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As seen in today’s Wall Street Journal …

Europe’s Ailing Drug Industry
December 28, 2005

Just a decade ago, more than two-thirds of all drug research was conducted in Europe. Now, 60% is conducted in the United States. Major European drug makers such as Aventis, Novartis and GlaxoSmithKline have shifted significant portions of their research operations from the Continent to the U.S. and beyond. And human talent continues to follow the research money: Some 400,000 European science and technology graduates now live in the U.S., with thousands more leaving every year.

For all this, European investors, scientists and patients have their own political leaders to blame. Deliberate government policy, in the form of price controls imposed by national health-care systems, is slowly choking off a once-thriving sector.

Europe’s government-run and dominated health-care systems are virtually monopsonies. As the primary buyers in their national markets, they have the power to set drug prices 40% to 60% lower than the free-market prices in the United States. These price controls have a serious impact on innovation.

Research and development are expensive. Researchers at Tufts University in Boston determined that drug makers spend at least $800 million just to develop a new medicine, and there is a high risk that a drug could fail after years of testing or flunk the government approval process. In the United States, companies are allowed to recoup their investments and make a profit by charging a price that incorporates their research costs. In Europe, that is seldom the case.

The loss to research caused by price controls was quantified in a recent study by the U.S. Department of Commerce. The study looked at the impact of pharmaceutical price controls in 11 countries, among them Holland, France and Germany, and found that price controls caused a $5 billion to $8 billion annual reduction in funding for drug research and development.

What could that amount buy? According to the study, it could lead to the discovery of three or four new potentially life-saving chemicals each year. So it’s no surprise that from 1998 to 2002 there were only 44 new drug launches in Europe, compared to 85 in the U.S.

But now is no time for Americans to be smug. Ironically, there is a bipartisan move afoot in the United States to implement the same policies that have dried up pharmaceutical research in Europe by having the government “negotiate” drug prices.

The U.S. Congress passed legislation in 2003 that added a new prescription drug benefit for the disabled and elderly participating in the country’s Medicare program. It also created a novel system to deliver the drug benefit, encouraging private, competing companies to negotiate the best prices they can with drug makers.

Congress included in its legislation a “non-interference” clause that preserves the right of these drug plans to negotiate prices freely with the drug companies, without intervention from the federal government. While Americans have mixed opinions about this gigantic government drug program, one thing is clear: Repealing non-interference would put the U.S. pharmaceutical industry on the European path, yet it is a top priority of liberals who plan to bring up this legislation next year.

If non-interference is reversed, it will allow the federal government to step in and set prices for all 40 million Medicare recipients. Since they consume almost half of all prescription medicines sold in the United States, this would effectively amount to nationwide price controls.

We’ve already seen such policies force drug makers out of Europe. Roche chairman Franz Humer has pointed out that the research-based pharmaceutical companies could just as easily move on to Asia, where technology and education are steadily improving. In fact, Roche has just opened a research center in Shanghai, while other drug makers are flocking to Singapore and India.

Of course, if the U.S. gives drug makers a reason to go on the move again, European governments could make their own pitch by eliminating the interventionist policies that have been undercutting drug innovation in their countries. They just might be able to lure talented drug researchers and pharmaceutical investments back home by recognizing the value of pharmaceutical research — not only in creating new medicines but in reviving a valuable industry.

Ms. Turner is president of the Galen Institute, a health-research organization based in Alexandria, Virginia.

Nevada Attorney General George Chanos has released an opinion concluding that Nevada law prohibits the importation of prescription drugs from Canada unless such prescription drugs have been approved by the Federal Food and Drug Administration.

That’s a safe bet.

The Attorney General’s Office drafted the opinion in response to a legal opinion request from Larry L. Pinson, Executive Secretary to the Nevada State Board of Pharmacy.

The opinion analyzes Senate Bill 5, enacted in a special session of the 2005 legislature, which was intended to authorize the licensing of certain Canadian pharmacies to provide only “FDA approved” prescription drugs by mail to Nevada residents.

That’s a sucker bet.

To pursue the metaphor, state legislators should stop encouraging their citizenry to play Russian Roulette with their health by purchasing medicines from non-FDA approved foreign sources.

