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Showing posts with label GlaxoSmithKline. Show all posts
Showing posts with label GlaxoSmithKline. Show all posts
Friday, 16 August 2013
Wednesday, 17 July 2013
China bars Glaxo exec from leaving country
China has barred a GlaxoSmithKline executive from leaving the country as it turns up the heat on the drugmaker over allegations of corruption.
Steve Nechelput, finance director for GlaxoSmithKline China, has been prevented from traveling outside China since the end of June, the company said Wednesday.
The U.K. drugmaker has been accused by China of using a network of more than 700 travel agencies and other firms to channel bribes to health officials since 2007.
Four senior Chinese executives of GSK have been detained, according to state news agency Xinhua, although the company says Nechelput was not among them.
"At no time has [Nechelput] been questioned or arrested, and he is not one of the individuals in detention," a GSK spokesperson said.
Nechelput, who holds a British passport, remained in his post. Mark Reilly, the top GSK executive in China, is currently in the U.K.
Meanwhile, Chinese state media has put the government's allegations against GlaxoSmithKline on public display.
The company was the subject of an editorial published Wednesday in the Communist Party's mouthpiece publication, and state central television aired the apparent confession of one of the four GSK executives.
The media campaign is the latest in a series of actions in recent days that suggest China is embarking on a concerted effort to crack down on corruption.
The commentary in the People's Daily was written under a pseudonym -- but one that sounds like "voice of China" when spoken.
"GlaxoSmithKline's bribery case shows how complicated and difficult the fight against commercial corruption can be," the commentary said. "Seriously attacking multinational companies' commercial bribery is of great significance to maintaining market economy order and keeping a fair competition environment."
GSK (GSK) is accused of funneling hundreds of millions of dollars in kickbacks to doctors, hospital and government officials in China. The activities appear to have been designed to encourage the use of GSK products, and to keep prices at artificially high levels.
Steve Nechelput, finance director for GlaxoSmithKline China, has been prevented from traveling outside China since the end of June, the company said Wednesday.
The U.K. drugmaker has been accused by China of using a network of more than 700 travel agencies and other firms to channel bribes to health officials since 2007.
Four senior Chinese executives of GSK have been detained, according to state news agency Xinhua, although the company says Nechelput was not among them.
"At no time has [Nechelput] been questioned or arrested, and he is not one of the individuals in detention," a GSK spokesperson said.
Nechelput, who holds a British passport, remained in his post. Mark Reilly, the top GSK executive in China, is currently in the U.K.
Meanwhile, Chinese state media has put the government's allegations against GlaxoSmithKline on public display.
The company was the subject of an editorial published Wednesday in the Communist Party's mouthpiece publication, and state central television aired the apparent confession of one of the four GSK executives.
The media campaign is the latest in a series of actions in recent days that suggest China is embarking on a concerted effort to crack down on corruption.
The commentary in the People's Daily was written under a pseudonym -- but one that sounds like "voice of China" when spoken.
"GlaxoSmithKline's bribery case shows how complicated and difficult the fight against commercial corruption can be," the commentary said. "Seriously attacking multinational companies' commercial bribery is of great significance to maintaining market economy order and keeping a fair competition environment."
GSK (GSK) is accused of funneling hundreds of millions of dollars in kickbacks to doctors, hospital and government officials in China. The activities appear to have been designed to encourage the use of GSK products, and to keep prices at artificially high levels.
Related story: China drugs scandal set to grow
The CCTV report featured GSK executive Liang Hong explaining how the bribery scheme worked, including the use of fake conferences and travel agencies to create receipts for services that were never performed. The surplus funds were then used to pay bribes.
The circumstances of the interview are difficult to discern and it wasn't clear whether the confession was coerced.
How much damage the scandal will do to GSK's reputation or bottom line remains unclear. But the episode underscores the challenges of doing business in China, an enormous, rapidly developing market in which bribes and corruption are often deeply ingrained.
Related story: Rolls-Royce in China corruption probe
GlaxoSmithKline -- which makes Paxil, Avandia and Wellbutrin -- declined to comment on the CCTV report and reiterated a statement from earlier this week that it was "deeply concerned and disappointed" by the allegations.
"GSK shares the desire of the Chinese authorities to root out corruption," a spokesperson said Monday. "These allegations are shameful and we regret this has occurred."
China's investigation could expose the company to legal action in the U.K., and possibly the United States, under laws relating to the bribery of foreign public officials.
GlaxoSmithKline said it had informed the U.K.'s Serious Fraud Office about the allegations but had not yet been asked to provide any further information. The agency, which investigates and prosecutes corruption cases, said it could neither confirm nor deny an interest in the claims against GSK at this stage.
Asked about Nechelput's travel restrictions, the U.K. Foreign Office said it was seeking more information from the Chinese authorities and was in contact with GSK.
Sunday, 14 July 2013
Chinese clinical trials probed
Drugmakers have increasingly been turning to China for large clinical trials because they’re cheaper and there’s a bigger population of subjects to draw on.
Now U.S. regulators have stepped in, questioning sloppy data and irregularities from the world’s most populous country.
Bristol-Myers Squibb Co. and Pfizer Inc.’s blood thinner Eliquis, approved in December, was stalled for nine months because of misconduct, errors and an alleged cover-up attempt at a Chinese trial site overseen by Bristol-Myers, according to documents posted by the Food and Drug Administration. The delay came after the company told the FDA that patients got the wrong medicine, records were secretly changed and “serious adverse events” went unreported, the documents show.
Now U.S. regulators have stepped in, questioning sloppy data and irregularities from the world’s most populous country.
Bristol-Myers Squibb Co. and Pfizer Inc.’s blood thinner Eliquis, approved in December, was stalled for nine months because of misconduct, errors and an alleged cover-up attempt at a Chinese trial site overseen by Bristol-Myers, according to documents posted by the Food and Drug Administration. The delay came after the company told the FDA that patients got the wrong medicine, records were secretly changed and “serious adverse events” went unreported, the documents show.
The errors led to a lengthy reanalysis of the data and spurred a debate within the agency on what the drug’s label should say about its effectiveness. An agency official also questioned whether large trials in countries like China with similar data shortfalls were a viable basis for approving treatments, according to the documents.
The mistakes showed a “pattern of inadequate trial conduct and oversight,” according to minutes of a Feb. 9 agency meeting involving the two New York companies and the FDA, posted on the agency’s website.
Sales for Eliquis may one day reach $10 billion a year, according to analysts. The delay, though, may cut the time Eliquis is protected by patent, reducing revenue by billions of dollars.
The Eliquis case is an example of the increasing scrutiny the pharmaceutical industry is facing on its research in China, which offers a huge base of test subjects and costs that the Tufts Center for the Study of Drug Development says can be half those in the United States.
Drugmakers will keep having problems with sloppy data and misconduct as long as they keep doing trials in places like China without providing better oversight, said Thomas Marciniak, an FDA medical team leader who wasn’t directly involved in the Eliquis application but reviewed the trial independently.
“What we need is high-quality trials. If we’re not getting them in the low-cost areas, either fix the low-cost areas, or stop doing them,” Marciniak said in an interview, emphasizing that he was speaking for himself and not the agency.
Last month, London-based GlaxoSmithKline said it fired its head of Chinese research after the scientist allegedly misrepresented data that was published in a medical journal.
Bristol-Myers, which ran the Eliquis trial known as Aristotle, responded appropriately once the mistakes became known, said Elliott Levy, the company’s executive who oversaw the research. A reanalysis done by the company and the FDA deleted the questionable data and found it didn’t substantially affect the final, positive result, he said.
The mistakes “were not exceptional,” Levy said in a telephone interview. “The issues they raised required recourse to the primary source data and some months to fully evaluate, but they’re not exceptional issues.”
Asked whether the issues in China created concerns that other misconduct or bad data may have occurred in the trial, Levy said Bristol-Myers was confident they hadn’t. “I don’t think there’s anything unique about China in this regard,” Levy said. “We’ve looked closely at the quality of the data and reliability and it’s not distinguishable from the United States and Europe.”
Pfizer is confident in the trial results, said Mackay Jimeson, a spokesman for the company.
Christopher Granger, a professor of medicine at Duke University in Durham, N.C., who was the lead outside researcher on the trial, disagreed with Levy.
“There is a greater likelihood of some of this impropriety in certain regions,” Granger said in a telephone interview. “We’ve had experiences in India and China where we’ve had more than we would have expected.”
Eliquis was developed as a safer and easier-to-take replacement for warfarin, a half-century-old blood thinner widely used to combat blood clotting and strokes.
Pfizer, the world’s biggest drugmaker, and Bristol-Myers share sales on Eliquis, which competes with Boehringer Ingelheim’s Pradaxa, and Bayer and Johnson & Johnson’s Xarelto.
The final-stage trial of Eliquis began in 2006, and eventually grew to more than 1,000 sites in 40 countries, according to the FDA. About 16 percent of the 18,000 patients were in Asia, with three dozen sites located in China.
Doctors and hospitals who sign on as investigators are typically paid for getting patients to enroll in the trial. They’re overseen by the drug companies, which monitor the patients in coordination with the physicians. Much of that work is done by contract research organizations.
In the Eliquis trial, Bristol-Myers hired Pharmaceutical Product Development Inc., a closely held Wilmington, N.C., company known as PPD, to help oversee it.
The Eliquis trial was questioned on two issues, according to the FDA documents first cited by the journal Pharmaceutical Approvals Monthly.
One was the improper manipulation of records at a study site for 35 patients at the Shanghai 9th Peoples Hospital in China. The second involved the high percentage of the 9,000 patients who were supposed to be getting Eliquis, and instead were either given the wrong drug, or the wrong dose.
There was a broad list of issues at the Shanghai hospital, according to FDA documents.
They included failure to report four potential adverse medical events, late reports on three others and three medical outcomes that weren’t included in the data. The FDA also reported that some patient records disappeared just ahead of a site visit by agency inspectors.
“The records were altered in order to cover-up GCP violations which had occurred at the site,” the FDA said in its report. GCP stands for “good clinical practice.”
Levy disputed some aspects of the report. The company “examined the trial data at that site and found that all the primary endpoints and the key secondary endpoints were appropriately documented and reported,” he said.
One was the improper manipulation of records at a study site for 35 patients at the Shanghai 9th Peoples Hospital in China. The second involved the high percentage of the 9,000 patients who were supposed to be getting Eliquis, and instead were either given the wrong drug, or the wrong dose.
There was a broad list of issues at the Shanghai hospital, according to FDA documents.
They included failure to report four potential adverse medical events, late reports on three others and three medical outcomes that weren’t included in the data. The FDA also reported that some patient records disappeared just ahead of a site visit by agency inspectors.
“The records were altered in order to cover-up GCP violations which had occurred at the site,” the FDA said in its report. GCP stands for “good clinical practice.”
Levy disputed some aspects of the report. The company “examined the trial data at that site and found that all the primary endpoints and the key secondary endpoints were appropriately documented and reported,” he said.
