Today’s Solutions: December 01, 2023

The exposure of the true face of the pharmaceutical industry.

Bryan Hubbard | June 2003 issue
It was the end of another busy week at the offices of What Doctors Don’t Tell You, and everyone was keen to get their coats on and head for home for the weekend. Just then the phone rang, and each person looked to the next as if to say: ‘Why don’t you answer it?’ In the end, one staff member picked up the receiver to hear a message he would never forget. The voice at the other end was a woman’s. She explained that, on that very day, she had retired from a fairly senior position at a drug company. She refused to reveal which one. She said she was so relieved to leave her job. ‘I just got tired of sweeping things under the carpet. The number of deaths caused by our drugs is appalling. It’s been like working for a morgue.’
It was a frustrating call. The tone of her voice suggested she had been genuine; anyone who wanted to mislead us would have given us much more information than the tantalising nuggets she did impart. Perhaps she didn’t know any more than that, although the way she was talking suggested this was unlikely. We hadn’t been producing What Doctors Don’t Tell You that long when she made her call, but hers was not the first pointer that all was not quite right in the state of the pharmaceutical industry. We know now she was speaking the truth. What we still don’t know is the actual size of the problem, although it must be far worse than the official figures that paint a scary enough picture.
What we do know is that at least 106,000 Americans die every year as a result of some adverse reaction (ADR) to a prescription drug, and a further 7,000 die from an error relating to a drug, such as a wrong dosage or the wrong concoction. We know this because the Institute of Medicine (IOM) carried out a survey among patients who died while in an American hospital. This startling piece of research was published in the prestigious Journal of the American Medical Association1.
These figures are just the tip of the iceberg. Many, many people die from a reaction to a drug, but a link is never established; many people die in their homes rather than in hospital, or report their symptoms as an out-patient or to their family doctor. Finally, the vast majority of drug-related deaths are never reported at all. In concluding its research paper, the IOM accepted that its findings were a gross under-calculation for those very reasons.
It’s worth stressing that we are talking solely about deaths; the numbers of people who are seriously harmed, possibly for life, by a drug are not even touched upon in the study. In all, 225,000 people in the United States die every year as a result of medicine, and drugs are the cause of half of all these deaths, says the IOM. French researchers reached similar findings. They reckon that doctors report only one in 24,433 adverse reactions.
A similar gloomy picture is painted in the United Kingdom. Here, medical errors, which include drug reactions, kill 40,000 people every year, according to a study by the University College London. Again, the study is based on deaths in hospitals and so excludes the many more deaths that happen at home. Dr. Bill Inman, who started the Yellow Card system in the UK in 1963, has made the most conservative view of the level of under-reporting. The system is simple enough; if a doctor suspects a drug has caused an adverse reaction, he writes it down on the Yellow Card and sends it back to the Medicines Control Agency. Dr. Inman reckons just 10% of all reactions are ever reported. So, whether it’s 1 in 24,433 cases or 1 in 352, or if it’s Dr. Inman’s 1 in 10 best guess, the situation is clearly far worse than the official figures suggest.
The Medicines Control Agency says that 33,109 adverse reactions to drugs were reported to its officials in 2000, which was up 55% on 1999. Of these, 44% were serious reactions, and 2% were fatal. According to those figures, 600 people in Britain died as a result of a drug reaction in 2000. But if we apply even the most conservative estimate of under-reporting, this would mean that around 6,000 people died in the UK from an adverse drug reaction in the year; apply the Medicare dioxin analysis and the true death tally balloons to a figure in excess of 200,000.
Thus far, we’ve been looking only at fatalities, which is the least common reaction of them all, of course. Let’s now turn to what is described as ‘a serious’ adverse reaction. This would usually mean the immediate stopping of the drug therapy, provided the doctor realises that the drug is the problem. One study found that 2,216,000 Americans suffer a serious reaction – that is, they are permanently disabled or spend time in hospital – from a prescribed drug every year. This doesn’t include the many others who suffer a bad reaction that, however, doesn’t leave them permanently disabled, or are treated as out-patients. This also doesn’t allow for the problem of under-reporting at hospitals. Researchers reckon that hospital consultants report only 1 in 20 adverse reactions. The problem is partly to do with multiple prescriptions to elderly patients. Another major factor is the constant release of new drugs into the marketplace, a drive more to do with a drug company’s share price than the benefit of mankind.
Pharmaceuticals is the most profitable industry in the world. In the year 2000, the top 20 drug companies had a combined sale of £135 billion US$220 billion, and they enjoyed an average growth rate of 11%. Sales topped $253 billion in 2001, double the revenues achieved in 1997. The overall profitability of pharmaceuticals was further emphasised in the Fortune 500 list. While the average Fortune 500 company saw profits during 2001 nosedive by 53%, the drug companies on the list saw theirs leap another 33%. Collectively, the top 10 drug companies in the list topped all three of the magazine’s measures of profitability. They enjoyed the greatest return on revenues, reporting a profit of 18.5 cents for every $1 of sales, which was eight times higher than the combined return of every other sector on the list. Commercial banking achieved a return of just 13.5 cents per $1 made.
During the year, the pharmaceutical giants’ advertising expenditure outstripped major retail manufacturers such as Nike, while spending far less than expected on research. Britain’s largest drug company – and the second largest in the world after Pfizer – is GlaxoSmithKline (GSK) which, in 2001, achieved sales $34 billion, and a pre-tax profit of $10 billion, an astonishing margin of 31%. The GSK figures confirm the Fortune findings that the pharmaceutical industry is by far the most profitable in the world, outstripping the automobile, petrochemical, property, banking and technology sectors with ease.
The major lifeblood for any industry, and this is especially true for drug companies, is new product. Shareholders and city analysts alike thirst for news of new breakthroughs, cures for disease X, and so on. The problem is that it can cost a pharmaceutical company anything up to $570 million to successfully bring a new drug to market. It’s also very hit-and-miss, with plenty of false trails before the research chemists feel they are finally on to something.
