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I am proud to have served with Les Crawford at the FDA. I am prouder to consider him my friend.

The DC Council has approved legislation (which Mayor Anthony Williams has said he will sign) that would make it illegal for pharmaceutical companies to sell prescription drugs at an “excessive price” in the District of Columbia. And, of course, if companies don’t comply there is a civil penalties clause. In medical terms, the Council needs to have their collective heads examined. But their mental health isn’t the issue. The real question is, what aspects of drug pricing do pharmaceutical company’s control? Pfizer doesn’t own a chain of pharmacies. Eli Lilly doesn’t have a stake in CVS. And, in case you didn’t know, there is no such thing as MSRP (manufacturer’s suggested retail price) for prescription medicines. Here’s how it works — a drug company sells its products to a wholesaler who sells it to a pharmacy (often with multiple re-sellers and re-packagers in-between). And everyone along the supply chain marks up the price to make a profit. In fact, by the time you receive your prescription at the pharmacy, the price can be upwards of 40% over the initial price charged by the pharmaceutical company. But, since the DC Council is made up mostly of lawyers (including the genius who introduced the legislation, David Catania — a lawyer at the mega-DC firm of Akin, Gump, Strauss, Hauer, Feld) it’s not surprising they’ve chosen to focus on the deepest pockets — the pharmaceutical industry. It wouldn’t look good, after all, if their legislation forced local pharmacies (who enjoy a sizable profit on their sale of medicines) to close in Anacostia. What does “DC” stand for? Based on the current disposition of the DC City Council, it stands for “Drug Catastrophe.”

This just in …

STRASBOURG, France (AP) — Counterfeit Viagra, antibiotics and other drugs are on the rise in Europe, leading international pharmaceutical and health care experts said, blaming insufficient cross-border cooperation.

Meeting at a three-day conference organized by the Council of Europe, government officials, law enforcement officers, doctors and pharmaceutical experts from Europe and the United States called Thursday for tighter criminal legislation, better public awareness campaigns and a central point for collecting information on fake drugs.

They warned that the rise in counterfeit medicines could undermine patients’ confidence in public health care.

“It is worrying that there is no recognized central reference point in Europe entrusted with surveillance, trend analysis and policy recommendations in the field of counterfeit medicines,” said Maud de Boer-Buquicchio, deputy secretary general of the Council of Europe, the continent’s leading human rights body.

“This situation helps the counterfeiters, who can rely on international cooperation gaps in Europe,” she said. “Even when they are caught, they far too often get away with administrative fines with no deterrent effect.”

Counterfeit medicines make up approximately 10 percent of the European pharmaceutical market — up from close to zero 10 years ago — and often are supplied by international criminal rings, the World Health Organization says.

In Russia, some 20 percent of all drugs distributed are fake, while in Mexico it is 40 percent and in Nigeria as much as 80 percent, Council of Europe and WHO statistics show.

Counterfeit medicines often are packaged like the genuine product and are hard to detect. Lifestyle drugs, such as Viagra, and essential medicines such as antibiotics and insulin are particularly popular with counterfeiters, but there’s also an increasing number of fake contact lenses and even materials such as surgical mesh.

Experts warned that purchasing health products over the Internet poses a major health risk as such drugs often have not been approved by a competent health authority.

A study conducted by the U.S. General Accounting Office in 2004 showed that four out of 21 medicines ordered from Web sites outside the United States or Canada were fake.

“Patients using these services are at risk of receiving medicines which are counterfeit, out of date or unidentifiable for lack of proper packaging,” said Jean Parrot, President of the International Pharmaceutical Federation.

The conference, which runs through Friday, focuses on identifying ways to detect fake drugs, combating distribution and drawing up guidelines to protect the public. Representatives of the European Commission, the European Patent Office and the U.S. Food and Drug Administration were attending the meeting.

Fred Fricke, director of the Forensic Chemistry Center at the FDA, highlighted a recent case: Two former employees of pharmaceutical giant Johnson & Johnson set up their own business in India and were producing fake, non-sterile surgical mesh and distributing it to a number of hospitals in the United States.