Gooz News

  • 12.23.2005

The following blog contains non-emotional comments from Dr. Bob Goldberg …

After reading that the FDA approved the first drug for treating kidney cancer in over ten years, a drug that was so effective that the National Cancer Institute told the company that was developing it to stop the trial early, I wondered, “what would Merrill Goozner write.” Goozner, who has dumped on every new cancer drug developed and pissed on Tysabri the drug for multiple sclerosis which is about twice as effective as any other drug for MS on the market for many patients was true to form. Goozner once again blatantly distorts clinical data to assert that the drug, Nexavar, does not prolong life. In fact, many patients lived on average twice as long with end stage kidney cancer (6 months compared to 3 months) compared to people who had other drugs. Now anyone but Goozner, who wants to put new drugs in the worst light possible, will tell you that the average includes people who lived a lot longer than 6 months including those who went into remission. And as we develop genetic tests to identify who responds best to which cancer drugs we will be able to provide Nexavar to people with kidney cancer patients well before the cancer is end stage and treat it as a chronic disease as we are doing with breast cancer. The FDA and NCI rapidly reorganized the clinical trials for this drug around such new science as best it could. And it is in large part for this reason that Nexavar was so quickly approved after so much delay. Going forward the FDA is seeking to use tools that more accurately measure how and cancer drug works and what patients it works for.

But all you read from Goozner is the heart problems associated with the drug and how the Europeans are waiting, waiting and waiting for real survival data. Of course Goozner won’t tell you that the Europeans are still waiting for survival data about Herceptin even as we are using to basically cure breast cancer before it starts in a lot of women in an effort to save money. And he ignored the quote from FDA’s cancer division head Dick Padzur who said, “Rarely do we see a 100 percent improvement in a new cancer treatment.”

Goozner, like Sid Wolfe, who heads up Public Citizen, the group from which Goozner’s garbage flows is more interested in killing drug companies than in saving the lives of people. His life work is in contrast to a friend of mine, Alan Feldman who died five years ago this Hanukkah from kidney cancer. He was an oncologist. But more than that he was one of the kindest and most generous people I have ever known Even as he himself was dying from cancer he treated other patients, offering them hope and care. In the last of his journal entries Alan wrote that he hoped he could live to see the day when a more effective medicine for kidney cancer would be approved. He realized how precious each day was as a doctor, father and friend. My celebration of this Hanukkah will be enhanced by knowing that one his wishes has finally come to pass. But my joy in learning about the approval of Nexavar is tempered by the sadness in knowing that he is not alive to use it on behalf of others.

Bob Goldberg reports in from the Big Rock Candy Mountain.

FDA Moves to Decrease Lead in Candy (AP)

The FDA proposed Thursday a stricter recommended limit on the amount of lead, a highly toxic metal, allowable in certain types of children’s candy. The Food and Drug Administration now recommends that candies eaten by small children not contain more than one-tenth of a part per million lead. That amount of lead does not pose a significant risk to small children, the agency said. “This new guidance level will further reduce an already minimal risk from lead exposure in candy,” said Acting FDA Commissioner Dr. Andrew von Eschenbach.

For those of you thinking such a regulatory action is a well-meaning public health initiative, think again. I have in my possession the off-label responses of Sid Wolfe of Pubic Citizen and Charles Grassley to the FDA candy action. Wolfe of Public Citizen lambasted the FDA action stating “this is an obvious move by the agency to do the bidding of the junk food industry who wants to boost profits during the holiday season in a too-little, too-late effort to pass their poison off as healthy.” Senator Charles Grassley commented that the lead limit was yet another example of how industry is too cozy with the FDA. “If there really was a firewall between businesses and the agency, the lead would stay in and kids would eat less candy. I am demanding every candy maker send me every sample of candy ever sent to the FDA, every letter they ever sent to the FDA, every lab test sent to the agency and every document in the United States in every household in the country with the words lead and candy in them. In fact, if the word is spelled led, I want that document too. And the same goes for that cute stationery and pencils and toothbrushes with the name Candy or Candi on it.”

Hey Abbott!

  • 12.22.2005

Texas won’t allow Canadian drugs after all

A new state law intended to help Texas consumers buy less
expensive prescription drugs from Canada was struck down Wednesday by
Attorney General Greg Abbott, who ruled that it violated federal law.
The attorney general said the statute violates the federal Food, Drug
and Cosmetic Act, which “makes it an offense not only to import, but to cause the importation of prohibited medications.”

