Dean Baker: How to End Corruption in the Drug Industry

It’s popular to beat up on the drug industry these days, but it is a deserving target. The prices drug companies charge in the US are outlandish; most of their so-called research is on “new drug applications.” But over 80% of those are other uses of existing drugs. For instance, Wellbutrin, an anti-depressant, is also an effective aid in quitting smoking.

But why go to the trouble and considerable cost of sponsoring clinical trials for an NDA? After all, most doctors know about and are free to prescribe for these “off label” uses. Because the pharmaceutical companies are permitted to market drugs only for their approved uses. In other words, these NDAs are solely for marketing purposes.

Big pharma (ironically, like Microsoft) wraps itself in the mantle of its innovation. Yet a great deal of drug R&D is funded by the Federal government. But the Feds do not demand limits on price increases or other quid pro quos for their largesse.

Consider: what other industry besides pharma is profitable enough to afford in-person selling to small businessmen? And based on my research into drug selling, companies like Pfizer often have more than one salesman calling on the same doctor (each detailman handles at most three drugs). Oh, and the companies continue to spend on research after the drug has been approves simply to generate new talking points for the salesmen. The drug firms have found they need to refresh their message every year to eighteen months.

Dean Baker depicts the industry as corrupt, and has a sweeping, elegant remedy: have the Federal government, rather than the drug industry, pay for clinical trials. The independent contractors would be kept on a very short leash, prohibited from any direct contact with pharmaceutical companies (and the penalties on the drug companies for trying to influence the contractors would also be severe).

While this idea is too bold to be implemented (and looks too much like “government interference in the free market when the degree of regulation and the patent protection makes this anything but a free market to begin with), it has much greater odds of succeeding than any amount of money thrown at the FDA, which is shorthanded and independent of its staffing issued, not very oriented towards enforcement.

From the Guardian:

The prescription drug industry in the United States stands alongside the tobacco and gun industries as outlaws of the corporate world. The leading firms in the industry are routinely caught engaging in a wide range of corrupt practices. This list includes concealing test results that show drugs to be harmful or ineffective, payoffs to researchers for publishing favorable articles in professional journals, bribing doctors to prescribe certain drugs, and hiring former cheerleaders to pitch drugs to doctors.

This sort of corruption should not be surprising to anyone familiar with basic economics. The government currently finances prescription drug research by granting companies patent monopolies on the drugs that they develop. This allows them to sell their drugs at prices that can be several thousand per cent above the cost of production. Drugs that could profitably sold in stores for $4 a prescription may instead sell for $300 or $400 per prescription. This enormous gap between the price and the cost of production invites the sort of corruption that we see in the pharmaceutical industry.

Each time a new scandal is exposed, the industry promises to root out the bad apples and the regulators promise to do a better job. That allows everyone to feel better until the next scandal is exposed. But the problem is not a few bad apples – the problem is the structure of the industry.

The way to eliminate corruption in the pharmaceutical industry is to get prices more in line with the cost of production. The best way to bring prices in line with costs is to have the government pick up much of the industry’s research costs, in exchange for charging much lower prices [PDF].

The place to start is through public financing of clinical drug trials. This is by far the most corrupt part of the drug development process, since clinical test results are most immediately associated with the approval and marketing of drugs. If the tests can be taken out the control of drug companies who have a direct material stake in their outcome, it will remove the major source of corruption in the prescription drug industry.

The government can appropriate a sum of money approximately equal to what the industry now spends on clinical trials (around $20bn a year). It can then arrange long-term contracts (10-12 years) with independent testing firms, who would then decide which drugs to test. Renewal and expansion of the contracts would depend on the effectiveness of the contractor in finding and testing new drugs and preventing unsafe drugs from coming to market.

The government should impose strict rules on the contractors to prevent the sort of abuses that we currently see in the industry. First, there should be no overlap of financial interests between the firms doing the testing and the drug companies. All communications between the two, for example petitions to test a particular drug, should be in the form of public documents posted on the internet. Any other contact should be treated the same way as if a lawyer contacts a sitting juror in a pending case – it’s called “jury tampering” and you spend years in jail for doing it.

Also, all the data from the tests must be publicly posted on the internet. This will allow any researcher anywhere in the world to independently analyze the data. This should substantially reduce the likelihood of mistakes or misrepresentations of results.
It would also enormously facilitate comparative effectiveness assessments of different drugs. This will allow for much better and more timely research.

The method for paying for this research will also improve the public’s health. If drug prices in the United States are brought more in line with drug prices elsewhere in the world then the industry would have less incentive to use misleading marketing and bribery to push their drugs. The savings to the Medicare drug program alone could easily cover the cost of the testing. If we could also get lower prices for the public as a whole it would both increase access and further reduce corruption.

