From the Editors
Pharmaceuticals Ripe for a Shake-up
Aggressive marketing and high profits
Earlier this year, the UK media carried three stories about the pharmaceutical
industry. The first was based on an article in the open access journal PLoS
Medicine that confirmed what many scientists and clinicians had long suspected:
while modern antidepressants make massive profits for the drug companies,
for most patients they are no more effective than placebos. In the second,
it was reported that a loophole in the law meant that the UK-based drug giant GlaxoSmithKline
was not to be prosecuted for its alleged failure to reveal the results of
trials that had shown the antidepressant Seroxat caused some children to become
suicidal. The third story concerned the ploys that another UK based company
Reckitt Benckiser had been using to delay for as long as possible the appearance
of a generic version of Gaviscon, its highly profitable treatment for
These aren’t just isolated incidents. There have been serious
concerns about the pharmaceutical industry for a long time, and the two books
reviewed in this issue of SiS give other
examples of similar practices and worse. Pharmaceuticals are necessary;
many of us owe our health or even our lives to them.
There are thousands of people working in the drug companies who genuinely
want to help combat diseases and reduce suffering. As long as the industry
is organised in the way it is, however, these practices are bound to continue.
Pharmaceuticals are not generally very costly to
produce. The justification for the high prices they command is that it takes
lots of money to develop a drug and take it through clinical trials,
especially because those that make it to market have to pay for those that
do not. The price also has to cover the cost of marketing; pharmaceutical
companies typically spend far more on marketing than on research and development.
All those representatives calling on doctors, all the
lavish meetings doctors are invited to, all those American TV commercials
telling you to pester your doctor for the latest wonder
drug, all add significantly to the price of the drugs we buy.
Unfortunately, the heavy investments
in drug development especially in marketing and the high marginal profits militate
against the interests of those who use and pay for the drugs. Pharmaceuticals
rank as the second most profitable industry, just behind mining and well ahead
One obvious consequence is that companies are very reluctant
to abandon a drug if problems appear late in development or after it is on
the market. The lawsuits that have been filed against Merck claim that they
did not react quickly enough to reports that people who were taking the painkiller
Vioxx had an increased risk of heart attacks and strokes. The issue in the
Aubrey Blumsohn story (see Actonel: Drug Company Keeps Data from
Collaborating Scientists, SiS 30) is whether Proctor & Gamble’s
osteoporosis drug Actonel is at least as effective as Merck’s Fosamax. If
it is not, more precisely if it is widely believed that it is not, Proctor
& Gamble have a lot to lose.
The relatively low unit cost of producing a drug means that pharmaceutical
companies are always looking for “blockbusters”, drugs that are will sell
in vast quantities and so make vast profits. There is a strong incentive to
take a drug that has been shown to be useful for a limited number of people
and use aggressive marketing to get it prescribed more widely. Anti-depressants,
which are among the most profitable of modern drugs, are generally acknowledged
to be effective for many people with severe depression, but the evidence is
growing that they are no more helpful than placebos for the majority of people
for whom they are prescribed. They may not do these patients much good, but
they do wonders for the profits of the companies that make them.
Weak regulation fails to protect consumers
We might hope that these pressures would be countered by regulation, but
just as in the worlds of banking and insurance, the regulators are massively
outgunned by the companies they are supposed to be regulating. They do not
have the staff or the resources to do their jobs properly. They depend on
the companies to supply them with data and even to analyse it, and they have no way of
knowing of data that the company chooses not to supply. If a problem
starts to appear after a drug is on the market and the company chooses to
ignore it, there is typically very little a regulator can do. It cannot compel
the company to investigate, it does not have the resources to carry out its own investigation, and it cannot intervene without
an investigation. Even if a regulator felt strong enough to do that, which
the past performance of most of them suggests is unlikely, it could lay itself open to legal action if subsequent
harm to patients was held to be due to the withdrawal of the drug in question.
The companies also have large legal departments to look for loopholes
in the regulations and to defend them against claims for compensation from
private individuals. And because they are so large, they can threaten to damage
the economy by moving their businesses to where regulation is even less strict.
Many clinical trials, for example, are already carried out in third world
countries for that reason
Defenders of the industry might argue that while there may be
drawbacks to having such large pharmaceutical companies, we still need them
because only large companies have the resources to do the speculative research
that is necessary to discover novel drugs. Even if this was true in the past,
it is less so today because more and more of the innovation is being done
in universities or small companies, as is happening in other industries as
well. Because many of the small companies are spin-outs from universities,
the taxpayer is already subsidising the early stages of drug development.
Pharmaceuticals for the masses
Small enterprises do not have the resources to
take their successes forward, but there are other ways of proceeding. For
example, two drugs for the treatment of black fever, a serious disease
that affects about half a million people a year in the Third World, have been
developed largely under the auspices of the World Bank, the WHO, the UN Development
Program and the San Francisco based charity, the Institute for OneWorld Health.
Pharmaceuticals are not consumer goods but an integral part of
healthcare. Different countries organise and pay for healthcare in different
ways but in almost all of them the state plays a central role. The only developed
country that leaves it largely to private enterprise and the market is the
USA, and as everyone knows, the Americans pay far more and get far less for
their money. In pharmaceuticals, we are all using the American system, and
not surprisingly, we are all paying more and getting less than we should.
Even worse, we are not being adequately protected against drugs that are unnecessary
or hazardous or both.