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“Our Sick Drug Business”: Congress Writes Laws To Enrich Drug Companies At The Expense Of American Consumers

Sometimes the road to hell is paved with bad intentions. A company adopts a business model so twisted that justice must come clanking down on its executives and bankrollers. Justice is now being served on Valeant Pharmaceuticals International. Evil this blatant is headed for the full Hollywood treatment.

Valeant preys on sick people by acquiring essential drugs and then multiplying their price for a fast profit. Example: Upon buying the maker of Cuprimine, a 53-year-old drug that treats a rare genetic disorder, the Canadian company hiked its price 5,787 percent. Example: After obtaining the rights to two heart drugs, Isuprel and Nitropress, Valeant jacked up their prices by 525 percent and 212 percent, respectively.

Charlie Munger, the vice chairman of Warren Buffett’s Berkshire Hathaway, called Valeant a “sewer” at the conglomerate’s recent annual meeting. If the burning fires of hell are not available, a sewer will do.

Get this: Valeant charges Americans almost 100 times more for flucytosine than it does Britons. Used to treat cryptococcal meningitis, flucytosine costs $2,000 a day in the United States, versus $22 a day in Britain.

How could this be? Ask your Congress.

From the Medicare drug benefit on up, it has written laws to enrich drug companies at the expense of American consumers and taxpayers. Valeant’s going down not because it was greedy but because it was insanely greedy.

Calling Valeant a “drug company” is problematic because it’s not much into researching and developing new medications. “Bet on management, not on science,” its outgoing CEO, J. Michael Pearson, was fond of saying.

It takes some doing to provoke the U.S. Senate to hold a hearing on a drug company’s pricing. In this, Valeant (and previously Martin Shkreli’s Turing Pharmaceuticals) succeeded.

Under the harsh lights, Pearson conceded that his company made “mistakes.” His big mistake was not recognizing that even the most pliable champions of America’s medical-industrial complex have their limits.

Pearson’s description of Valeant’s program offering price breaks for hospitals that use some of its drugs didn’t glow for long. Hospitals responded that when they tried to obtain those alleged discounts, they got nowhere. Valeant didn’t answer their emails. It didn’t answer the phone.

What else made Valeant think it could get away with such anti-social behavior? No doubt Wall Street’s willingness to invest in its money-raking scheme contributed. Hedge fund giant William Ackman was Valeant’s leading pitchman, enticing other big funds to join in the pillage.

Valeant has problems in addition to a business model so repugnant it couldn’t be allowed to live. Among them is a high pile of debt. And its accounting practices aren’t so hot, either.

Thus, it’s no huge surprise that Valeant’s stock price has collapsed 85 percent since last summer. Ackman’s Pershing Square Capital Management and other hedge fund participants have lost billions.

Ackman told the hearing that his fund was not entirely aware of Valeant’s drug pricing policy. He was a “passive” investor, he said. Somehow the truth would have seemed less damning. Are we to believe that Pershing Square poured $4 billion into a company without inquiring as to how it made money?

In an almost comical exchange with the senators, Ackman said: “I totally get it. We’re going to come up with an appropriate (drug) price based on an appropriate rationale.”

All is not forgiven. Investors lost billions, but patients may have lost far more.

One hopes that spotlighting this egregious gouging on drug prices won’t deter attention from the lower-level daily gouging that our laws enable. The only remedy for that, frankly, is new lawmakers.

 

By: Froma Harrop, The National Memo, May 3, 2016

May 4, 2016 Posted by | Big Pharma, Congress, Pharmaceutical Companies | , , , , , , | 3 Comments

“A Pill For Every Ill”: Consumer Drug Advertising Should Be Banned

Consumer advertising of prescription drugs is a massive public health experiment in which billions of dollars are spent each year. But this advertising is a blunt instrument where a sharp edge is needed.

Drugs have harms as well as benefits, and the harms are greater when drugs are indiscriminately prescribed. Consumer advertising, delivered to the masses as a shotgun blast, rather than as specific information to concerned patients or caregivers, results in more prescriptions and less appropriate prescribing.

There is no evidence that consumer ads improve treatment quality or result in earlier provision of needed care. Research has shown that the ads convey an unbalanced picture, with benefits and emotional appeals given far greater weight than risks. Clinicians can work to override these miscues, but this steals precious time from activities that can provide real benefit to patients. In the packed agenda of the patient visit, in which so many real concerns and evidence-based care are available to make a difference in people’s lives, the intrusion of marketing risks harm.

Advertising also provokes a subtle shift in our culture — toward seeking a pill for every ill. While there are many for whom stimulants and other medications can be a godsend, the case of attention deficit hyperactivity disorder is a prime example of how, too often, a pill substitutes for more human responses to distress. U.S. clinicians prescribe stimulant medication for A.D.H.D. at a rate 25 times that of their European counterparts. The complex decision to start a long-term medication should be motivated by the observations of teachers and parents and children, in the context of a relationship with a caring clinician − not stimulated by rosy ads.