It’s been estimated that it can take from 10 to 15 years from that first ‘eureka’ moment until the drug is finally licensed for use, and that just 3 out of 10 drug companies ever recoup all the development costs of bringing a new drug to market. Despite the risks, most drug companies are pursuing the pharmacy’s holy grail – the next best thing.
The importance of new product lines for the pharmaceutical industry cannot be overstressed; in the US 33.7% of all drug prescriptions were for new products in 2000 closely followed by the Canadian market where new drugs accounted for 29.8% of all sales. In the UK, new drugs represented 15.7% of the total market.
This market share is mirrored in revenues. Turning again to GlaxoSmithKline as an example, new products represented 22% of total pharmaceutical sales in 2001.
It’s also worth noting that, while drug companies like to see themselves as altruistic champions of mankind, most spend twice as much on marketing and advertising as they do on research. This is another symptom of the licensing process. A patent, usually running for 20 years, is taken out once the research team has made an initial breakthrough. However, once the licensing process has been completed, the patent may have only another five or six years left to run before other drug companies can produce ‘me-too’ copies. This means the drug company has a short window of time to recoup its $570 million initial investment. As a result they often choose very aggressive marketing campaigns from the outset.
Drug companies are not as innovative as they’d have us believe. The high costs of research tend to prevent highly experimental work. Most new drugs are modifications of existing ones. Dr. John Griffin, then a senior official in the medicines division at the Department of Health, discovered in a study he conducted in 1981 that the 204 new chemical entities marketed over the previous decade had largely been introduced into areas ‘already heavily oversubscribed’. ‘Innovation is directed towards commercial returns rather than therapeutic need,’ says Griffin.
Drug companies have been called two-headed beasts. One head could almost be described as cerebral: it’s interested in research, and the people it employs are serious-minded academics, usually with first-class science degrees. The other is more reptilian. It’s the sales arm that has to claw back the vast amounts spent researching the newly-licensed drugs. The first requirement is to create a need for a drug. The implicit selling techniques of the drugs industry were made explicit by Fred Nadjarian, managing director of Roche in Australia. In an interview, he revealed how drug companies went about selling a drug. He used the example of marketing of Roche’s antidepressant moclobemide, sold in the UK as Manerix.
A press release in Australia revealed that one million Australians suffered a ‘soul-destroying’ psychiatric disorder called social phobia. What the Australian public didn’t know was that Roche had sponsored the publicity, and that they were about to launch moclobemide, specifically designed to treat ‘social phobia’. Nadjarian suspected he had been a victim of his over-zealous marketing department when Roche tried to recruit some of the million sufferers for a trial of the drug. Quite simply, the patients weren’t out there.
Social phobia is a disease affecting very few people, if any, in fact. Nadjarian points out that the example of social phobia is true for a wide range of diseases. ‘If you added up all the statistics, we all must have about 20 diseases. A lot of these things are blown out of all proportion,’ he said. While drug companies sponsor press publicity, academics are keen to also exaggerate the prevalence of a disease as it can draw attention to their own research. ‘Behind every statistic there is a vested interest,’ said Nadjarian.
His comments add weight to a growing belief that the practice of exaggerating the prevalence and seriousness of a disease is widespread in the pharmaceutical industry.
The vast majority of new products are ‘me-too’ drugs that offer a variation on an existing drug doing a similar job. That being the case, how do you convince a doctor to switch to your drug, which has had very limited safety trials, and stop using a drug that at least is tried and tested?
In the UK, there is a code of practice that forbids any inducement to encourage a doctor to prescribe a drug. For instance, clause 18 in the code states: ‘No gift, benefit in kind or pecuniary advantage shall be offered or given as an inducement to prescribe, supply, administer, recommend or buy any medicine except certain, inexpensive promotional aids and competition prizes that are relevant to the recipient’s work.’
There is, however, a useful loophole in clause 19, which allows for ‘appropriate hospitality… such as scientific and promotional meetings, provided the hospitality is secondary to the main purpose of the meeting’. So, stories about free computers and cash are things of the past. Or are they? In Germany authorities there have just uncovered a giant bribery web that involved over 100 hospitals. Doctors had been given cars, computers and paid-for trips, while others had accepted cash payments of up to $24,000 from employees of SmithKline Beecham. The scandal, which involved thousands of doctors, has attracted a great deal of interest, not least from the German wing of Transparency International, an anticorruption group. A Transparency International spokeswoman says: ‘This is a normal practice in the drug industry. Our organisation has done a lot of research on bribery and corruption in the German health sector in the past three years, but the pharmaceutical industry has not changed its habits.’ In the US alone, drug companies spend around $2 billion a year on events for doctors, so exercising full use of the clause 19 loophole. This can include dinners and ‘conventions’ where the ostensible reason to attend is to learn something about a condition – although the sponsoring drug company will have a drug that happens to treat that condition – and doctors are usually handed a cheque of between $500 and $2,000 for turning up.
A report by the Medicines Control Agency in 1992 revealed that 31 post marketing trials were inadequate, biased and poorly designed. In America, the FDA has set up MEDWatch to encourage health professionals to report side effects. Currently, it estimates that only 1% of side effects are reported to the FDA. The most scandalous aspect of the post marketing study is that the drug company is not obligated to publish the research; it must inform the drugs authorities but, under Section 118, need not reveal it to the public. This means that a drug company and a drug authority can be aware of a serious side effect, even though a doctor is still prescribing it. He, of course, would be as ignorant of the findings as the patient.

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