reached an estimated $1.8
trillion, more than 15% of GDP. Some $200 billion of that went on
prescription drugs. Despite this enormous expenditure, large numbers of
Americans are becoming increasingly frustrated about the state of
health care in their country. Many elderly people struggle to pay for
their drugs (although from next year they will get a helping hand from
the government), big companies complain about their medical bills, and
45m people lack health insurance. Over the years, this frustration has
in turn been vented on doctors, managed-care companies and hospitals;
now it is the drug companies' turn, their public standing having fallen
as precipitously (see chart 2) as their share price.

THE DRUGMAKERS' DILEMMA
Why this anger at companies in the business of making life-enhancing
medicines? The following excerpts from a report on congressional
hearings in America neatly summarise the case against and for Big
Pharma in turn:

How true. Pharma profits are both a blessing and a curse. Many people
feel uncomfortable with the idea of money being made from medicine,
even when it is the price to be paid for innovation and better health.
Pharmaceutical firms are not the only ones to make a handsome living
out of health care, but they do so more conspicuously than others. Few
patients know how much their doctor earns, or what a hospital is
charging. But Americans blame high drug prices on Big Pharma's appetite
for profits. Senator Edward Kennedy, a long-time critic of the
industry, has a simple formula for categorising drug firms: he reckons
that a third of them have the public interest at heart, a third are
motivated by greed, and a third are somewhere in-between.

This is nothing new. Indeed, the congressional hearings quoted above
took place back in 1960. The debate over pharma profits and practices
has waxed and waned ever since. In the 1960s and 1970s, the first wave
of blockbuster drugs for ulcers and high blood pressure came to market,
drugs that treat--or even prevent--chronic conditions and are therefore
taken for years. This was a fundamental change from an earlier
generation of drugs that tackled acute ailments such as bacterial
infections. The 1980s brought more new pharmaceuticals, for depression,
cancer and nasty viruses, such as HIV.

By the early 1990s, the prospect of health-care reform and price
controls in America brought gloomy predictions for the industry, but
they turned out to be spectacularly wrong. Drugs that had been seen as
modest earners, such as the cholesterol-lowering statins, became
multi-billion-dollar blockbusters. Massive marketing campaigns lifted
sales, and investors piled in as share prices rose ever higher. Firms
flirted with all sorts of businesses before homing in on patented
pharmaceuticals as the model for modern big drugmakers. The launch of a
few high-profile drugs, such as Viagra and Lipitor, created the sense
of an industry always on the verge of great scientific breakthroughs.
And the growth of employer-sponsored health insurance provided a lot
more money to pay for it all.

At the same time, white coats started to give way to dark suits in the
boardroom as a new generation of CEOs from the commercial side of the
business took over from scientists and doctors. Firms started to
concentrate on hitting quarterly earnings forecasts, and mergers became
a popular way to cut costs. Drugmakers began to spin out patents to
stretch their sales, and became staunch advocates of strong
intellectual-property rights at home and abroad. Existing drugs were
tried out on different diseases, and more drugs of the same
feather--so-called "me-too" medicines--poured out of the pipelines.

Much of the mess some of the big pharmaceutical companies have found
themselves in over the past few years is a consequence of those heady
days. The fruits of new science, such as bioinformatics and genomics,
are only now starting to appear, later, as usual, than scientists had
hoped for, and size has not helped the big pharmaceutical firms to
excel at discovering new drugs.

Marketing practices are now under scrutiny, and drug companies stand
accused of rushing drugs to market on the back of inadequate studies
and withholding information about their drawbacks from patients and
physicians. Drug companies have been slow to recognise that the
traditional relationship between experts and the public has changed.
Much of the public trust drugmakers enjoyed derived from the
doctor-patient relationship, which is central to medicine. Yet that
relationship too has changed over the past decade. If patients are
prepared to question their doctors--sometimes prompted by
pharmaceutical advertising--they are bound to start questioning the
suppliers of their medicines too.

The cycle will in all likelihood turn again, and the bad press and
gloomy investor sentiment will improve for a while. But drugmakers'
essential dilemma will remain. As businesses, they are expected to
innovate, take risks, compete vigorously and reap the rewards. But when
they try to maximise shareholder returns, they run into trouble. If
Kellogg wants to flood the airwaves with commercials to promote
cornflakes for dinner, best of luck; but when Pfizer was trying Viagra
for female sexual dysfunction, it was accused of inventing diseases to
match its drugs.

A DIFFERENT KIND OF MARKET
This illustrates the essential difficulty of bringing market forces
into medicine. Health care does not work like a normal market, although
there are ways of making it more market-like, such as shifting more
purchasing power to patients and providing them with more information.
But buying health care will never be like buying, say, a sports car,
because a sick consumer is more constrained in his choice than a
healthy one.

Some critics of the drug industry argue that drugmaking should be taken
out of private hands and put in the public domain; after all, many of
the basic discoveries that drug companies develop and profit from came
from universities and government institutes in the first place. But
there is little evidence that governments or universities are any
better than the private sector at bringing new drugs to market. The
public may not like the way drug firms choose to spend their R&D
dollars, or how they go about promoting their wares, but at least they
have a record of bringing them to market in the first place.

Pressure from investors, buyers, regulators, doctors and patients is
already forcing the world's leading drugmakers to question the way they
do business. "The industry was living a little fat and happy," says
Sidney Taurel, Eli Lilly's boss. Many firms are now busy cutting costs.
Some are diversifying away from primary care to specialist drugs,
vaccines, generics or diagnostics. Some smaller companies may find
themselves in mergers over the next few years. Some of the biggest
firms might get smaller as they spin off some of their operations,
perhaps even their core R&D. It will become harder to tar the whole
industry with a Big Pharma brush.