Saturday, 13 July 2013
Are clinical trial data shared sufficiently today? No
When discussing transparency it is important to be clear on what is being requested, as obfuscation is sometimes used to avoid discussing simple fixes. At stake are four levels of information about trials:
- Knowledge that a trial has been conducted, from a clinical trials register.
- A brief summary of a trial’s results, in an academic journal article or regulatory summary.
- Longer details about the trial’s methods and results, from a clinical study report where available.
- Individual patient data.
The AllTrials campaign calls only for the first three to be published.
The status quo is plainly unsatisfactory. The most current review—with no cherry picking permitted—estimates that around half of all trials for the treatments being used today have gone unpublished; and that trials with positive results are twice as likely to be disseminated.1 This is a problem for both industry and academic trials.
Although some in industry claim that these problems are in the past, in reality all supposed fixes have failed. In 2005, journal editors passed regulations stating that they would publish only registered trials: the evidence now shows these regulations have been widely ignored.2 In 2007, US legislation was passed requiring all trials since 2008 to post results on clinicaltrials.gov within a year of completion: the best published evidence shows this law has been ignored by 60-90% of trials. If industry representatives believe these problems have been fixed, they should present published evidence to support their case, with methods and results that are available for public scrutiny.
Even if the latest rules on transparency were to be implemented perfectly—starting from now—they would still do nothing to improve the evidence base for the treatments we use today, because they all cover only trials from the past few years. More than 80% of the medicines prescribed this year were generic, and came on the market more than a decade ago. We need the results of trials on these treatments, which are still available, albeit on paper. It is both practical and reasonable to request that these documents should be simply scanned, and shared.
The arguments against this level of transparency are conflicted and misguided. John Castellani, of the Pharmaceutical Research and Manufacturers of America (PhRMA), has claimed previously that it’s enough for regulators alone to see all the information on trials, and to see it behind closed doors. But this goes against the fundamental principles of science: we rely on transparency about methods and results, so that every experiment can be double checked and critically appraised. Although he might not realise it, Castellani’s position also exposes patients to real and unnecessary risks. Many of the most notable recent problems with medicines—problems with rofecoxib (Vioxx) and rosiglitazone (Avandia), for example, and problems with the evidence base for oseltamivir (Tamiflu)—were spotted by independent academics and doctors, and not by regulators. This isn’t because regulators are incompetent; on the contrary, they are highly trained, intelligent, and well motivated. But risks and benefits can be difficult to detect, and like everything in science, these problems benefit from many eyes.
For similar reasons, it is peculiar to see industry argue that information should not be shared simply because there might be disputes about interpretation: disputed interpretations are widespread throughout science and medicine, they are normal, and this open debate is how we get closer to the truth. And likewise, we do not silence medical scaremongers in the media by hiding information about trials; if anything, routinely withholding trial results is more likely to undermine public trust.
Overall, the lack of progress on transparency has been startling. Some worry that these problems should not be discussed in public, while we fix them quietly behind closed doors. But the problem of withheld trial results has been documented since at least 1986, and industry has successfully delayed remedial efforts for three decades. The latest strategy has been to raise the spectre of patient privacy.
In February, for example, PhRMA released a colourful statement that misleadingly suggested that I and the BMJ have somehow called for the reckless public release of full individual patient data sets. They made this claim, despite the head of press relations at PhRMA already knowing that neither I nor the AllTrials campaign call for individual patient data to be published.
The BMJ has recently called for individual patient data to be made more widely available, in an editorial.
Was this reckless and unreasonable? I don’t believe so. Where industry has shared data with researchers, it has been only piecemeal, and after enormous battles. But in many fields, there is already a long history of sensible and cautious sharing of detailed datasets—for example, to conduct individual patient data meta-analyses. These produce better estimates of treatment benefits, and improve care for patients, with appropriate concern for confidentiality. The Early Breast Cancer Trialists Collaborative Group’s meta-analyses, already published, represent just one notable example. The YODA project at Yale is looking at best practice for data sharing, as are many other groups. What’s more, the European Medicines Agency (EMA) has fully committed to sharing individual patient data after 2014, and are consulting only on the best mechanism to do so. These are reasonable and responsible things to discuss, as evidence based medicine moves forwards and becomes more effective.
Is patient confidentiality also an issue when clinical study reports are shared, as AllTrials and I have suggested they should be? Clinical study reports are long documents—often thousands of pages—but they are important, because analyses have shown that the information published in academic journal reports on clinical trials can be misleading or inaccurate, when compared with these longer, definitive sources of information. These reports certainly do contain some information about individuals—for example, in narrative descriptions of adverse events—but such information can easily be removed, or shared only with named researchers, if this is deemed necessary. Some industry figures have claimed that removing this material is either impossible or prohibitively expensive. But in 2010 the European ombudsman made a ruling of maladministration against the EMA, for claiming exactly that. The ombudsman examined the clinical study reports requested from the agency in detail, and concluded that the administrative burden of removing patient information, where necessary, was small. The European ombudsman has also stated clearly that there is no important commercially confidential information in these reports—the fact that a drug is not as good as claimed is not, in itself, something any company can hope to ethically withhold from doctors and patients.13 Since then, the EMA has released 1.6 million pages of clinical study reports14 under its new policy.13 Because these documents are so informative—and because the EMA holds only a small proportion of all the clinical study reports in existence—alltrials.net is asking for all existing clinical study reports to be made available, on all medicines currently in use.
This campaign has rapidly snowballed to become the mainstream position in the United Kingdom. AllTrials is now supported by more than 50 000 individuals, and 250 organizations, including more than 100 patient groups, the National Institute for Health and Care Excellence, academic funders such as the Medical Research Council and the Wellcome Trust, royal colleges, the Royal Pharmaceutical Society, the British Pharmacological Society, and the Faculty of Pharmaceutical Medicine, to name but a few. Ironically, within 24 hours of PhRMA denouncing our calls for greater transparency, GlaxoSmithKline—the world’s fourth largest drug company—signed up as supporters of alltrials.net. They have committed to do the very thing that PhRMA says is impossible, and share all clinical study reports going back to the foundation of the company.
If the transparency we ask for is practical, and reasonable, then what lies behind the colourful denunciations of PhRMA? Speaking to policy staff in some signatory organizations, one worrying theme recurs. We knew that withholding trial data was common, people have said, and we knew that it harms patients, but we felt embarrassed to talk about it, because even raising the issue seemed somehow subversive. This is a worrying state of affairs, and a testament to the power of aggressive lobbying by industry. But it is also perhaps a testament to the capture of key opinion leaders, and the dangers of longstanding inaction at senior levels in the medical establishment. In the UK, we have seen the same phenomena during prominent inquiries into failing hospitals: many senior staff, in numerous organizations, all saw a problem, but most were too busy—or too anxious about workplace conflict—to put patients first.
The problem of missing trials is one of the greatest ethical and practical problems facing medicine today. It also represents a bizarre paradox: we can spend millions of dollars on a trial, hoping it is free from bias, trying to detect a modest difference between two treatment groups; and then at the final moment we let all those biases and errors back in, by permitting half the results to disappear. Future generations may well look back at our tolerating this in amazement, in the same way that we look back on mediaeval bloodletting. The AllTrials movement is driving the solution forwards: patients need industry to engage constructively with this widespread consensus, on the practical details—urgently—so that we can all move on.
GSK: no evidence of China bribes, staff under house arrest
GlaxoSmithKline says it has found no evidence of its employees in China paying bribes to doctors and hospitals, despite claims made by the country's Public Security Bureau.
The last couple of weeks has seen the drugs giant's activities in China come under the spotlight and the PBS issued a statement talking about bribes being paid through travel agencies or as "project sponsorships". GSK is also suspected of being involved in tax-related crime, according to the ministry, which says that the offences have been occurring "for some time, involving a large number of people and significant amounts of money".
The PSB also claimed that some employees at GSK have already confessed to the offences. A GSK spokesperson told PharmaTimes World News that "we are aware of the statement from the PSB [and] we are willing to cooperate with the authorities in this inquiry".
The last couple of weeks has seen the drugs giant's activities in China come under the spotlight and the PBS issued a statement talking about bribes being paid through travel agencies or as "project sponsorships". GSK is also suspected of being involved in tax-related crime, according to the ministry, which says that the offences have been occurring "for some time, involving a large number of people and significant amounts of money".
The PSB also claimed that some employees at GSK have already confessed to the offences. A GSK spokesperson told PharmaTimes World News that "we are aware of the statement from the PSB [and] we are willing to cooperate with the authorities in this inquiry".
The spokesperson noted that "this is the first official communication that has been published by the PSB in relation to the specific nature of its investigation. We take all allegations of bribery and corruption seriously. We continuously monitor our businesses to ensure they meet our strict compliance procedures".
However, "we have done this in China and found no evidence of bribery or corruption of doctors or government officials", said the spokesperson, noting that "if evidence of such activity is provided we will act swiftly on it".
Constant surveillance
Meantime, this morning, the Daily Telegraph has reported that at least 30 GSK employees, including five or six executives, are currently under house arrest and constant surveillance, quoting an unnamed source familiar with the situation.
Those held include the company's legal counsel in China, who has been cut off from communication with GSK's head office, the source claims. The newspaper says that GSK is locked in emergency meetings with its advisors over the situation and has hired Jun He, one of Beijing's leading law firms.
However, "we have done this in China and found no evidence of bribery or corruption of doctors or government officials", said the spokesperson, noting that "if evidence of such activity is provided we will act swiftly on it".
Constant surveillance
Meantime, this morning, the Daily Telegraph has reported that at least 30 GSK employees, including five or six executives, are currently under house arrest and constant surveillance, quoting an unnamed source familiar with the situation.
Those held include the company's legal counsel in China, who has been cut off from communication with GSK's head office, the source claims. The newspaper says that GSK is locked in emergency meetings with its advisors over the situation and has hired Jun He, one of Beijing's leading law firms.
Friday, 12 July 2013
The Truth About the Drug Companies
Every day Americans are subjected to a barrage of advertising by the pharmaceutical industry. Mixed in with the pitches for a particular drug—usually featuring beautiful people enjoying themselves in the great outdoors—is a more general message. Boiled down to its essentials, it is this: “Yes, prescription drugs are expensive, but that shows how valuable they are. Besides, our research and development costs are enormous, and we need to cover them somehow. As ‘research-based’ companies, we turn out a steady stream of innovative medicines that lengthen life, enhance its quality, and avert more expensive medical care. You are the beneficiaries of this ongoing achievement of the American free enterprise system, so be grateful, quit whining, and pay up.” More prosaically, what the industry is saying is that you get what you pay for.
