Healthy Skepticism Library item: 13019

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Publication type: news

Leigh D.
Company accused of cheating NHS
The Guardian 2008 Mar 7
http://www.guardian.co.uk/society/2008/mar/07/health.nhs

Full text:

A drug company faces accusations of cheating the NHS by blocking a generic version of Gaviscon, the lucrative treatment for indigestion.

Internal documents leaked from Reckitt Benckiser reveal the existence of Project Eric, a secret plan by the company to manipulate doctors and regulators.

Gaviscon is one of Britain’s most common remedies, prescribed in large quantities to people with heartburn. It costs little to produce but its high price makes millions for its Hull-based manufacturer. Although Gaviscon has been out of patent for almost 10 years, a cheap generic version wanted by the government has never been developed. Such a drug could have saved the NHS up to £40m.

The leaked documents reveal in detail how the company blocked the generic version. It is a tactic known in the pharmaceuticals business as “evergreening”.

The company says the memos were “inappropriate” and did not reflect Reckitt’s eventual actions.

Extracts, due to be broadcast tonight on BBC Newsnight, disclose Reckitt’s plan to manipulate regulators on supposed safety grounds, threaten legal challenges and spin out procedures.

These delays were designed, according to the files, to give Reckitt time to mount what was described as “a clever idea” – a switch to an almost identical product with a different name. “I am sure there must be something we can dig out of the cupboard!” an executive wrote.

The company suddenly withdrew its cheap Gaviscon supplies from the NHS in 2005. It allegedly used high-pressure sales tactics on doctors to transfer patients on to a slightly reformulated product, called Gaviscon Advance.

This was not covered by the laboriously negotiated generic specification for Gaviscon liquid. So doctors are still unable to find a cheap generic alternative they can prescribe. A more expensive version of Gaviscon liquid is still on pharmacists’ counters. The firm says doctors could still prescribe that if they wished. The company’s data shows it costs only 74p to produce a bottle of Gaviscon. It and its variants are sold to the NHS for £2.70.

The key to Reckitt’s blocking tactics lay in the arcane question of a name. Before a doctor can prescribe a generic from his database, and a rival firm can manufacture it, it has to have an official title. These are handed out by the British National Formulary (BNF).

Reckitt’s first move was to claim that Gaviscon was so unusual, as a compound of three separate chemicals, that the BNF had no right to issue a name. It took three years, in which the BNF took a series of lawyers’ opinions, to dismiss this claim.

Reckitt’s next tactic in 2003 was to intervene with a regulatory body, the British Pharmacopeia Commission (BPC), part of the Medicines and Healthcare Regulatory Agency (MHRA).

The company claimed on safety grounds that a detailed quality specification, known as a monograph, was needed first. The BPC was persuaded to agree.

But a series of memos appear to lay bare Reckitt’s true intentions.

The manager for what Reckitt calls its “power brand” explained it could use “the rationale of health and safety” to design a switched product to “muddy the waters”. The company would buy time by “devising a plan to extend the development of a … name as long as possible”. It thought it could spin the process out until 2006, setting up as many “barriers to competitors” as possible in the eventual detailed specification.

Meanwhile, doctors were persuaded to switch all patients, many on repeat prescriptions, to Gaviscon Advance. It was basically the same product, based on a seaweed extract and sodium bicarbonate, but at double strength.

Some sales tactics in 2005 were so unscrupulous that the industry’s self-regulating watchdog made a ruling of unethical behaviour against Reckitt.

A senior whistleblower from the drug company is due to speak on Newsnight tonight. He says: “They got them to switch all the patients – go in and change the computer systems overnight and maybe a letter would go out to all the patients saying your medication has been changed.

“Reckitt cheated the National Health Service – it could have saved the NHS millions of pounds. I felt it had to be exposed.”

Reckitt denies cheating the NHS. “We are unhappy with some of the language and the sentiment … in the internal correspondence which are inappropriate. We are reviewing this internally,” it said in a statement. “We do not believe that these sentiments in any way were reflected in our actions towards, and our interactions with, the BPC/BNF.” The company said it believed it was acting within the law.

Backstory
Suspicions have grown that pharmaceutical firms manipulate patent rules to maintain prices.

In January the European commission made dawn raids on the world’s biggest drug firms, to gather evidence of possible anti-competitive behaviour

This followed a £40m fine on AstraZeneca in 2005 for misusing the patent system to delay market entry of rivals to its ulcer drug, Losex. The case had similarities to allegations against Reckitt over Gaviscon.

Firms raided this year were AstraZeneca, Pfizer, Smith & Johnson, Merck, Sanofi-Aventis and Teva.

The memos
April 17 2003 memo from Charlotte Reader, Reckitt marketing manager

“If we were to change the formulation … with the rationale that we are doing so for health and safety reasons … we could withdraw Gaviscon liquid from sale within the NHS and replace it with the new formulation … We could potentially apply for a new patent on this formulation and effectively protect all our Gaviscon liquid business within the NHS for another 20 years.

“The other … option would be to see if there is anything we can do in the short term to muddy the waters in the face of the threat … something else we have changed/tweaked that we could develop a selling rationale to the NHS/GPs around that …

“I am sure there must be something we can dig out of the cupboard!”

July 7 2003 memo from Reader

“The BNF have recently instigated a process to try and introduce a non-proprietary name for GL … We have successfully managed to stop this process … “

July 23 2003 memo from Anand Sharma, senior executive

“A clever idea to protect Gaviscon liquid from the generics threat … The monograph by BPC … Why do we want to expedite its publication? Should we not drag it as long as we can? … The risk is of a £9m business.”