Level-headed logic and sound advice from the editorial page of the Washington Post …

PROCEEDINGS began this week in the lawsuit filed by Frederick Humeston
of Boise, Idaho, against Merck and Co., the makers of the painkiller
Vioxx. Mr. Humeston wants compensation for the heart attack he suffered in 2001, two months after he began to take Vioxx. The facts of the case would seem to give Mr. Humeston little chance. Not only do studies of Vioxx show that the risk of heart attack is linked to use over a much longer term, but Mr. Humeston was, like many other middle-aged men, at risk of a heart attack for other reasons, too.
Unfortunately for Merck, scientific facts didn’t play much of a role in the first Vioxx trial, which ended on Aug. 19. The Texas jury in that case awarded $253.4 million to the widow of a man who died of a heart attack triggered by arrhythmia, which is not a condition Vioxx has been proven to cause. The jury, declaring that it wished to “send a message” to Merck, decided to make an enormous symbolic award anyway. Besides, said one juror afterward, the medical evidence was confusing: “We didn’t know what the heck they were talking about.” Because Texas law limits the size of jury awards, the final cost to Merck is likely to be closer to $2 million. But the precedent set by the jury is ominous. Merck is facing about 5,000 similar lawsuits. If every one of those costs the company $2 million, the total price will come to $10 billion — if, of course, a company called Merck is still around to pay it. Politicians and regulators should be asking themselves whether a system of massive cash awards to people who may or may not have been adversely affected by Vioxx is a logical, fair or efficient way to run a drug regulatory system. They should also be asking whether juries that scorn medical evidence are the right judges of what information should or should not have been on a prescription label. After all, Vioxx was produced and sold legally. The drug was approved by the Food and Drug Administration, and its label did warn of coronary side effects. It is possible, even probable, that Merck was negligent in its decision to ignore early warnings of the cardiovascular risks of Vioxx. But the company has already paid a price for that negligence, in the losses it has suffered after abruptly taking Vioxx off the market. Fair compensation for the injured needn’t entail disproportionate financial
punishment as well. In the long term, using the courts to “send a message” to Merck isn’t going to help consumers. If the result is an even more cautious FDA approval system and a more cautious pharmaceutical industry, that will keep innovative drugs off the market for much longer. More people will die waiting for new treatments. The cost of producing new drugs will rise dramatically. Already, there are whole areas of medicine — women’s health during pregnancy, for example — that are made so risky by liability issues that companies may stop doing research in them. The first principle of reforming this system should be that a company that follows the FDA’s rather extensive guidelines should be protected from punitive, if not compensatory, damages. At the very least, it is time for Congress to start considering whether a model such as the one set up for children’s vaccines — in which a fund is set up to cover the
costs incurred by children harmed by vaccines — should be constructed
for all drugs.

All schizophrenics react to medicines the same way. So says the New York Times. According to the Gray Lady, “The nation is wasting billions of dollars on heavily marketed drugs that have never proved themselves in head-to-head competition against cheaper competitors.” But have these medicines proved themselves where it counts — in the bodies and biochemistries of schizophrenics? For many patients (although clearly not enough for the New York Times) a new therapeutic option often provides the chance to live their lives outside the horrible fog of schizophrenia The plain fact is that some medicines work better for some patients than for others. Some marginally so, others more significantly. One size does not fit all and nowhere is this more true than in patients suffering from severe mental illness. It’s time that the good folks at the Times editorial board stop listening to the better (Marcia) angels of their nature and reserve judgment before speaking with mental health professionals, patients and families thereof.

