Fascinating article in today's Wall Street Journal (A2 column). Thanks to a very nice reader who called my attention to the column. For those with a subscription - The Misconceptions About Drug Prices

The Bush administration thinks more of the free market would be better, and makes one observation that hasn't received much public attention. Brand-name drug prices are lower abroad because governments won't let the market set prices, but prices of generic drugs -- those for which the patent has expired -- are higher for the same reason. He argues that other countries deny themselves the benefits of cheap generics. While generics account for half of all prescriptions in the U.S., they are less than 40% in Canada and less than 10% in France, he notes.

The point, too often overlooked in the debate about allowing more imports of prescription drugs, is that the U.S. will run into trouble if it tries to adopt only parts of other countries' approach to drug prices.

The U.S. spends more on drugs: $556 per person in 2000 versus $473 in France, $385 in Canada and $252 in Australia, the Organization for Economic Cooperation and Development reports. But because the U.S. spends even more on other health care, drugs are a bigger share of health spending elsewhere: 12.4% of all health spending in the U.S. versus 21% in France, 16.2% in Canada and 13.8% in Australia.

These data certainly stimulate ones thinking. We do want less expensive trade name drugs. The goal seems reasonable. However, we can function well within the current system. We (physicians) have a great array of generics to prescribe. Judicious use of generics will certainly help patient expenditures on drugs.

Cheaper drugs or siren songs?

Next week, the Department of Health and Human Services's Medicare drug card discount Web site is going to go "live," giving seniors the first chance to shop for the lowest prices for drugs under the new program — which also includes about $8 billion in cash, about $4 billion in discounts and billions more in direct benefits from biotech and pharmaceutical companies themselves. All told, millions of seniors will wind up paying less for drugs than they pay in Canada, or even next to nothing.

Yet, critics of the card and groups like Families USA are actively telling seniors they won't save any money because any discounts will have been eaten up by huge price increases now and in the future. They — along with the governors of many states — are instead pushing for the importation of medicines at government-controlled prices or for outright federal-price regulations.

Here are the facts about the Medicare drug discount program. All seniors are eligible to sign up for cards providing average discounts of about 20 percent on all drugs. In addition, 10 million seniors making less than $16,000 a year will get $600 to buy drugs and, depending on the card they choose, can be automatically enrolled in drug and biotech company programs that will cover the rest of the cost of medicines for about $25 a month or less.

The Families USA response? A "road show" that includes as its centerpiece a video narrated by Walter Cronkite that tells seniors that drug companies have raised drug prices by 15 percent a year, while drug discounts will only be 10 percent a year. The implicit message to old folks: Why bother signing up? Wait for the price-control revolution and drug imports to see the "true savings."

As usual, politics dominate. I have not researched these drug cards sufficiently to understand the benefits or drawbacks. I suspect that the truth lies somewhere in the middle.

As a physician, my major responsibility remains knowing drug costs and lower cost alternatives. We try to teach our residents about drug costs and how to minimize costs while meeting therapeutic goals.

We should emphasize several principles. New is not necessarily better. The newest PPI (Nexium) should never be a drug of first choice. One should switch to a more expensive drug only when the data clearly show an advantage, and the less expensive drug has failed. Try to minimize the number of prescriptions for each patient.

If we remember those principles we can help patients afford their medications without making them choose between food and medications.

I suspect that the drug cards will help some patients. This strategy seems to have more "staying power" than the drug importation strategy (which will likely fail for economic reasons).

I found this link on theheart.org (which is heavily underwritten by pharmaceutical companies) - The Dawn of McScience. Just one quote to give you the sense of this long polemic.

Even scientific journals, supposedly the neutral arbiters of quality by virtue of their much-vaunted process of critical peer review, are owned by publishers and scientific societies that derive and demand huge earnings from advertising by drug companies and from the sale of commercially valuable content. The pressure on editors to adopt positions that favor these industries is yet another example of the bias that has infiltrated academic exchange. As editor of The Lancet I have attended medical conferences at which I have been urged to publish more favorable views of the pharmaceutical industry. For Krimsky, "the idea that public risk (that is, publicly supported research) should be turned into private wealth is a perversion of the capitalist ethic." The Pope would probably agree.

Certainly this quote does not do justice to this long piece. If the subject interests you, I recommend reading and considering the problem of the pharmaceutical industry its influence on academe.

For long time readers, this essay reflects issues that we have discussed several times. For new readers, read this NY Times piece, and then read my former rant on this topic.

When Your Doctor Goes to the Beach, You May Get Burned

Gifts

I will reiterate my position on pharmaceutical gifts. I accept anything that costs less than $10, e.g., lunch at noon conference, a pen (although I generally discard it after clinic), a pad of paper. I go to NO pharmaceutical company sponsored events - talks, golfing, consultations. I did some of these activities many years ago - then as I learned about influence, I understood that I was not immune from drug company manipulations. Thus, I had to distance myself.

From the NY Times piece:

Relatively few researchers have investigated the question of exactly what that something big is. Among other considerations, it is one of the few research topics in medicine that will not attract drug company financing.

A handful of studies have looked at the common practice of giving doctors free drug samples and have shown that it unquestionably induces them to prescribe drugs they would otherwise avoid. The other gifts also appear to bring a nice return. In one clever 1992 study published in the journal Chest, Cleveland researchers surreptitiously tracked doctors' use of two drugs before and after all-expense paid educational jaunts to sunny resorts. They found that drug prescriptions more than tripled, an effect that persisted for more than a year, while the use of equivalent drugs remained stable.

It is all quite deplorable, my friend says. He used to add routinely that none of this data was applicable to him, but a recent series of events may have changed his mind.

For those who want to understand why drug company gifts work please read Cialdini's work starting with this web site devoted to the psychology of influence - Influence at Work. If you are intrigued I highly recommend his book - Influence: The Science of Persuasion.

No ranting - just a link - Pop That Pill This is how the article ends - the leadup is worthwhile also -

Is all of this bad? Not entirely. There is some notion of empowerment that goes along with being a medical consumer rather than a mere patient. Sure, drug companies are trying to persuade you, but that in itself means they are investing you with the power of decision-making. It means you are being emboldened to discuss alternatives with your doctor without being concerned that you will be patronized, as patients routinely were in the Marcus Welby era. But with empowerment comes increased responsibility. How many people have the insight or time to look at the published research before confronting their doctors with what they think is the drug they ought to be taking?