Whatever the individual prospects of today's big drugmakers, there is
no doubt that their products as a whole have a bright future. The next
decade will see the emergence of many more drugs of many more kinds to
treat many more ailments. Some of these drugs will come from unexpected
sources. Most of them will offer small but steady improvements over
what went before, and will enhance the quality of life for some but not
all patients. But there will also be a few breakthrough products that
will tackle disease in fundamentally different ways. For all this to
happen, though, better ways will have to be found of valuing these
medicines, not only in terms of what they cost but also of the savings
they bring elsewhere.

-----
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Consumer Affairs.com: Consumer Group Challenges AMA on Drug Ads

You should take a look at Consumer Group Challenges AMA on Drug Ads.


June 30, 2005
A consumer group is calling on the American Medical Association (AMA) to disclose the amount of advertising money that the AMA collects from drug companies in the wake of the AMA's announcement that it will "investigate" the impact of drug company advertising on consumers.

Drug Ads
• Consumer Group Challenges AMA on Drug Ads
• AMA Takes No Position On Direct-To-Consumer Drug Ads
• Consumer Drug Ads May Influence Doctors' Rx Decisions
• FDA Objects to Zyrtec Ads
• FDA Panel Gives Vioxx a Yellow Light
• Devilish Viagra Ads Pulled
• Consumers Sue AstraZeneca Over Nexium Ad Campaign

In the June 15 issue of the Journal of the American Medical Association, 9 of the 16 full page advertisements were for pharmaceuticals, including the first six pages and the inside and back covers.

The AMA's announcement failed to acknowledge the fact that drug companies spent five times more on marketing to physicians, including advertising in journals, than they do on advertising to consumers.

A large body of research has found that pharmaceutical advertising and marketing to doctors has led to increased prescribing, use and possibly over-use of prescription drugs.

"The AMA's feigned concern for the fate of patients targeted by drug advertising makes about as much sense as a pusher enrolling his customers in drug-addicts anonymous," said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights (FTCR).

"Patients and doctors have a right to know how much advertising money the AMA's journal receives from drug companies. Drug companies spend five times as much on marketing to doctors than they do advertising to consumers because they know their profits depend upon whether a doctor is motivated to prescribe the newest blockbuster," Flanagan said.

According to the AMA's 2003 tax return, the AMA receives two times more money in advertising dollars than it does from subscriptions.

In 2003, the latest data available, the AMA received $41,123,622 from advertising revenue, compared to $17,677,540 from subscription fees. The AMA's advertising revenue accounts for 45 percent of the group's total program revenue.

In 2000 (the latest data available) drug companies spent $4.8 billion on "physician detailing," the practice of sending marketers to doctors' offices to encourage doctors to prescribe a company's drugs.

In the same year, drug companies spent $2.4 billion on consumer advertising. Total physician promotional spending by drug companies in 2000 was $13.2 billion, including $484 million for journal advertising.

In 2004, Pfizer settled a lawsuit for $430 million with the U.S. Attorney General's office that alleged that the company had promoted its anti-convulsant medication, Neurontin, to doctors for "off-label" treatments -- those not approved by the FDA.

CRJ: Bitter Pill

target="_blank">Bitter Pill by Trudy Lieberman.


Last December, Sepracor, a company in Marlborough, Massachusetts, whose core business is concocting slight variations of the world’s best-selling drugs, got the go-ahead from the Food and Drug Administration to sell Lunesta, a new sleeping pill that could be used for months without losing its effectiveness. To prime Wall Street for the drug’s potential profitability, Sepracor’s chief executive officer, Timothy Barberich, told analysts that insomnia is “one of the most prevalent and growing medical needs in our society,” while David Southwell, the company’s chief financial officer, described insomnia to the media as “underrecognized” and “undertreated,” and estimated the U.S. market for sleep aids at $3.5 billion a year and growing. Following the industry’s modern marketing script (create a need, then a drug to fill it) Sepracor soon began selling Lunesta to the public — with the help of the press.

As with most launches of drugs, Sepracor and one of the academic medical centers involved in testing the drug (in this case, Duke University) offered journalists sources they could call, including those with financial links to Sepracor. And the company got results. For example, some of the nation’s most respected newspapers peppered their stories with quotes from Dr. Andrew Krystal, who conducted the Duke clinical trial of Lunesta and was the lead author of the study that reported the results. Krystal had designed and conducted other studies for Sepracor, and had also served on a company advisory board. Most of the news stories did not disclose his financial ties to the drugmaker.

To humanize their stories about Lunesta, the Los Angeles Times and The Washington Post both featured Terri Bagley, a forty-three-year-old owner of a North Carolina cleaning business who had been paid to participate in the Duke trial, and who was offered to the press by Duke p.r. officials. Bagley told the Times that Lunesta could reduce “road rage” since “there’ll be a lot more well-rested people out there.” In the Post she said she was counting the days until she could get a prescription. A story headlined sleepless at duke find cure, appearing in the Raleigh News & Observer, a paper near Bagley’s hometown, devoted several paragraphs to her sleeping problems.