The industry doesn’t really have an argument against having independent testing firms paid on contract by the government. They just have lots of money to buy politicians. This means that the effort to clean up the drug industry will be a long and difficult process, but it can be done. Anyone who questions this fact should try to light up a cigarette in an airplane, restaurant or public building.

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  1. reason

    This is an important topic. But it should be broadened. We need a proper debate about the intersection of democracy, science, commerce, competition and public interest. Pharmaceuticals are clearly the most egregarious case. I think people should read Jane Jacobs “Systems of Survival” before they start. I think science and commerce are fundamentally incompatible (because science needs openness, co-operative and a commitment to an honest search for the truth).

  2. Jake

    Come on, Yves, this is nonsensical.

    First, if no one does do a clinical trial, how are you going to know if prescribing drug X off-label for condition Y isn’t just going to kill the patient, much less do anything useful, much less be more effective than any other treatment?

    Second, consider the economics of the drug business. After you get a product approved, you have a gargantuan capital asset with a precisely limited shelf life. Cost of goods for the marginal sale is very low, so spending a lot of money on marketing is inevitable.

    Thirdly, where are these contractors going to come up with drug candidates to test? Knock enough off the value of a drug candidate, and you won’t see as many. And for all their talk, universities have done a poor job of producing drug candidates (therapeutic targets are another story, but they are wildly different things, as the sad story of COX-2 inhibitors will show).

  3. Quiact

    If I were to rate the corruptive tactics performed by big pharmaceutical companies during my intimate experience with them , the frequent and intentional strategy of implementing fabricated and unreliable results of clinical trials performed by others possibly tops the list of corruptive tactics by the pharmaceutical industry that sponsors such trials.

    By this atrophy of the scientific method absent of authenticity that has been known to occur, harm and damage is possibly done to the health of the public.

    The marketing protocol for pharmaceutical clinical trials includes designing the clinical trial protocol and having the ability to oversee this trial. Also, they select targeted investigators and the clinical trial sites. The sponsor runs investigator meetings, as well as select and control contract research organizations (CROs). The sponsor also performs data assessment, as well as completes the clinical trial so it can be published in a journal chosen by the sponsor.

    Most would agree that the science of research should be sound and as aseptic as possible- completely free of deliberate and reckless interference. However, it appears, money and increased profits can be a catalyst for disregard for human health with the clinical trial process that is largely unregulated.

    This is particularly a factor on post-marketing studies of various pharmaceutical companies, as some pharmaceutical corporations seem to be deliberately conducting nothing less than seeding trials- with about a 50 percent tax credit for these trial sponsors. Trials that are in fact pointless and void of scientific benefit.

    Decades ago, clinical trials were conducted at academic settings that focused on the acquisition of knowledge and the completely objective discoveries of drugs and devices to benefit mankind. Then, in 1980, the Bayh-Dole Act, Public Law 96-517,was created, which allowed for such places with their researchers can profit off of their discoveries that were performed for pharmaceutical companies and others in the past.

    Furthermore, such academic institutions were coerced to license patented inventions to those pharmaceutical companies that will then commercialize these discoveries paid for in large part by the taxpayers who funded this research to a degree.

    This resulted in the creation of for-profit research trial sites without any academic affiliation that are called Contract Research Organizations. CROS utilize primarily community patient care clinics whose staff are absent of any research training compared with the former researchers that existed decades ago.

    Because of this structure, the clinical trial investigators of these pharmaceutical sponsored trials are likely novice compared with academic researchers.

    This, of course, happens with intent by the sponsor who can and does control all aspects of the clinical trial protocol at the site locations of a clinical trial that the pharmaceutical company structures and even gives the trial the title they want for their marketing purposes.

    These quite numerous CROS are in fact for- profit, with some CROs making billions of dollars a year, and this market continues to grow.

    The trials conducted at such places again are sponsored by pharmaceutical companies that control and manipulate all aspects of the trial being conducted involving their particular drug chosen to be studied.

    Etiology for their deception regarding this manipulation is because the pharmaceutical company that sponsors such a trial is basically creating a marketing tool for this drug of theirs to be studied in this manner. This coercion is done by various methods of deception in subtle and tacit methods.

    As a result, research in this protocol of the sponsor ensures favorable results of the sponsor’s medication that is involved in the clinical trial they clearly own.

    These activities are again believed to be absent of true or applied regulation to any degree, and therefore have the autonomy to create whatever they want to benefit the pharmaceutical sponsor.

  4. Quiact

    There likely is a collusive relationship between the sites, the CRO, and the sponsor, as this whole system is planned beforehand by the pharmaceutical sponsor of their clinical trial to again be utilized to increase the market share of the drug studied that they promote.