One doctor told me he's gotten tired of arguing with those of his patients who insist on an inferior or inappropriate drug because they liked the advertisement. "I don't make a case for or against individual treatments anymore," he said, "no matter how much I may disagree, It takes away time I need to deal with other patients. I just flat out give my opinion, and they can take it or leave it. But considering that I'm the one with the M.D., if I were the patient, I'd listen up."

Are there benefits to having a more informed patient base? "Informed is a loaded word," this doctor said, "Informed about what? The ads usually end off by saying, 'Ask your doctor,' but the message they're really conveying is, 'Tell your doctor.'"

Tell the consumers about side effects! US FDA Wants Ads for Medicine to Highlight Risks

Prescription drug advertisements should highlight key risks rather than just list a string of possible side effects in tiny print, U.S. regulators said in new guidelines unveiled on Wednesday.

"Consumers want and deserve information presented in a way that's clear, accurate and understandable," Food and Drug Administration Commissioner Mark McClellan said.

To which I must clap wildly! Now let us have the same guidelines for supplements and then I will do a jig!

Drug Companies Get Too Close for Med School's Comfort

Studies indicate that most physicians meet with pharmaceutical representatives four times a month.

Studies also reveal that most physicians erroneously believe the representatives do not influence prescribing habits.

When doctors and trainees meet with reps, they change their prescribing habits and are far more likely to prescribe the drugs described, even when they are more expensive or have no benefit over alternatives. They are also more willing to request illogical changes to hospital guidelines that govern which drugs can be prescribed.

Estimates suggest that roughly $1 billion was spent advertising antidepressants to health professionals in 2000.

More than 400 psychiatrists were asked by Dr. Timothy Peterson and his colleagues at Harvard to describe their beliefs about antidepressants. More than half said they believed that newer agents were more effective than older antidepressants known as tricyclic antidepressants and that newer antidepressants, called selective serotonin reuptake inhibitors, or S.S.R.I.'s, had fewer side effects than generic S.S.R.I.'s.

But studies conducted at Oxford, Duke, the University of Manchester and the Canadian Coordinating Office for Health Technology that used a statistical strategy called meta-analysis to combine the results of hundreds of independent studies found that S.S.R.I.'s were as effective as tricyclic antidepressants or slightly less effective. They also revealed that S.S.R.I.'s were tolerated by slightly more patients but had as many side effects.

As usual I have mixed feelings when it comes to the pharmaceutical companies. While I personally work hard to distance myself from drug reps, I do understand the importance of the industry. This article presents a biased opinion against the pharmaceutical industry. But much of the content is accurate.

A reader sent in this link. It is a good one. Foregone conclusions

The public is being regularly deceived by the drug trials funded by pharmaceutical companies, loaded to generate the results they need

A reader posted this comment/question today:

Hi Medrants,

Your salary won't be increasing with the ridiculous cost of drugs. The notion that extremely expensive ACE-I are either no better or potentially less effective than thiazide diuretics represents a huge waste of ((LIMITED)) health care dollars. Please choose one of the following:
1) Stick with your current salary and prescribe whichever antihypertensive you like.

2) Prescribe thiazides first line and advocate some of the money previously wasted on ACE-Is goes to help providing comprehensive outpatient care.

1 or 2 ?

First, I learned many years ago that hypotheticals are dangerous. Lawyers love to pose them to make rhetorical points. They are tricky to answer.

This question has several flaws. First, ACE inhibitors are no longer ridiculously expensive. Second, for many patients they may even save costs (i.e., less CHF, less progression of CAD, less onset of diabetes mellitus). Thus, the question as framed lacks coherence.

Please refer to my many commentaries on ALLHAT. Diuretics rarely control BP alone. Most patients require two drugs for adequate control. In many subgoups the evidence supports ACE inhibitors plus a diuretic as the best combination.

My critiques of ALLHAT stem from designing a study which does reflect practice. If an ACE inhibitor alone does not control the BP, the next logical drug is a thiazide diuretic. Almost any class of antihypertensives benefits from adding a thiazide.

To me the importance of ALLHAT is that thiazides do work. However, when one adds all additional evidence, many subgroups - type II diabetes mellitus, proteinuric chronic kidney disease and known CAD in particular - have great benefit from an ACE inhibitor. I generally start with an ACE inhibitor, and quickly add a low dose of a diuretic if adequate pressure is not achieved with an ACE alone. ALLHAT does not provide the data for that treatment plan, because it was designed for a different less important question.

Derek Lowe is always good. This rant exceeds even his high standards. Things Only a Friend Can Tell You. Please go read it.

For those interested, this links to today's Letters to the Editor about the pharmaceutical industry and medical education. They are solid, but our commentary surpasses. The Doctors and the Drug Makers (6 Letters)

Your Doctor's Drug Problem written by Arnold Relman - former editor of the New England Journal of Medicine.

Relman identifies the problem of drug company controlled CME, but overextrapolates the evil.

To renew their licenses, doctors in almost all states are required to enroll in continuing medical education programs, and these are now largely subsidized, directly or indirectly, by the pharmaceutical industry. There are official guidelines for keeping these programs free of commercial bias, but they are voluntary. Most of these educational programs are presented by industry-friendly experts who are selected and paid by the companies selling the drugs being discussed, and most of their talks emphasize the medical benefits of those drugs. Some of this information is useful, but much of it is simply marketing disguised as education.

Let us clearly understsand the problem. Often drug companies will sponsor a speaker on a topic. The speaker will talk about an issue relevant to the company's drug. Some talks almost blatantly cheerlead for a particular drug. Other talks just increase awareness of the entity that the drug treats.

There are multiple levels of hell. We can modify our current system to disallow the most egregious talks, while preserving the true contributions.

I agree that we have a problem. I disagree with the extent of that problem. I disagree with Relman's assertion

So it is not merely that the pharmaceutical industry is using doctors to sell its products. Medical schools and other educational institutions are not teaching doctors how to use drugs wisely and conservatively. Until they insist that the pharmaceutical industry stick to its own business (which can include advertising but not education), we are unlikely to get the help we need from our doctors in controlling runaway drug expenditures.

I hear many talks at medical schools which do teach physicians how to use drugs wisely and conservatively (and I even give some of those talks myself). We have a problem, but many educators are addressing the issue.