The Washington Post, The New York Times, and Good Morning America did offer an independent opinion. Dr. Gregg Jacobs, an assistant professor of psychiatry at the Harvard Medical School, said that other treatments for sleep disorders, such as talk therapy, may work better than sleeping pills. Jacobs himself, though, was amazed at the tone of the coverage. “You would think that, the way the media covered it, it was a new miracle drug,” he says. “It’s not even close.”

Americans have always been obsessed with all things health-related, but today a drug can move almost instantaneously from medical research to miracle cure through news media that too often seem more interested in hype and hope than in critically appraising new drugs on behalf of the public. The problem has grown dramatically in recent years as direct-to-consumer advertising has increased, delivering ever-higher ad revenues to the nation’s media. Instead of standing apart from the phenomenon and earning the public’s trust, the press too often is caught up in the same drug-industry marketing web that also ensnares doctors, academic researchers, even the FDA, leaving the public without a reliable watchdog.

Consider the case of the National Sleep Foundation’s annual poll to promote National Sleep Awareness Week. The poll, released in March, found that 75 percent of adult respondents said they had frequent difficulty sleeping, a problem serious enough, they said, to affect their sex lives. “It was an important story,” says Richard Gelula, the foundation’s chief executive officer. “The poll gets treated as news, and this year it got good news coverage” (at least twenty-four stories by CJR’s count). As the poll gathered headlines, Sepracor was dispatching 1,250 sales representatives to physicians’ offices to educate them about Lunesta, part of a $60 million advertising push. The foundation’s mission, Gelula says, is to tell people what good sleep is, how to get it, how to recognize the signs and symptoms of sleep disorders, and to talk to their doctors if they have any of them. It is a message that dovetails with Sepracor’s advertising pitch, which like all direct-to-consumer advertising instructs patients to talk to their doctor.

Virtually all the news stories about the poll failed to identify the National Sleep Foundation’s ties to the drug industry. According to Gelula himself, nearly $1 million of his $3.6 million budget comes from makers of sleeping pills, including Sepracor, which gave the foundation a $300,000 grant to produce a series of “Sleep Medicine Alerts” — brochures designed to educate doctors about insomnia. Sepracor, along with other companies that make competing products, is also a $250,000 platinum sponsor of National Sleep Awareness Week. The foundation’s own Web site reveals that the group is funded by drug companies, physicians, patients, medical centers, and makers of sleep aids, most of which have an interest in new drugs and treatments. But with the exception of CBS Evening News, the press did not disclose the financial link between the foundation and the companies that would benefit from the poll’s results. “The media are victims of the same problem as doctors and patients,” says Dr. Jerry Avorn, a professor of medicine at the Harvard Medical School. “Too often they get industry-sponsored sources of information that look like they are from unbiased, scientifically driven public-interest groups when in fact they are thickly veiled marketing activities.”

In its public comments, Sepracor contends that Lunesta is safe because the older drugs from which it is derived have generated no safety problems. Like all drugs, though, Lunesta has side effects. For example, it apparently lingers in the body: the professional product label, written for physicians and pharmacists and not routinely seen by patients, warns users not to engage in any hazardous occupations that require complete mental alertness or motor coordination, such as driving a car or operating machinery, after taking the drug, and also to be cautious of “potential impairment” in performing such activities on the day after taking the pill. Most of the press coverage did not discuss this drawback, which might make it problematic for patients to get to work the next day. Meanwhile, evidence is accumulating of problems with all sleep drugs, which reporters could have examined but did not. In a meta-analysis of all available research on sleep medicines, the Canadian Medical Association Journal noted that users of a drug similar to Lunesta were at increased risk of traffic accidents. The National Institute for Clinical Excellence, a British government watchdog for health spending, found no consistent difference in safety or effectiveness between the class of drugs Lunesta belongs to and older sleeping medications. What’s more significant, an editorial in the British Medical Journal observed that no sleeping drug has yet to be shown more effective than placebos for improving the quality of life and daytime functioning, or for avoiding such outcomes as falls and fractures. Terri Bagley’s testimonials that Lunesta made her feel better hardly count as medical evidence. The British Medical Journal editorial placed Lunesta within the overall scientific knowledge about insomnia and its treatment — vital context absent from U.S. press accounts, where the science of a new drug comes last, if at all.

Press acquiescence to industry public relations stems in part from an American cultural belief in the inherent goodness of medicine and its corollary — that every new pill, every new treatment, works and should be treated as safe and effective unless proven otherwise. In his landmark 1982 book, The Social Transformation of American Medicine, Paul Starr explains how in the late nineteenth and early twentieth centuries the medical profession benefited from the cultural and social upheaval — including the embrace of science — to establish itself (and thus its money-making medicines) as the unquestioned authority on matters of health, a position it has enjoyed ever since.

Even without that cultural baggage, though, the pharmaceutical beat is a challenge. For one thing it is huge. The American pharmaceutical industry logs more than $250 billion in annual sales. Drug spending has been doubling roughly every five years; an increasing number of Americans will be taking medicines daily for the rest of their lives. And the public has a growing appetite for news about drugs. It’s an industry, meanwhile, that produces many medicines that improve and extend lives, and sometimes save them, such as diuretics for high blood pressure, and drugs that mitigate the symptoms of Parkinson’s disease or prevent blindness from glaucoma.

But not all the medicines these companies produce are beneficial, and some of them are dangerous. “The public is being allowed to believe that drugs are safer and more effective than they really are,” says Dr. Marcia Angell, who for two decades was editor-in-chief of The New England Journal of Medicine. “Journalists, as well as the public and physicians, have bought hook, line, and sinker the idea that these drugs are getting better.”