Seems as though there’s more to Switzerland than chocolate, Heidi, and precision watches. We now, unfortunately, must add a problem with counterfeit prescription drugs. The problem will get it’s most high-profile airing at a three-day Council of Europe meeting instigated by the Swiss Agency for Therapeutic Products, Swissmedic.There have been two high-profile cases of counterfeit drug trafficking in Switzerland in the past three years. In 2002 a wholesaler in the Basel region was caught selling repackaged drugs to Germany worth SFr23 million ($18 million). And two years later Swiss customs seized HIV medicines that had been stolen from a batch sent to Africa by the World Health Organization. Swissmedic is also concerned about the quantity of fake drugs available on the internet.
The Swiss regulatory authority proposed the Council of Europe meeting two years ago because the problem is not just confined to individual countries. “This is a Europe-wide problem, which means we have to collaborate,” said spokesman Paul Dietschy. “Some countries need to change their laws because this is not illegal in all countries. We also need to solve problems with data protection that stops us getting information.” Dietschy hopes the programme of workshops and presentations at the Council of Europe headquarters in Strasbourg will lead to a coordinated effort to combat the problem. The event will be attended by representatives of all 46 Council of Europe member states together with healthcare professionals, patients’ organisations and representatives from the pharmaceutical industry.”We need a collaboration between customs, justice authorities and police on the one hand and the drugs industry, including manufacturers, wholesalers and medicine agencies on the other,” said Dietschy. “We must educate doctors and pharmacists and connect the industry to the authorities.” He added that the problem of counterfeit drugs was relatively new in Europe, but has been growing steadily over the past five years. “This has been going on in developing countries for many years, but it is a new problem in Europe since the beginning of the 21st century. There have been about 15 big cases in Europe that we know of. There is big money involved.”The Council of Europe estimates that drugs that have been deliberately and fraudulently mislabelled are on the rise. “They present substantial health risks to Europe’s citizens, including potential fatalities,” the council said in a statement ahead of this week’s meeting.

Here’s an idea — how about sending Sentors Dorgan and Vitter on a fact-finding mission?

Every potential government action yields a reaction, and nowhere is that eternal truth clearer than in the ongoing debate over the importation of pharmaceuticals subject to foreign price controls. Such legalized importation would be one way for those favoring price controls on pharmaceuticals—a blatant wealth transfer from the future to the present—to have that cake without actually having to vote for it, and thus having to bear responsibility for the ensuing adverse effects on future human suffering.

In any event, all the importation talk some months ago led the authorities and others in Canada and elsewhere to make it clear that they could not be viewed as America’s pharmacy; the Canadian market simply is too small to supply America’s pharmaceutical demands even at current prices. And the pharmaceutical producers themselves, like all good capitalists attempting to do well by doing good, would have incentives to limit sales into the various foreign markets, so that foreign governments in effect would not take on the role of determining pharmaceutical prices in the U.S.

And so we have yet another example of government grasping ever-more power so as to circumvent the problems created by previous (or other proposed) power grabs: Current proposals to allow the importation of pharmaceuticals subject to foreign price controls include provisions forcing the producers to sell to the foreign governments all the drugs demanded at the controlled prices, thus transforming the foreign markets into the central middleman suppliers for the U.S. market.

Where to begin? This means that foreign governments—or more specifically, the foreign governments imposing the tightest price constraints—will be given the power to set prices in the U.S. Do we want the future of U.S. medical technology to be determined by political pressures overseas and/or by bureaucrats in Ottawa or Brussels or elsewhere? Apparently, some in the U.S. Congress do indeed. And precisely what is the economic value of any given pharmaceutical patent when that economic value in the U.S. can be confiscated by foreign politicians, whether elected democratically or not? So much for the future of pharmaceutical investment and innovation—the research and development process takes over a decade, and what investor wants to bet on political outcomes not only in the U.S., but anywhere in the world?— and thus for the future development of cures.

And let us have no nonsense about the importation of pharmaceuticals subject to price controls as a manifestation of “free trade.” Forced sales at controlled prices—prices not approved even by We the People, that is, Congress—are no more consistent with the principles of free trade than the purchase of stolen merchandise from the back of a truck would be consistent with the principles of free enterprise. Thus is the forced sales approach a blatant violation of the Takings Clause of the 5th Amendment, as the price controls would transfer the property rights (i.e., real wealth) inherent in patents from pharmaceutical producers and future patients to current interest groups without any compensation whatever, whether just or not.

The last time I read the 13th Amendment to the Constitution, it said something rather sharply unfavorable about involuntary servitude. The forced sales proposals would mandate that pharmaceutical producers sell all that is demanded at the prices dictated overseas, without recourse to the ordinary processes of negotiation, let alone legal institutions. Thus would American firms be forced to serve foreign masters—literally—on terms dictated by foreigners. And let us not forget the “nondiscrimination” dimension of the forced sales gambit: If the German government buys, say, 30 million doses of a drug at a given price, would the pharmaceutical firm be forced to sell an identical quantity at the same price to anyone in Germany? That the answer is not clear—it might very well be “Yes”—reveals a good deal more about the forced sales idea than its proponents would like us to know.

