Latest Drugwonks' Blog

Long-term thinking at long last in European health policy? Maybe.

European governments seem to be swapping a bludgeon for a scalpel when it comes to cutting the cost of medicines. According to Reuters, drug makers should not expect an end to the overall drive to squeeze prices but there are signs of a more discriminating approach that may actually help “big pharma”, according to industry executives and analysts. Andrew Witty, head of European pharmaceuticals at GlaxoSmithKline Plc said a growing number of governments are now realizing that healthcare reforms must include rewards for innovation.

“There are still a few governments that are very focused on short-term, non-discriminatory cost measures, where they simply cut prices and they donç©° really care if it is an innovative product or an old one, but they are getting fewer,” he told Reuters. ‘There are more and more countries where we are seeing governments get much tougher on the prices of old, off-patent medicines and being prepared to reward meaningful innovation more quickly and more fully.” For companies like Glaxo, which relies heavily on sales of newer drugs, that is good news.

European pharmaceuticals growth is hovering around a 10-year low with sales in the top five markets — Germany, France, Britain, Italy and Spain — rising just 3% in the 12 months to November, according to IMS Health. Yet Merrill Lynch believes the worst effects of European pricing reforms may now be over, with Germany in particular showing signs of recovery. Growth in German pharmaceuticals has picked up to 7%, from 1% in 2004, largely as a result of a cut in mandatory manufacturer rebates to the government, the investment bank said in a report this month.

Spam, MD

  • 02.01.2006

Here’s an unsolicited e-mail that I got today …

Dear Peter Pitts:

It’s a well-known fact that Consumer Reports provides expert advice
and unbiased information and Ratings. Each year, we report on
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to treadmills.

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I will not be subscribing to this marvelous opportunity. You can draw your own conclusions.

Vet-ing Clinton

  • 01.31.2006

Paul Krugman wrote an op-ed singing the praises of what he calls the socialistic health care system of the Department of Veterans Affairs. He was taking a page from a speech given by Hillary Clinton the week previous to his editorial in which she outlines a new vision of Clintoncare where government still runs the show but uses electronic patient records, price controls and government drug lists to make medicine more efficient. The following lengthy deconstruction by Bob Goldberg is must reading for anyone who wants to fully understand the manner in which Mrs. Clinton and others shround their effort to nationalize health care with deliberately misconstrued interpetations of obscure research publications they know journalists are too hurried to track down and seemingly erudite (but misinformed) discussions of the impact that market forces and medical technology have on the American health care system.

Here’s the link:

Download file

Calfee Talk

  • 01.30.2006

Here is a link to an important perspective on the FDA’s new physician labeling rule. It’s penned by AEI scholar and CMPI advisory board member Jack Calfee.

Download file

Big news that will surely generate big controvery …

The New York Times and other media report that the European Union’s drug regulator recommended approval on Friday of a generic version of a growth hormone, a step forward in attempts to get approval for copies of biotech drugs.

Regulators in the European Union and the United States have not yet approved any so-called biosimilar medicines amid fears over safety and pressure from makers of patented biotech drugs. One big concern is that biotech drugs, unlike traditional chemical compounds, are too complex to copy easily and safely.

The European Medicines Agency said that studies on Omnitrope, a growth hormone made by Sandoz, the generic arm of Novartis, showed comparable quality, safety and efficacy to Genotropin, a Pfizer drug already approved in Europe. The decision should pave the way for the European Commission, the European Union’s executive arm, to give formal approval to Omnitrope within a few months.

Europe issued guidelines for biosimilar medicines in 2004, laying out the steps needed for regulatory approval. That has made it easier to file than in 2003, when the European Commission declined to approve Omnitrope, said Andreas Rummelt, chief executive of Sandoz.

Oops. I made a mistake in yesterday’s blog entry (“Lack of Evidence-Based Accusations”). I referred to Dr. David J. Rothman as President of the Institute of Medicine. He is, in fact, President of the Institute on Medicine as a Profession. I have to admit that my initial reference came directly from the New York Times article on the JAMA editorial. (And I should know better than to take whatever appears in the New York Times as entirely fact-checked.) Mea culpa. (It’s like they say, everything you read in the paper is true, except for those things you know about personally.) What I find most interesting about this correction is that Dr. David Rothman isn’t even an MD — but he sure has strong opinions about who should be visiting their offices.