In reality, she says, based on research for her 2004 book, The Truth About the Drug Companies, of the 415 drugs approved between 1998 and 2002, only 14 percent were truly innovative, 9 percent were drugs that had been modified in some way, and 77 percent were simply “me-too” drugs, copies of medicines already on the market, created not necessarily to improve health but to fill a spot in a company’s product portfolio.

The news media have tended to see drug coverage as fitting into two discrete compartments. The pharmaceutical industry is covered in the business pages and, sometimes, in the health sections. But a vast middle ground between business coverage and consumer health reporting and advice remains largely unexplored by the press — the territory of corporate marketing and sponsored scientific research that connects the bottom line to the latest “breakthrough.” Reporters who want to write about this middle ground must be wary not only of the companies’ sophisticated marketing techniques, but also of other competing interests that try to use reporters to pitch their journals and university medical centers, or spin their political positions about drug policy. “Everyone is in cahoots,” says a woman who spent several years conducting medical-education activities for pharmaceutical companies. She asked to remain anonymous because she is currently consulting in the health-care industry. “The money spent is outrageous.”

On the drug beat, the stakes are high, and sometimes they involve life and death. This is evident in an examination of the coverage of Vioxx and the other Cox 2 pain relievers, once hailed in the media as “super aspirin.” In the case of Vioxx, thousands of people have died from heart attacks while taking the drug, making Vioxx the biggest drug disaster in U.S. history. In hindsight, few would argue that the public was well served by media coverage of any of the Cox 2 drugs, from the beginning when a Vioxx researcher told The Buffalo News it was inappropriate to provide precise statistics on side effects, to the end, last February, when reporters missed the point made by an FDA advisory committee whose thirty-two members unanimously concluded that all the Cox 2 drugs cause heart attacks. Reporters, instead, focused on a recommendation, narrowly approved by the committee, that Celebrex and Bextra remain on the market; some speculated that Vioxx might soon be back. Seven weeks later the FDA ordered Bextra off the market and issued the strongest possible “black box” warning for Celebrex, effectively curtailing further advertising for the drug.

Four years before Merck, the maker of Vioxx, pulled the drug from the market on September 30, 2004, reporters could have discovered signs of trouble by reading about the Cox 2 drugs in the medical journals. In November 2000, for instance, the New England Journal published results of the VIGOR (Vioxx gastrointestinal outcomes research) study, which questioned the cardiovascular safety of Vioxx. Several months later The Journal of the American Medical Association (JAMA) published a study that examined all the research that had been done on the Cox 2 drugs and concluded that the “available data raise a cautionary flag” about the risk of heart attacks and strokes. Dr. David Graham, the associate director of the FDA’s Office of Drug Safety, who testified before the Senate Finance Committee about the FDA’s failure to protect the public from unsafe drugs, calculates that from the time Vioxx came on the market until its withdrawal 61,000 people died from heart attacks associated with the drug, and another 79,000 had nonfatal heart attacks. As the timeline on pages 46 and 47 shows, the press barely paid attention. In fact, as the chart demonstrates, the media missed a number of warning flags that might have led to stories that saved lives.

Rita Rubin, who covers the pharmaceutical industry for USA Today, tried to sound the alarm on Vioxx in a story published in early February 2001. Her story drew on the VIGOR study cited in the New England Journal, which found that patients taking Vioxx had five times more heart attacks than those taking the pain reliever naproxen, sold under the brand names Aleve and Naprosyn. In Rubin’s story, an official from Merck challenged the VIGOR study’s findings, insisting that since naproxen, like aspirin, helps prevent heart attacks, Vioxx hadn’t caused heart attacks but rather naproxen had prevented them. Graham of the FDA and other scientists later pointed out that for naproxen to have had the effect Merck was claiming, it would have to be three times more effective at preventing heart attacks than aspirin. “That was completely beyond belief,” Graham says. Yet at the time almost no one in the media was questioning the numbers, let alone Merck’s damage-control campaign. “Some scientists were really scared of Merck,” Rubin says. “They wouldn’t go on the record about their concerns.”

When a pharmaceutical company prepares to market a drug, it anoints medical “thought leaders,” such as department heads at major universities who have expertise about the drug and the disease it treats. They and their institutions are paid by the drug makers to test their products. More importantly, these academic thought leaders have prestige. “The most senior experts at some of the most renowned institutions have financial connections to industry,” says Marcia Angell. “They are precisely the people the industry wants to buy off.”

Those are the experts drug companies and their p.r. agencies steer journalists to when they need sources who can provide quick explanations of complicated scientific material. Peter Rost, a Pfizer vice president of marketing who makes it clear he is not talking on behalf of his employer, describes what journalists are up against. “Even if you are a hard-digging reporter looking for the one clinic that’s objective and has not taken company money and has credibility, it’s like looking for a needle in a haystack,” he says. “You’re likely to find a clinic that is either directly or indirectly on the company’s payroll.”