Is any of this true? Well, the first part certainly is. Prescription drug costs are indeed high—and rising fast. Americans now spend a staggering $200 billion a year on prescription drugs, and that figure is growing at a rate of about 12 percent a year (down from a high of 18 percent in 1999). Drugs are the fastest-growing part of the health care bill—which itself is rising at an alarming rate. The increase in drug spending reflects, in almost equal parts, the facts that people are taking a lot more drugs than they used to, that those drugs are more likely to be expensive new ones instead of older, cheaper ones, and that the prices of the most heavily prescribed drugs are routinely jacked up, sometimes several times a year.
Before its patent ran out, for example, the price of Schering-Plough’s top-selling allergy pill, Claritin, was raised thirteen times over five years, for a cumulative increase of more than 50 percent—over four times the rate of general inflation. As a spokeswoman for one company explained, “Price increases are not uncommon in the industry and this allows us to be able to invest in R&D.” In 2002, the average price of the fifty drugs most used by senior citizens was nearly $1,500 for a year’s supply. (Pricing varies greatly, but this refers to what the companies call the average wholesale price, which is usually pretty close to what an individual without insurance pays at the pharmacy.)
Paying for prescription drugs is no longer a problem just for poor people. As the economy continues to struggle, health insurance is shrinking. Employers are requiring workers to pay more of the costs themselves, and many businesses are dropping health benefits altogether. Since prescription drug costs are rising so fast, payers are particularly eager to get out from under them by shifting costs to individuals. The result is that more people have to pay a greater fraction of their drug bills out of pocket. And that packs a wallop.
Many of them simply can’t do it. They trade off drugs against home heating or food. Some people try to string out their drugs by taking them less often than prescribed, or sharing them with a spouse. Others, too embarrassed to admit that they can’t afford to pay for drugs, leave their doctors’ offices with prescriptions in hand but don’t have them filled. Not only do these patients go without needed treatment but their doctors sometimes wrongly conclude that the drugs they prescribed haven’t worked and prescribe yet others—thus compounding the problem.
The people hurting most are the elderly. When Medicare was enacted in 1965, people took far fewer prescription drugs and they were cheap. For that reason, no one thought it necessary to include an outpatient prescription drug benefit in the program. In those days, senior citizens could generally afford to buy whatever drugs they needed out of pocket. Approximately half to two thirds of the elderly have supplementary insurance that partly covers prescription drugs, but that percentage is dropping as employers and insurers decide it is a losing proposition for them. At the end of 2003, Congress passed a Medicare reform bill that included a prescription drug benefit scheduled to begin in 2006, but as we shall see later, its benefits are inadequate to begin with and will quickly be overtaken by rising prices and administrative costs.
For obvious reasons, the elderly tend to need more prescription drugs than younger people—mainly for chronic conditions like arthritis, diabetes, high blood pressure, and elevated cholesterol. In 2001, nearly one in four seniors reported that they skipped doses or did not fill prescriptions because of the cost. (That fraction is almost certainly higher now.) Sadly, the frailest are the least likely to have supplementary insurance. At an average cost of $1,500 a year for each drug, someone without supplementary insurance who takes six different prescription drugs—and this is not rare—would have to spend $9,000 out of pocket. Not many among the old and frail have such deep pockets.
Furthermore, in one of the more perverse of the pharmaceutical industry’s practices, prices are much higher for precisely the people who most need the drugs and can least afford them. The industry charges Medicare recipients without supplementary insurance much more than it does favored customers, such as large HMOs or the Veterans Affairs (VA) system. Because the latter buy in bulk, they can bargain for steep discounts or rebates. People without insurance have no bargaining power; and so they pay the highest prices.
In the past two years, we have started to see, for the first time, the beginnings of public resistance to rapacious pricing and other dubious practices of the pharmaceutical industry. It is mainly because of this resistance that drug companies are now blanketing us with public relations messages. And the magic words, repeated over and over like an incantation, are research, innovation, and American. Research. Innovation. American. It makes a great story.
But while the rhetoric is stirring, it has very little to do with reality. First, research and development (R&D) is a relatively small part of the budgets of the big drug companies—dwarfed by their vast expenditures on marketing and administration, and smaller even than profits. In fact, year after year, for over two decades, this industry has been far and away the most profitable in the United States. (In 2003, for the first time, the industry lost its first-place position, coming in third, behind “mining, crude oil production,” and “commercial banks.”) The prices drug companies charge have little relationship to the costs of making the drugs and could be cut dramatically without coming anywhere close to threatening R&D.
Second, the pharmaceutical industry is not especially innovative. As hard as it is to believe, only a handful of truly important drugs have been brought to market in recent years, and they were mostly based on taxpayer-funded research at academic institutions, small biotechnology companies, or the National Institutes of Health (NIH). The great majority of “new” drugs are not new at all but merely variations of older drugs already on the market. These are called “me-too” drugs. The idea is to grab a share of an established, lucrative market by producing something very similar to a top-selling drug. For instance, we now have six statins (Mevacor, Lipitor, Zocor, Pravachol, Lescol, and the newest, Crestor) on the market to lower cholesterol, all variants of the first. As Dr. Sharon Levine, associate executive director of the Kaiser Permanente Medical Group, put it:
Before its patent ran out, for example, the price of Schering-Plough’s top-selling allergy pill, Claritin, was raised thirteen times over five years, for a cumulative increase of more than 50 percent—over four times the rate of general inflation. As a spokeswoman for one company explained, “Price increases are not uncommon in the industry and this allows us to be able to invest in R&D.” In 2002, the average price of the fifty drugs most used by senior citizens was nearly $1,500 for a year’s supply. (Pricing varies greatly, but this refers to what the companies call the average wholesale price, which is usually pretty close to what an individual without insurance pays at the pharmacy.)
Paying for prescription drugs is no longer a problem just for poor people. As the economy continues to struggle, health insurance is shrinking. Employers are requiring workers to pay more of the costs themselves, and many businesses are dropping health benefits altogether. Since prescription drug costs are rising so fast, payers are particularly eager to get out from under them by shifting costs to individuals. The result is that more people have to pay a greater fraction of their drug bills out of pocket. And that packs a wallop.
Many of them simply can’t do it. They trade off drugs against home heating or food. Some people try to string out their drugs by taking them less often than prescribed, or sharing them with a spouse. Others, too embarrassed to admit that they can’t afford to pay for drugs, leave their doctors’ offices with prescriptions in hand but don’t have them filled. Not only do these patients go without needed treatment but their doctors sometimes wrongly conclude that the drugs they prescribed haven’t worked and prescribe yet others—thus compounding the problem.
The people hurting most are the elderly. When Medicare was enacted in 1965, people took far fewer prescription drugs and they were cheap. For that reason, no one thought it necessary to include an outpatient prescription drug benefit in the program. In those days, senior citizens could generally afford to buy whatever drugs they needed out of pocket. Approximately half to two thirds of the elderly have supplementary insurance that partly covers prescription drugs, but that percentage is dropping as employers and insurers decide it is a losing proposition for them. At the end of 2003, Congress passed a Medicare reform bill that included a prescription drug benefit scheduled to begin in 2006, but as we shall see later, its benefits are inadequate to begin with and will quickly be overtaken by rising prices and administrative costs.
For obvious reasons, the elderly tend to need more prescription drugs than younger people—mainly for chronic conditions like arthritis, diabetes, high blood pressure, and elevated cholesterol. In 2001, nearly one in four seniors reported that they skipped doses or did not fill prescriptions because of the cost. (That fraction is almost certainly higher now.) Sadly, the frailest are the least likely to have supplementary insurance. At an average cost of $1,500 a year for each drug, someone without supplementary insurance who takes six different prescription drugs—and this is not rare—would have to spend $9,000 out of pocket. Not many among the old and frail have such deep pockets.
Furthermore, in one of the more perverse of the pharmaceutical industry’s practices, prices are much higher for precisely the people who most need the drugs and can least afford them. The industry charges Medicare recipients without supplementary insurance much more than it does favored customers, such as large HMOs or the Veterans Affairs (VA) system. Because the latter buy in bulk, they can bargain for steep discounts or rebates. People without insurance have no bargaining power; and so they pay the highest prices.
In the past two years, we have started to see, for the first time, the beginnings of public resistance to rapacious pricing and other dubious practices of the pharmaceutical industry. It is mainly because of this resistance that drug companies are now blanketing us with public relations messages. And the magic words, repeated over and over like an incantation, are research, innovation, and American. Research. Innovation. American. It makes a great story.
But while the rhetoric is stirring, it has very little to do with reality. First, research and development (R&D) is a relatively small part of the budgets of the big drug companies—dwarfed by their vast expenditures on marketing and administration, and smaller even than profits. In fact, year after year, for over two decades, this industry has been far and away the most profitable in the United States. (In 2003, for the first time, the industry lost its first-place position, coming in third, behind “mining, crude oil production,” and “commercial banks.”) The prices drug companies charge have little relationship to the costs of making the drugs and could be cut dramatically without coming anywhere close to threatening R&D.
Second, the pharmaceutical industry is not especially innovative. As hard as it is to believe, only a handful of truly important drugs have been brought to market in recent years, and they were mostly based on taxpayer-funded research at academic institutions, small biotechnology companies, or the National Institutes of Health (NIH). The great majority of “new” drugs are not new at all but merely variations of older drugs already on the market. These are called “me-too” drugs. The idea is to grab a share of an established, lucrative market by producing something very similar to a top-selling drug. For instance, we now have six statins (Mevacor, Lipitor, Zocor, Pravachol, Lescol, and the newest, Crestor) on the market to lower cholesterol, all variants of the first. As Dr. Sharon Levine, associate executive director of the Kaiser Permanente Medical Group, put it:
"If I’m a manufacturer and I can change one molecule and get another twenty years of patent rights, and convince physicians to prescribe and consumers to demand the next form of Prilosec, or weekly Prozac instead of daily Prozac, just as my patent expires, then why would I be spending money on a lot less certain endeavor, which is looking for brand-new drugs?"
Third, the industry is hardly a model of American free enterprise. To be sure, it is free to decide which drugs to develop (me-too drugs instead of innovative ones, for instance), and it is free to price them as high as the traffic will bear, but it is utterly dependent on government-granted monopolies—in the form of patents and Food and Drug Administration (FDA)–approved exclusive marketing rights. If it is not particularly innovative in discovering new drugs, it is highly innovative—and aggressive—in dreaming up ways to extend its monopoly rights.
And there is nothing peculiarly American about this industry. It is the very essence of a global enterprise. Roughly half of the largest drug companies are based in Europe. (The exact count shifts because of mergers.) In 2002, the top ten were the American companies Pfizer, Merck, Johnson & Johnson, Bristol-Myers Squibb, and Wyeth (formerly American Home Products); the British companies GlaxoSmithKline and AstraZeneca; the Swiss companies Novartis and Roche; and the French company Aventis (which in 2004 merged with another French company, Sanafi Synthelabo, putting it in third place). All are much alike in their operations. All price their drugs much higher here than in other markets.
