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4 short articles on Pharmaceutical Industry—Count as 1 for RDP’s
Obama gives powerful drug lobby a seat at healthcare table
By Tom Hamburger
August 4, 2009
Los Angeles Times
Reporting from Washington — As a candidate for president, Barack Obama lambasted drug companies and the influence they wielded in Washington. He even ran a television ad targeting the industry's chief lobbyist, former Louisiana congressman Billy Tauzin, and the role Tauzin played in preventing Medicare from negotiating for lower drug prices.
Since the election, Tauzin has morphed into the president's partner. He has been invited to the White House half a dozen times in recent months. There, he says, he eventually secured an agreement that the administration wouldn't try to overturn the very Medicare drug policy that Obama had criticized on the campaign trail.
"The White House blessed it," Tauzin said.
At the same time, Tauzin said the industry he represents was offering political and financial support for the president's healthcare initiative, a remarkable shift considering that drug companies vigorously opposed a national overhaul the last time it was proposed, when Bill Clinton was president.
If a package passes Congress, the pharmaceutical industry has pledged $80 billion in cost savings over 10 years to help pay for it. For his part, Tauzin said he had not only received the White House pledge to forswear Medicare drug price bargaining, but also a separate promise not to pursue another proposal Obama supported during the campaign: importing cheaper drugs from Canada or Europe. Both proposals could cost the industry billions, undermine its ability to develop new cures and, in the case of imports, possibly compromise safety, industry officials contend.
Much of the bargaining took place in July at a meeting in the Roosevelt Room, just off the Oval Office, a person familiar with the discussions said. In attendance were Tauzin, several industry chief executives -- including those from Abbott Laboratories, Merck and Pfizer -- White House Chief of Staff Rahm Emanuel and White House aides.
Yet everyone agrees that drug companies -- Washington's leading source of lobbyist money -- now have "a seat at the table" at the White House and on Capitol Hill as healthcare legislation works its way through Congress. If nothing else, a popular president who six months ago criticized drug companies for greed now praises their work on behalf of the public good.
"I think the pharmaceutical industry has been quite constructive in this debate," Obama told a small group of regional reporters last week. "And the savings that they've put on the table are real and significant and are appreciated."
In an interview, Tauzin said he carefully negotiated his agreements with the White House, offering the $80-billion discount program in return for assurances that there would be no government price-setting in Medicare Part D, the drug program for seniors.
It was important, he said, to block the threat of Medicare price negotiations, which he called tantamount to price-setting and a threat to the industry. In addition, Tauzin said the industry asked the administration not to allow the import of cheaper drugs because of safety concerns…[Dunn cut several paragraphs for space reasons].
Tauzin, a Democrat who helped found the conservative Blue Dog coalition in the House before switching to the Republican Party in 1995, was chairman of the House committee that helped shepherd Medicare drug legislation through Congress, including the provision that the government not interfere with price negotiations... [Dunn cut rest for space reasons]
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What's new about prescription drug pricing?...
By: Morton Mintz
Washington Post, February 11, 2001
What's new about prescription drug pricing is the attention that it's been getting in Congress, thanks partly to bus loads of elderly Americans going to Canada and Mexico to buy their medicines at sharply lower costs. What's relatively new is direct-to-consumer television and print advertising of drugs, on which pharmaceutical manufacturers are spending billions of dollars.
What's surprisingly old is the problem of excessively high drug pricing.
In December 1959, the Senate Judiciary Committee's subcommittee on antitrust and monopoly, led by Estes Kefauver (D-Tenn.), launched an unprecedented investigation of the pharmaceutical industry. Over the ensuing 2 1/2 years, the subcommittee exposed pricing practices that repeatedly astonished the public -- but may seem all too familiar to consumers today. Some examples from the Kefauver report:
* Eli Lilly was selling 100 tablets of the antibiotic V-Cillin to pharmacies in England for $ 6.50 and in Australia for $ 10.75, while charging pharmacies in the United States $ 18.
* For 100 pills of the steroid prednisone, the production cost was $ 1.50, tops. Brand-name manufacturers were charging pharmacists $ 18, and the retail price was $ 30.
* For 100 capsules of the antibiotic tetracycline, Bristol's production cost was $ 1.67, its price to druggists $ 30.60. Consumers paid $ 51.
Then, as now, pharmaceutical manufacturers and their allies claimed that high prices were indispensable to fund the research that produces constant advances in drug therapy. The subcommittee found, however, that the 22 largest pharmaceutical manufacturers were spending 24 cents of every revenue dollar on promotion. This was approximately four times their spending on research.
Kefauver cited specific findings that further undermined the research rationale:
* Schering charged pharmacies $ 8.40 for 60 tablets of estradiol progynon, a drug for menopausal disorders. Schering bought the drug in bulk from Roussel of France, and therefore had done no research of its own on it. The 60 tablets contained 11.7 cents worth of the drug. Schering's markup was 7,079 percent…
[Dunn cut a few paragraphs to shorten length]
"What we are confronted with in the prescription drug industry," Kefauver concluded in the subcommittee's report, "is the existence of prices which by any test and under any standard are excessive."
The senator urged several reforms. Had they been enacted, consumers would have saved billions of dollars annually for nearly 40 years. But they were not. "Conservative congressmen, responding to industry opposition" gutted the price provisions of the Kefauver bill, Fortune magazine reported at the time.
