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In the July issue of the newsletter we printed the
entire editorial by the then editor of the New England Journal of
Medicine (NEJM), Dr. Marcia Angell, MD, entitled "The
Pharmaceutical Industry -- To Whom Is It Accountable?"
She has since left her position at the journal. In a recent issue
of the NEJM, several letters in response to her editorial were published.
Most were critical of some of the positions given by Dr. Agnell
in the editorial.
Alan F. Holmer of the Pharmaceutical Research
and Manufacturers of America states:
...the industry is accountable to physicians
and their patients who are waiting for cures and better treatments,
and it is also accountable to patients who need access to the medicines
the industry has already developed ... . Because we are accountable
to patients, we will continue to fight proposals for price control,
which would hurt patients by reducing our ability to fund the search
for treatments and cures.
Angell's prescription of additional regulation
for an already highly regulated industry would mean fewer medicines
for patients in the future.
Angell notes that the portion of health care
expenditures that outpatient prescription drugs account for -- now under
8 percent -- is growing. As medicines increasingly
prove to be the most effective and cost-effective treatment for many
patients, why shouldn't we spend more on them? Even when
expenditures for drugs do not lower the overall costs of care, drug
treatment often remains the most cost-effective option and has large
benefits in terms of the quality of life.
Max C. Reif, M.D. of the University of Cincinnati
Medical Center Cincinnati, OH states:
Drug companies are accountable
to their stockholders, and that is how it should be. The fact
that an industry develops products that by virtue of their excellence
become indispensable does not mean that the industry has an additional
responsibility to society. Such responsibilities belong to the government.
If society decides that everyone is entitled to new and effective drugs,
then it will have to make the necessary political and financial sacrifices.
The argument that a company that develops a desirable product must give
it away means punishing the innovator -- a bad economic policy.
J. Steven Schwarting, M.D. of the Abilene Family
Physicians Abilene, KS states:
I thank Dr. Angell for succinctly describing
the current drug industry. As a family physician practicing in a rural
community, I have reached the same conclusions. I let
my patients know almost daily the problems with the drug industry;
they do not have to be told how it affects their pocketbooks. I hope some
way can be found to implement Dr. Angell's suggested reforms.
Ned Rightor, M.Div. MXCIX Needham, MA states:
The price of medicines is only the most obvious
proof of a fundamental flaw in the way we currently provide medical care:
the idea that somehow market forces can be used to shape a wise and efficient
system. Poppycock. All the market forces are in one
direction, because nobody wants to die, so there is no price point that
slows demand much. This is very good for insurance companies
and drug companies -- and for nobody else. It is high time for a new approach.
William K. Summers, M.D. of the Alzheimer's Corporation
Albuquerque, NM, James Driscoll, Ph.D., Log Cabin Republicans Washington,
DC, and Jane M. Orient, M.D. Association of American Physicians and Surgeons
Tucson, AZ state:
The most important reason for the high
cost of drugs is the pre-marketing cost per drug of more than half
a billion dollars. Up to 90 percent of this cost is due to
excessive regulations imposed by the FDA. (1) These hurdles place small
companies, cheap drugs, and drugs with a small market at a serious competitive
disadvantage. The pre-marketing costs are recouped for only 3 of 10 drugs.
The drug company must attempt to recover costs within the five-year period
before another drug supplants the product. Under these conditions, aggressive
marketing is a necessity.
Dr. Angell complains about inequities
in pricing. Europeans pay less than Americans, but drug prices in Europe
are regulated. This means that the cost of drug development is unfairly
passed from Europe to America.
A shift in the FDA's focus
to post-marketing surveillance would dramatically
reduce the cost of drug development. The safety of a drug is more accurately
assessed after the drug has been marketed.
Dr. Angell replied to these comments as follows:
" ... Dr. Reif is correct that drug companies are accountable to
their stockholders; that is their fiduciary responsibility. The
question is whether the consequent drive for profits, with its adverse
effects on the availability of drugs for the neediest patients, should
be tempered by external regulations. I believe it should, especially
given that this industry benefits greatly from taxpayer-funded research,
government-granted monopolies, and large tax breaks."
"Mr. Holmer engages in the usual protestation by the industry that
any restraints on pricing would cripple research and development and leave
us bereft of important new drugs. The implication, echoed by Dr. Summers
and his colleagues, is that the industry is just squeaking by because
it plows its revenues back into research and development. As I explained
in my editorial, that is far from the case. The large
drug companies spend about 40 percent of their revenues
on marketing, reap about 30 percent in profits, and spend a comparatively
small 20 percent on research and development. No doubt, important
new drugs are on the horizon, but so is a cornucopia of copycat drugs
directed toward people who can be persuaded by dint of that gigantic marketing
budget that the next antihistamine or statin or lifestyle drug is somehow
better than the last. The less important a new drug, the more marketing
is required to sell it. "
The New England
Journal of Medicine November 9, 2000; 343
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