I also want to clarify my statement about the JAMA article’s lack of evidence. There certainly are plenty of citations — but not a jot about patient outcomes. How trivial! Further, the authors of the article view the visits of pharmaceutical sales reps as the only variable on a physician’s prescribing behavior. What about formulary restrictions? Or payment incentives? Or counter-detailing efforts, tiered co-pays or payor-switching? Details. Details. Details.

The concept that big, bad Pharma is to blame for everything isn’t just simplistic and sophistic but deleterious to a serious conversation about the issue. Rather than trying to point a finger, the authors should pick up a mirror.

This week’s recommendation in the Journal of the American Medical Association (that all but eliminates any role for pharmaceutical or medical device companies in teaching doctors about their products) reveals a lot about the medical profession’s anxiety about the integrity of some of its members.

First, as Peter Pitts notes below, there is no published evidence that relationships between manufacturers and physicians harm patient care. I am not a physician, but I can read Dr. Wazana’s article as well as anyone else. In her literature review of pharmaceutical sales practices, previously published in the same journal, and relied upon by the authors of this week’s proposal, she concludes that “no study used patient outcome measures”. The “negative outcomes” that she measured included physicians developing a “positive attitude toward pharmaceutical representatives” as a result of an interaction. That’s hardly a scandalous endpoint!

The term “health industry” is also interesting: the authors include drug and medical device makers in this “industry”, but not physicians, even though they earn their livings in it too! There is also an assumption that “education” and “influence” are mutually exclusive, but this is absurd: one cannot educate without influencing. Undoubtedly, drug and device makers seek to influence physicians, but that does not mean that the influence is uneducational.

Of course, the biggest unasked question is: where will the money come from to conduct education, if the corporations are banned? One answer could be that the physicians, as a profession that enjoys a government-granted monopoly on prescribing, should levy the costs of education on themselves. However, I am not aware of any study estimating what the per capita levy to cover these costs would be. I also doubt that many physicians will be enthusiastic about this proposal, once they face the full costs of their continuing education.

Nor is it out of line to accept that manufacturers’ reps are the best source of information for that medicine or device. Because I seem to be fond of automobile analogies lately, let’s try another one. A friend of mine owns a Volvo. Volvo pays for the head mechanic to go back to Sweden for training at the Volvo factory every year or two. This gives her the confidence that the dealership will service her car optimally. Imagine a Volvo dealer who proclaimed that he never let Volvo reps on his lot, or allowed them to train his staff, and forbad all communications with the manufacturer. That would not give you confidence that this was the man from whom to buy a Volvo, would it?

I realize that this is not a perfect analogy, but it illustrates the importance of understanding that the socially optimal level of drug makers’ “influence” over physicians is certainly greater than zero.


Brennan, T.A., et al. 2006. “Health Industry Practices That Create Conflicts of Interest: A Policy Proposal for Academic Medical Centers”. Journal of the American Medical Association 295(4):429-433.

Wazana, A. 2000. “Physicians and the Pharmaceutical Industry: Is a Gift Ever Just a Gift?” Journal of the American Medical Association 283(3):373-380.

A few key paragraphs from an editorial in today’s Wall Street Journal on the new Physician-Labeling rule:

So you might think everyone would welcome the Food and Drug Administration’s latest initiative to tackle the problem by requiring simplified labels with the most important information prominently displayed. But not some Democrats on Capitol Hill, who are so dependent on their trial-lawyer donors that they are fighting to preserve the current climate of uncertainty and confusion.

“A typical abuse by the Bush Administration,” said Ted Kennedy after the announcement last week of the FDA’s new labeling rule. House Democrat Maurice Hinchey said the FDA had “gone to bat for the drug industry.” He is threatening legislative action. And of course the lawyer (er, “consumer”) advocates at Ralph Nader’s Public Citizen piled on.

If drug makers are going to be asked to simplify labels, it only makes sense for the FDA to reassure them that the sound science embodied in its labeling oversight will still be held to “pre-empt” contrary findings at lower levels of government.

