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Reforming pharmaceutical
bad boys
From the Bangor Daily News, September 16th, 2003
By Dr. Erik Steele
Last updated: Tuesday, September 16, 2003

Editor's note: This is the second of two opinion pieces by Dr. Steele about the American pharmaceutical industry, its power and the growing number of challenges to it. Click here to see the first part.

In the playgrounds of my youth there was always a bad boy we loved to hate. When he finally got his comeuppance at the hands of someone bigger or a coalition of the smaller, the moment left a sweet taste to be savored for weeks.

The bad boy of the American health care system is its pharmaceutical industry, and after a long run as the playground bully, this well-heeled coalition of huge companies is finally taking some well-earned licks of its own. Why it got the reputation, the licks it is taking, and what happens when the beatings stop, all have implications for the medicines we take and how much we pay to take them.

If the pharmaceutical industry currently looks like a deer with a bull's-eye tattooed on its forehead that just walked into a gun show, it got there because it has seemed willing to do anything for a buck. Some practices in the pursuit of profit have been predatory enough to make a pirate pale. Among them:

  • Widespread manipulation of the results of "scientific" studies to support drug sales;
  • Some marketing practices so questionable as to perhaps be illegal.
  • Two months ago Abbott Laboratories paid $622 million in fines to settle an investigation into its marketing practices. It and other companies have paid more than a billion dollars in such fines in the last four years;
  • Makers of AIDS-fighting drugs vigorously fought the manufacture of cheaper, generic versions of these drugs for AIDS-ravaged, poverty-ridden Africa;
  • Promoting new uses of drugs as a way to expand sales;
  • Many pharmaceutical manufacturers have routinely fought entry of generic drugs onto the U.S. market in order to protect their profits on brand-name drugs, sometimes suing over pill coatings and package colors as of patent infringement. As a result, American patients have paid billions of extra dollars for their medicines, billions which have gone unnecessarily to the most profitable industry in the country;
  • Pharmaceutical costs have been among the fastest rising health care costs, and Americans pay more for their prescription drugs than patients in any other Western country.

As a result of these and other issues, the American pharmaceutical industry is now under siege on virtually all fronts. Big business, state governments, even the traditionally friendly Republican Party, and President George W. Bush, have joined the slugfest. A few examples:

  • 22 state governments beat back drug industry objections and now force physicians to prescribe less costly drugs to Medicaid patients, up from three states just three years ago;
  • President Bush recently announced new federal rules that would limit the ability of brand name drug manufacturers to slow the flow of generic drugs to the market by repeatedly suing generic drug manufacturers. He said the new rules would allow Americans faster access to cheaper generic drugs, saving patients $3.5 billion annually;

Smelling blood in the water, two pharmaceutical companies turned on one of their own, Astra-Zeneca, and announced they would rush a generic version of Astra-Zeneca's blockbuster Prilosec to the over-the-counter market this fall. The move could cost Astra-Zeneca billions, and represented the first time a brand name manufacturer had been so vigorously attacked by one of its own;
The idea of a Medicare prescription drug benefit, which the industry has successfully fought for years, is still alive in Congress. Some of the country's biggest businesses are lined up against the pharmaceutical industry in this debate. The industry's failure to kill the proposed benefit is but one of several legislative issues which have failed to go its way recently, and suggests a significant loss of clout in Washington, the home of pharmaceutical industry clout.
Things have gotten so bad that industry lobbyist Pharma, recently referred to as "a multi-armed octopus" by one Republican Congressman because of its lobbying practices on Capital Hill, boosted its lobbying budget for 2003 by 23 percent, to $150 million, according to The New York Times. Saying the industry was "on the defensive, facing a 'perfect storm'" of resistance, Pharma reportedly earmarked additional millions to lobby the Food and Drug Administration, state governments, Congress and to fight Canadian drug imports. According to a Pharma document reported by The Times, $1 million will reportedly go to developing "a standing network of economists and thought leaders to speak against federal price control regulations" in op-ed pieces, articles and testimony. (They have not yet contacted me as a thought leader, however - I must be thinking too clearly.)

As America's big businesses, health insurance companies and politicians take their shots at the pharmaceutical industry, care must be taken not to kill the industry with its well-deserved comeuppance. We are now dependent for our future health on an industry that, while it has demonstrated little interest in our health, is the only pharmaceutical industry we have. Ours is a free enterprise model of pharmaceutical manufacturing and marketing and profit is its heart. Reducing industry profits too much in order to reduce prescription drug costs risks killing the goose that keeps laying golden miracle drugs. As the industry is forced to function more like a corporate citizen motivated by patient interests and less like a ticket scalper, it may lose some of its ability to make the next great drug. We are potentially cursed by the remedy to the curse of high drug costs.

The real answer to this dilemma is for the pharmaceutical industry to reinvent itself in an economically viable model of social responsibility. It needs to prove that our prescription drug care can safely be left to an industry run for the principal purpose of making profit and improving stock prices. It needs a corporate conscience. Otherwise it runs the risk of being dismembered by its growing number of desperate and infuriated enemies. Our future is in its hands; if it continues to run socially and economically amok we will all keep taking our pieces out of the industry's financial hide, its profits will dry up, and the dollar drive to invent new wonder drugs will be lost. Then who will make our prescription drugs for us? The Department of Defense, perhaps?