So read his op-ed, but try to keep his thoughts into perspective, avoiding the hyperbole.

Wow! The Lancet has laid down the gauntlet. The statin wars: why AstraZeneca must retreatThe editorial ends:

Since there are no reliable data about efficacy and safety--and AstraZeneca is facing unusually acute commercial pressure to force rosuvastatin into the market--doctors should pause before prescribing this drug. Physicians must tell their patients the truth about rosuvastatin--that, compared with its competitors, rosuvastatin has an inferior evidence base supporting its safe use. AstraZeneca has pushed its marketing machine too hard and too fast. It is time for McKillop to desist from this unprincipled campaign.

And Astra-Zeneca responds: (warning, pdf file) The response.

The BBC news has this article on the subject: AstraZeneca defends its new bestseller

According to the magazine, AstraZeneca needs to eat into this market to recover from falling profits and flat sales of its ulcer pill Prilosec which is facing stiff competition from generic drugs.

When The Lancet's editorial was written, AstraZeneca's latest financial figures had been disappointing, its profits falling fast.

But on Thursday this week the drugs firm reported a reversal of its fortunes with a rise in pretax profits to $1.11bn, up from $923m during the same period earlier.

The recently launched Crestor was a major contributor to this rise, having already gained a 2% market share, and analysts expect the drug to bring in $3bn worth of sales a year.

I doubt that this story will surprise anyone. The pharmaceutical industry functions to make money for investors. Often this goal aligns with improving patient care. Sometimes the industry just looks for market share, and patient care effects are neutral. This controversy most likely reflects a drug with no major advantage for patients, but a major financial advantage for Astra-Zeneca. They have every right to market their drug. They should not complain too loudly when the are criticized. "The lady doth protest too much, methinks" - Shakespeare, Hamlet

Pfizer Wins FDA Approval of Inspra for Heart Failure

Pfizer Inc. on Wednesday said U.S. regulators approved the company's drug, Inspra (eplerenone tablets), for congestive heart failure patients who have already had a heart attack.

The U.S. Food and Drug Administration approved Inspra last year for treating high blood pressure.

Inspra, a selective aldosterone blocker, will compete with older classes of drugs such as ACE inhibitors and calcium channel blockers.

I have blogged extensively on eplerenone in the past - just do a search to find the articles.

Most physicians dislike direct to consumer (DTC) advertising. Apparently we are in the minority. F.D.A. Reviews Ads for Drugs

An ad for the prescription drug Zoloft asks: "Feeling sad? Anxious? Tired?" Zoloft is sold by Pfizer as a treatment for depression and other disorders. It is but one of many print and broadcast advertisements that pitch prescription drugs directly to consumers - a category of ads scrutinized last week at a hearing held by the Food and Drug Administration.

The two-day hearing, in Washington, was part of the agency's review of the rules governing prescription-drug advertising. Because many of the 29 studies presented at the hearing reported positive public results - like increased communication between patients and doctors - the prevailing prediction among supporters of the ads was that the drug agency would allow the ads to continue in much the same form as today.

"It's rare that you get such validation from a meeting like this," said Dick O'Brien, executive vice president and director for government affairs at the American Association of Advertising Agencies, a longtime advocate for the ads. "This is one where you feel all of a sudden like you're on the side of angels."

"My hope is that these two days were so positive that they may help to put this controversy to bed once and for all."

Balderdash! I agree more with the following quote.

But some critics showed no sign of backing off.

"This is a really unlevel playing field for consumers," said Larry D. Sasich, a research analyst at the health research group of Public Citizen, a consumer advocacy group. "You have an industry that maintains that a 30-second or 60-second television spot empowers consumers to make an informed decision about their drug therapy."

Instead, Mr. Sasich said, the spots play up the promise of the products, leaving consumers on their own to ferret out potential side effects or adverse reactions.

The Washington meeting did not adequately address such issues, said Barbara Mintzes, a post-doctoral fellow at the Center for Health Services and Policy Research at the University of British Columbia in Vancouver.

"The question is: Who was talking?" Ms. Mintzes said. "There were a few people presenting who were independent, but the large majority were either people from the industry or financed by them."

Anyone was welcome to present original research at the meeting, but an open door does nothing to ensure that all the relevent research is included, Ms. Mintzes said.

I remain skeptical of these ads. However, it does appear that they will remain for the near future.

For those who are not jiggy with the lingo, PPI stands for proton pump inhibitor. This drug class includes Prilosec, Prevacid, Aciphex and Nexium (apologies to foreign readers - these are the US trade names). Since their introduction in the 80s they have made large amounts of money for their respective drug companies. That will probably change very soon. Heartburn Drug Battle Likely

Cracks appeared yesterday in a pillar of drug industry profits with twin announcements that users of a huge-selling heartburn drug will soon have alternatives that will be cheaper and easier to buy. As a result, the biggest fight ever seen between managed-care companies and drug makers could soon begin.

In the first announcement, Novartis said it would soon start selling omeprazole, the generic version of Prilosec, even though a court has yet to approve the sale. The aggressive move could open Novartis to huge damages if a judge eventually ruled that its generic version infringed patents owned by AstraZeneca, which sells Prilosec. But it also means that consumers will soon save a bundle on the medicine. Prilosec currently sells for $116 for a month's supply on Drugstore.com. A lone generic version introduced in December sells for $100; with more generic entries, analysts said the price could drop to $11.

Then Procter & Gamble said yesterday that it would begin selling an over-the-counter version of Prilosec on Sept. 15, priced about 70 cents a pill, or $22 or so for a month's supply.

The two announcements would not be so important if Americans collectively did not eat so much late-night pizza. But the obesity epidemic and the eating habits that have contributed to it have led to an explosion in heartburn in the United States.

Prilosec and its cousins Nexium, Prevacid, Protonix and Aciphex ? collectively known as proton-pump inhibitors, or P.P.I.'s ? are now the biggest-selling drugs in the world, with $13 billion in United States sales last year, according to NDC Health, a health information company. Prilosec's $4.6 billion in sales last year brought at least twice the profit generated by every McDonald's, Wendy's, KFC, Taco Bell and Pizza Hut combined.

But every P.P.I. works almost identically, and there is little evidence that one is any better than another. So when prices of both generic and over-the-counter versions of Prilosec plunge, managed-care companies will try to persuade patients taking other pills to switch. Some will probably stop paying for other brands altogether.