Since the United States is the major profit center, it is simply good public relations for drug companies to pass themselves off as American, whether they are or not. It is true, however, that some of the European companies are now locating their R&D operations in the United States. They claim the reason for this is that we don’t regulate prices, as does much of the rest of the world. But more likely it is that they want to feed on the unparalleled research output of American universities and the NIH. In other words, it’s not private enterprise that draws them here but the very opposite—our publicly sponsored research enterprise.
Over the past two decades the pharmaceutical industry has moved very far from its original high purpose of discovering and producing useful new drugs. Now primarily a marketing machine to sell drugs of dubious benefit, this industry uses its wealth and power to co-opt every institution that might stand in its way, including the US Congress, the FDA, academic medical centers, and the medical profession itself. (Most of its marketing efforts are focused on influencing doctors, since they must write the prescriptions.)
If prescription drugs were like ordinary consumer goods, all this might not matter very much. But drugs are different. People depend on them for their health and even their lives. In the words of Senator Debbie Stabenow (D-Mich.), “It’s not like buying a car or tennis shoes or peanut butter.” People need to know that there are some checks and balances on this industry, so that its quest for profits doesn’t push every other consideration aside. But there aren’t such checks and balances.
What does the eight-hundred-pound gorilla do? Anything it wants to.
What’s true of the eight-hundred-pound gorilla is true of the colossus that is the pharmaceutical industry. It is used to doing pretty much what it wants to do. The watershed year was 1980. Before then, it was a good business, but afterward, it was a stupendous one. From 1960 to 1980, prescription drug sales were fairly static as a percent of US gross domestic product, but from 1980 to 2000, they tripled. They now stand at more than $200 billion a year.6 Of the many events that contributed to the industry’s great and good fortune, none had to do with the quality of the drugs the companies were selling.
The claim that drugs are a $200 billion industry is an understatement. According to government sources, that is roughly how much Americans spent on prescription drugs in 2002. That figure refers to direct consumer purchases at drugstores and mail-order pharmacies (whether paid for out of pocket or not), and it includes the nearly 25 percent markup for wholesalers, pharmacists, and other middlemen and retailers. But it does not include the large amounts spent for drugs administered in hospitals, nursing homes, or doctors’ offices (as is the case for many cancer drugs). In most analyses, they are allocated to costs for those facilities.
Drug company revenues (or sales) are a little different, at least as they are reported in summaries of corporate annual reports. They usually refer to a company’s worldwide sales, including those to health facilities. But they do not include the revenues of middlemen and retailers.
Perhaps the most quoted source of statistics on the pharmaceutical industry, IMS Health, estimated total worldwide sales for prescription drugs to be about $400 billion in 2002. About half were in the United States. So the $200 billion colossus is really a $400 billion megacolossus.
The election of Ronald Reagan in 1980 was perhaps the fundamental element in the rapid rise of big pharma—the collective name for the largest drug companies. With the Reagan administration came a strong pro-business shift not only in government policies but in society at large. And with the shift, the public attitude toward great wealth changed. Before then, there was something faintly disreputable about really big fortunes. You could choose to do well or you could choose to do good, but most people who had any choice in the matter thought it difficult to do both. That belief was particularly strong among scientists and other intellectuals. They could choose to live a comfortable but not luxurious life in academia, hoping to do exciting cutting-edge research, or they could “sell out” to industry and do less important but more remunerative work. Starting in the Reagan years and continuing through the 1990s, Americans changed their tune. It became not only reputable to be wealthy, but something close to virtuous. There were “winners” and there were “losers,” and the winners were rich and deserved to be. The gap between the rich and poor, which had been narrowing since World War II, suddenly began to widen again, until today it is a chasm.
The pharmaceutical industry and its CEOs quickly joined the ranks of the winners as a result of a number of business-friendly government actions. I won’t enumerate all of them, but two are especially important. Beginning in 1980, Congress enacted a series of laws designed to speed the translation of tax-supported basic research into useful new products—a process sometimes referred to as “technology transfer.” The goal was also to improve the position of American-owned high-tech businesses in world markets.
The most important of these laws is known as the Bayh-Dole Act, after its chief sponsors, Senator Birch Bayh (D-Ind.) and Senator Robert Dole (R-Kans.). Bayh-Dole enabled universities and small businesses to patent discoveries emanating from research sponsored by the National Institutes of Health, the major distributor of tax dollars for medical research, and then to grant exclusive licenses to drug companies. Until then, taxpayer-financed discoveries were in the public domain, available to any company that wanted to use them. But now universities, where most NIH-sponsored work is carried out, can patent and license their discoveries, and charge royalties. Similar legislation permitted the NIH itself to enter into deals with drug companies that would directly transfer NIH discoveries to industry.
Bayh-Dole gave a tremendous boost to the nascent biotechnology industry, as well as to big pharma. Small biotech companies, many of them founded by university researchers to exploit their discoveries, proliferated rapidly. They now ring the major academic research institutions and often carry out the initial phases of drug development, hoping for lucrative deals with big drug companies that can market the new drugs. Usually both academic researchers and their institutions own equity in the biotechnology companies they are involved with. Thus, when a patent held by a university or a small biotech company is eventually licensed to a big drug company, all parties cash in on the public investment in research.
These laws mean that drug companies no longer have to rely on their own research for new drugs, and few of the large ones do. Increasingly, they rely on academia, small biotech startup companies, and the NIH for that. At least a third of drugs marketed by the major drug companies are now licensed from universities or small biotech companies, and these tend to be the most innovative ones. While Bayh-Dole was clearly a bonanza for big pharma and the biotech industry, whether its enactment was a net benefit to the public is arguable.
The Reagan years and Bayh-Dole also transformed the ethos of medical schools and teaching hospitals. These nonprofit institutions started to see themselves as “partners” of industry, and they became just as enthusiastic as any entrepreneur about the opportunities to parlay their discoveries into financial gain. Faculty researchers were encouraged to obtain patents on their work (which were assigned to their universities), and they shared in the royalties. Many medical schools and teaching hospitals set up “technology transfer” offices to help in this activity and capitalize on faculty discoveries. As the entrepreneurial spirit grew during the 1990s, medical school faculty entered into other lucrative financial arrangements with drug companies, as did their parent institutions.
One of the results has been a growing pro-industry bias in medical research—exactly where such bias doesn’t belong. Faculty members who had earlier contented themselves with what was once referred to as a “threadbare but genteel” lifestyle began to ask themselves, in the words of my grandmother, “If you’re so smart, why aren’t you rich?” Medical schools and teaching hospitals, for their part, put more resources into searching for commercial opportunities.
Starting in 1984, with legislation known as the Hatch-Waxman Act, Congress passed another series of laws that were just as big a bonanza for the pharmaceutical industry. These laws extended monopoly rights for brand-name drugs. Exclusivity is the lifeblood of the industry because it means that no other company may sell the same drug for a set period. After exclusive marketing rights expire, copies (called generic drugs) enter the market, and the price usually falls to as little as 20 percent of what it was. There are two forms of monopoly rights—patents granted by the US Patent and Trade Office (USPTO) and exclusivity granted by the FDA. While related, they operate somewhat independently, almost as backups for each other. Hatch-Waxman, named for Senator Orrin Hatch (R-Utah) and Representative Henry Waxman (D-Calif.), was meant mainly to stimulate the foundering generic industry by short-circuiting some of the FDA requirements for bringing generic drugs to market. While successful in doing that, Hatch-Waxman also lengthened the patent life for brand-name drugs. Since then, industry lawyers have manipulated some of its provisions to extend patents far longer than the lawmakers intended.
In the 1990s, Congress enacted other laws that further increased the patent life of brand-name drugs. Drug companies now employ small armies of lawyers to milk these laws for all they’re worth—and they’re worth a lot. The result is that the effective patent life of brand-name drugs increased from about eight years in 1980 to about fourteen years in 2000.10 For a blockbuster—usually defined as a drug with sales of over a billion dollars a year (like Lipitor or Celebrex or Zoloft)—those six years of additional exclusivity are golden. They can add billions of dollars to sales—enough to buy a lot of lawyers and have plenty of change left over. No wonder big pharma will do almost anything to protect exclusive marketing rights, despite the fact that doing so flies in the face of all its rhetoric about the free market.
As their profits skyrocketed during the 1980s and 1990s, so did the political power of drug companies. By 1990, the industry had assumed its present contours as a business with unprecedented control over its own fortunes. For example, if it didn’t like something about the FDA, the federal agency that is supposed to regulate the industry, it could change it through direct pressure or through its friends in Congress. The top ten drug companies (which included European companies) had profits of nearly 25 percent of sales in 1990, and except for a dip at the time of President Bill Clinton’s health care reform proposal, profits as a percentage of sales remained about the same for the next decade. (Of course, in absolute terms, as sales mounted, so did profits.) In 2001, the ten American drug companies in the Fortune 500 list (not quite the same as the top ten worldwide, but their profit margins are much the same) ranked far above all other American industries in average net return, whether as a percentage of sales (18.5 percent), of assets (16.3 percent), or of shareholders’ equity (33.2 percent). These are astonishing margins. For comparison, the median net return for all other industries in the Fortune 500 was only 3.3 percent of sales. Commercial banking, itself no slouch as an aggressive industry with many friends in high places, was a distant second, at 13.5 percent of sales.
In 2002, as the economic downturn continued, big pharma showed only a slight drop in profits—from 18.5 to 17.0 percent of sales. The most startling fact about 2002 is that the combined profits for the ten drug companies in the Fortune 500 ($35.9 billion) were more than the profits for all the other 490 businesses put together ($33.7 billion). In 2003 profits of the Fortune 500 drug companies dropped to 14.3 percent of sales, still well above the median for all industries of 4.6 percent for that year. When I say this is a profitable industry, I mean really profitable. It is difficult to conceive of how awash in money big pharma is.
Drug industry expenditures for research and development, while large, were consistently far less than profits. For the top ten companies, they amounted to only 11 percent of sales in 1990, rising slightly to 14 percent in 2000. The biggest single item in the budget is neither R&D nor even profits but something usually called “marketing and administration”—a name that varies slightly from company to company. In 1990, a staggering 36 percent of sales revenues went into this category, and that proportion remained about the same for over a decade.13 Note that this is two and a half times the expenditures for R&D.
These figures are drawn from the industry’s own annual reports to the Securities and Exchange Commission (SEC) and to stockholders, but what actually goes into these categories is not at all clear, because drug companies hold that information very close to their chests. It is likely, for instance, that R&D includes many activities most people would consider marketing, but no one can know for sure. For its part, “marketing and administration” is a gigantic black box that probably includes what the industry calls “education,” as well as advertising and promotion, legal costs, and executive salaries—which are whopping. According to a report by the non-profit group Families USA, the for-mer chairman and CEO of Bristol-Myers Squibb, Charles A. Heimbold Jr., made $74,890,918 in 2001, not counting his $76,095,611 worth of unexercised stock options. The chairman of Wyeth made $40,521,011, exclusive of his $40,629,459 in stock options. And so on.