Abbott, whose jurisdiction covers only Texas law, said similar proposals in Maryland, Tennessee and Vermont have encountered legal challenges.

Can FDA do more to speed the advance of cancer treatments? Of course. But FDA hasn’t been idle. Consider the agency’s existing initiatives to help make innovative therapies available more quickly and at a lower total cost while maintaining high standards of consumer protection.

FDA has already made great strides:

* Reducing drug development times by avoiding multiple review cycles
* Improving the review process through a quality systems approach to medical product review
* Supporting innovation in medical products by clarifying regulatory uncertainty and increasing predictability in product development

FDA has been available and engaged in constant communication sponsors early on in the review process including:

* End of Phase II meetings
* Pre-NDA meeting
* Post-NDA Submission meeting being piloted by the Oncology Division

FDA has requested and approved comprehensive development programs in advance of “Fast Track” designations, helping to ensure clinical trials are properly structured:

* Using newly developed Special Protocol Assessment guidance, product developers work more closely than ever before with the FDA to create phase III studies prior to implementation to gather all necessary information

* FDA’s call for the use of a Continuous Marketing Application enhances sponsor access to early guidance and feedback for Fast Track drugs or biologics intended to treat serious or life threatening diseases, and provides for FDA-sponsor agreement to engage in frequent scientific.

In addition to early and frequent communication, FDA’s quality systems approach to medical product review has facilitated the regulatory review process through:

* The implementation of the Common Technical Document (CTD) and the electronic CTD (eCTD), which uses cutting edge technology and combined with international public health policy to provide better quality, consistency and communication with sponsors. Another key component to this program is the development of new medicines by creating clearer guidance for product approvals in priority areas (e.g., obesity, diabetes and oncology).

* The Special Protocol Assessment (SPA), guidance was created to help product developers design phase III trials that will ensure necessary data is being collected. In addition, the FDA works closely with sponsors to review and approve a comprehensive development program in anticipation of Fast Track designation and the potential filing for Accelerated Approval. This includes phase III confirmatory studies —a major theme repeatedly mentioned as a criterion for accelerated approval.

Overall, these and other initiatives are designed to help the FDA achieve its public health mission of promoting and protecting patient health by reducing time to market for new medical products such as Nexavar — resulting in earlier patient access to safe and effective treatments.

Do more? Sure. But credit where credit is due for important reforms already designed and implemented.

My 18 year old son has epilepsy and so I bring you the following news with gratitude and excitement and courtesy of the FDA website. The full story can be found at

The Food and Drug Administration announced today that a drug to treat seizures, has become the 100th medicine to have new information for children and teenagers included in its labeling. Under eight years of legislation to enhance pediatric drug information, 100 pediatric drugs now include additional labeling information on safety, efficacy, dosing and unique risks for children.

The Federal Food, Drug, and Cosmetic Act (as amended by the Food and Drug Administration Modernization Act of 1997 — FDAMA) and the 2002 Best Pharmaceuticals for Children Act (BPCA), provides incentives to companies who perform research to determine the safety, efficacy, dosing and unique risks associated with medications for children, based on the same level of scientific evidence required for adults.

Under the law, FDA works with the larger pediatric community to determine which products should be studied in the pediatric population based on the public health needs of children. FDA has issued more than 300 requests for studies of medications, based on either the frequent use or the potential use of those medicines in the treatment of children, or on the need for pediatric information so the drugs may be used to treat disorders for which children have few or no other options. Since FDAMA was enacted in 1997, manufacturers have conducted more than 250 pediatric studies for 125 products. By comparison, in the 7-year period before FDAMA was enacted only 11 such studies were conducted. The studies from 114 products responded to the requests by FDA and these products have been granted six months of additional marketing without generic competition.

“The studies were conducted for a wide range of childhood conditions, such as asthma, HIV, seizures, juvenile rheumatoid arthritis, pain management, diabetes, high blood pressure, attention deficit hyperactivity disorder, brain tumors and leukemia,” said Steven Galson, MD, Director of FDA’s Center for Drug Evaluation and Research. “They have resulted in important new pediatric information in 100 new drug labels and additional drugs are presently being studied to further protect our children from any serious side effects.”