    Guest authorship has been known to be aggressively recruited by sponsors by paying a known opinion leader to sign off on the completed clinical trial. The author’s duty includes making noted cognitive contributions to a published clinical trial, as well as revising and drafting the clinical trial.

    Furthermore, the pharmaceutical sponsor recruits investigators to be used for this function of what ultimately is a fabricated clinical trial protocol. The trial manuscript and protocol design is prepared by those employed by the drug company sponsor upon specific direction of this sponsor on how this should be prepared.

    The medical program coordinator of a particular sponsored trial is an actual employee of the sponsoring drug company and also may act as the publisher, manuscript version reviewer, and the clinical trial director who works with the drug company’s hired CRO editors whose objectives are to benefit the sponsor.

    Typical and ultimate cost of the final manuscript of the trial to the sponsor created by the hired CRO and the recruited ghostwriters exceeds 1000 dollars per page, some have said.

    Merck engages in this behavior, which shocked many, as they were always viewed as an ethical pharmaceutical company that always placed patients over profits.

    Apparently, this is no longer the case. There are other well known and large pharmaceutical corporations that consider this plan of action standard operating procedures to ensure growth of their drugs.

    Further disturbing is that once the creation of the trials is completed, the research paper is often composed with specific directions by the sponsor to writers known again as ghostwriters. These people are usually not identified and acknowledged by the sponsor, and may not be trained in clinical research overall, as they are simply freelance writers.

    One does not need research training or certification in order to perform this function. Rarely do clinical trial ghostwriters question their instructions about their assignment, which is clearly deceptive and undocumented by the pharmaceutical sponsor. Also, these hired mystery writers are known to make about 100 grand a year performing this deception full time.

    This activity removes accountability and authenticity of the fabricated clinical trial even further. The corruptive act is finally completed by the sponsor hiring again a known thought leader as an author to have their name be placed on the trial, while this hired author likely had absolutely no involvement with the trial, or even reviewing the trial is not asked or required by the hired author, others have said.

    To have the trial published, the sponsor has been known to pay an obscure journal, and the sponsor bribes the journal in a few ways, such as the sponsor purchasing from a selected journal thousands of reprints of their study from the journal, for example.

    Again, how often this process is performed is unknown, yet frequent enough to create hundreds of such false writers mentioned earlier and progressively growing research sites to receive the support the pharmaceutical industry.

    So benefits of pharmaceuticals that are studied in such a malicious way potentially can harm patients and their treatment options along with clear safety risks as a result of this process.

  5. Quiact

    The purchased reprints of the fabricated clinical trial are then bought by the sponsor of the study from the medical journal they hired to publish this trial. The reprints are eventually distributed to the sponsor’s sales force to share the content with prescribers, with the sales force completely unaware about this manipulation that has happened with such a trial that benefits the drug they promote for their employer.

    As a bonus, the sponsor may agree to pay the chosen medical journal to advertise their products to be placed in this journal as well.

    Such misconduct discussed so far impedes research and the scientific method with frightening ethical and harmful concerns, as stated previously. If so, our health care treatment options with drugs that are claimed to have benefits that are absent have now become unreliable in large part due to such corruptive situations. Not to mention the absence of objectivity that has been intentionally eliminated with trials produced in this way.

    More now than ever, meds are removed from the market or are given black box warnings due to the damaging effects of drugs approved by the FDA. We as citizens need to dig deep and ask why this is happening.

    Transparency and disclosure needs to happen with the pharmaceutical industry for reasons such as this as well as many others, in order to correct what we have historically relied upon for conclusive proof, which is the scientific method.

    More importantly, research should be conducted in a way that the sponsor cannot in any way interfere in such ways described in this article, which would require independent clinical trial sites with no involvement from the maker of the drug studied in a clinical trial.

    And clearly, regulation has to be enforced not selectively, but in a complete fashion regarding such matters. Public awareness would be a catalyst for this to occur, after initially experiencing a state of total disbelief that such operations actually are conducted by such people, of course. We can no longer be dependent on others for our optimal health.

    Commercial sponsors of clinical studies have the potential to manipulate the structure, implementation, and assessment of the clinical trial results to further their monetary interests.

    This, of course, is detrimental for patients because clinical trial results supposed to be based on the best information from clinical trials possibly may be restructured by others, and is done so with deliberate intent and reckless disregard. Pharmaceutical Marketing uses science this way as a host to infect it, and bastardize the scientific method.

    Knowledge is power, and is also possibly a lifesaver.

    “Ethics and Science need to shake hands.” ……. Richard Cabot

    Dan Abshear
    Author’s note: What has been written was based upon information and belief.

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