The New York Times’s Science section has set a standard for the news media by requiring its reporters to disclose their sources’ financial conflicts of interest when appropriate — in effect providing the context for readers to better understand the comments scientists make. But such rules are rare. Scientists who test the drugs tend to talk up the product’s strengths to the press. “It’s not that scientists lie, but if they say certain things, they get rewarded,” says Dr. Bruce Psaty, a professor of medicine and epidemiology at the University of Washington. If these experts speak favorably about a drug to the press, they tend to get invitations to speak about the drug at conventions for doctors and at educational seminars that hospitals offer for their employees, where they get a chance to further promote their study results. All these activities help enhance careers and bring good press to the clinic or the university. “It used to be death to get your name in the paper if you were an academic,” says Sherrie Kaplan, associate dean of the College of Medicine at the University of California at Irvine. “Now academics are elbowing each other to get on the Today show.” For those who learn how to market their studies, the visibility brings the next round of grant money. The more Congress and the public hear about the study, the more potential support from the National Institutes of Health, which awarded $22 billion in grant money in 2003, the last year for which a total is available. The more other drug makers hear about a scientist’s study, the more likely they are to seek out him or her for the next clinical trial. And the more likely journalists are to use that scientist again.

If a reporter demands something more than the company line, however, the drug company p.r. machine often calls on its scientists to employ the hard sell, as CBS correspondent Sharyl Attkisson discovered when Crestor, a cholesterol-lowering agent, was making news late last year. In his congressional testimony, the FDA’s Graham had said that Crestor was one of five drugs whose safety must be “looked at quite seriously.” Public Citizen, a watchdog group, had petitioned the FDA to remove Crestor from the market, saying it had caused muscle breakdown leading to kidney failure in some patients. That was not the kind of publicity that AstraZeneca, the drug’s maker, needed. To assuage an anxious public, it blitzed the airwaves with a catchy commercial set to the sing-song prose of Dr. Seuss. It also bought full-page ads in major newspapers, asserting that “the FDA has confidence in the safety and efficacy of Crestor,” a claim the agency later said was false.

CBS’s Attkisson thought Crestor’s troubles added up to a good story. While AstraZeneca was weighing her request for an on-camera interview, Attkisson began to receive unsolicited offers for interviews from doctors with financial ties to AstraZeneca. In one e-mail, a doctor from Rush University Medical Center in Chicago told Attkisson he had conducted numerous studies on Crestor and urged her to take him up on his offer “to ensure ALL the information about this important class of medication gets out to the public, and not just a selective interpretation of data.” A second doctor, a nephrologist from the Cleveland Clinic Foundation, wrote to Attkisson that the accusations made by Public Citizen about Crestor’s safety were false, saying it was “imperative” that her story “be both factual and accurate.” AstraZeneca sent Attkisson examples of other press stories quoting doctors making positive statements about Crestor. Attkisson told the company she didn’t need help finding independent experts. At that point, she says, AstraZeneca got pushy. “We got lobbied so hard on this story by doctors, two outside p.r. firms, AstraZeneca, and one crisis-management firm,” she says. “They worked me and pushed me and contacted the executive producer and the president of the news division. But my bosses were generally supportive.” Her Crestor story, when it finally aired in mid-December 2004, featured an AstraZeneca vice president but none of the doctors who had e-mailed Attkisson. Although the FDA decided to keep Crestor on the market, in March it ordered a stronger warning label for the drug stating that it may increase the risk of life-threatening muscle damage. The FDA’s action generated little press coverage.

Like most regulators, the FDA has always had a somewhat cozy relationship with the companies it regulates. In the 1990s, that relationship grew closer with the passage of legislation that required drug makers to pay money to the agency to help finance the approval process. Another law lowered the bar for approval. The agency got the message: Congress wanted drugs on the market more quickly. The ’90s legislation helped foster a climate at the agency in which drug companies are seen as clients, a culture that has continued to flourish. A columnist for the trade publication Medical Marketing & Media wrote in January that the Bush administration has made the FDA “an informal ‘partner’ to the industry.” That partnership helps explain why some of the FDA’s actions don’t seem to have the public interest in mind — such as its tardiness in ordering a warning label for Vioxx; its approval of Vioxx for migraines, a new use, in March 2004, while evidence of safety problems was accumulating; or its approval of Vioxx for arthritis in children in August 2004, just weeks before Merck decided on its own to pull the drug, in September of that year.

The partnership also helps explain why some journalists, especially those who ask the tough questions, get frozen out. Agency officials have been known to play favorites with reporters, ignoring the ones who probe behind official pronouncements. After the Cox 2 debacle, Sharyl Attkisson noticed that the FDA had issued a public health advisory suggesting that patients at high risk for gastrointestinal bleeding may be appropriate candidates for drugs like Celebrex; yet in June 2002, the FDA had taken the recommendation of its advisory committee that Celebrex should continue to carry the standard warning about the risk of gastrointestinal bleeding. Attkisson wanted to understand the discrepancy between the agency’s earlier conclusions about Celebrex and its latest recommendation, so she asked for an interview. An e-mail exchange over a period of seven days shows how the FDA stalled and finally refused to cooperate. A p.r. official demanded to know whom else she would be interviewing, and what the actual questions were, and then said that without this information the agency could not proceed with the interview. “The FDA is as obstructionist as the drug companies, if not more so,” Attkisson says. “That may be the biggest scandal behind these drug stories.” Other reporters echo her observations. “People who don’t cover the FDA may have an unrealistic idea of how open it is,” says USA Today’s Rita Rubin. “I can tell you, it is not.”