For all P.P.I's, the average monthly out-of-pocket payment for people with insurance is already more than $30 ? which exceeds the expected price of a month's supply of over-the-counter Prilosec. And that average payment will probably increase.

Drug makers, on the other hand, will use their considerable marketing muscle to persuade doctors and patients that they should remain loyal to brand-name prescription pills no matter the price. In similar previous battles, drug makers have generally come out on top.

Several key points here. First, the drugs are not very expensive to make - otherwise the OTC price would be much higher. Second, we will see a marketing battle over PPIs, not an efficacy battle. The NY Times article correctly states that the drugs all work the same. One does need to adjust the dose to achieve equivalence, but omeprazole (Prilosec) works very well.

I expect this rant will receive many testimonials both pro and con. To understand the passion this subject develops check out this December 2002 rant and examine the number of comments - Generic omeprazole . The NY Times predicts that physicians will go generic in this situation.

"A P.P.I. is a P.P.I.; they're interchangeable," he said. Dr. Seidman predicted that generic and over-the-counter versions of Prilosec would greatly reduce the money his patients spend on other P.P.I. brands.

Dr. Mark A. Fendrick, editor of The American Journal of Managed Care, said other companies would follow WellPoint's lead. "This is going to be a real test of how well managed-care companies can fight against the marketing power of the branded pharmaceutical industry," Dr. Fendrick said.

I like these announcements. OTC Prilosec and generic omeprazole (with competition) will save patients and insurance companies money. The pharmaceutical companies deserve an appropriate return on their investment. They have received excessive return thus far and hopefully these announcements will bring those returns back in line for this drug class.

Biting The Hand That Fed Me

I, of course, consider myself immune to these blatant attempts at persuasion. Am I? I think so. I read serious medical journals and unbiased reviews of medications. I always try to prescribe based on hard evidence. I use effective generics. I want the best for my patients.

I also know that someday I'll have a patient with irritable-bowel syndrome tell me she's tried everything. I'll ask her if she's tried the drug-that-paid-for-my-dinner. If she says no, I'll consider saying something like, "There's this new drug. It's pretty expensive, and I know that your insurance doesn't cover it, but it might be worth a try."

Ka-ching!

So it's probably time for Doctor E to take the pledge once more. To swear that he won't take any more of these gifts. To promise to get his information about drugs only from objective, unbiased sources. "I'm sorry," I'll say to the next drug rep, "but I can't accept your invitation. I'm doing my part to keep drug costs down."

That's what I'll say -- but do you realize how much ahi carpaccio costs when you have to pay for it out of your own pocket?

Read the entire self confessional. Dr. E lays out the physician pharmaceutical industry relationship concisely. What about db? db will eat the lunch at noon conference. He will occasionally pick up a pen or a pad of paper. db has a $10 rule.

I have at least one drug rep who avoids me entirely. He represents Nexium. I explained to him why I thought his company was acting unethically. I refuse to sign for Nexium free samples in our resident's clinic. He does not bother me anymore.

I have thought about how to address this issue for the past 2 days. Fortunately, Medpundit did a great job and I can focus on another 'sticky wicket'. Medpundit (go to Friday, August 8th - bloggers link function is acting funny again!!).

The Medical Letter, an excellent, unbiased source of drug information, reviewed the subject last month and found the evidence wanting. According to The Letter, the FDC Reports cited a study that found among 1,134 children, ?emotional lability? occurred in 3.2% of users compared to 1.5% of nonusers. ?Emotional lability? was defined as ?crying, mood fluctuations, thoughts of suicide and attempted suicide.? There were no completed suicides in the group. That's an important distinction. It isn't uncommon for depressed people, especially teenagers, to make a consciously feeble attempt at suicide - such as taking a drug they think is harmless, like Tylenol. Their goal isn't to kill themselves, but to gain attention.

On the face of it, the current recommendation to avoid these drugs seems overly cautious. For one thing, compared to older anti-depressants, they are more effective and they are safer. In the old days, before SSRI?s, doctors always excercised caution with anti-depressants because the drugs themselves could be instruments of suicide. Patients would only be given a small amount of the drugs at a time, say a week or two, to avoid intentional overdoses. With the SSRI?s, that?s not a problem.

To read the NY Times article that stimulates this discussion - Debate Resumes on the Safety of Depression's Wonder Drugs. I agree with Medpundit on this issue. I have seen dramatically positive results in many patients. The side effect profile seems much milder than the older antidepressants. She also makes a wonderful point about the NY Times arrogance concerning primary care physicians. Just another reason to show disdain for that paper.

DIY Drug Development?

Well, there's nothing there that 30 whole hours of free consulting can't fix, I'm sure. And all the universities have to do, it seems, is raise the money for the really expensive stuff. Quite a deal. I wish these folks the best, but I can't help but think that they're going to be climbing a steep learning curve with ropes and pitons. DB's hopeful comment is "If this works, the straw man argument about investing in research may move towards moot." Well, as someone who's been getting beaten up for years by said straw man, let me add some comments of my own: If you know some chemistry, some biochemistry, some molecular biology or medicine, then the business of drug development looks pretty hard. Then when you try it out, you find that it's a lot harder than it looks.

Well you cannot really blame me for hoping. I do believe some companies work very hard at research. One can ask about what kinds of research, how much, and what change would one project if reimportation works. This question (and any answer) has too many hypotheticals to allow good decision making.

So I do understand the difficulty of drug development. However, I am not certain if our current economic situation is sustainable. Moving towards a free market (as the Cato authors suggest) may or may not change research investment.

I find Robert Prather one of the most compelling bloggers. Probably that stems from our very similar philosophy. I wrote to him, asking him to comment on yesterday's post concerning reimportation. Here is his post - Drug Reimportation And The Current Split Among Free-Marketeers. As I read his post, I believe that his main point stems from favoring a free market philosophy but not trusting other countries. His points are well made. I still believe that reimportation will move the market efficiently.

Maybe this is really the answer - Three Universities Join Researcher to Develop Drugs

But university officials say that system is breaking down as pharmaceutical companies and venture capitalists have become more averse to gambling on raw technology and more interested in drugs that have demonstrated at least some promise in a small clinical trial. That has left more promising ideas unable to pass through what some experts have called the "valley of death" between basic discovery and commercial development.

"We in the university are being deprived of a common way to develop technologies because we cannot form companies like we used to," said Joel B. Kirschbaum, director of the office of technology management at the University of California at San Francisco.