Consumer drug advertising is banned in most of the world, although pharmaceutical companies are making a full-court press on the European Union, even while violating the limited guidelines for that advertising in the United States.

In the information age, in which more balanced sources of information on drugs should be widely available, biased pill-pushing messages are a public health menace. To advance the health of the public, the United States should follow the lead of the vast majority of countries, and ban direct-to-consumer pharmaceutical advertising.

 

By: Kurt C. Strange, Room for Debate, The New York Times, December 15, 2013

December 16, 2013 Posted by | Pharmaceutical Companies, Public Health | , , , , , , , | 1 Comment

Eric Cantor Loves Government Spending…On The Drug Industry

Republicans would like you to believe that our deficit problem is primarily a spending problem and that responsibility for that problematic spending is primarily a Democratic responsibility. But the second claim is as misleading as the first. Republicans have also been known to promote wasteful government spending, particularly when it goes towards an industry with which they happen to be cozy. For a vivid illustration of this, look no further than a new Politico article about House Majority Leader Eric Cantor and his position on a key deficit reduction proposal.

The proposal in question would lower the cost of what the federal government currently pays to provide low-income seniors with prescription drugs. For years, the government purchased drugs for these seniors directly through Medicaid, taking advantage of the low prices drug companies must, by law, provide when selling drugs for the people in that program. But that changed in 2006, with the creation of Medicare drug benefit. At that point, the government delegated the purchasing of drugs for low-income seniors to private firms. And the firms haven’t been able to negotiate equally deep discounts, partly because of restrictions on their ability to limit drug availability.

According to the Congressional Budget Office, restoring the “Medicaid discount” for low-income seniors could save more than $100 billion over the course of a decade, depending on the structure of the proposal. And, at one point, many health care reformers had hoped to include that proposal as part of what became the Affordable Care Act. The administration and leaders of the Senate Finance Committee agreed not to include the proposal in the final legislation, as part of their infamous deal with the drug industry lobby. But that was a one-time deal, at least in theory, and congressional negotiators are looking seriously at enacting the proposal now.

The problem is lawmakers like Cantor, who oppose the idea. According to the Politico story, written by Matt Dobias, Cantor is making the same argument that the drug industry lobby does: That the proposal would amount to a form of government price controls, retarding economic growth and discouraging innovation.

The latter point is highly dubious: The reduction would bring reimbursement levels for these drugs very close to what they were a few years ago. Many experts, including the CBO, think the likely impact on research and development would be negligible. (Harvard economists Richard Frank and Joseph Newhouse addressed this issue at some length in Health Affairs a few years ago.)

As for the former suggestion, it’s true that any net reduction in government spending could reduce economic growth, at least at this particular moment. That’s why it’s not a good idea to be madly slashing government spending right now — and why, perhaps, congressional negotiators should delay implementation of this cut, like the others, so that it would take effect after the economy has more fully recovered.

But Cantor’s anxiety over the economic ramifications of spending cuts seems strangely selective. He hasn’t raised similar concerns about cuts to food stamps, Medicaid, and similar programs that would likely have a more devastating impact, both on the economy as a whole and the people who depend upon them for support.

Then again, food stamp recipients didn’t donate $168,000 to Cantor’s reelection campaign in the last cycle. The drug industry did.

By: Jonathan Cohn, The New Republic, July 15, 2011

July 17, 2011 Posted by | Big Pharma, Budget, Businesses, Class Warfare, Congress, Conservatives, Corporations, Debt Crisis, Deficits, Democrats, Economic Recovery, Economy, GOP, Government, Government Shut Down, Health Reform, Ideologues, Ideology, Lawmakers, Medicaid, Medicare, Middle Class, Pharmaceutical Companies, Politics, Republicans, Right Wing, Seniors, Wealthy | , , , , , , , , , | Leave a comment

Drug Marketing and Free Speech: U. S. Supreme Court Says Data Mining Trumps Your Medical Privacy

Pharmaceutical companies, which spend billions of dollars a year promoting their products to doctors, have found that it is very useful to know what drugs a doctor has prescribed in the past. Many use data collected from prescriptionsprocessed by pharmacies — a doctor’s name, the drugs and the dosage — to refine their marketing practices and increase sales.

The Supreme Court on Thursday made it harder for states to protect medical privacy with laws that regulate such practices. In 2007, Vermont passed a law that forbade the sale of such records by pharmacies and their use for marketing purposes. The ruling upheld a lower court decision that struck down the law as unconstitutional.

Justice Anthony Kennedy, writing for the 6-to-3 majority, said the law violates First Amendment rights by imposing a “burden on protected expression” on specific speakers (drug marketers) and specific speech (information about the doctors and what they prescribed). It is unconstitutional because it restricts the transfer of that information and what the marketers have to say.

In dissent, Justice Stephen Breyer explains that the law’s only restriction is on access to data “that could help pharmaceutical companies create better sales messages.” He notes that any speech-related effects are “indirect, incidental, and entirely commercial.” By applying strict First Amendment scrutiny to this ordinary economic regulation, he warns, the court threatens to substitute “judicial for democratic decision-making.”