Erik Steele, D.O. is a physician in Bangor, an administrator at Eastern Maine Medical Center, and is on the staff of several hospital emergency rooms in the region.

 

If you missed part one, here it is….

Nexium -
the little purple cash grab
By Dr. Erik Steele, e-mail Dr. Erik
Last updated: Tuesday, September 2, 2003

Editor's note: This is the first of two opinion pieces by Dr. Steele about the American pharmaceutical industry, its power and the growing number of challenges to it. Click here for the second part.

Nexium is "The Little Purple Pill" designed to heal two things: your heartburned esophagus and its manufacturer's financial bottom line. In the battle over high prescription drug costs in this country, the Nexium story should give us all pause and ulcers.

As the year 2001 approached, Nexium's manufacturer, pharmaceutical giant AstraZeneca, was facing a _$6 billion problem; its patent on the heartburn wonder drug Prilosec was due to run out in October 2001. By then it was selling $6 billion a year in Prilosec, making it one of the most successful drugs ever sold, and AstraZeneca needed a way to keep this pharmaceutical cash cow alive when that patent expired. The company knew that when Prilosec "went generic," AstraZeneca was no longer going to be able to sell Prilosec at $3 a pill because other companies were going to make and sell generic Prilosec (omeprazole) at a lower price. Then, General Motors, which was spending more than $50 million a year on Prilosec for its employees, and other companies like it, were going to switch thousands of employees on company health plans to generic omeprazole. AstraZeneca was going to lose a lot of that $6 billion.

But AstraZeneca is in the business of making money. It was not about to let Americans off its $6 billion Prilosec hook, so it developed something to replace Prilosec and prevent an ulcer in its own bottom line.

First, AstraZeneca sued companies that planned to make and sell generic omeprazole when the Prilosec patent ran out. By doing so, it ultimately forced three of those four companies to drop their plans, and delayed introduction in the United States of generic Prilosec. One company survived its suit, and the generic version of omeprazole finally made it to the U.S. market this year. Round one to AstraZeneca. (Just recently, two additional companies said they would brave lawsuit threats from AstraZeneca and market their own generic Prilosec versions, according to The New York Times.)

While it was tying its generic competition up in court, AstraZeneca lined up its big right hook, Nexium. Its scientists basically changed what amounted to one molecule on omeprazole and voila, made esomeprazole, the chemical isomer of omeprazole, the son of Prilosec. AstraZeneca marketed esomeprazole as Nexium (probably because calling it BillionsForAstraZenecium seemed like a bad marketing idea).

In 2001, with the generic competition delayed in court and Nexium now ready to go, AstraZeneca set about the work of convincing Americans and their doctors to switch millions of Prilosec users to Nexium, instead of to generic Prilosec when it became available. Now, convincing Americans patients and doctors to use name brand Nexium/esomeprazole at about $3 per pill instead of cheaper generic Prilosec would take real work, but AstraZeneca, with billions of dollars at risk, was up to the task. Beginning in 2001, AstraZeneca mounted one of the most comprehensive pharmaceutical marketing campaign in U.S history to sell Nexium.

It made Nexium in a color that looked like the original Prilosec. It hired hundreds of new salespeople to market the drug, and advertised the drug on TV, in magazines, and to doctors. It flooded doctors' offices with free samples of the "Little Purple Pill," a technique widely used by pharmaceutical companies to get patients started on free versions of a new medicine. (Then, when the freebies run out the patient has to buy the drug with a prescription.) It offered some hospitals breaks on the price for Nexium, so hospital doctors would use Nexium in the hospital and send patients home on Nexium prescriptions. In 2001 alone AstraZeneca spent almost $500 million marketing Nexium.

Most prominent was Nexium's slick TV "heal the damage" ad campaign, which was aimed directly at the American consumer. It urged heartburn sufferers to talk to their doctors about what might be "severe erosions in your esophagus" and Nexium. You could not watch the national evening news without hearing about how "I didn't know" about the risk of heartburn and the miracle of Nexium.

AstraZeneca even signed a deal with Minor League Baseball for the "Pitching for Community Health" campaign, in which Hall of Fame pitcher Jim Palmer talked at minor league baseball games about his struggle with heartburn and "the importance of recognizing and treating health symptoms in every day life."

And it all worked, and Rounds 2-14 have gone to AstraZeneca. Nexium is selling like hotcakes, and to date an estimated 40 percent of patients who were formerly on Prilosec have switched to Nexium. America's doctors have allowed themselves to be buffaloed and hoodwinked into writing Nexium prescriptions by the millions. America's health care industry has stood by ineffectually, as have patients and employers, all rolled over by AstraZeneca's masterful marketing of the Son of Prilosec. Nexium has healed lots of patients, but heartburned many in the health care system who had hoped to save patients and payors millions of dollars by using generic omeprazole.

While Americans continue to pay millions of unnecessary dollars for their heartburn prescriptions, I am going to heal my own heartburn over this issue; I have written my last prescription for Nexium. AstraZeneca can "heal the damage" to its bottom line without my help. I apologize in advance to my patients who take the medicine; we will work something out.

As for the ubiquitous Nexium ads in which everyone says "I didn't know" about Nexium and heartburn? Now you do. Go fight Round 15.

Erik Steele, D.O. is a physician in Bangor, an administrator at Eastern Maine Medical Center, and is on the staff of several hospital emergency rooms in the region.

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