The universities say they do not plan to become drug companies. But by doing more of the basic work on drugs themselves ? like testing them for toxicity in animals ? they say they can then entice pharmaceutical companies. Moreover, they say, they will get a better deal because some of the risk has been taken out.

Whether the consortium will work is open to question. Under the deal, SRI International, which does contract research, will offer the universities up to 30 hours of free consulting for each project to develop a plan for how to test for toxicity, make the drug for clinical trials and other necessary steps. But the universities would still have to come up with the money for the tests, manufacturing or other tasks.

If this works, the straw man argument about investing in research may move towards moot.

Conservative Drug Split

The prescription-drug-reimportation bill the House passed in the wee hours last Friday morning, by a vote of 243 to 186, was widely opposed by the thoughtful Right ? folks at AEI, CEI, the Heritage Foundation, the Manhattan Institute, Americans for Tax Reform, the Club for Growth, the Wall Street Journal, the Washington Times, even Cato's own Doug Bandow in last Thursday's NRO. When we saw, however, that principled members of the House like Jeff Flake (R., Ariz.) and Pat Toomey (R., Penn.) were on the other side, we thought we'd take a closer look. It turns out that this really is one of those issues that's as simple as it seems ? free trade is the answer ? although it's easy to be distracted by the complications that surround it. And that, unfortunately, appears to be what's happened to many of our friends and colleagues.

Nuances in the bill aside, its effect would be to allow prescription drugs ? most of them developed and manufactured in America, but available far more cheaply abroad ? to be reimported into this country at those much lower prices. To be sure, many in Congress who supported the bill did so on crass political or anti-corporate grounds: drugs cost too much; drug companies are gouging the public, as is evidenced by prices abroad; let's drive domestic prices down, and cut government outlays in the process, by letting Americans buy from abroad. "The issue is price," said Rep. Rosa DeLauro (D., Conn.). "It is time that this Congress stop acting as a wholly owned subsidiary of the pharmaceutical companies and step up to its responsibility to the consumers of this nation." Motives aside, that's an easy target for those who understand FDA regulations on drug research and development; the extraordinary upfront costs of R&D; the need for drug patents to encourage R&D; and socialized national medical systems abroad.

Because our drug market, burdened as it is with regulations and cost controls, is still free relative to such systems, America's drug companies, which do most of the world's drug research and development, recoup most of their costs, including R&D costs, in the domestic market, then sell abroad at prices far below true costs. Foreigners are thus classic free riders. As with defense, Americans are underwriting a good part of the health-care costs of the rest of the world. But if we allow those below-true-cost drugs to be reimported, critics say, there goes the R&D and all the wonder drugs of recent years. As AEI's John Calfee put it in a July 14 piece aptly titled "The High Price of Cheap Drugs," "reimportation would mean importing foreign price controls, which would destroy the pricing structure of the U.S. drug market and have disastrous consequences for future drug research and development."

Those are powerful arguments ? until you stop to think about them, as Rep. Pat Toomey did in a July 17 "Dear Colleague" letter, one paragraph of which goes to the heart of the matter:

Specifically, dropping trade barriers and freeing U.S. consumers to purchase drugs at far lower prices overseas would significantly threaten the profit margins of the pharmaceutical companies. These companies would be forced to present the price-setting countries with an ultimatum: Either liberalize your market or we will leave. It's hard to imagine that countries in this situation will deny their citizens access to life-saving drugs. Instead, they will most likely ease their controls and increase the price they are willing to pay for their drugs.

Toomey goes on say that if free trade were not reason enough to support the bill before the House, then the destruction of price controls should be. In short, reimportation is both right and good.

These paragraphs just introduce a very careful and thorough analysis of this complex issue. As a libertarian, I agree with this essay. The authors (from the Cato institute) have worked through the pros and cons nicely. I believe that careful reading (which will take around 15 minutes) is worth your time. They conclude with this thoughtful paragraph.

In a nutshell, if foreign governments want to pay less ? and will not pay more even if it means their own citizens will go without better drugs ? then let those governments police the no-resell terms that enable them to get the lower prices. Right now, not only do Americans pay higher prices because foreigners refuse to pay the actual costs of drugs, but they pay the enforcement costs of that arrangement as well, including restrictions on their freedom. And if foreign governments cannot police those discriminatory contracts ? because the incentive to resell, on one side, and to buy more cheaply, on the other side, makes enforcement difficult or impossible ? then let a truly free market, encumbered only by enforceable contracts in restraint of trade, set prices at whatever the market will bear. It is neither right nor good that Americans bear so great a portion of the health-care costs of the world.

This article has tipped the balance. I am no longer confused over this issue. I clearly favor drug reimportation!

Drug Lobby Pushed Letter by Senators on Medicare

When the House voted last week to let Americans import less expensive medicines from Canada and Europe, 53 senators signed a letter opposing the legislation, a letter that the industry trade group, which vigorously opposed the measure, hailed as proof of its argument that the bill would jeopardize patient safety.

What the trade group, the Pharmaceutical Research and Manufacturers Association, did not say, at the time, was that it helped coordinate the signature campaign.

The Senate "Dear Colleague" letter, timed to coincide with passage of the House bill, will have an important role in whether the import measure survives a conference with the Senate on a larger drug benefits package. Several conferees, including Senators Orrin G. Hatch of Utah and Don Nickles of Oklahoma, both Republicans, are among the signers.

The trade group's involvement in gathering signatures, detailed in a document obtained by The Times, is not a surprise. It offers a glimpse into the aggressive efforts by the pharmaceutical manufacturers to defeat the import provision. That section would require the Food and Drug Administration to create a system for consumers, pharmacists and wholesalers to import less expensive drugs from Canada and Europe.

I need not comment - but maybe you will!

Lashing Back at Drug Companies

In addition, while the drug companies trot out the shibboleth that they need high prices to continue to fund high levels of research, the public is realizing that these companies spend a great deal on promotional and marketing activities -- including, presumably, the massive campaign contributions to Congress.

It's not difficult to understand why the public resents the drug companies when prices in the United States for critical medicines are often two, three or four times higher than the prices for the same medicines, made by the same companies, sold in Canada, Mexico and other countries.

We need them, but darn it could they just act a little more responsibly. (I know, they are acting responsible to their share holders).

