'The Truth About the Drug Companies' and 'Powerful Medicines': The Drug Lords

November 14, 2004


DURING the past year, when I was driving my children to
school, I'd hear the same advertisement on the radio again
and again. You've probably heard it too: as somber music
played in the background, a young man, his voice cracking,
explains how he developed a rare and deadly form of cancer.
He wonders if he will ever play baseball with his son, and
then relates how, thanks to a company called Novartis and
its new cancer treatment (never mentioned, but a drug
called Gleevec), he's been given a new lease on life.

What is most fascinating about this ad is that it should
seem necessary. As Marcia Angell points out in ''The Truth
About the Drug Companies: How They Deceive Us and What to
Do About It'': ''Truly good drugs don't have to be
promoted. A genuinely important new drug, such as Gleevec,
sells itself.'' So why advertise a cancer drug that cures a
fatal leukemia and has no competition? The answer, of
course, is that Novartis is not advertising Gleevec, but
the company itself -- and the virtues of the drug industry
as a whole. Why? Because, as Angell notes, a ''perfect
storm'' of indignation -- on the part of consumers,
regulators+and even doctors -- may be developing around the
pharmaceutical business.

In just one week this summer, the news included reports
that Schering-Plough pleaded guilty to cheating Medicaid;
the city of New York sued leading pharmaceutical companies,
including Amgen, Bayer, Bristol-Myers Squibb, Eli Lilly,
Johnson & Johnson and Merck, for inflating costs and
defrauding taxpayers; Janssen Pharmaceutica Products
admitted it had withheld from the public information about
potentially fatal side effects in a schizophrenia drug it
markets; and Wyeth settled yet another in the multibillion
dollars' worth of lawsuits against it by people who
suffered permanent injury from use of the fen-phen
weight-loss drugs. All this against a broad public
perception of price-gouging, lack of innovation and
bombastic self-congratulation. And that brings me back to
the Novartis ad.

An alternative history for Gleevec is recounted in both
Angell's methodical multicount indictment of the drug
industry and Jerry Avorn's entertaining jeremiad,
''Powerful Medicines: The Benefits, Risks and Costs of
Prescription Drugs.'' In this less heroic version, several
decades of dogged research by academic scientists -- much
of it paid for by American taxpayers through the National
Institutes of Health -- had teased out the molecular
details of chronic myelogenous leukemia, a rare and fatal
hematological cancer. Researchers at Novartis (then
Ciba-Geigy) created several compounds that in theory might
throw a monkey wrench into the process by which blood cells
become cancerous. But these potential miracle drugs sat on
the shelf untested, until Brian Druker, a researcher at the
Oregon Health and Science University, asked for the
compounds and became the first to discern their anticancer
properties in the lab dish. Even that wasn't enough. As
Avorn tells it, ''Novartis had so little interest in
committing resources to the drug's development that cancer
researchers had to resort to the bizarre tactic of sending
a petition to the company's C.E.O., signed by scientists in
the Leukemia and Lymphoma Society of America, imploring him
to make more drug available for clinical studies.''

Novartis has overcome its lack of enthusiasm -- it now
charges $27,000 for a year's supply of Gleevec. But those
heart-warming ads, now the centerpiece of the Novartis
corporate identity, say more than intended about how
today's pharmaceutical industry takes credit where little
is due. As both Angell and Avorn lay out in painstaking,
often enraging, detail, a self-serving mythology --
promulgated on a scale possible only in a business with
annual worldwide revenues of $400 billion -- has enveloped
the pharmaceutical industry. Angell and Avorn cut through
the haze, arguing persuasively that Americans are paying an
enormous amount of money for some very mediocre medicines.

The rising voices of disillusionment have the credentials
to back up their scorn. Two of the season's most stinging
anti-drug-industry analyses come from former editors in
chief of The New England Journal of Medicine. Marcia Angell
is one. Jerome P. Kassirer is the other; the title of his
book, ''On the Take: How America's Complicity With Big
Business Can Endanger Your Health'' (Oxford University,
$26), says it all. Jerry Avorn, a professor at Harvard
Medical School, helps decide what drugs are used in
Boston's Brigham and Women's Hospital. And John Abramson
was a doctor in family practice until, as he recounts in
''Overdosed America: The Broken Promise of American
Medicine'' (HarperCollins, $24.95), he began to detect what
might politely be called statistical legerdemain in
articles promoting new drugs in the aforementioned New
England Journal.

These books are not simply diatribes against high prices
and lagging development of new medicines. More
disturbingly, the authors contend that the drug industry
has polluted the scientific basis of modern medicine with
rigged market-driven clinical studies that inflate the
effectiveness of new, high-priced drugs while concealing
their risks to patient safety. Angell's occasionally
strident language, laced with terms like ''bribes and
kickbacks'' and ''faux research'' seems hyperbolic -- until
you consider that one week's worth of headlines.

