Healthy Skepticism Library item: 1339

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Publication type: news

Rowland C.
An ailing image: Drug industry's tenacious price protection stirs anger
The Boston Globe 2003 Jul 11

Full text:

Stinging from yet another State House loss to the drug industry, state Senator Mark Montigny likens pharmaceutical companies to one of the most maligned of corporate villains: “They’re getting to be a bit like tobacco.” It is a comparison heard more often among critics of the nation’s pharmaceutical companies, despite the obvious irony: Tobacco kills; drugs cure.

“This is an industry that, if they weren’t so greedy, I think they could stand on higher ground,” Montigny said.

In the mind of Montigny and the growing number of animated critics, the list of drug company wrongdoing is long. Pharmaceutical manufacturers are working hard to block senior citizens and others from buying cheaper prescription drugs from Canada. The industry is battling to prevent states from buying drugs in bulk to lower prices for seniors and the poor. A legislative priority of the industry is preserving loopholes that allow major drug makers to fend off competition from less costly generic drugs.

Then there have been the whistle-blower cases, alleging that drug companies have in effect bribed doctors to prescribe their products and illegally inflated prices, which have led to criminal and civil settlements running into the billions of dollars. Internationally, there are complaints that drug companies have been reluctant to make AIDS drugs more available.

It adds up to a growing chorus from advocates that the drug industry is protecting profits at the expense of health concerns. “Over the past couple of years, the drug industry has been moving into the role of Big Tobacco,” said Robert Hayes, president of the Medicare Rights Center, a frequent industry critic.

The comparisons have not been lost on executives in the tobacco industry, which was sued by attorneys general and only relieved some of the public pressure with a $244 billion settlement in 1998.

“At the height of it, you had everybody trying to get a piece of the action,” said Mark Smith, a spokesman for Brown & Williamson Tobacco Corp. “Typical of that kind of politicking and legal action was this overall drive to demonize the enemy. Since we settled in 1998 . . . they are turning on some other entity that they can turn into a villain.”

A drug industry trade group, the Pharmaceutical Research and Manufacturers of America, known as PhRMA, said critics who compare drug manufacturers with the makers of cigarettes have their own legislative agendas. “There are a number of people who are sharp critics of the industry who have unleashed a barrage of distorted allegations so they can get the legislation passed they want to pass,” said PhRMA spokesman Jeff Trewhitt. “They have attempted to tar the most innovative industry in the world.”

Despite all of the pressure — and possibly enhancing the view that it is an extremely powerful industry — drug companies are winning battle after battle in the halls of government.

Massachusetts this year is considering a bulk-purchasing plan sponsored by Montigny that would give the state greater leverage to win price discounts. But changes made to the legislation by Republican Governor Mitt Romney, especially removing Medicaid patients from the buying pool, gutted the legislation, according to proponents. Romney’s administration said it removed the Medicaid population to enhance the administration’s flexibility.

Forty-nine states are considering prescription drug legislation this year, and more than half of those states are debating discount plans, bulk-purchasing, tighter marketing rules, or some combination, according to statistics gathered by the National Conference of State Legislatures.

Some are modeled on the groundbreaking MaineRx program, which was designed to limit prescription prices for patients with no health insurance and has been hotly contested by drug lobbyists and lawyers.

But only a small fraction of these proposed laws have passed.

Meanwhile, in Congress, the House and Senate are moving forward with a Medicare prescription drug benefit that would cost $400 billion over 10 years. The drug industry’s main trade group, PhRMA, fought such a move for years. But it now backs the plan, after securing a victory in a critical area. The bills avoid giving the government authority over drug prices. Instead, prices will be set in the free market, through negotiations between drug companies and private benefit managers.

The industry has achieved its victories with increased spending on lobbying and campaign contributions. Drug companies have also been working hard to burnish their image publicly. For example, Novartis AG recently ran a series of “corporate reputation” newspaper ads featuring patients whose lives were saved by its products. Absent a Medicare drug benefit, they have offered seniors their own discount cards for particular drugs. A handful of companies, including Pfizer and GlaxoSmithKline, are providing steep discounts or free drugs to states for the treatment of AIDs patients.

Drug companies spend a combined $32 billion a year on research and development, said Trewhitt, the PhRMA spokesman. Price controls, he said, could reduce that work and curb the flow of new drugs to market.

The assaults on the industry, he added, relate to the debate being waged this year over a Medicare prescription drug benefit.

“We have ended up under the spotlight because of the lack of access to medicine for too many elderly patients,” he said. “People have incorrectly blamed us for it.”

Katherine Greider, author of a 2003 book, “The Big Fix: How the Pharmaceutical Industry Rips Off American Consumers,” said the prescription drug industry’s mass marketing to consumers, which has exploded in the last decade, has subtly tarnished the industry’s image.

It reduces the emphasis on academic-based research and collaboration with the medical community, she said, and puts them in the same category as the makers of soap and beer.

“It contradicts the image that `We are in league with the white coats.

We are sophisticated,’ “ said Greider. “The Madison Avenue, advertising, glitzy image doesn’t really jibe with this other personality of the industry as being scientific.”

One result, she said, is Americans appear less likely to listen to the industry’s political message.

“When they talk about [Canadian] reimportation, they are worried about safety. When they talk about prescription drug ads on television, it’s education,” she said. “After a while, it doesn’t seem convincing to people.”