A stellar commenter, RG, writes:

There is also a deeply held impression that these new drugs have revolutionized medical care in this country, as Doug Bandow seems to believe in his article. That may only be true to a certain extent.

In a compelling book, THE RISE AND FALL OF MODERN MEDICINE, Dr. James Le Fanu, a renowed medical writer from London, made the point that the fall of the pharmaceutical industry started around the late 1970s, when nothing new was added to our pharmocopeia in comparison to the drugs that were discovered and synthesized from after World War II to the end of the 1970s. And he is probably right.

There may have been a profusion of drugs over the last 25 years, but Dr. Le Fanu again pointed out that most of these were copy-cats from previously released drugs, costing much more and with at most marginal benefits. We can think of anti-inflammatories, antibiotics, hypertensive drugs, H2 acid antagonists, and a host of other me-too drugs that really have not made a dent in revolutionizing treatment. In short, he is suggesting Big Pharma had met a dead-end, a reason why it had to concentrate on life-style drugs (Viagra for impotence, Rogaine for baldness, the ill-fated phen-phen for weight loss) and forced many of the companies to merge into mega-giants to consolidate their dwindling new-product potential.

I beg to disagree. Having graduated from medical school in 1975, I would bring this perspective to argue the point. Let us start with heart failure. Back in 1975 we had no ACE inhibitors, or ARBs. The first study showing the CHF survival benefit of an ACE inhibitor was published in 1988.

The profusion of anticoagulants, helpful in treating acute coronary syndromes, which range from thrombolytics to platelet inhibitor drugs, have made signficant strides. We see more such drugs under development, enhancing our options to care for such patients.

In cardiac prevention, we have the statins - first represented by lovastatin. These drugs represent the only major class which clearly helps in secondary prevention and probably helps some patients in primary prevention.

Adult onset diabetes mellitus has several classes of hypoglycemics to draw on. We had first generation sulfonylureas.

AIDS is a new disease, and all the antivirals developed to treat AIDS have arrived over the past 15-20 years.

The proton pump inhibitors have revolutionized the treatment of acid disorders, and are not a me too drug when compared with H2 blockers. They represent the application of further physiologic understanding.

Since the 70s we have made remarkable progress in treating heart disease - and prolonging quality life! We have more specific cancer cures, especially with regards to lymphomas and leukemias. We have a greater assortment of antimicrobial agents, from newer antibiotics, to antifungals, to a variety of antivirals. We have a plethora of options for ameliorating mental illnesses (from depression to psychosis).

I do not accept Dr. Le Fanu's argument. While I have quibbles with the pharmaceutical industry, I cannot argue that they have done nothing worthwhile. Au contraire, they have provided me the tools to often modify the natural history of disease. Our profession (and here I speak principally of internal medicine as I am most familiar with internal medicine) is intellectually richer and more satisfying because of these and other pharmaceutical advances.

db descends from his soapbox. Back to pimping.

House Approves Bill Easing Imports of Less Expensive Drugs

In a major defeat for the pharmaceutical industry, the House voted by a wide margin early this morning to approve a measure that would make it easier for Americans to import inexpensive prescription medicines from Canada and Europe.

The vote, 243-186, came shortly before 3 a.m., after a fiery hour-long debate that capped a long and stressful day for lawmakers, who are rushing to finish their business by tonight so they can leave the Capitol to start their month-long summer recess.

The outcome was a surprise. Until the last minute, lawmakers on both sides were saying the vote would be too close to call. Even as the votes were being cast, some lawmakers held back, to see which way their colleagues were voting.

"I think this is the Congress saying, ?We hear you, drug prices are too high," said Representative Jo Ann H. Emerson, Republican of Missouri, who forced the vote by extracting a promise from the House leadership in exchange for favoring a broader Medicare prescription drug benefit that is a high priority of the White House. She added, "It's time we stopped subsidizing the world and bring fairness and fair prices to Americans."

The measure now becomes the official position of the House in its negotiations with the Senate to reconcile differences in their two versions of the prescription drug legislation. But its fate is uncertain; on Thursday, 53 senators released a letter saying they oppose the provision. And it is unclear how hard the House representatives in the Medicare negotiations will fight for it.

The Republican leadership of the House worked vigorously against the bill, as did the drug manufacturers--who stand to lose millions if it becomes law--and the Food and Drug Administration, whose officials argued the measure would jeopardize safety. The vote did not fall along party lines; rather, the debate turned on whether lawmakers were willing to accept the drug makers' argument that the measure would harm patients and defy free trade by allow the importation of not only drugs, but price controls.

"This is an interesting debate, because its not between the Democrats and the Republicans" said Representative Ted Strickland, Democrat of Ohio, who supported the measure. He added, "It's between the people and the pharmaceutical companies."

About this bill, I just do not know. Read my earlier post (scroll down, it is the 3rd post down from this one) on the pharmaceutical industry. I am confused.

Today's Lancet has an editorial which explicates the problem of how we should treat the pharmaceutical industry. What price competitiveness in the drugs industry? This article refers to a consideration of the issues which have made the United States the leader in new drug development. The article takes a European perspective, but it gives an excellent balance to our philosophical conundrum.

Since 1990, the US pharmaceutical industry has surged ahead of that in Europe. While spending on research and development in Europe increased 2·5-fold from 1990 to 2002, in the USA such spending jumped 5-fold. US firms are adopting and exploiting new technologies more rapidly and claiming more patents in important areas like biotechnology. Indeed, to take advantage of this American productivity, European-based drug companies are spending more and more of their research and development budgets in the USA.

In 2000, a panel of experts commissioned by the European Commission produced a report, Global Competitiveness in Pharmaceuticals, that concluded: "Europe is lagging behind [the USA] in its ability to generate, organise, and sustain innovative processes that are increasingly expensive and organisationally complex." The report identified several reasons why the US industry has pulled ahead. It found, for example, that American research is "an integrated system, highly differentiated and pluralistic within a common framework", while European science "is composed of fragmented and relatively small national systems". In fact, European scientists are more likely to collaborate with US researchers than with scientists in other European nations. The USA has also created a vertical system in which small innovative exploratory companies develop new products which can then be exploited by larger firms that have the staff, expertise, and capital to refine and market those products.