The reasons for the transformation of the industry's image
from life-saving pioneer to robber baron are many. But at
root is a profound shift in the hierarchy of influence and
decision making within the companies themselves over the
last two decades, as the traditional emphasis on research
and development has given way to marketing. The change is
everywhere apparent: in the background of many company
executives, in the annual balance sheets (in 2001, Angell
estimates industrywide marketing budgets at $54 billion,
almost double research-and-development outlays, which the
industry lobby puts at $30 billion), in the army of 88,000
salesmen (or detailers), trained to bird-dog doctors and
persuade them to prescribe their company's drugs. Though
much drug industry research remains outstanding, the system
rewards what Avorn calls ''trivial pseudo-innovation'';
shifting the emphasis from research to marketing was, he
says, ''just responding rationally to the legal, regulatory
and economic pressures of a marketplace that had become

Angell, who gives a vivid historical context, dates the
''watershed year'' to 1980, on the cusp of a era in which
it became ''not only reputable to be wealthy, but something
close to virtuous.'' The Bayh-Dole Act of 1980 basically
turned academic labs into farm teams for industry research,
allowing publicly funded researchers in academic
institutions (where much of the real enterprise and
innovation occur) to patent their discoveries and license
them to the private sector; the law has created a thicket
of licensing and royalty relationships, wink-and-nod
consultancies and conflicts of interest. As Angell
tellingly relates, the authors of one New England Journal
article collectively owned up to so many financial
conflicts that they had to be listed separately on a Web
site. The headline on the editorial she wrote about the
episode was ''Is Academic Medicine for Sale?'' One cynical
reader replied: ''No. The current owner is very happy with

Then there was was the Hatch-Waxman Act of 1984, which did
what it was ostensibly designed to do, make it easier for
generic drug makers to put cheaper medicines on the market
-- but at enormous cost to the consumer. In Angell's view,
Hatch-Waxman was a Trojan horse bill; its loopholes meant
that pharmaceutical companies could, with patent
infringement suits costing, say, a mere $5 million, extend
government-granted monopolies on popular drugs like
Prilosec and Claritin, in some cases for more than four
years, yielding them billions of dollars in additional

It gets worse. Laws passed in the 1990's gave drug
companies extraordinary financial influence over their
primary regulator, the Food and Drug Administration,
through so-called user's fees to expedite reviews of new
drugs. And both Angell and Avorn quote Senator Bill Frist's
devastatingly candid remark revealing that one respected
candidate for the agency's top job in 2002 apparently lost
industry support because ''there was a great deal of
concern that he put too much emphasis on safety.''

As for the recent Medicare reform bill, with its
prescription drug benefit, Angell considers the measure a
huge windfall for industry, because it explicitly forbids
Medicare to bargain on prices. Indeed, Angell foresees a
grim day of reckoning, and calls for its immediate repeal.

Pharmaceutical Research and Manufacturers of America, the
industry's lobbying group, has tirelessly argued that high
drug prices are needed to support the high-risk endeavor of
drug discovery and development. Yes, the business is risky.
But Angell gives us good reason to dispute the much-quoted
figure of $802 million as the average cost for developing a
new drug, and the assertions of innovative research and
development. She cites studies showing that between 1998
and 2002, 415 new drugs received F.D.A. approval; only 133
were ''new molecular entities,'' or genuinely novel
compounds, and of those, only 58 -- or 14 percent of all
new drugs for the five-year period -- were considered
likely by the F.D.A. to be ''a significant improvement''
over existing products.

Avorn covers much the same ground, but comes at it by
statistical analysis of drug effectiveness and safety. As a
''pharmacoepidemiologist,'' he studies large patient
databases to determine how often certain medications are
used and how well they work. His watchword is
''evidence-based medicine'' -- the use of randomized
controlled clinical trials, in which participants are
randomly assigned to receive, for example, a drug being
tested or a dummy pill, or of large-scale epidemiological
studies to determine with statistical rigor exactly which
drugs are safest, most effective and, increasingly, most
cost-effective. He laments that ''we have begun to allow
the marketplace to usurp the place of evidence in
determining which treatments are effective.'' The
marketplace has also been very good about playing down side
effects: Avorn's accounts of the systematic ''obfuscation
of risk'' for two drugs ultimately withdrawn from the
market, the diet drug Redux and the diabetes drug Rezulin,
are stomach-turning in their detailing of corporate

What to do? Angell's most urgent recommendation (among
many) is to establish an independent mechanism within the
National Institutes of Health, for testing prescription
drugs against each other without involving the industry.
Avorn, in arguing for more evidence-based medicine, lays
out several nonprofit and for-profit scenarios for
precisely that kind of independent, data-driven drug
assessment. (My own view is that there will be a McDonald's
on Mars before drug companies relinquish head-to-head
clinical testing of their products -- precisely because
high-quality data is a poison pill to most of their

In 1906, Upton Sinclair documented abuses in the
meat-packing industry; his book, ''The Jungle,'' catalyzed
outrage and helped lead to the Food and Drug Act of 1906,
which set the first national food and drug regulatory
processes. I doubt either of these books will have a
similar impact. Public policy these days is mostly driven
by events, not books. My guess is that it will take the
pharmaceutical equivalent of a plane crash -- perhaps a
devastating new influenza epidemic, a disease for which, as
this flu season's experience makes painfully clear, fewer
and fewer companies bother to make vaccines; or a hugely
successful life-saving cancer drug whose high cost would
make the economic wall between the haves (who get to live)
and the have-nots (who don't) politically unsustainable.
That unpleasant day of reckoning is almost upon us. These
fine books go a long way in explaining how our medicine,
once so vaunted, has become so bitter. hThe authors of one
scientific article had so many conflicts, they needed a Web
site to list them.

Stephen S. Hall is the author, most recently, of
''Merchants of Immortality: Chasing the Dream of Human Life


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