If 1980 was a watershed year for the pharmaceutical industry, 2000 may very well turn out to have been another one—the year things began to go wrong. As the booming economy of the late 1990s turned sour, many successful businesses found themselves in trouble. And as tax revenues dropped, state governments also found themselves in trouble. In one respect, the pharmaceutical industry is well protected against the downturn, since it has so much wealth and power. But in another respect, it is peculiarly vulnerable, since it depends on employer-sponsored insurance and state-run Medicaid programs for much of its revenues. When employers and states are in trouble, so is big pharma.
And sure enough, in just the past couple of years, employers and the private health insurers with whom they contract have started to push back against drug costs. Most big managed care plans now bargain for steep price discounts. Most have also instituted three-tiered coverage for prescription drugs—full coverage for generic drugs, partial coverage for useful brand-name drugs, and no coverage for expensive drugs that offer no added benefit over cheaper ones. These lists of preferred drugs are called formularies, and they are an increasingly important method for containing drug costs. Big pharma is feeling the effects of these measures, although not surprisingly, it has become adept at manipulating the system—mainly by inducing doctors or health plans to put expensive, brand-name drugs on formularies.
State governments, too, are looking for ways to cut their drug costs. Some state legislatures are drafting measures that would permit them to regulate prescription drug prices for state employees, Medicaid recipients, and the uninsured. Like managed care plans, they are creating formularies of preferred drugs. The industry is fighting these efforts—mainly with its legions of lobbyists and lawyers. It fought the state of Maine all the way to the US Supreme Court, which in 2003 upheld Maine’s right to bargain with drug companies for lower prices, while leaving open the details. But that war has just begun, and it promises to go on for years and get very ugly.
Recently the public has shown signs of being fed up. The fact that Americans pay much more for prescription drugs than Europeans and Canadians is now widely known. An estimated one to two million Americans buy their medicines from Canadian drugstores over the Internet, despite the fact that in 1987, in response to heavy industry lobbying, a compliant Congress had made it illegal for anyone other than manufacturers to import prescription drugs from other countries.15 In addition, there is a brisk traffic in bus trips for people in border states, particularly the elderly, to travel to Canada or Mexico to buy prescription drugs. Their resentment is palpable, and they constitute a powerful voter block—a fact not lost on Congress or state legislatures.
The industry faces other, less familiar problems. It happens that, by chance, some of the top-selling drugs—with combined sales of around $35 billion a year—are scheduled to go off patent within a few years of one another.16 This drop over the cliff began in 2001, with the expiration of Eli Lilly’s patent on its blockbuster antidepressant Prozac. In the same year, AstraZeneca lost its patent on Prilosec, the original “purple pill” for heartburn, which at its peak brought in a stunning $6 billion a year. Bristol-Myers Squibb lost its best-selling diabetes drug, Glucophage. The unusual cluster of expirations will continue for another couple of years. While it represents a huge loss to the industry as a whole, for some companies it’s a disaster. Schering-Plough’s blockbuster allergy drug, Claritin, brought in fully a third of that company’s revenues before its patent expired in 2002. Claritin is now sold over the counter for much less than its prescription price. So far, the company has been unable to make up for the loss by trying to switch Claritin users to Clarinex—a drug that is virtually identical but has the advantage of still being on patent.
Even worse is the fact that there are very few drugs in the pipeline ready to take the place of blockbusters going off patent. In fact, that is the biggest problem facing the industry today, and its darkest secret. All the public relations about innovation is meant to obscure precisely this fact. The stream of new drugs has slowed to a trickle, and few of them are innovative in any sense of that word. Instead, the great majority are variations of oldies but goodies—”me-too” drugs.
Of the seventy-eight drugs approved by the FDA in 2002, only seventeen contained new active ingredients, and only seven of these were classified by the FDA as improvements over older drugs. The other seventy-one drugs approved that year were variations of old drugs or deemed no better than drugs already on the market. In other words, they were me-too drugs. Seven of seventy-eight is not much of a yield. Furthermore, of those seven, not one came from a major US drug company.
For the first time, in just a few short years, the gigantic pharmaceutical industry is finding itself in serious difficulty. It is facing, as one industry spokesman put it, “a perfect storm.” To be sure, profits are still beyond anything most other industries could hope for, but they have recently fallen, and for some companies they fell a lot. And that is what matters to investors. Wall Street doesn’t care how high profits are today, only how high they will be tomorrow. For some companies, stock prices have plummeted. Nevertheless, the industry keeps promising a bright new day. It bases its reassurances on the notion that the mapping of the human genome and the accompanying burst in genetic research will yield a cornucopia of important new drugs. Left unsaid is the fact that big pharma is depending on government, universities, and small biotech companies for that innovation. While there is no doubt that genetic discoveries will lead to treatments, the fact remains that it will probably be years before the basic research pays off with new drugs. In the meantime, the once-solid foundations of the big pharma colossus are shaking.
The hints of trouble and the public’s growing resentment over high prices are producing the first cracks in the industry’s formerly firm support in Washington. In 2000, Congress passed legislation that would have closed some of the loopholes in Hatch-Waxman and also permitted American pharmacies, as well as individuals, to import drugs from certain countries where prices are lower. In particular, they could buy back FDA-approved drugs from Canada that had been exported there. It sounds silly to “reimport” drugs that are marketed in the United States, but even with the added transaction costs, doing so is cheaper than buying them here. But the bill required the secretary of health and human services to certify that the practice would not pose any “added risk” to the public, and secretaries in both the Clinton and Bush administrations, under pressure from the industry, refused to do that.
The industry is also being hit with a tidal wave of government investigations and civil and criminal lawsuits. The litany of charges includes illegally overcharging Medicaid and Medicare, paying kickbacks to doctors, engaging in anticompetitive practices, colluding with generic companies to keep generic drugs off the market, illegally promoting drugs for unapproved uses, engaging in misleading direct-to-consumer advertising, and, of course, covering up evidence. Some of the settlements have been huge. TAP Pharmaceuticals, for instance, paid $875 million to settle civil and criminal charges of Medicaid and Medicare fraud in the marketing of its prostate cancer drug, Lupron.19 All of these efforts could be summed up as increasingly desperate marketing and patent games, activities that always skirted the edge of legality but now are sometimes well on the other side.
How is the pharmaceutical industry responding to its difficulties? One could hope drug companies would decide to make some changes—trim their prices, or at least make them more equitable, and put more of their money into trying to discover genuinely innovative drugs, instead of just talking about it. But that is not what is happening. Instead, drug companies are doing more of what got them into this situation. They are marketing their me-too drugs even more relentlessly. They are pushing even harder to extend their monopolies on top-selling drugs. And they are pouring more money into lobbying and political campaigns. As for innovation, they are still waiting for Godot.
The news is not all bad for the industry. The Medicare prescription drug benefit enacted in 2003, and scheduled to go into effect in 2006, promises a windfall for big pharma since it forbids the government from negotiating prices. The immediate jump in pharmaceutical stock prices after the bill passed indicated that the industry and investors were well aware of the windfall. But at best, this legislation will be only a temporary boost for the industry. As costs rise, Congress will have to reconsider its industry-friendly decision to allow drug companies to set their own prices, no questions asked.
This is an industry that in some ways is like the Wizard of Oz—still full of bluster but now being exposed as something far different from its image. Instead of being an engine of innovation, it is a vast marketing machine. Instead of being a free market success story, it lives off government-funded research and monopoly rights. Yet this industry occupies an essential role in the American health care system, and it performs a valuable function, if not in discovering important new drugs at least in developing them and bringing them to market. But big pharma is extravagantly rewarded for its relatively modest functions. We get nowhere near our money’s worth. The United States can no longer afford it in its present form.
Clearly, the pharmaceutical industry is due for fundamental reform. Reform will have to extend beyond the industry to the agencies and institutions it has co-opted, including the FDA and the medical profession and its teaching centers. In my forthcoming book, The Truth About the Drug Companies, I discuss the major reforms that will be necessary.
For example, we need to get the industry to focus on discovering truly innovative drugs instead of turning out me-too drugs (and spending billions of dollars to promote them as though they were miracles). The me-too business is made possible by the fact that the FDA usually approves a drug only if it is better than a placebo. It needn’t be better than an older drug already on the market to treat the same condition; in fact, it may be worse. There is no way of knowing, since companies generally do not test their new drugs against older ones for the same conditions at equivalent doses. (For obvious reasons, they would rather not find the answer.) They should be required to do so.
The me-too market would collapse virtually overnight if the FDA made approval of new drugs contingent on their being better in some important way than older drugs already on the market. Probably very few new drugs could meet that test. By default, then, drug companies would have to concentrate on finding truly innovative drugs, and we would finally find out whether this much-vaunted industry is turning out better drugs. A welcome by-product of this reform is that it would also reduce the incessant and enormously expensive marketing necessary to jockey for position in the me-too market. Genuinely important new drugs do not need much promotion (imagine having to advertise a cure for cancer).
A second important reform would be to require drug companies to open their books. Drug companies reveal very little about the most crucial aspects of their business. We know next to nothing about how much they spend to bring each drug to market or what they spend it on. (We know that it is not $802 million, as some industry apologists have recently claimed.) Nor do we know what their gigantic “marketing and administration” budgets cover. We don’t even know the prices they charge their various customers. Perhaps most important, we do not know the results of the clinical trials they sponsor—only those they choose to make public, which tend to be the most favorable findings. (The FDA is not allowed to reveal the results it has.) The industry claims all of this is “proprietary” information. Yet, unlike other businesses, drug companies are dependent on the public for a host of special favors—including the rights to NIH-funded research, long periods of market monopoly, and multiple tax breaks that almost guarantee a profit. Because of these special favors and the importance of its products to public health, as well as the fact that the government is a major purchaser of its products, the pharmaceutical industry should be regarded much as a public utility.
These are just two of many reforms I advocate in my book. Some of the others have to do with breaking the dependence of the medical profession on the industry and with the inappropriate control drug companies have over the evaluation of their own products. The sort of thoroughgoing changes required will take government action, which in turn will require strong public pressure. It will be tough. Drug companies have the largest lobby in Washington, and they give copiously to political campaigns. Legislators are now so beholden to the pharmaceutical industry that it will be exceedingly difficult to break its lock on them.
But the one thing legislators need more than campaign contributions is votes. That is why citizens should know what is really going on. Contrary to the industry’s public relations, they don’t get what they pay for. The fact is that this industry is taking us for a ride, and there will be no real reform without an aroused and determined public to make it happen.
China says GSK executives confess to bribery and tax crimes
GlaxoSmithKline executives in China have confessed to bribery and tax violations, the country's security ministry said on Thursday, during one of a string of investigations into foreign firms in the world's second-biggest economy.
The ministry said the case against Britain's biggest drugmaker involved a large number of staff and a huge sum of money over an extended period of time, with bribes offered to Chinese government officials, medical associations, hospitals and doctors to boost sales and prices.
GlaxoSmithKline Plc (GSK) executives also used fake receipts in unspecified tax law violations, it added.
