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“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

“A Very Sweet Deal”: Prescription Drug Price-Gouging Enabled By Congress

Republicans and Democrats don’t agree on much. But one thing they would agree on if they knew the facts is that because of the cozy relationship big drug companies have with our lawmakers in Washington, Americans pay far more for their medications than people anywhere else on the planet.

As a consequence, our health insurance premiums are much higher than they should be. And our Medicare program is costing both taxpayers and beneficiaries billions of dollars more than necessary.

Americans who are uninsured are at an even greater disadvantage: many of them have no choice but to put their health at risk because they can’t afford the medications their doctors prescribe for them.

Drug makers have so much influence in Washington that they’ve been able to kill numerous proposals over the years that would enable the U.S. government to regulate drug prices like most other countries do. Between 1988 and 2012, the pharmaceutical industry spent more on lobbying than any other special interest, forking over a total of $2.6 billion on lobbying activities, according to OpenSecrets.org. That’s far more than even banks and oil and gas companies spent.

That money helped them get a very sweet deal when members of Congress were drafting legislation that would eventually be the Medicare Part D prescription drug program. Drug makers were able to get their friends in Congress to insert language in the Part D legislation that prohibits the federal government from seeking the best prices from pharmaceutical companies.

According to a recent analysis by Health Care for America Now (HCAN), an advocacy group, the 11 largest drug companies reported $711.4 billion in profits over the 10 years ending in 2012, much of it coming from the Medicare program. They reaped $76.3 billion in profits in 2006 alone, 34 percent more than in 2005, the year before the Part D program went into effect.

“Americans pay significantly more than any other country for the exact same drugs,” said HCAN Executive Director Ethan Rome.

How much more do we pay than residents of other countries? Here are a few examples of what we pay on average for six brand name drugs compared to what residents of other countries pay, according to the International Federation of Health Plans:

— Celebrex (for pain) – U.S.: $162; Canada: $53

— Cymbalta (for depression and anxiety) – U.S: $176; France: $47

— Lipitor (for high cholesterol) – U.S.: $124; New Zealand: $6

— Nasonex (for nasal allergies) – U.S: $108; U.K.: $12

— Vytorin (for high cholesterol) – U.S: $123; Argentina: $31

— Nexium (for acid reflux) – U.S.: $123; Spain: $18

The Congressional Budget Office says that if Medicare could get the same bulk purchasing discounts on prescription drugs as state Medicaid programs already get, the federal government would save at least $137 billion over 10 years.

In his proposed budget for 2014, President Obama is asking Congress to require drug companies to sell their medications to Medicare at the best price they offer private insurance companies, which is what they are required to do for Medicaid.

On April 16, several members of Congress, led by Sen. Jay Rockefeller (D-W.Va.) and Rep. Henry Waxman (D-Calif.), introduced legislation to require drug companies to provide rebates to the federal government on drugs used by people who are eligible for both Medicare and Medicaid. One of the cosponsors was Independent Sen. Angus King, the former governor of Maine. The lawmakers noted that with the exception of Medicare Part D, all large purchasers of prescription drugs negotiate better prices. Their bill, they say, would correct excessive payments to drug companies, while saving taxpayers and the federal government billions of dollars.

As you can imagine, the drug companies don’t like what President Obama and the lawmakers are proposing. You can expect them to mount a multi-million dollar PR and lobbying campaign over the coming months to protect both their sweet deal with Medicare and their Wall Street-pleasing profits.

 

By: Wendell Potter, Guest Contributor, Politix, April 23, 2013

April 29, 2013 Posted by | Big Pharma, Medicare | , , , , , , | 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

The Make-Believe Billion: How Drug Companies Exaggerate Research Costs To Justify Absurd Profits

For years the government has sought to make brand-name drugs cheaper and more widely available to the public. It has tried and failed to limit to a reasonable time period various patent and other “exclusivity” protections. Or it’s tried and failed to negotiate volume discounts on the drugs that the feds purchase through Medicare. Every time, the pharmaceutical lobby has used its considerable wealth and political clout to block any government action that might trim Big Pharma’s profits, which typically amount to between one-quarter and one-half of company revenues. And just about every time, Big Pharma has argued that huge profit margins are vitally necessary to the pharmaceutical industry because drug research and development costs are so high.

The statistic Big Pharma typically cites (see, for instance, this PhRMA video on how Mister Chemical Compound becomes Mister Brand-Name Drug) is that the cost of bringing a new drug to market is about $1 billion. Now a new study indicates the cost is more like, um, $55 million.