But a major factor behind the US success is money: drug prices are not fixed in the huge American market, whereas in Europe many countries control drug prices or place regulatory caps on profits. As a result, while drug prices in the USA have been rising steadily over the past several years, price increases have been kept down and several European governments have actually been initiating price cuts. As one drug industry official told the Wall Street Journal, "Companies go where they get the best return on their investment and right now that is the US".

And that defines the dilemma. We want to keep drug prices reasonable and affordable for the masses. Yet we also desire the advances that the pharmaceutical industry provides. Our challenge comes in striking the right balance of price and innovation.

Many of the Commission's recommendations are interesting, in particular the establishment of an NIH-like organisation to help bring European scientists together. The degree to which the market should be allowed to determine drug prices is more problematic. Any reform would need to take into the account the risk such changes will pose to the health systems of Europe, which have sought to provide affordable health care for all. The success of the American system has encouraged scientific advances but it has failed to give access to those advances to everyone who needs them.

So we are left to consider the greater good. Which do we prefer? Should we have rapid advances in pharmacotherapeutics? Or should we slow down advances so that everyone can afford their medications? We have no good answers to this dilemma.

In the US we are still considering the possibility of allowing importation of drugs from Canada and elsewhere. This certainly would help some patients financially, but will it effect innovation. I am stumped. The questions seem simple, but the answers evade me.

For another opinion on this issue - Demonizing Those Who Cure Us

The research group Europe Economics found that patients often wait years for access to even life-saving new medicines. Incredibly, the more useful the product and the more people to be helped, the smaller likelihood that European governments will quickly approve it. Explained Europe Economics: countries "facing tight budget constraints will be more resistant to a given price demanded by a company the higher they expect the demand for the product to be."

The rest of the article deals mostly with the importation issue. I continue to have mixed thoughts on these issues. I present these links so that you can share my confusion.

I just might be unbiased. I doubt it, but I have received criticism that I am pro pharmaceutical companies, and criticism that I am blindly anti pharmaceutical companies. That diversity of criticism makes one suspect that perhaps there is a quest for truth herein. Today you decide. Study Finds Drug Costs Are Soaring for Elderly

The study, which was issued yesterday by Families USA, a consumer group, shows "how important it is to offer significant subsidies to the lowest-income seniors," Ron Pollack, the group's executive director, said in a telephone interview.

As many as half of the elderly do not have insurance for drugs for some part of the year, he said, because they either lack coverage or have exceeded the limits on their policies, which frequently cap the amount the insurer must pay.

Prices for the 50 drugs increased an average of 6 percent, compared with a rise of 1.8 percent in the Consumer Price Index, excluding energy prices, the study said. More than half of the drugs increased by three or more times the inflation rate, while a quarter stayed the same.

Over the years, drug prices have consistently outpaced inflation, said Mr. Pollack, who noted that these increases are particularly hard on the elderly, who are often on fixed incomes.

An elderly person without coverage buying Lipitor, Vioxx, Synthroid and Fosamax would pay nearly $3,000 a year for all four drugs, Families USA said.

The study met with sharp criticism from the pharmaceutical industry, which argued that many elderly people were able to buy drugs at discounted prices. "Regrettably, Families USA has decided to continue complaining about prescription medicines, rather than to pitch in and help seniors get the medicines they need," the Pharmaceutical Research and Manufacturers of America, a trade association, said in a statement. "Instead of misleading seniors by referencing only undiscounted prices, it should be helping them gain access to the life-saving, cost-effective medicines they need."

Some economists read this site. They appropriately jump all over me when I beat up the pharmaceutical companies too much. Perhaps they can explain the hyperinflation of drug prices. Perhaps they cannot.

This commentary implies that anti-pharmaceutical industry organizations are having a negative impact on future development of HIV drugs. AIDS drug incentive dilemma

Dr. Des Martin, president of the South African HIV Clinicians Society, suspects that "among several reasons, the threat of generic competition and attacks on multinational companies could be behind the recent decline in HIV anti-retroviral compounds." Some drug company boardrooms are certainly switching investment from AIDS research into areas where they can still make profits, such as erectile dysfunction and baldness.

As drug prices have fallen more than 90 percent in poor countries, treatment of the afflicted has risen, but not by much. Why? Prices are a small factor in creating access to AIDS drugs. However, the price fixation of left-leaning health nongovernmental organizations (NGOs) has led them to concentrate on this issue at the expense of more important matters such as building health infrastructure and training medical personnel. While the Bush team commendably plans to spend money on these essential components, it seems to be unaware of the long-term harm of the anti-pharma campaigns. It may even compound the problem as it announced that the Bush program will purchase generics from Indian producers.

I need more data here. We do need a balance between greed and enough profit to incentivize research. How do we balance the drug company's interests and the interests of poor countries with overwhelming numbers of AIDS patients.

We need incentives for HIV drug research. Pharmaceutical companies, like all companies, exist first to make a profit for the owners. They will apportion their resources in those areas where they expect the highest probability of return on investment.

Thus, we have a dilemma. We can easily ponder the questions and conjecture hypothetical answers. In the meantime the international AIDS epidemic is not decreasing.

A terrible mistake

It is a bill that will bar the Food and Drug Administration, which was expressly created to guarantee the safety of drugs, from stopping drugs from coming in from Canada and 25 other countries, including South Africa, where more than 20 percent of its drugs are counterfeit or adulterated, even if it thinks it might undermine the safety or security of the supply of medicines in America. Imagine that: Congress telling the FDA to take a powder when it comes to the basic mission of ensuring that the medicines we take are safe.

This bill is at odds with a letter Mark McClellan, the FDA's commissioner, recently wrote saying that he couldn't guarantee safety, and neither could his Canadian counterparts. But Mrs. Emerson and her GOP colleague, Gil Gutknecht of Minnesota, are so determined to import Canadian-style price controls that they ignore Mr. McClellan's warnings. In the FDA's place, Mr. Gutknecht would require that packaging of every prescription drug incorporate "overt optically variable counterfeit-resistant technologies," whatever that means.

I always find Robert Goldberg's opinions interesting and thought provoking. This commentary addresses the problem of importing pharmaceuticals.

While I agree with some of his points, as usual I cannot agree with all his points. I do agree that the FDA should have jurisdiction regarding this situation. Patients are at risk from imported drugs. Quality control should concern everyone.