China has targeted foreign firms on multiple fronts in recent months, including alleged price-fixing, quality controls and consumer rights, forcing companies to defend their reputations in a country where international brands often have a valuable edge over local competitors in terms of public trust.
Last week, European food groups Nestle and Danone said they would cut the price of infant formula milk in China after Beijing launched an investigation into the industry.
China is an increasingly important country for international drugmakers such as GSK, which are relying on growth in emerging markets to offset slower sales in Western markets where many former top-selling medicines have lost patent protection.
IMS Health, which tracks pharmaceutical industry trends, expects China to overtake Japan as the world's second biggest drugs market behind the United States by 2016.
"We take all allegations of bribery and corruption seriously," GSK said in a statement.
"We continuously monitor our businesses to ensure they meet our strict compliance procedures - we have done this in China and found no evidence of bribery or corruption of doctors or government officials," it added, saying it would cooperate with the authorities.
The charges of bribery make the GSK case the highest profile probe in China since four executives of mining giant Rio Tinto Plc were jailed in March 2010 for taking bribes and stealing commercial secrets.
The four - one a China-born Australian citizen and three Chinese nationals - received jail terms of between seven and 14 years after being found guilty of getting information from confidential strategy meetings of the body representing China's steel industry in negotiations with iron ore suppliers.
Under China's legal system, the GSK executives will be formally charged after the completion of the preliminary investigations.
The ministry said the case against Britain's biggest drugmaker involved a large number of staff and a huge sum of money over an extended period of time, with bribes offered to Chinese government officials, medical associations, hospitals and doctors to boost sales and prices.
GlaxoSmithKline Plc (GSK) executives also used fake receipts in unspecified tax law violations, it added.
China has targeted foreign firms on multiple fronts in recent months, including alleged price-fixing, quality controls and consumer rights, forcing companies to defend their reputations in a country where international brands often have a valuable edge over local competitors in terms of public trust.
Last week, European food groups Nestle and Danone said they would cut the price of infant formula milk in China after Beijing launched an investigation into the industry.
China is an increasingly important country for international drugmakers such as GSK, which are relying on growth in emerging markets to offset slower sales in Western markets where many former top-selling medicines have lost patent protection.
IMS Health, which tracks pharmaceutical industry trends, expects China to overtake Japan as the world's second biggest drugs market behind the United States by 2016.
"We take all allegations of bribery and corruption seriously," GSK said in a statement.
"We continuously monitor our businesses to ensure they meet our strict compliance procedures - we have done this in China and found no evidence of bribery or corruption of doctors or government officials," it added, saying it would cooperate with the authorities.
The charges of bribery make the GSK case the highest profile probe in China since four executives of mining giant Rio Tinto Plc were jailed in March 2010 for taking bribes and stealing commercial secrets.
The four - one a China-born Australian citizen and three Chinese nationals - received jail terms of between seven and 14 years after being found guilty of getting information from confidential strategy meetings of the body representing China's steel industry in negotiations with iron ore suppliers.
Under China's legal system, the GSK executives will be formally charged after the completion of the preliminary investigations.
The security ministry did not give details on the number of executives questioned, their identities, nor when the questioning took place.
GOVERNMENT BRIBES
It is still too early in the process to know the extent of potential punishments, said Jerry Ling, a Shanghai-based partner for law firm Jones Day who specialises in U.S. and Chinese anti-bribery law.
However, according to guidance set by China's top court last December, there are a number of factors about the case that could increase any fine or punishment, including the involvement of bribes to government officials and the sensitivity of medicine prices.
"The fact that the Ministry of Public Security is running this investigation means that the exposure is more serious," added Ling.
In smaller bribery cases, China's State Administration for Industry and Commerce tends to take the lead. While these cases could lead to fines, they rarely results in criminal sentences.
A full confession - which China says the executives have given - could mean GSK benefits from leniency measures linked to voluntary disclosure.
A Britain-based analyst, who covers GSK and who declined to be named, said the company had worked hard to eradicate malpractice. It pleaded guilty to misdemeanour charges in the United States and paid a $3 billion fine a year ago.
"Given the past experience they've had with depression drugs in the U.S., they would be ultra cautious on anything to do with corrupt practices," the analyst said.
However, the analyst noted that China was an under-developed market where it would be difficult to monitor all sales practices and, in addition, authorities were likely to take a hard line with foreign firms.
GSK shares closed down 0.6 percent on Thursday, compared with a 0.6 percent rise in the wider FTSE 100 index.
GSK has had problems in China before.
It said on Monday it was investigating separate allegations that its staff had used improper tactics to market the cosmetic treatment Botox in China, but had so far found no evidence of bribery or corruption.
GSK, Merck & Co Inc and other foreign and domestic drugmakers are also being investigated by China's top economic planning agency on cost and pricing issues.
Lista actualizada de empresas que experimentan y NO experimentan con animales
Lista de empresas que SÍ experimentan con animales:
Procter & Gamble:
Empresas que NO experimentan (no quiere decir que no contengan igredientes provenientes de animales, a leer los paquetes para saber):
Alicorp:
Source
- Desodorantes y perfumes: Giorgio, Hugo Boss, Old Spice, Secret, Trinity, Jovialle, Dove, Gucci
- Pañales y productos para el bebé: Pampers.
- Alimento para animales no humanos: Eukanuba, Iams.
- Cuidados del cabello: Head & Shoulders, Pantene, Herbal Essences, Wella, Dove
- Higiene sanitaria: Always, Tampax.
- Limpieza: Ariel, Ace, Rindex, Cierto, Magistral.
- Medicinas: Metamucil, Vicks.
- Cuidado de los dientes: Oral B, Pro.
- Productos de belleza: , Max Factor.
- Otros: Gillette.
- Coloración: Koleston, Soft Color.
- Cuidado de la piel: Olay.
- Baterías: Duracell.
- Otros Braun, Lacoste.
- Alimentos: Pringles
Nestlé:
- Alimentos: Nido, Molico, La Lechera, Suflair, Maggi, Mendicrim, Shimy, Nido, Nestum, Colados Gerber, Nan Pro 3, Svelty.
- Cereales para el desayuno: Nesquik, Trix y Trix, Chocapic, Estrellitas, Fitness, Gold, Fibramax.
- Chocolates y golosinas: todas las variantes de Nestle, Garoto, Serenata de amor, Bananita Dolca, Batón, Crunch.
- Bebidas: Nescao, Nesquik, Nestlé Xocolat.
- Cafes: Amanecer, Nescafé, Cofee-Mate.
- Helados y dulces: Noel, Frigor, Dolca.
- Aguas Minerales: Nestlé, Eco de Los Andes, Glaciar, Villa de Los Arroyos, Perrier, San Pellegrino, Aqua Panna.
- Alimentos para animales no humanos: Friskies, Dog Chow, ProPlan, Purina One, Dogui, Gati.
Colgate-Palmolive:
- Pasta de dientes: Colgate, Kolynos, Odol, Noc 10, Plax.
- Cuidado personal: Palmolive, Polyana, Spedd Stick, Harpers, Pompis, Protex, Aktiol.
- Limpiadores: Odex.
- Alimentos para animales no humanos: Hill's pet nutrition.
Unilever:
- Aderezos y alimentos en gral: Hellmann's, Fanacoa, Savora, Baker`s Joy, Mrs. Dash, Molly Mc Butter.
- Leches de Soja: Ades.
- Caldos y sopas varias: Knorr, Arisco.
- Almidón de maíz: Maizena.
- Té: Té Lipton.
- Helados: Kibon.
- Salsas de tomate: Cisco.
- Pastas de dientes: Close Up.
- Desodorante, shampoo, jabón: Rexona, Sedal, Organics, Lux, Suave, Lord Cheseline, Impulse, Patrichs, Vo5, Nexxus, Tressemmé, Soft & Beautiful, Just for me, Consort, Motions, TCB, FDS, Simple, Static Guard, Veritas, Axe, Clear, Lifebuoy
- Higiene sanitaria: Kleenex.
- Cremas y emulsionantes: Pond's, St. Ives, Noxema.
- Limpieza: Drive, Granby, Skip, Comfort, Vivere, Ala, Cif, Vim.
- Edulcorantes: Sugar Twin.
Kimberly Clark Argentina:
- Pañales: Huggies
- Higiene sanitaria: Day´s, Poise, Plenitúd, Kotex, Mimosa
- Papel higiénico y pañuelos: Scott, Kleenex
Johnson and Johnson:
- Limpieza: Blem, Brishine, Ceramicol, Echo, Glade, Glocot, Klaro,Klear, Lysoform, Mr. Músculo, Pass, Shout, Ziploc, Windex, Pato.
- Matamosquitos: Baygon, Fuyi, Off, Raid
- Higiene sanitaria: Carefree, OB, Band-Aid.
- Cremas y cosméticos: Neutrogena. Acuvue, Clean & Clear, Listerine, Lubriderm, Roc
Reckitt & Benckiser:
- Harpic, Woolite, Lysol, Air Wick, Vanish, Veet, Easy Off Bang y Procenex.
Mars:
- Alimento animales no humanos: Kitekat, Pedigree, Wiskas
- Golosinas: Snickers, Twix, Skittles, M&M
L'Oreal:
- Elvive, Garnier, Lancome, Maybelline, Ralph Lauren, Vichy, Casting, Redken, Cacharel, Kerastase, Biotherm, Colorama, Giorgio Armani, Helena Rubinstein, LaRoche Posay
Beiersdorf:
- Eucerin, Atrix, Nivea.
3M:
- Nexcare, Post-it, Scotch,
Clorox:
- Limpieza: Ayudín, Poet, Trenet, Arco Iris, Mortimer, Pino Luz, Plomero líquido, Pine Sol
- Insecticidas: Selton
Glaxo Smith Kline S.A:
- (Menciono solo las marcas más conocidas): Aquafresh, Corega, Ivu Evanol, Sensodyne, Uvasal, Etiquet, Hinds, Panadol.
Papelera del plata:
- Pañales: Babysec, Cotidian
- Higiene sanitaria: Elite, Higienol, Susexx, Ladysoft
Phillip Morris:
- Cigarrillos: Philip Morris, Marlboro, Parliament, L&M, Le Mans, Chesterfield, Benson & Hedges, Virginia Slims y Colorado, Petra, Vatra, Alpine, F6, Longbeach, Bond.
Nobleza Piccardo:
- Cigarrillos:Todas sus marcas.
Laboratorios Bagó:
- Todos sus productos
Otras marcas:
- Adidas, Bic, Dermaglos, Energizer, Liquid Paper, Biferdil, Avon, Mary Kay, Bausch & Lomb, Bobbi Brown, Henkel, Schwarzkopf, Dodot, Artez Westerley, Revlon, Granix.
Alicorp:
- Limpieza: Plusbelle, Limol, Zorro, Limzul, Federal, Cristal, Suavisante para la ropa "Suave"
- Galletitas Okebon
Celulosa Campana:
- Rollo de cocina, pañuelos y papel higiénico "Campanita" y "Celestial"
Tabacalera Sarandí SA:
- Cigarrillos: Red Point y Baltimore.