And is there any reason to believe that such forced sales would be limited to drugs? If U.S. politicians can transfer wealth to their constituencies in the form of “cheap” pharmaceuticals, why not a myriad of other goods that require massive up-front investments?

So there we have it. Fewer medicines. U.S. markets held hostage to foreign political pressures. A wholesale destruction of the Bill of Rights. Government of, by, and for the People—Sovereignty—cast to the winds. Such are the inexorable outcomes yielded by politicians and bureaucrats in hot pursuit of wealth redistribution, the larger adverse implications be damned.

Breaking news story from Canada — the Royal Canadian Mounted Police (the RCMP is Canada’s FBI) has admitted there are three or four counterfeit pharmaceutical investigations in the Greater Toronto area, but they won’t say anything else — including what drugs are involved. According to Ken Hansen, head of the RCMP’s federal enforcement unit and the co-chair of an Interpol committee on counterfeiting, the government has known about the threat of fake pharmaceuticals for some time — it was flagged in a 2000 RCMP report — but the rate at which it is growing is why it’s suddenly on the radar screens across the world. “You’ve got to evolve to meet the crime. Status quo isn’t an option. The problem will just get worse,” said Hansen. “Virtually every organized crime group in Canada is involved in counterfeit goods because it turns a high profit and comes with limited punishment and little enforcement.” That sounds ominously familiar to what’s going on in the U.S., Europe, Africa, and Asia. Health Canada and the U.S. Food and Drug Administration signed a memorandum of understanding to communicate and cooperate on issues of drug safety. I wonder if Health Canada has picked up the phone?

For more information on CMPI’s September 20th Washington, DC gathering of many of the world’s top counterfeit drug experts (including a free audio webcast) please visit

The Council of Europe is launching a program to combat counterfeit medicines with a seminar in Strasbourg from 21 to 23 September 2005. It will bring together all Council of Europe member states, European associations of trade and industry, healthcare professionals and patients’ organizations, institutions of the European Union and international organizations to draw up measures against counterfeiting that will work. Counterfeit medicines are deliberately and fraudulently mislabelled, and they are on the increase in Europe, with estimates ranging from 6% to 20% of market shares in certain regions. They present substantial health risks to Europe’s citizens, including potential fatalities.

Miller's Crossing

  • 09.16.2005

Recently Henry Miller (a member of the Center for Medicines in the Public Interest board of advisors — the parent of this blog site and a fellow FDA alum) published an op-ed in The Washington Times titled “FDA’s Short Dose of Reality.” While I don’t agree with a lot of what Henry writes, I certainly feel he raises some critical points — one of which is that the health policy community is a tightly knit fraternity. Or should I say “sorority?” I mention this gender question because, in his piece, Henry points out that the senior vice president of the Association of American Medical Colleges (David Korn) is married to a former FDA Deputy Commissioner (Carol Scheman). (Note: Henry did not use her name in the article.) Dr. Miller received a scathing e-mail in response and their dialogue — completely unedited — can be seen below. Here’s the question — why the hubbub?

To: Henry Miller
From: Carol Scheman

Dear Henry,

Your recent “Washington Times” piece was forwarded to me and while I am not particularly interested in debating the opinions you express, I am surprised that you think it pertinent to note that “David Korn, is one of the two authors and happens to be married to a former FDA deputy commissioner.” I think this reference is not simply silly and gratuitous, it is also sexist and offensive and an artifact of a time when some people found two career couples and the idea of women working somehow odd and complicating. I am not sure what point you were trying to make so I decided to ask you. Was this simply a random thought that your editors neglected to excise or are you making a point? And if you are making a point, exactly what is it? And with this issue aside, I do hope you are well.


To: Carol Scheman
From: Henry I. Miller

Dear Carol:

Nice to hear from you; I hope all goes well. The point of my article to which you took offense was merely to point out that there’s an obscure connection between one of the authors of the AAMC
report (which I found to be less than complete and too kind to FDA) and the agency that most readers of the report wouldn’t know about. I would also have drawn attention to the connection if David had been, say, the father or brother of a former FDA deputy commissioner.

With best regards,


Is this the first confirmed case of Karl Rove Syndrome?


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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