[Paleopsych] NYT: A Doctor Puts the Drug Industry Under a Microscope

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Tue Sep 14 13:59:01 UTC 2004

A Doctor Puts the Drug Industry Under a Microscope
NYT September 14, 2004

[I sent a review of her book earlier.]

WASHINGTON - In many ways, Dr. Marcia Angell is an unlikely
muckraker. A pathologist by training, she is the former
editor in chief of The New England Journal of Medicine. She
is also a senior lecturer at Harvard Medical School.

But just days short of her 65th birthday and her first
Social Security check, Dr. Angell is taking on the American
pharmaceutical industry with a new book, "The Truth About
the Drug Companies: How They Deceive Us and What to Do
About It" (Random House)."I don't worry about labels," Dr.
Angell said in an interview at the Hotel Monaco, where she
stopped during a book tour.

In a 1996 book, she noted, she argued "that there wasn't a
shred of evidence that the breast implants were causing all
the disease they were said to."

"I was said to be a tool of the pharmaceutical and device
companies," Dr. Angell recalled. "I call them as I see

Q. Why produce an investigative book on the pharmaceutical

A. Because everyone knows that prescription drug prices are
sky-high. Americans pay far more for our drugs than people
in other countries. The drug companies say, "We need high
prices to cover our staggering research and development
costs, and if you do anything to squeeze our prices, it
will stifle innovation." The book was written to examine
that argument.

Q. The pharmaceutical companies say their prices are steep
because they spend somewhere in the neighborhood of a
billion dollars per drug bringing them to market. Did your
research support this assertion?

A. A group of economists - mainly funded by the drug
companies - came up with the widely quoted figure on this.
They said that it cost $802 million to bring a drug out.
They, however, were looking at the most expensive drugs to
develop: new chemical compounds developed entirely in
house. Most new drugs aren't that at all. Most are what
people call "me too" drugs, which are slight variations of
older drugs already being sold.

According to these economists, the real cost of bringing
out those rare original drugs is actually around $403
million. But they doubled it by factoring in how much money
the companies might have earned if they'd invested that
$403 million. Moreover, the economists did not figure into
their total the many generous tax breaks these companies
receive for doing research and development. This is a
highly inflated figure.

The fact is that for the last two decades the drug
companies have been hugely profitable. Last year there was
a little wiggle downward, but in 2002, the 10 biggest
American drug companies had a median profit of 17 percent
of sales compared to a median of 3 percent for the other
Fortune 500 companies. In the 1990's, profits ran between
19 and 25 percent. Prices are high to keep profits high.

Q. Exactly what are these "me too" drugs you argue against?

A. They are minor variations of old drugs already on the
market. Sometimes a company creates a "me too" drug as a
way of extending a patent on an older one. For example,
AstraZeneca created Nexium to replace the virtually
identical Prilosec when its patent was about to expire. By
putting out these me-too's, the companies can get new
exclusive marketing rights on what are essentially the same
old drugs.

Other companies come in with their own me-too's because
markets are expandable. It's been shown that when you
advertise one me-too drug, you increase the sales of all of

Q. Why do you have a problem with this?

A. The prevalence of the me-too's really says an awful lot
about the lack of innovation within the pharmaceutical
industry. If you look at the new drugs marketed over the
last six years, 78 percent weren't even new chemical
compounds. They were just new combinations or different
formulations of old drugs. And 68 percent were classified
by the F.D.A. as unlikely to be improvements over drugs
already on pharmacy shelves.

At the same time, there are shortages of some important
drugs that the pharmaceutical companies aren't much
interested in making because they are not as profitable as
the me-too's. But the companies don't have to turn out
needed drugs, if they are not lucrative. And they don't.

Q. How much of the high cost of drugs is the result of
marketing and sales expenditures?

A. The companies spend over 30 percent of their revenues on
marketing and administration. Their marketing budgets are
so enormous because they have to persuade doctors and
patients to prescribe one me-too drug over another. If you
had a truly innovative drug - a cure for cancer, for
instance - you wouldn't have to market it much. The world
would beat a path to your door.

Q. Was there anything in your life that pushed you to write
this book?

A. As a journal editor, I witnessed a disturbing trend in
pharmaceutical research. Twenty years ago, most drug trials
were conducted at academic medical centers and the
pharmaceutical companies tended to stand back during the
testing period. However, in recent years, the companies
have succeeded in attaching strings to research contracts,
often designing the studies themselves, keeping the data
in-house and deciding whether or not to publish the
results. They also began to contract with private research
companies for testing. Moreover, the medical schools and
even individual researchers began to enter into
entrepreneurial arrangements with the drug companies.

While all this was occurring, I began to see bias creep
into medical research. And I saw a lot of it. The most
obvious example were studies comparing a new drug to a
placebo. That may be enough to get a drug F.D.A. approval,
but it should not be enough for The New England Journal of
Medicine. Doctors don't want to know whether a drug is
better than nothing. They want to know if it's better than
what they are already using.

Q. You've written that "because most medical journals are
dependent on drug ads for their survival, it probably also
influences what they publish." Were you speaking of The New
England Journal of Medicine there?

A. No. That's because the Journal was virtually unique. We
had a real wall between the advertising people and the
editorial offices. But many other medical journals - and
there are thousands of them - are little more than vehicles
for advertisements. Still others, while they are not quite
that, will put out occasional sponsored supplements, which
I wouldn't have any confidence in whatsoever.

Q. You left the editor's chair at The New England Journal
of Medicine in 2000. Have there been any big changes there
since your departure?

A. There's only one I know of - we had a policy that review
articles and editorials could not be written by anyone with
any financial connection to a company whose product was
featured in that article. We said that disclosing the
connection was not enough.

When we printed papers on original research and there were
often conflicts of interests, we published those articles
with disclosures. It's my understanding that the policy on
reviews and editorials is no longer in place. I'm sorry
they made that change. But they say it's too hard to find a
prominent author who doesn't have a conflict of interest.

Q. The first phase - the discount card phase - of the new
Medicare drug benefit is about to go into effect. Do you,
as a newly minted senior, believe it will make prescription
drugs more affordable?

A. It's not going to have a major effect. These discounts
are very small, maybe 10 to 15 percent. At the rate of
inflation of drug prices, they'll be overtaken in a very
short time.

Now, the main Medicare drug benefit that goes into effect
in 2006 is designed to funnel billions of dollars to the
pharmaceutical industry. It's an absolute bonanza for it.
The pharmaceutical industry's lobbyists made certain that
the legislation contained a provision barring Medicare from
negotiating drug prices.

Interestingly, the federal government negotiates drug
prices for the Veterans Affairs system and gets very low
prices because it is a bulk purchaser. And Medicare would
have been the biggest bulk purchaser of all - so it could
have negotiated very low prices. That provision allows the
drug companies to continue raising their prices faster than
the inflation rate, and the drug benefit will soon become


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