Big Pharma has been making its R&D argument for half a century, but the specific source of the $1 billion claim is a 2003 study published in the Journal of Health Economics by economists Joseph DiMasi of Tufts, Ronald W. Hansen of the University of Rochester, and Henry Grabowski of Duke. I will henceforth refer to this team as the Tufts Center group, because they were working out of the (drug-company-funded) Tufts Center for the Study of Drug Development. The Tufts Center group “obtained from a survey of 10 pharmaceutical firms” the research and development costs of 68 randomly chosen new drugs and calculated an average cost of $802 million in 2000 dollars. That comes to $1 billion in 2011 dollars based on the general inflation rate since 2000 (28 percent). One billion dollars for every little orange prescription bottle in your medicine cabinet! And according to PhRMA, even that is way too low! As of 2006, its calculation of the drug-development average had already risen to $1.32 billion. That means costs specific to drug development increased by 64 percent between 2000 and 2006. Medical inflation typically outpaces general inflation, but PhRMA’s calculation puts its rate of cost increase at more than twice the rate for medical inflation during that period (26 percent). If Pharma’s alleged inflation rate hasn’t slackened since 2006, then the drug-development average should be now approaching $2 billion. But let’s not go there. We’ll stick to Big Pharma’s official last-stated estimate of $1.32 billion.

The new study, by sociologist Donald W. Light of the University of Medicine and Dentistry of New Jersey and economist Rebecca Warburton of the University of Victoria, and published in the journal BioSocieties, builds on some excellent previous research by journalist and health care blogger Merrill Goozner, author of The $800 Million Pill, and the consumer advocate Jamie Love. Light and Warburton begin by pointing out that drug companies submitted their R&D data to the Tufts Center group on a confidential basis and that these numbers are therefore unverifiable. Light and Warburton find it a little fishy that only 10 of the 24 invited firms chose to participate, given “the centrality of the issue and the prominence of the Center” within the industry. “The sample,” they suggest, “could be skewed” toward companies or drugs “with higher R&D costs.” Light and Warburton also observe that if the Tufts Center group made any effort of its own to verify the information it received from the drug companies, the group makes no mention of it in the study.

The first research phase involved in developing a new drug is basic (as opposed to applied) research. Very little of this type of research is funded by drug companies; 84 percent is funded by the government, and private universities provide additional, unspecified funding. The Tufts Center group assumed that drug companies spent, on average, $121 million on basic research to create a new drug, but Light and Warburton find that hard to square with their estimate that industry devotes only 1.2 percent of sales to all their basic research. Add in a few additional considerations and Big Pharma would have us believe basic research costs end up constituting more than one-third of the Tufts Center’s $802 million estimate. That’s way too much, Light and Warburton say.

Another problem Light and Warburton have with the Tufts Center group is that they didn’t subtract from their R&D calculations pharmaceutical firms’ tax breaks. Research and development costs, they point out, are not depreciated over time like other investments; rather, they’re excluded entirely from taxable profits. This tax break lowers net costs by 39 percent. Add in other tax breaks and that cuts the Tufts Center group’s R&D estimate in half.

Now take that figure and cut it in half again, Light and Warburton say, because half the Tufts Center group’s estimate was the “cost of capital,” i.e., revenue foregone by not taking the money spent on R&D and investing it in securities instead. But R&D is a cost of doing business, Light and Warburton point out; if you don’t want to spend money on it, then you don’t want to be a drug company. And who says that investing in securities always increases your capital? Sometimes the market goes down. Many of us learned that the hard way in 2008.

There are other problems. The Tufts Center group’s per-subject calculation of how much clinical trials cost was six times that of a National Institutes of Health study. Its calculation of how much time it takes to conduct clinical trials and have them reviewed by the Food and Drug Administration—7.5 years—is twice as long as Light and Warburton’s calculation, which is less than four years. The Tufts Center group’s use of the average (mean) cost rather than the median cost, Light and Warburton argue, is also misleading, because R&D costs for different drug products vary widely, and a very few expensive drugs will skew the mean. That appears to have happened in this case, because the Tuft Center group’s median was only 74 percent of the mean.

When Light and Warburton correct for all these flaws—well, all the ones that can be quantified—they end up with an average cost of bringing a drug to market that’s $59 million and a median cost that’s $43 million. In 2011 dollars, that’s a $75 million average and a $55 million median.

So the drug companies’ $1.32 billion estimate was off, according to Light and Warburton, by only $977 million. Let’s call it a rounding error.

By: Timothy Noah, Slate-March 3, 2011

March 4, 2011 Posted by | Big Pharma, Pharmaceutical Companies | , , , , , , , | Leave a comment

   

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