Given that the drug companies stack the deck on journalists, and that the academic community and the top government regulator can be too close to drug makers, the question becomes: how high a priority is it for the nation’s news media to get the full story about pharmaceuticals? The question has loomed even larger since the drug makers realized in the late 1990s that direct-to-consumer advertising on TV and in newspapers and magazines could drive sales figures to new heights. For one week in April CJR monitored the evening newscasts of CBS, NBC, and ABC. During that week, network viewers saw an average of sixteen commercials for prescription drugs and an average of eighteen for over-the-counter medicines each night. In 1999, the five networks, including CNN and Fox News, received $569 million in advertising revenue from pharmaceutical companies, according to TNS Media Intelligence. In 2004, that number had nearly tripled, to $1.5 billion. Drug ad revenue is less for print outlets, but still nothing to dismiss. At the end of 2004, for example, drug-company ad revenue for Time magazine totaled $67 million; for Newsweek $43 million; and for The New York Times, $13 million. This doesn’t mean that news executives consider such income when they make story assignments, but in places where the wall between the news side and the business side has weakened, the temptations are stronger than ever.

Cultural pressures within news organizations, meanwhile, also work against the nuanced and more balanced stories that the drug beat demands. Science doesn’t usually fit neatly into categories of all good or all bad. It’s ambiguous and changing. As the Cox 2 pain relievers show, a finding that seems conclusive one month can be dead wrong the next. Ambiguity is troubling to editors. And stories trumpeting new drugs are an easy way to get on page one or on the air, especially if the ambiguity is ignored. The coverage of an older drug called donepezil, marketed by Pfizer under the brand name Aricept, is a case in point. In April, The New England Journal of Medicine published a study about how Vitamin E and donepezil affected patients with mild cognitive impairment from Alzheimer’s disease. The study had three conclusions: first, Vitamin E did not work; second, donepezil did not slow the progression to Alzheimer’s after three years of treatment; and third, the drug was “associated” with a lower rate of progression after one year of treatment. Dr. Jeffrey Drazen, who edits the Journal, says the study showed that donepezil “had a little bit of an effect,” but adds that “the major conclusion had to do with Vitamin E.” ABC News, though, didn’t see the study that way. On both World News Tonight and Good Morning America, the network focused on the shred of positive data about donepezil, making it sound like a major breakthrough. ABC’s Dr. Tim Johnson, the network’s physician-reporter, recommended that people who have pre-Alzheimer’s disease take donepezil even though the Journal study on which the ABC segment was based did not support such a clear-cut recommendation.

Many of the reporters interviewed for this story complained about editors who were inclined to defer to the FDA, which makes it hard for them to write negatively about a drug that has the agency’s approval, or to investigate the agency itself. “I have had editors of major papers say to me that if I cover the FDA on a daily basis, I can’t investigate it at the same time,” says Alicia Mundy, a Washington correspondent for The Seattle Times who has written about the drug industry for a variety of publications. “My answer is that they are saying that one reporter is allowed to be a shill and the rest are allowed to be reporters.”

To be sure, news organizations have published some fine stories about bad drugs stories that have transcended the drug company spin and other reportorial pitfalls. Reporting in 2000 by David Willman of the Los Angeles Times helped push the dangerous diabetes drug Rezulin off the market, and his reporting in 2003 and 2004 sparked reforms concerning financial conflicts at the National Institutes of Health. But this sporadic good work is negated by the more frequent puff pieces about new drugs, like the one the Los Angeles Times Health section published in January about Lunesta. That story featured Terri Bagley’s testimonials, but failed to disclose its main source’s ties to Sepracor or present any independent opinion. The veteran journalist Donald Barlett has observed that there is much more investigative reporting going on today than ever before, but stories that appear once or twice a year do not reverse the damage done by the parade of daily stories that fail to give readers and viewers balanced and in-depth information about their medicines.

Late last year USA Today asked in a front-page headline: CAN AMERICANS TRUST THEIR MEDICINE? If there are more disasters like Vioxx, the answer may be no. And if we in the media do not press the FDA and cover its warnings, if we don’t challenge the industry’s persistent efforts to hide negative information about clinical trials, then we risk fostering a backlash in which the public will reject the very drugs that do make their lives better — in essence, the real breakthroughs.

Trudy Lieberman is a contributing editor to CJR. The magazine gratefully acknowledges support for this article from the Fund for Investigative Journalism.

UTNE: The drug industry excels at turning reporters from watchdogs into lapdogs

The drug industry excels at turning reporters from watchdogs into lapdogs
—By Trudy Lieberman, Columbia Journalism Review .


The PR machines of drug companies purr like the Jaguars of so many physicians. Such precision tuning has given pill pushers the ability to manipulate media coverage so that their new medicines hit the market with a spoonful of positive publicity. Many reporters are getting caught in their traps, while others are avoiding them, Trudy Lieberman writes in the Columbia Journalism Review.

Journalists with integrity who cover the drug industry have it tough. Finding a source in the drug-development field untainted by industry sponsorship is "like finding a needle in a haystack," says Peter Rost, a Pfizer vice president of marketing. Company PR reps routinely try to force-feed the press sources with conflicts of interest and serve up stories-on-a-platter. (Lieberman cites several instances of esteemed news outlets wolfing them down.) Plus, it's not an uncommon practice for the Food and Drug Administration (FDA), which often acts as an adjunct to the industry, to blacklist muckraking reporters: "The FDA is as obstructionist as the drug companies, if not more so," says CBS correspondent Sharyl Attkisson.

Despite the drug beat's challenges, Lieberman is critical of recent soft-hitting reporting: "[T]he press too often is caught up in the same drug-industry marketing web that also ensnares doctors, academic researchers, even the FDA, leaving the public without a reliable watchdog." She points to the Cox 2 fiasco as an example of where coverage with real teeth might have prevented deaths and suffering.