I disagree with him on the problem of financially impacting the pharmaceutical industry. If we could insure quality concerns, I would favor the competition. The pharmaceutical industry could (and should) live within a true market economy. He opines:

Drug companies and biotech firms alike would be forced to sell their products at generic drug margins and at the lower value of the Canadian dollar, devastating investment in a generation of smarter drugs and personalized medicine. Mrs. Emerson and Mr. Gutknecht blather on about how their bills promote "free trade," but if they really did, they wouldn't stop at drugs. They would allow for the reimportation of automobiles, which, if just limited to the top selling 50 models, would save Americans $11 billion a year. Why not just turn Canada into one big Costco, for that matter?

I find this paragraph hyperbolic. Why should the US (and only the US) fund pharmaceutical research? How much profit margin does the pharmaceutical industry need? I doubt that competition would prevent ongoing research.

Are the pharmaceutical firms selling drugs at less than cost to other countries? Again I find this unlikely. I suspect that the pharmaceutical industry would still make money and still make research.

F.D.A. Approves Over-Counter Sales of Top Ulcer Drug

Prilosec is expected to sell for less than $1 a pill when it becomes available without a prescription this fall, compared with $4 a pill now. But few consumers who have health insurance will see any savings, because many managed care plans will stop paying for the drug altogether, health care executives said.

"We don't cover over-the-counter drugs," said Deborah Whitehead of Tufts Health Plan, a major insurer in the Boston area.

But older people of limited means who have no health insurance other than Medicare, which does not cover prescription drugs, stand to save hundreds of dollars a year.

Patients who take similar drugs, like Nexium, Prevacid, Protonix and Aciphex, may soon find that their health insurers have made the medications more expensive or harder to obtain, managed care executives said. That would parallel what has happened since Claritin, the widely used allergy drug, was switched to over-the-counter from prescription sales late last year.

Millions more Americans will be affected this time. Prilosec and similar drugs, known as proton-pump inhibitors, had $13 billion in total sales last year, more than any other class of drug and more than twice that of Claritin and similar antihistamines, according to NDCHealth, a health information company. Unlike allergy drugs, whose effects vary somewhat, the proton-pump inhibitors all have nearly identical effects on patients. That may give health plans a freer hand to force patients to use over-the-counter Prilosec rather than the prescription versions.

So paradoxically, a cheaper drug might cost you more! This ruling makes sense for the nation. This ruling makes sense for patients who pay for their own medications. But it will cost some patients money.

Senate Votes to Give Consumers Faster Access to Generic Drugs

The Senate overwhelmingly approved a proposal today to give consumers swifter access to low-cost copies of brand-name prescription drugs.

It also turned back a Democratic effort to limit the premiums that could be charged for new prescription drug benefits under Medicare.

The 94-to-1 vote on generic drugs came just minutes after the 56-to-39 vote on Medicare premiums.

Both proposals were offered as amendments to a sweeping bill that would add drug benefits to Medicare and fundamentally restructure the program, which provides health insurance to 40 million people who are elderly or disabled.

We will have a Medicare drug bill. The political forces that favor this bill are too strong to stop a bill.

Will we have the right bill? Probably not, but one can argue that this imperfect bill will improve patient health. Back to the generic issue:

House Republican leaders have shown little interest in such generic drug legislation. But Mr. Schumer said it would be difficult for them to kill the proposal in the expected conference committee to iron out differences on the overall Medicare bill.

Mr. Schumer said the generic drug proposal could save consumers $60 billion to $70 billion in the next decade and could reduce Medicare costs by $18 billion to $20 billion. The proposal goes beyond new rules issued last week by the Food and Drug Administration, which took its own action to make generic drugs more accessible. In recent years, Mr. Schumer said, brand-name drug companies have used "frivolous patents, lawsuits and legal mumbo-jumbo" to delay the marketing of generic drugs.

The Gregg-Schumer proposal would limit the ability of brand-name drug companies to delay federal approval of competing generic drugs. Brand-name manufacturers would be allowed only a single 30-month stay, while a court tries to resolve patent disputes. Brand-name companies have sometimes blocked competition for much longer, by filing additional patent claims and piling 30-month stays on top of one another.

The measure would also bar collusive agreements under which brand-name drug companies pay generic companies to keep generic drugs off the market.

The existing law provides an incentive for generic drug companies to challenge patents that may be invalid. If they are successful, such companies have the exclusive right to market the generic drug for 180 days, but sometimes the drug never reaches the market. Under the Gregg-Schumer proposal, generic drug companies would have to market the drug in a timely way or lose their 180-day protection.

This bill should fix a system that has meandered from original intent. We want the pharmaceutical industry to have sufficient incentives to produce new drugs. They deserve some patent protection. Where I (and many physicians) object is the legal games that the industry plays to extend patent protection beyond the time the law allows. This drug should close some legal loopholes. Patients will benefit.

Bush Announces an Easing of Rules on New Generic Drugs

President Bush announced new rules today that make it easier to introduce lower-cost generic versions of prescription drugs, intensifying his efforts to address health care issues ahead of next year's election.

The president, making good on a proposal he first made last year, said the Food and Drug Administration's action would limit the ability of pharmaceutical companies to delay the introduction of generic versions of prescription medicines. He said the F.D.A. rule would curtail a practice among manufacturers of brand-name drugs of delaying the introduction of generic versions by filing multiple patent-infringement lawsuits against potential competitors.

Under current rules, each patent-infringement suit causes a 30-month delay by the F.D.A. in considering generic versions of a drug for approval. Mr. Bush said drug makers would now be limited to a single 30-month regulatory delay to sort out patent disputes.

Mr. Bush said he was also directing the agency not to block generics because of patent disputes over minor issues like the color of a pill bottle or the use of ingredients not related to the drug's effectiveness. And he said his action would tighten the overall rules on patent applications, making it a criminal offense to make false statements to get a patent.

"By taking these actions, we will bring generic drugs to the market much more quickly ? in some cases, years earlier," Mr. Bush said during an appearance at a hospital here. "And this should save the American consumers about $3.5 billion a year, savings that will go, of course, to the consumers, to our seniors, or to Medicare programs administered by the state or to employer health plans."

The trade association for the big pharmaceutical companies signaled that they opposed the administration's decision and would fight similar legislation pending in the Senate.

Physicians generally favor using generics. Not all patients agree. Just do a search on generic omeprazole and you can read about the many readers who believe that this generic drug does not work.

I certainly favor more access to generics. While drug costs continue to rise even for generics, they do tend to stimulate market forces and lower prices for the class involved.