The law would have been upheld, Justice Breyer says, if the court had treated it as a restriction on commercial speech, which is less robustly protected than political speech. The court’s majority unwisely narrows the gap between commercial and political speech, and makes it harder to protect consumers.

By:  Editorial, The New York Times, June 23, 2011

June 24, 2011 Posted by | Big Pharma, Constitution, Consumers, Corporations, Democracy, Freedom, Pharmaceutical Companies, Politics, Regulations, Supreme Court | , , , , , , , , , , , , , , , | Leave a comment

Drugs and Profits: Pharmaceutical Companies Should First Do No Harm

Last year the Food and Drug Administration rescinded approval of the drug Avastin for treating breast cancer patients, prompting a firestorm of criticism. The decision was denounced by some politicians as health care rationing, and by breast cancer patients who feared that they would be deprived of a drug that they felt had helped them immensely.

But these criticisms ignore the facts: Avastin was rejected simply because it didn’t work as it was supposed to, and the F.D.A. should resist the aggressive campaign by Genentech, the drug’s maker, to get that ruling reconsidered at a hearing in late June.

Avastin has been on the market for seven years, and combined with other drugs it is effective in treating, but not curing, some colon, lung, kidney and brain cancers. It inhibits the development of new blood vessels and in so doing can starve a growing tumor.

Treating a breast cancer patient with Avastin costs about $90,000 a year, and Genentech could lose $500 million to $1 billion a year in revenue if the F.D.A. upholds the ban.

A clinical trial published in 2007 demonstrated that Avastin, when paired with the chemotherapy drug Taxol, halts the growth of metastatic breast cancer for about six months longer than chemotherapy alone. Genentech then asked the F.D.A. for approval of Avastin, combined with Taxol, for use against metastatic breast cancer.

This halt in tumor growth is known as progression-free survival. But delaying the worsening of cancer does not necessarily prolong life, and Avastin was not shown to lengthen patients’ overall survival time. So Genentech argued that the drug led not to longer life, but to improved quality of life.

In 2007, an F.D.A. advisory committee rejected the application, deciding that the toxic side effects of Avastin outweighed its ability to slow tumor growth. The F.D.A., however, overrode the committee and granted what is called accelerated approval, allowing Avastin to be used pending further study. The criteria for full approval was that Avastin not worsen overall survival and that the drug provide clinically meaningful progression-free survival.

To support its case Genentech submitted data from two additional clinical trials in which Avastin was paired with chemotherapy drugs other than Taxol. Like the first trial, neither showed a survival benefit. Both showed an improvement in progression-free survival, though this outcome was much less impressive than in the original study. In addition to seeking full approval for the Avastin-Taxol combination, Genentech also asked the F.D.A. to approve the use of Avastin with the drugs used in these follow-up studies.

Genentech presented progression-free survival as a surrogate for better quality of life, but the quality-of-life data were incomplete, sketchy and, in some cases, non-existent. The best that one Genentech spokesman could say was that “health-related quality of life was not worsened when Avastin was added.” Patients didn’t live longer, and they didn’t live better.

It was this lack of demonstrated clinical benefit, combined with the potentially severe side effects of the drug, that led the F.D.A. last year to reject the use of Avastin with Taxol or with the other chemotherapies for breast cancer.

In its appeal Genentech is changing its interpretation of its own data to pursue the case. Last year Genentech argued that the decrease in progression-free survival in its supplementary studies was not due to the pairing of Avastin with drugs other than Taxol. This year, however, in its brief supporting the appeal, Genentech argues that the degree of benefit may indeed vary with “the particular chemotherapy used with Avastin.” In other words, different chemotherapies suddenly do yield different results, with Taxol being superior. The same data now generate the opposite conclusion.

Perhaps more troubling is the resort to anecdote in the brief to the F.D.A. and in the news media.  Oncologists recounted their successes, and patients who were doing well on Avastin argued for its continued approval. But anecdote is not science. Such testimonials may represent the human voices behind the statistics, but the sad fact is that there are too many patients who have been treated with Avastin but are not here to tell their stories.

Avastin will not disappear because of the F.D.A. decision. It remains available for treating other cancers, and research to find its appropriate role in breast cancer treatment continues. In the meantime, the F.D.A., which is expected to make its decision in September, needs to resist Genentech’s attempt to have it ignore scientific evidence.

Serious progress in the treatment of cancer will not be the result of polemics, lobbying or marketing. Genentech’s money and efforts would be better spent on research for more meaningful treatments for breast cancer.

By: Frederick C. Tucker, Jr., Oncologist and Op Ed Contributor, The New York Times Opinion Pages, May 24, 2011

May 25, 2011 Posted by | Big Pharma, Capitalism, Consumers, Corporations, Government, Health Care, Health Care Costs, Health Reform, Pharmaceutical Companies, Politics, Public Health, Regulations, U.S. Chamber of Commerce, Women, Women's Health, Womens Rights | , , , , , , , , , , , , , , , , , | Leave a comment

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