The FDA’s reassertion of the pre-emption doctrine is really nothing new, as some recent cases demonstrate … In Dowhal v. SmithKline Beecham, a plaintiff argued that nicotine replacement products be required to warn that they might theoretically cause birth defects. But the FDA had already considered and denied requests for such a warning because it believed the known risks of a mother’s continued smoking to a fetus far outweigh the known risks of nicotine itself. Again, there was the possibility of the court issuing a ruling in direct contradiction of federal law, and again the FDA intervened.

It’s hard to think of a case that better illustrates the moral bankruptcy of the Kennedy-Hinchey-trial lawyer position here than Dowhal. The kind of labeling and litigation environment they are fighting to preserve would probably have the effect, among others, of more women continuing to smoke during pregnancy. Overwarning on medications can be as much of a risk to public health as underwarning.

Our only concern is that this latest assertion of the pre-emption doctrine may not be enough to rein in state courts that have ignored it before. Congress might also consider making the FDA’s supremacy in drug safety matters clearer in statute, lest the Vioxx cases and others do irreversible damage to a vital American industry. Or, if Congress doesn’t like pre-emption, it could always dissolve the FDA and leave the matter entirely to the tort system. What should be unacceptable is to leave companies, as now, subject to the double jeopardy of FDA approval followed by tort-law second guessing.

Well said!

U.S. District Judge Eldon Fallon of New Orleans, who is overseeing thousands of consolidated federal lawsuits over Vioxx, ruled that Merck could depose a current editor and former editor of the New England Journal of Medicine, which last month criticized drug maker Merck & Co. for withholding data from a published study on its withdrawn painkiller Vioxx.

The depositions are to center on a December editorial in the journal that said Merck concealed three heart attacks suffered by patients in a large study published in the journal in November 2000. Merck has said those heart attacks happened after the study’s cut-off date for side effects, but journal editors say such data is routinely added until a study’s publication.

“The court should prohibit Merck from engaging in these retaliatory tactics because they run afoul of the protection journalists enjoy under the First Amendment,” an attorney for the NEJM wrote in a motion seeking to block the subpoenas.

What happened to the NEJM’s call for full disclosure and transparency?

The Wall Street Journal reports on Pfizer’s battle against Chinese counterfeiters who make and ship copies of its medicines, such as Viagra™ and Lipitor™. The story shows how active Pfizer is in counteracting this activity (which I trust we all agree is harmful to human welfare). It also reports on other examples of counterfeiting, such as a Chinese copy of a General Motors automobile, which the Chinese government does not altogether appear committed to stamping out.

Now, I know that “friends don’t let friends drive Chevrolets”, as the bumper sticker on many a Ford or Toyota pick-up reads, but (all kidding aside), if the U.S. government decided to make it illegal for GM to manage how it manufactures and sells its cars worldwide, you would have no idea whether you were driving a real GM car or a Chinese knock-off with dodgy brakes, fatigued metal in the frame, and seat belts that were just stapled behind the fabric. Plus, GM would quickly learn that it doesn’t pay to invest in new automotive technology because the U.S. government would just let foreigners steal it. That’s why the U.S. government is supporting GM in its Chinese legal battles against these counterfeiters, according to the article.

On the other hand, if Chinese companies want to develop their own automotive brands and sell them to Americans, they are free to do so. In fact, in January 2005, Malcolm Bricklin, a well-known automotive entrepreneur who imported Yugos years ago, announced plans to import Chery cars, a major Chinese brand, to the U.S. starting in 2007. Far from preventing this international free trade, U.S. law will protect Chery’s trademark and patents just like it protects GM’s.

Now, I would guess that it is many times harder to ship fake cars into the U.S. than fake pills, but the same legal framework, incentives, and dangers arise. So, it does not make sense that some U.S. politicians, lately even California’s Governor Szchwarzenegger, have decided that they do not like international free trade that respects intellectual property and outlaws piracy, but prefer to allow counterfeiters send their fake pills into the U.S. unchecked, via what is disingenuously labeled “drug importation”.


Zamiska, N., & H.W. Tesoriero. 2006. “As Pfizer Battles Fakes in China, Nation’s Police Are Uneasy Allies,” Wall Street Journal, January 24: A1


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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