Goloteca SA:
- Cigarrillos: Fénix y Neón.
Miguel Pascuzzi SA:
- Cigarrillos: Achalay y Ka.
Cooperativa Jujuy:
- Cigarrillos: CJ
Espert SA:
- Cigarrillos: Melbourne
Dólar S.A.:
- Cigarrillos: Boxer y Macedonia.
Coimexpor S.A.:
- Cigarrillos: V8 y 357
American Spirit:
- Cigarrillos
Molinos Ro de la Plata:
- Matarazzo, Lucchetti, Exquisita, Preferido, Arroz Gallo, Café Arlistán, Cruz de Malta, Vitina, Cocinero, Lira, Blancaflor, Nbleza Gaucha, Favorita, Don Vicente, Manty, Minerva y Maltifé.
Kraft Foods:
- Chocolates: Cadbury, Mantecol, Tita, Milka, Shot, Toblerone, Rhodesia.
- Galletitas: Club social, Express, Mayco, Oreo, Terrabusi, Cerealitas, Pepitos!
- Chicles y caramelos: Halls, Bubbaloo, Yummy, Beldent, Bazooka, Palitos de la selva, Lenguetazo, La yapa.
- Bebidas en polvo: Tang y Clight.
- Premezclas: Royal.
- Pastas: Terrabusi, Vizzolini, Don Felipe, Canale.
Limpieza: Querubin, El coloso, Gigante, Suiza.
Cuidado personal: Natura, Weleda, Fresh, Lina, Calipso, Primont, El Naturalista, Rayito de Sol, Cutex, Paco Rabbane, Capilatis, Valquer Profesional, Amway, Victoria´s Secret, Urban Velvet, L’Bel Paris, Bourjois Paris, Sephora, Oriflame, Laboratoires La Prairie SA, Farmacity, Opción Salon SRL, Prime, Chemoil, Hierbas del Oasis.
Alimentos: Bosque verde, Flora Dánica, Mi soja, Yin Yan, Soyana, La esquina de las flores, Casa vegana, Lee, Nutrileza, Kellog´s, Vegetalex, Kiwicha, Ceral, hierbas del Oasis.
Otros: Tuperware
Source
Wednesday, 10 July 2013
GlaxoSmithKline plc
Glaxo Wellcome plc and SmithKline Beecham plc merged in 2001 to become GlaxoSmithKline plc (GSK), the largest pharmaceutical company in the world.
At present, private pharmaceutical companies control the development of new medicines. Profit margins, not global health needs, are what determine the next new drug. GlaxoSmithKline’s corporate motto is ‘committed to improving the quality of human life’. GSK has shown it’s commitment by suing the South African Government for trying to supply AIDS victims with medicine they can afford, knowingly producing toxic drugs, and by emitting more carcinogens than almost any other chemical producer in the UK.
Industry areas: Prescription Medicines, Vaccines, and Consumer Health Products [i.e. toothpaste, nutritional drinks and over the counter (OTC) medicine]
Market share and importance:
At present, private pharmaceutical companies control the development of new medicines. Profit margins, not global health needs, are what determine the next new drug. GlaxoSmithKline’s corporate motto is ‘committed to improving the quality of human life’. GSK has shown it’s commitment by suing the South African Government for trying to supply AIDS victims with medicine they can afford, knowingly producing toxic drugs, and by emitting more carcinogens than almost any other chemical producer in the UK.
Market share and importance:
GlaxoSmithKline is the world’s largest pharmaceutical company. In 2000 GlaxoWellcome and SmithKline Beecham had a seven per cent share of the global pharmaceutical market, combined. In addition, the two combined companies accounted for 26 per cent of all vaccine sales, and 17 per cent of all anti-invectives (antibiotics, etc.).
History:
In January 2001 Glaxo Wellcome plc and SmithKline Beecham plc officially merged to become GlaxoSmithKline plc. GSK’s history dates back to 1715, when Plough Court pharmacy, a predecessor to SmithKline Beecham, was opened in London.
Glaxo Laboratories Limited (the predecessor to Glaxo Wellcome) was set up in 1929, with director Alec Nathan. “Nathan formed the company when it was discovered that their dried baby food ‘Glaxo’ was the cause of rickets in children. The first product Glaxo Laboratories Ltd produced was therefore Ostelin, a vitamin D concentrate to replace vitamins that were destroyed in the food drying process.”
From the 1930s onwards there was a flurry of mergers and acquisitions. The business of Glaxo Laboratories Ltd expanded greatly with the new market created by the founding of the National Health Service (NHS).[8] And in 1972 Beecham Group Ltd made an unsuccessful bid to buy Glaxo Group Ltd.
Products:
GlaxoSmithKline’s pharmaceuticals include the antidepressant Paxil/Seroxat the HIV/AIDS treatment Combivir, Zofran, a treatment for alcoholism, and Avandia a treatment for Type 2 diabetes.
Their Consumer Health Products [see Corporate Crimes, Animal Welfare] include Aquafresh Toothpaste, Tums antacid, Nicorette and the ‘nutritonal drinks’ Horlick’s, Lucozade and Ribena.
Pfizer Inc
Pfizer is a research-based global pharmaceutical company. The company discovers, develops, manufactures and markets medicines for humans and animals, as well as consumer products.
The company was incorporated as Charles Pfizer & Co in the US in 1942 but the original business dates back to a partnership founded in 1849. Until the turn of the century this partnership produced only citric acid but then began to expand into other chemicals and pharmaceutical products. A phase of rapid growth began with the production of penicillin in World War II (it was Pfizer penicillin that arrived with the Allied forces on the beaches of Normandy in 1944) and the development of the company’s most famous product, the antibiotic Terramycin in 1949. Based on this strength, Pfizer grew in the 40s and 50s through horizontal integration in the US as well as through internal development.
Under the methodical directive of John Powers, head of international operations and future president and chief executive officer, Pfizer’s foreign market expanded into 100 countries and accounted for $175 million (£199 million) in sales by 1965. It would be years before any competitor came close to commanding a similar share of the foreign market. Pfizer’s 1965 worldwide sales figures of $220 million (£149,7 million) indicated that the company might possibly be the largest pharmaceutical manufacturer in the US. By 1980 Pfizer was one of the two US companies among the top ten pharmaceutical companies in Europe, and the largest foreign health care and agricultural product manufacturer in Asia. Powers guided the company in a new direction with an emphasis on research and development.
By 1989, Pfizer operated in more than 140 countries. Pfizer entered the 90s facing controversy about heart valves produced by Shiley, a Pfizer subsidiary. In 1990, 38 fractures of implanted valves were reported (see also crime section). Pfizer became a household name in the late 90s with its development of the break-through male impotence drug Viagra, which became the world’s fastest-selling pharmaceutical product (until overtaken by another Pfizer brand).
It appears Viagra also had an effect on the company’s senior executives; in 1999 they began forcing their intentions on rival Warner-Lambert, finally harassing the smaller company into a shotgun marriage in the first ever-hostile take-over in the pharma sector. This take-over turned Pfizer into the largest and richest pharmaceutical enterprise in the world.
Pfizer has worked its way up the global ranking list by way of internal growth and development, acquisitions, the licensing of products from competitors (Pfizer generously borrowed research from its competitors and released variants of these drugs. While all companies participated in this process of ‘molecular manipulation’, whereby a slight variance is produced in a given molecule to develop greater potency and decreased side effects in a drug, Pfizer was particularly adept at developing these drugs and aggressively seizing a share of the market), research & development, and by way of comprehensive marketing efforts.
Pfizer’s successful marketing efforts impinged on other companies in the pharma sector. (Pfizer’s modern market campaigns broke tradition in the pharma industry. Pfizer’s Terramycin campaign turned the company –a relative newcomer to the industry—into the largest advertiser in the American Medical Association’s journal. Some companies did not appreciate Pfizer’s ‘hard sell’ tactics and attacked Pfizer. However, after Pfizer’s campaign proved to be highly effective, other companies took a similar lead) It is manifested in the "arms race" of escalating numbers of sales representatives, particularly in the US; the huge pre-launch marketing budgets when companies try to make as big a splash as possible; and aggressive TV advertising campaigns in which drugs are seemingly being treated and presented to the consumer audience as any other consumer product.
Pfizer recently announced a new mission: to become the world’s ‘most valued’ company. Pfizer CEO McKinnell declared that the new mission came about because the old mission set in the 1990s (to lead the pharmaceutical industry) had been achieved. He explains: ‘Becoming most values simply means that we emerge as the company recognised as the best by patients, customers, business partners, and the communities where we live and work. It’s a long term mission focused on making Pfizer’s success a winning proposition for everyone.’
Source
Pfizer is the largest and richest pharmaceutical enterprise in the world. Fortune® named Pfizer as the fifth-best ‘wealth-creator’ in America. The company is a global leader in human pharmaceuticals, and also has a large array of consumer health care, confectionery, and animal health care products. In 2000, its revenues equalled $29,6 billion (£20,14bn), eight of Pfizer’s pharmaceutical products attained sales of at least $1 billion (£680,4 million) each. Pfizer’s main competitors are Merck, Glaxo SmithKline, Novartis, Brystol Myers Squibb and AstraZeneca.
In 2001, Pfizer has budgeted approximately $5 billion (£3,402 bn) for research and development -more than any other drug company in the world. However, the company is likely to spend even more money on marketing. Extensive marketing practices (e.g. huge TV advertising campaigns) have turned some drugs, like Claritin and Viagra, into household names. According to the Financial Times (26 April 2001), ‘Pfizer has powered its way up the global ranking list to its unassailable position thanks mainly to its marketing prowess.’
History:
In 2001, Pfizer has budgeted approximately $5 billion (£3,402 bn) for research and development -more than any other drug company in the world. However, the company is likely to spend even more money on marketing. Extensive marketing practices (e.g. huge TV advertising campaigns) have turned some drugs, like Claritin and Viagra, into household names. According to the Financial Times (26 April 2001), ‘Pfizer has powered its way up the global ranking list to its unassailable position thanks mainly to its marketing prowess.’
History:
The company was incorporated as Charles Pfizer & Co in the US in 1942 but the original business dates back to a partnership founded in 1849. Until the turn of the century this partnership produced only citric acid but then began to expand into other chemicals and pharmaceutical products. A phase of rapid growth began with the production of penicillin in World War II (it was Pfizer penicillin that arrived with the Allied forces on the beaches of Normandy in 1944) and the development of the company’s most famous product, the antibiotic Terramycin in 1949. Based on this strength, Pfizer grew in the 40s and 50s through horizontal integration in the US as well as through internal development.