I hope that those who are quick on the draw to criticize the FDA are penning notes of congratulations in advance of the holiday break.

The Associated Press

SAN FRANCISCO — Customs agents have intercepted more than 50 shipments of counterfeit Tamiflu, the antiviral drug being stockpiled in anticipation of a bird flu pandemic, marking the first such seizures in the U.S., authorities said Sunday. The first package was intercepted Nov. 26 at an air mail facility near San Francisco International Airport, said Roxanne Hercules, a spokeswoman for U.S. Customs and Border Protection.

Since then, agents have seized 51 separate packages, each containing up to 50 counterfeit capsules labeled generic Tamiflu. The fake drugs had none of Tamiflu’s active ingredients, and officials were running tests to determine what the capsules did contain. Initial tests indicated some vitamin C in the capsules, said David Elder, director of the Food and Drug Administration Office of Enforcement. Information on the packages was written in Chinese, but it is unclear where the drugs originated, Elder said. They were sent by Asian suppliers to individuals who placed orders over the Internet, Hercules said. She said none of the shipments intercepted so far was bound for doctors or hospitals. Agents became suspicious because Tamiflu is produced by Swiss pharmaceutical manufacturer Roche, and there is no generic version available. “What we’re trying to do is alert the American public that they shouldn’t be buying this product because we may never be able to track down the manufacturers,” Elder said Sunday. “We’ve anticipated the likelihood of counterfeits from the very beginning. People are trying to profit on the heightened concerns of the American public.”

An investigation conducted by the U.S. Food and Drug Administration found a significant percentage of drugs touted as Canadian and shipped from Internet pharmacy websites claiming to be Canadian were not actually from Canada, the agency announced Friday.

The FDA said nearly one-half of the imported drugs intercepted from four selected countries were shipped to fill orders consumers believed had been placed with Canadian pharmacies. Of the drugs that were promoted as Canadian, 85 per cent actually came from 27 countries around the globe and a number were counterfeit, the agency said.

“These results make clear there are Internet sites that claim to be Canadian that, in fact, are peddling drugs of dubious origin, safety and efficacy,” FDA acting commissioner Dr. Andrew von Eschenbach, said in a statement.

“We believe that these bait and switch tactics — offering patients one thing and then giving them something else — are misleading to patients and potentially harmful to the public health.”

The FDA conducted its operation in August 2005 at JFK Airport in New York City, Miami International Airport, and Los Angeles International Airport. Agency officials examined all mail parcels suspected of containing pharmaceuticals sent from four countries — India, Israel, Costa Rica, and Vanuatu — that the FDA had previously noticed were sources of drugs apparently ordered from pharmacies alleged to be Canadian in origin. Out of nearly 4,000 parcels examined, about 43 per cent had been ordered from purportedly Canadian Internet pharmacies and the drugs were represented as being of Canadian origin. But only 15 per cent of those examined actually originated in Canada. And 32 of the medications were determined to be counterfeit.

Mired in Krug

  • 12.16.2005

Paul Krugman (the New York Times editorialist) in his 12/16 op-ed points to the “medical-industrial complex” as rife with conflicts of interest, avarice, and invention (and not “invention” as in “the mother of invention”). Mr. Krugman’s White Knight? Why none other than Dr. Eric Topol. His favorite “expert?” None other than Marcia Angell. Get the picture? And when he lists the tools in the pharmaceutical industry’s arsenal of “persuasion” he commences his litany with - ready? — “cheerleaders as sales representatives.” As Casey Stengal would say, “you can look it up.” Here’s the infuriating part, “Prescription drugs and high technology medical devices account for a growing share of medical spending.” Sound familiar? Does he know (or care) that the “growing share” is about 12 cents on the health care dollar? Is he naive enough to believe that acute care is all and chronic care is but a bagatelle; that rather than getting more people on statins we should strive to lower the prices of diabetic amputations? And here’s the annoying part, “In future columns I’ll talk about how serious health reform can reduce the conflicts of interest that are tainting our current system.” I can’t wait. To once again quote the Ol Perfessor, “They say you can’t do it, but sometimes it doesn’t always work.”


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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