The press' current stint as a PR tool for drug-makers coincides with an upsurge in ads hawking pills during TV news programs and in print. Whether or not the media has acquiesced for the sake of revenue is unclear. Lieberman raises an eyebrow, but, she explains, "This doesn't mean that news executives consider such income when they make story assignments, but in places where the wall between the news side and the business side has weakened, the temptations are stronger than ever."
-- Archie Ingersoll

Drug Dealing 101

The average NGO or civic group does not have adequate capacity to actively participate in the increasingly complex policy and legal environment of global trade. This puts decisions and actions taking place in corporate headquarters and multilateral assemblies out of reach of the ordinary citizen. Here is the short-version international legal framework for essential medicines, proprietary drugs, and CAFTA.


From GATT to the WTO
The end of WWII saw the creation of the World Bank (WB) and the International Monetary Fund (IMF) to regulate international economic cooperation. These are known as the "Bretton Woods" institutions, named for the town in Vermont, USA, where negotiations took place. The package of trade rules which came out of this gathering was the General Agreement on Tariffs and Trade (GATT 1947). It began with 23 countries, dealing only with trade in goods, and affecting just 10% of global trade. Thus began international trade liberalizations through progressive reductions of protectionist measures (ie tariffs), ensuring a tremendous momentum of trade growth.

GATT was legally only a provisional agreement and not a governing body. It did such a good job of reducing tariffs and promoting trade that governments had to develop other forms of protections for sectors threatened by overseas competition. Bilateral market-sharing agreements and subsidy structures were then created and implemented in effort to protect domestic products. Unable to respond to the vast overhaul of the global trade environment, the recessions of the 1970s and 80s, and increasing globalization, the Charter's relevance soon diminished.

Multi- and plurilateral accords between contractual member countries were added to GATT during negotiations called “trade rounds”. At the Uruguay Round of 1986-1994, the World Trade Organization (WTO) was created to replace GATT. This Geneva-based intergovernmental body binds all members to global commercial agreements which are multilateral, mandatory, and permanent. It contains a dispute-resolution mechanism to enforce their mandates. In addition to trade in goods, this new organization added trade in services and intellectual property (IP) to its mandate. Trade in services is covered under GATS (General Agreement on Trade of Services) and trade in IP is covered under TRIPS (Trade Related Aspects of Intellectual Property).

WTO has 148 member countries as of February 2005. It accounts for over 90% of global trade.

WTO/TRIPS
TRIPS covers literary works, phonograms, computer programs. It also covers industrial designs such as copyrights, trademarks, trade secrets, geographical indications, patents, undisclosed information, and is an increasingly important component of trade. Minimum standards of protections against counterfeiting and piracy were laid out at WIPO (Paris Convention for the Protection of Industrial Property and the Bern Convention for the Protection of Literary and Artistic Works). Member states are given a transition period (periodically revised to accomodate country-by-country capacities) to adapt enforcement laws for TRIPS-compliance: 1 January, 1995 for developed countries; 1 January 2005 for transition economies; 1 January 2016 for least developed countries.

A 3rd WTO Ministerial Conference was summoned in Seattle, US, on December 1999 to plan the next round of negotiations, the Millennium Round. But irreconcilable disagreements among the members, aggravated by a massive global movement in protest of the status quo, led to the meeting’s collapse.

WTO/TRIPS/DOHA/Compulsory Licensing and Parallel Importing
The effect of international trade laws on the procurement of essential medicines is a topic of much concern. Patent protections are essential to promote investment and innovation by an industry. But effective legislation must balance all interests and prevent abuse by the patent holder. Pharmaceutical companies, governments, and advocacy groups have been embroiled in legal clashes over this issue, particularly with medicines for the treatment of HIV/AIDS, or combination anti-retroviral therapies (ARVs) for reducing viral load. Almost 90% of HIV/AIDS is in the lowest 10% geographically in terms of GDP.

TRIPS treats pharmaceuticals like any other article of trade, even though these are not just another commodity. These are life-saving consumerables. Pharmaceuticals are covered by patents which grant a monopoly period to the innovator company for 20 years from the date of filing. Without the safety mechanisms in TRIPS, given the existing market structure, drug therapies are not affordable to people of the developing world. The two provisions in TRIPS for health emergencies are compulsory licensing and parallel importation.

Compulsory licensing is a legal intervention for removing the monopoly rights given by a patent, in order to obtain cheaper generic versions of medicines. Parallel importation is the purchase of proprietary drugs from the cheapest source, from someone besides the authorized distributor, because drug prices fluctuate from market to market.

Both of these are powerful tools in creating the competitive environment which forces prices down. These mechanisms must be included in the language of national laws for a country to employ it in leverage against corporate interests in periods of crisis.

In November 2001 at the 4th Ministerial Conference convened in Doha, Egypt, Bush signed the DOHA Declarations under tremendous pressure from developing countries and civil society. DOHA essentially reiterates the right of member countries to break patent monopolies in TRIPS for the purpose of protecting public health, particularly in promoting “access to medicines for all”.

CAFTA/FTAA a.k.a. Monroe Doctrine II...
The Central American Free Trade Agreement (CAFTA) is an expansion of the 1993 North American Free Trade Agreement (NAFTA) further into the hemisphere, and is key to advancing the Free Trade Area of the Americas Accords (FTAA). FTAA talks were shut down by fierce opposition at the 5th Ministerial Meeting in Cancun, Mexico, 2003. Ongoing disputes between the US and Brazil further raises doubts about this pact. Elimination of tariffs as CAFTA-DR is designed to do comes with a theoretical economic boon but have far-reaching ramifications on basic rights, environment, and sustainable development.