Under the methodical directive of John Powers, head of international operations and future president and chief executive officer, Pfizer’s foreign market expanded into 100 countries and accounted for $175 million (£199 million) in sales by 1965. It would be years before any competitor came close to commanding a similar share of the foreign market. Pfizer’s 1965 worldwide sales figures of $220 million (£149,7 million) indicated that the company might possibly be the largest pharmaceutical manufacturer in the US. By 1980 Pfizer was one of the two US companies among the top ten pharmaceutical companies in Europe, and the largest foreign health care and agricultural product manufacturer in Asia. Powers guided the company in a new direction with an emphasis on research and development.
By 1989, Pfizer operated in more than 140 countries. Pfizer entered the 90s facing controversy about heart valves produced by Shiley, a Pfizer subsidiary. In 1990, 38 fractures of implanted valves were reported (see also crime section). Pfizer became a household name in the late 90s with its development of the break-through male impotence drug Viagra, which became the world’s fastest-selling pharmaceutical product (until overtaken by another Pfizer brand).
It appears Viagra also had an effect on the company’s senior executives; in 1999 they began forcing their intentions on rival Warner-Lambert, finally harassing the smaller company into a shotgun marriage in the first ever-hostile take-over in the pharma sector. This take-over turned Pfizer into the largest and richest pharmaceutical enterprise in the world.
Pfizer has worked its way up the global ranking list by way of internal growth and development, acquisitions, the licensing of products from competitors (Pfizer generously borrowed research from its competitors and released variants of these drugs. While all companies participated in this process of ‘molecular manipulation’, whereby a slight variance is produced in a given molecule to develop greater potency and decreased side effects in a drug, Pfizer was particularly adept at developing these drugs and aggressively seizing a share of the market), research & development, and by way of comprehensive marketing efforts.
Pfizer’s successful marketing efforts impinged on other companies in the pharma sector. (Pfizer’s modern market campaigns broke tradition in the pharma industry. Pfizer’s Terramycin campaign turned the company –a relative newcomer to the industry—into the largest advertiser in the American Medical Association’s journal. Some companies did not appreciate Pfizer’s ‘hard sell’ tactics and attacked Pfizer. However, after Pfizer’s campaign proved to be highly effective, other companies took a similar lead) It is manifested in the "arms race" of escalating numbers of sales representatives, particularly in the US; the huge pre-launch marketing budgets when companies try to make as big a splash as possible; and aggressive TV advertising campaigns in which drugs are seemingly being treated and presented to the consumer audience as any other consumer product.
Pfizer recently announced a new mission: to become the world’s ‘most valued’ company. Pfizer CEO McKinnell declared that the new mission came about because the old mission set in the 1990s (to lead the pharmaceutical industry) had been achieved. He explains: ‘Becoming most values simply means that we emerge as the company recognised as the best by patients, customers, business partners, and the communities where we live and work. It’s a long term mission focused on making Pfizer’s success a winning proposition for everyone.’
Monday, 1 July 2013
China detains GlaxoSmithKline staff for fraud: reports
Chinese police detained employees of GlaxoSmithKline Plc in the cities of Beijing, Shanghai and Changsha after allegations of data fraud and bribery, the South China Morning Post reported today, citing an unidentified person from Shanghai's pharmaceutical sector.
The official Xinhua News Agency reported yesterday that police in Changsha were investigating senior managers at the drugmaker's local unit for suspected involvement in "economic crimes." Xinhua didn't say how many people were involved.
GlaxoSmithKline will cooperate with the investigation, London-based spokesman Simon Steel said late yesterday in response to questions about the probe as reported by Xinhua. "At this stage, it is unclear what the precise nature or purpose of the investigation is," he said.
Steel didn't immediately respond to an email today seeking comment on the South China Morning Post report.
The official Xinhua News Agency reported yesterday that police in Changsha were investigating senior managers at the drugmaker's local unit for suspected involvement in "economic crimes." Xinhua didn't say how many people were involved.
GlaxoSmithKline will cooperate with the investigation, London-based spokesman Simon Steel said late yesterday in response to questions about the probe as reported by Xinhua. "At this stage, it is unclear what the precise nature or purpose of the investigation is," he said.
Steel didn't immediately respond to an email today seeking comment on the South China Morning Post report.
Thursday, 27 June 2013
EMA decision to release drug data sparks controversy
A decision by Europe's drug regulator to release detailed data on drugs once a medicine is approved could discourage critical investment in crisis-hit Europe, Sanofi's chief executive said.
Chris Viehbacher, who took over as president of the European Federation of Pharmaceutical Industries and Associations (Efpia) on Monday, said companies would invest in regions where they felt welcome.
"If you, on the other hand, say, 'you guys are bad actors, we want to cut your prices, we want to take your confidential data and share it with any one of your competitors', you don't get the same feeling of encouragement," he told reporters.
The controversy over clinical data transparency compounds a situation where drugmakers are already reluctant to invest in Europe because of a wave of austerity-driven cuts in drug prices.
Chris Viehbacher, who took over as president of the European Federation of Pharmaceutical Industries and Associations (Efpia) on Monday, said companies would invest in regions where they felt welcome.
"If you, on the other hand, say, 'you guys are bad actors, we want to cut your prices, we want to take your confidential data and share it with any one of your competitors', you don't get the same feeling of encouragement," he told reporters.
The controversy over clinical data transparency compounds a situation where drugmakers are already reluctant to invest in Europe because of a wave of austerity-driven cuts in drug prices.
"If I was to say where would I put the next euro of investment, I would say either the next euro of investment would go to the United States or to emerging markets," Viehbacher said, speaking specifically as the head of France-based drugmaker Sanofi.
2 MILLION PAGES
Since November 2010, the European Medicines Agency (EMA) has released some 2 million pages of detailed information about drugs it has assessed - an approach it says reflects growing public demands for more openness to ensure that drugmakers cannot conceal adverse drug effects.
The idea behind it is to make drug companies more transparent, and help researchers pool information to fight disease better.
The problem, Viehbacher said, was that the data included details on things such as manufacturing processes that could allow a competitor to step in.
"The manufacturing process is often where the know-how of the company is, and this is particularly true of biological processes," he said.
"If all of this stuff is laid out, then we could have competitors from any country, particularly outside of Europe, suddenly start looking at our manufacturing process and we could suddenly find ourselves with some non-European competitors."
In April, U.S. companies AbbVie and InterMune used the courts to stop their clinical data being released, prompting the European regulator to appeal.
The EMA's plans to release clinical trial data have been slammed as irresponsible by the Pharmaceutical Research and Manufacturers of America lobby group - the U.S. equivalent of Efpia - which fears it could harm business and undermine incentives for research.
Still, some drug companies reckon the clamour for greater openness won't go away, given past drug safety scares. That has prompted Britain's GlaxoSmithKline to take a more conciliatory stance and decide to release a large amount of detailed data from its own clinical trials.
Wednesday, 19 June 2013
Japan: Cervix vaccine issues trigger health notice
The health ministry has issued a nationwide notice that cervical cancer vaccinations should no longer be recommended for girls aged 12 to 16 because several adverse reactions to the medicines have been reported.
“It is necessary to gather information immediately to accurately grasp how often (the side effects) are occurring,” said Mariko Momoi, who chairs the panel at the Health, Labor and Welfare Ministry that decided to suspend the recommendation. Momoi is vice president of the International University of Health and Welfare.
Cervical cancer vaccines are a recent addition to the regular vaccination list and were added after a revision to the Preventive Vaccination Law took effect in April. In Japan, cervical cancer is second only to breast cancer among those aged 20 to 39 and is estimated to strike nearly 9,000 women each year.
Despite the notice, issued Friday, most local governments will likely keep the vaccinations in question on their lists of free vaccines. But a ministry official said the vaccination rate is certain to drop sharply.
The two vaccines sold in Japan are Cervarix, made by GlaxoSmithKlein PLC of Britain, and Gardasil, made by Merck Sharp & Dohme, known as Merck & Co. in the United States.
Mika Matsufuji, 46, who represents an association of cervical cancer vaccination victims’ parents, said the health panel’s decision was a “big step forward.” Her daughter, who was vaccinated with Cervarix in 2011, lost the ability to walk and is now in a wheelchair, she said.
The group is calling for the vaccinations to be halted.
The panel said there was a strong possibility that severe prolonged pain was caused by some of the vaccinations. It concluded that active recommendation of cervical cancer vaccinations should thus be halted until a more complete picture of their side effects can be attained.
The ministry said this is the second time it has suspended a recommendation related to the regular vaccine program since problems cropped up with the Japanese encephalitis vaccine in 2005.
In 2011, however, Pfizer Inc.’s Prevnar and Sanofi SA’s ActHIB vaccines were suspended for about a month following the deaths of four children.
The panel focused on 38 cervical vaccine recipients who reported widespread pain. Given the timing of their symptoms, the panel concluded that a causal link to the vaccines could not be ruled out in many of the cases.
There were 245.1 reports of side effects per million vaccinations for Cervarix, and 155.7 reports per million for Gardasil — more than two other, separate vaccines that affect both sexes and were added to the regular list at around the same time.
Reports of side effects from the other two medicines came to 89.1 per million for a set of pneumococcus vaccines and 67.4 per million for Japanese encephalitis vaccines.
Cervical cancer vaccines are a recent addition to the regular vaccination list and were added after a revision to the Preventive Vaccination Law took effect in April. In Japan, cervical cancer is second only to breast cancer among those aged 20 to 39 and is estimated to strike nearly 9,000 women each year.
Despite the notice, issued Friday, most local governments will likely keep the vaccinations in question on their lists of free vaccines. But a ministry official said the vaccination rate is certain to drop sharply.
The two vaccines sold in Japan are Cervarix, made by GlaxoSmithKlein PLC of Britain, and Gardasil, made by Merck Sharp & Dohme, known as Merck & Co. in the United States.
Mika Matsufuji, 46, who represents an association of cervical cancer vaccination victims’ parents, said the health panel’s decision was a “big step forward.” Her daughter, who was vaccinated with Cervarix in 2011, lost the ability to walk and is now in a wheelchair, she said.
The group is calling for the vaccinations to be halted.
The panel said there was a strong possibility that severe prolonged pain was caused by some of the vaccinations. It concluded that active recommendation of cervical cancer vaccinations should thus be halted until a more complete picture of their side effects can be attained.
The ministry said this is the second time it has suspended a recommendation related to the regular vaccine program since problems cropped up with the Japanese encephalitis vaccine in 2005.
In 2011, however, Pfizer Inc.’s Prevnar and Sanofi SA’s ActHIB vaccines were suspended for about a month following the deaths of four children.
The panel focused on 38 cervical vaccine recipients who reported widespread pain. Given the timing of their symptoms, the panel concluded that a causal link to the vaccines could not be ruled out in many of the cases.
There were 245.1 reports of side effects per million vaccinations for Cervarix, and 155.7 reports per million for Gardasil — more than two other, separate vaccines that affect both sexes and were added to the regular list at around the same time.
Reports of side effects from the other two medicines came to 89.1 per million for a set of pneumococcus vaccines and 67.4 per million for Japanese encephalitis vaccines.
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