Congress, whether controlled by Democrats or Republicans, has not troubled since the Kefauver investigation to dig deeply into why drug prices are so many times higher than production costs. Nor into the effects on drug prices of the immense cost of promotion. (In the 4 1/2 years ending last June, the industry spent a staggering $ 54.5 billion promoting its wares to health-care professionals and consumers, according to the health-care information company IMS Health.)
Congress has failed to investigate the industry's often-repeated claim that it costs up to $ 500 million, on average, to bring a new drug to market (the figure came from a 1991 paper by four economists with ties to the drug industry). Or where sensible incentives for research end and profiteering begins. Or how to nurture research for therapeutic breakthroughs and to fight great scourges like AIDS, rather than for copycat medicines aimed only at gaining market share or for another drug for baldness.
So, frozen as ever, we begin the 21st century with pricing excesses continuing unabated... [Dunn cut rest for space reasons]
In Article, Doctors Back Ban on Gifts From Drug Makers
By GARDINER HARRIS
New York Times
January 25, 2006
The gifts, drugs and classes that makers of pharmaceuticals and medical devices routinely give doctors undermine medical care, hurt patients and should be banned, a group of influential doctors say in today's issue of The Journal of the American Medical Association.
Broadly adopted, the recommendations would transform doctors' day-to-day lives and shut off the focus of drug makers' biggest expenditures. But Dr. David Blumenthal, an author of the article, said it was "not very likely" that many in medicine would listen to the group.
Federal law forbids companies from paying doctors to prescribe drugs or devices, but gifts and consulting arrangements are almost entirely unregulated. Voluntary professional guidelines suggest that doctors refuse gifts of greater than "modest" value. Sanctions against doctors who accept gifts of great value are extremely rare.
The drug industry spends tens of billions of dollars a year to woo doctors, far more than it spends on research or consumer advertising. Some doctors receive a significant part of their income from consulting arrangements with drug and device makers. Others take regular vacations and golfing trips that are paid for by companies.
A recent lawsuit involving the device maker Medtronic revealed that one prominent Wisconsin surgeon received $400,000 for a consulting contract that required him to work just eight days. While such rich arrangements are often restricted to specialists, most physicians routinely accept small gifts from drug salespeople, including pens, mugs, pads and food.
Surveys show that most doctors do not believe that these gifts influence their medical decisions, although most believe that they do affect their colleagues' medical judgment.
But even small gifts can lead to profound changes in doctors' prescribing behavior, with "negative results on clinical care," the article states. As a result, all gifts should be banned, the authors conclude…
[Cut rest of article for space reasons]
How To Win Doctors And Influence Prescriptions
by Alix Spiegel
All Things Considered NPR News
October 21, 2010
Mathew Webb left a sales job in menswear for a sales job in pharmaceutical drugs 10 years ago and suddenly found himself surrounded by money… [Dunn cut several paragraphs for space reasons]
Today when a rep like Webb wants to get a doctor to write prescriptions for his drug, there's still one almost foolproof way to get that task accomplished.
To get a doctor to write more prescriptions, Webb asks the doctor to become a speaker…[Dunn cut paragraph for space reasons]
… The hard reality about doctor speaking is that though doctors believe that they are recruited to speak in order to persuade a room of their peers to consider a drug, one of the primary targets of speaking, if not the primary target, is the speaker himself.
On the surface, the act of speaking is a very straightforward transaction. The drug company gives the doctor a series of slides, sometimes some training in speaking,and then a date is set at a popular upscale restaurant where a roomful of other doctors gather over dinner and wine to listen to him talk.
The speaker is supposed to educate those other doctors about a drug's benefits and drawbacks, in the hope that they might prescribe the drug for their patients….[Cut several paragraphs for space reasons]… For the past month, NPR has talked to former and current representatives, 18 in all, and two are quoted in this story…[Dunn cut paragraph for space reasons]
… Drug companies train representatives to approach a narrow set of doctors in a very specific way, using language that deliberately fosters this idea that the doctors who speak are educators, and not just educators, but the smartest of the smart.
For example, every drug representative interviewed for this story used the exact same phrasewhen approaching a doctor with a pitch to become a speaker: Each doctor approached to speak was told that he was being recruited to serve as a"thought leader."
This phrase, Webb says, seems to haveincredible psychological power.
"When you do say 'thought leader' I think it's a huge ego boost for the physicians," Webb says. "It's like a feather in their cap. They get a lot from it."… [Dunn cut paragraph for space reasons]
But some drug representatives, like Maher, have a more cynical view of why drug companies choose the doctors they choose. It's not about how well respected the doctor is, according to Maher; it's about how many prescriptions he writes.
"I think nowadays a thought leader is defined as a physician with a large patient population who can write a lot of pharmaceutical drugs. Period," she says.
Do the doctors who do the speaking know that their prescribing habits have changed? If they do know, then in a sense they're being bought. If they don't, then they're unwittingly being played… [Dunn cut paragraph for space reasons]
The fact is that the top 20 doctors in a representative's territory prescribe the vast majority of the medication. According to Webb, the top 20 percent prescribe as much as the lower 80.
…Although doctors believe that they are recruited to speak in order to persuade a roomful of their peers to consider a drug, one of the primary targets … is the speaker himself. [Dunn cut paragraph for space reasons]
… According to Webb, he would give a high-prescribing doctor about $1,500 to speak. And following that speech, Webb would see the speaking doctor write an additional $100,000 to $200,000 in prescriptions of his company's drug.
Webb points out that the people recruited to speak are almost always high prescribers with incredibly high patient populations. "That much money, easily," he says."So yeah, it was a good return on investment."
…[Dunn cut rest for space reasons]