As the healthcare bill moves to the U.S. Senate and the country focuses on what is best and worst about the proposed legislation, now is the time to consider serious reform of both the price and safety of prescription drugs.
Concerning price, one of the best recommendations in the House bill is repeal of the bizarre restriction on Medicare to negotiate for lower prices from the drug companies. A bonanza for the drug companies, that restriction for years has forced the government to pay far higher prices for brand-name drugs than it needed to.
As other bloggers have pointed out, the Veteran Affairs System, which isn't bound by the same rules, is a model for pricing reform because it keeps a list of effective medicines and pays a fraction for them than Medicare does. With tens of millions more Americans finally expected to join the ranks of the medically insured, so greatly increasing the profits of the insurance and drug companies, the Senate has a small window of opportunity to press aggressively for the deepest price cuts from both. Let's hope they don't blow it. Pushing for such reform is, after all, one of the few ways the bill will have any hope of reining in soaring costs.
Concerning safety, Bloomberg News published a long piece today, "Pfizer Broke the Law by Promoting Drugs for Unapproved Uses," that lists only the most egregious crimes knowingly and repeatedly perpetrated by Pfizer and other major drug makers. Even so, and for good reason, the article is already lighting up the web and was a headline piece on this morning's Huffington Post. Among the more eye-popping facts: drug makers have in recent years shelled out $7 billion in penalties for committing felonies, with Pfizer alone paying the largest criminal fine in U.S. history, at $1.19 billion.
The article reports that in 2004 Pfizer used one of its units, Warner-Lambert, to influence physicians into prescribing an epilepsy drug called Neurontin for treatments the FDA had not authorized. Pfizer paid $430 million in criminal fines and civil penalties, assuring authorities that it wouldn't resort to the same illegal activity. On September 2 this year, however, another Pfizer unit pleaded guilty to the same felony, having in that case employed over 100 people to encourage off-label prescriptions for Bextra, a drug approved for the relief of arthritis. For that last felony, the Pfizer unit, Pharmacia & Upjohn, agreed to pay a record fine.
In January this year, to cite just one other example, Eli Lilly pleaded guilty to misrepresenting Zyprexa, a drug approved for the treatment of bipolar disorder. For committing the same felony, it paid $1.42 billion in fines and penalties. For four years, the drug maker had promoted Zyprexa as a treatment for dementia. Yet in one clinical trial, 31 people died after they were given the medication for that condition--"twice the rate for those taking a placebo."
Rather than expressing contrition for such illegal activity, including the flagrant breach of public trust, the drug companies invariably refuse to admit or deny wrongdoing; the enormous fines they are levied are but a fraction of the revenue they have made from pushing for off-label prescriptions (just one percent of their revenue from the same period, according to one study). Clearly, a day or so of bad press and a minor rap over the knuckles is, they wager, better for them than reforming their marketing strategies from the top down and refusing ever to put patient lives at risk. Nor, amazingly, are shareholders abandoning them for their felonious activity. On the contrary, in January this year, after Pfizer agreed to pay billions in penalties, the drug maker's share price actually went up by 9.3 percent.
All the signs suggest that this illegal activity is becoming the norm. One investigator from USC's Keck School of Medicine who in 2006 led a study for the National Institute of Mental Health of off-label use of drugs, including Zyprexa, observes that the drug makers' promotion of "off-label" treatments has become "an unwritten business plan." "They're [like] drivers that knowingly speed. If stopped, they pay the fine, and then they do it again."
With the healthcare bill still awaiting final approval, the U.S. Senate has a rare opportunity to examine and tighten oversight of the drug companies, including to debate whether "direct-to-consumer" advertising--a key reason for the drug makers' runaway costs--is really advancing the interests of public health. (Among industrialized countries, DTC advertising is legal only in the United States in New Zealand.) With the drug companies now in the national spotlight, it's time to make sure our senators are fully aware of the activity, criminal and not, that the drug makers for years have approved and encouraged.