Elsewhere, bilateral FTAs are aggressively pursued by the US government. Patent protections for proprietary drugs will be extended beyond the 20 years required under TRIPS. The new language weakens or eliminates a government’s ability to launch generic competition to lower the cost of medicines. It blocks test data from release within the patent period, denying generic manufacturers access to critical safety and efficacy information. It blocks the temporary override of a patent that compulsory licensing allows. CAFTA countries will be required to divert scarce resources to implement more stringent protection infrastructures, in compliance with rules counter to the broader interests of public health. Sanctions by WTO keep signatories from violating these charters.

These priority agendas from the Bush administration are drawing intense opposition from the global South. Even the World Bank has acknowledged the challenges these pacts will have on the participating members. A small number of transition countries who have won landmark legal battles of their own now lead this growing resistance-- Brazil, South Africa, India, Thailand.

Fierce lobbying now surrounds this pivotal trade pact. CAFTA is aiming for a floor vote before the July 4 recess of the US Congress.

Patents versus Patients

It's been several years since US-backed Big Pharma sued South Africa for obstruction of profit when it bypassed patent laws to provide cheaper generic medicines for its burgeoning AIDS epidemic. The suit was retracted under furious backlash from advocacy groups worldwide. That battle has since stepped up with the ascendancy of IP (intellectual property) and trade imperatives. At issue are patent regimes affecting life-saving pharmaceuticals. It is critical to have flexibilities in global IP rules that accommodate situations whereby a country simply cannot afford brand name originator drugs to respond to a crisis. In protection of public health, and "to promote access to medicines for all", the WTO TRIPS (Trade Related Aspects of Intellectual Property Rights) contains such provisions, called the DOHA Declarations, which specifically allow countries to break patents without challenge in face of extreme urgency. 2005 marks the year that developing countries are to come to full compliance with TRIPS. LDCs (least developed countries) have until 2016 to establish IP enforcement infrastructures. South Africa was only the beginning.

In the US, lawmakers are now duking out the fate of Bush's free-trade pact with Central America, CAFTA, an expansion of NAFTA further into the western hemisphere. Fierce lobbying on both sides have intensified for a bill that was signed in the White House last May and stalled in the House and Senate over the past year amid rising opposition. The Congressional Hispanic Caucus has already rejected it. Health advocates cite that the IP protections will confer monopoly-like status to high-priced brand-name drugs in already resource-poor markets, rendering them unaffordable and inaccessible. It extends data exclusivity provisions in TRIPS and creates a more restrictive atmosphere against DOHA.

Outside Brazil's UN Missions and Embassies this past weekend, AIDS demonstrators called on Brazil to summon the maximum flexibilities accorded by TRIPS for its public health emergency. Efforts to continue discounts for AIDS drugs have been met with enormous opposition from mega-pharmaceuticals (Pharma), despite the legal and voluntary sphere in which Brazil has sought to engage dialogue. This counterweight to the US in the western hemisphere is a model for the Southern Cone countries with its decisive response to its AIDS epidemic in the late 1990s, effectively using DOHA as a bargaining tool to lower procurement costs of ARVs (antiretrovirals) and in creation of a generics industry that is lauded worldwide. In exercising its right to prioritize public health by legally issuing a compulsory license against AIDS medicines patented by American companies, Brazil sits on the IP Priority Watch List for US sanctions. Its status in the Generalized System of Preferences, which bestows favorable trade access to the US market to select countries, is under threat and used as a carrot-stick.

Elsewhere, bilateral FTAs (free-trade agreements) are being pursued by the US that slip just under the radar of watchdog organizations, containing IP clauses which threaten the affordability of life-saving drugs. There is no transparency: the content of agreements are not publicly available before they are concluded. Many lives ride on the outcome of these free-trade pacts, negotiated by legions of American attorneys in language that allows for tightening of IP laws. Developing countries hardly have recourse against the gravitational pull of the Pharma-friendly US government. Thailand is on the near horizon to be sucked into these negotiations, with landmark judgments rolling out of its courts heralding a rough road ahead. Cambodia, the first LDC admitted to the WTO, is excluded from pharma-patenting until 2016.

Pharma influence is pervasive from the international negotiating tables to the consumer spheres. Pharma commands the highest profit margin of any US industry. It has more than one lobbyist for each member of the US Congress. Budgets for promotion to healthcare professionals, direct-to-consumer advertising, and sales forces exceed the GDP of Subsaharan Africa. It pays for over half of American Continuing Medical Education costs. Lucrative rewards are pushed at academics for promising research, with contracts including gag clauses to prevent the researcher from publishing unfavorable results. Leading companies spend two and a half times more on marketing and advertising than on R&D. Even medical journals have become an unwitting extension of Pharma's marketing efforts. Regulatory agencies-- the one consumer recourse-- are understaffed, underpaid, untrained in multi-sector evaluations, unknowledgeable in public health concerns, and increasingly under the influence of the big wallets of Big Pharma.

The commerce of medicine and public health is a paradox. It is a complex mishmash of basic human rights, global trade regimes, economies of scale, financing superstructures, back-door legalese-- all with ethical and moral underpinnings. It spawns a poverty industry that the development sector falls victim to-- or is created for. . . ? Profits are not being demonized here: FTAs are established to safeguard the prosperity of the parties involved. But what good are the safety mechanisms in these negotiations if applying them will incur the wrath of an unstoppable US government?