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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 www.rxcmpi.org.
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.
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
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
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?
From CMPI blogisto, Dr. Henry Miller …
In recent years, the costs of drug development have skyrocketed, with
direct and indirect expenses now exceeding $800 million to bring an average drug to market; and fewer than one in three drugs that are approved for marketing ever recoup their development costs. Even more ominous, the number of applications to FDA by industry for permission to market drugs has been steadily decreasing since 1995.
But drug and biotech companies spend more than $30 billion a year on
research, so how can that be? The reason is that regulators are
continually raising the bar for approval. For example, in just the past few years FDA officials have arbitrarily and unexpectedly directed clinical investigators to begin trials at inappropriately low dosages; limited approval of early stage studies only to single-dose, instead of dose-ranging, studies; demanded unnecessary, invasive procedures on patients; and even required that foreign trials be completed and the results submitted before the U.S. trials could begin. It’s bad enough that such an overly cautious mindset delays the availability of new drugs, but regulators’ increasing preoccupation with safety concerns may have become contagious: Drug manufacturers, too, seem to have begun to “err on the side of safety” to a degree that causes safe and effective drugs to be taken off the market voluntarily. An example is Tysabri, only the sixth medication approved — and the first in several years — for the treatment of Multiple Sclerosis (MS), a debilitating autoimmune disease that affects the central nervous system. The stunning results of the drug’s testing in clinical trials — which showed improvement in the quality of life and a reduction by more than half in the frequency of clinical relapses — induced FDA to grant accelerated approval last fall. MS patients eagerly put their names on waiting lists to get the medicine. But this ray of hope for MS sufferers was short-lived. By the time that several thousand patients were being treated with Tysabri, three deaths from a rare neurological disorder caused by a virus were reported. (Because the drug suppresses certain aspects of the immune response, regulators, clinicians and the drug’s developers had from the beginning been sensitive to the possibility of infections as a side effect.) Immediately — some would say prematurely — the manufacturers of the medicine voluntarily halted production and distribution, withdrew Tysabri from the market, and immediately initiated a full review of all patient data. MS victims and many neurologists were bitterly disappointed. Data obtained since the withdrawal have confirmed the drug’s efficacy and shown no additional drug-related deaths, so as a scientist, physician and
policy wonk, I wonder why Tysabri isn’t back on the market. Surely, this is a product that patients (with the approval of their physicians) should have the right to choose.
On September 20th, the Pacific Research Institute’s Center for Medicines in the Public Interest (the parent site of DrugWonks.com) is holding a conference on the urgent issue of international prescription drug counterfeiting. For more information on the event — which will feature leading international experts as well as senior U.S. government officials from the FDA and the Department of Justice — please visit www.politicalcap.com/pri. The event is being held in Washington, DC. If you are unable to be there you can still attend virtually via our audio weblink. To register for the audio weblink (at no charge) please visit www.videonewswire.com/event.asp?id=30518.
The following from the meek and mild mind of Bob Goldberg, PhD …
Only in the NY Times can a recusal to avoid even the appearance of a conflict of interest be treated as evidence as malfeasance of a sort. The Times, like most of the media never places its j’accuse in any context. So for instance, its story about the BMS diabetes drugs ignores the fact that the treatment targets a particular receptor (PPAR) that increases insulin sensitivity. It was only confirmed as a target by showing that people with a certain mutation of a gene regulating the PPAR receptor. Thus down the road it will be likely that for people with this variation, the BMS drug will be one of the best medicines for diabetes since it is the only one correcting for the genetic defect. This will be millions of patients who will get their insulin levels right when they could not with other drugs. All this is somehow over the heads of the great journalistic minds at the NYT. Perhaps this is why the writer only focuses on the ‘serious cardiovascular risks’ as opposed to trying to draw a nefarious link between and Vioxx. And perhaps this is why it ignored the fact that the risk is rare (less than 1 percent of all patients) which makes it as risky as other diabetes drugs on the market. Witholding that information probably had nothing to do with the goal of trying to explain the approval of the drug as a product of the ethically compromised panel. Interestingly, the NY Times failed to have either Gardiner Harris or Stephanie Saul cover advisory committee REJECTIONS of high profile drugs put forth by Johnson and Johnson, Abbott and Pfizer for cancer and osteoporosis respectively. Why? Because the votes don’t square with the conspiratorial model of drug approval they advance. Nor can the NY Times explain why it failed to mention the industry consulting of one advisory committee member, gastroenterologist Bryan Cryer, when quoting him in an article that the blood thinner Plavix might cause stomach ulcers but does note his financial ties in a piece alleging his vote to keep Celebrex on the market was bought and paid for. All this underscores the fact that ideology, pursued without regard to the truth or accuracy, turns people into idiots. No better example is that of Maurice Hinchey a congressman who would bar Nobel Prize winners in medicine from advising the FDA if they consulted for drug companies. Since all of them have, the Nobel Laureates are to be considered bias and compromised, according to the twisted logic of Hinchey and the NY Times. By extension which should disregard Pasteur’s path breaking insights into the role bacteria play in causing disease and his vaccine developments because he was largely funded by the French beer and wine industry. Sadly, based on the NY Times articles, Hinchey was able to get an amendment passed that would ban every researcher of any note from helping the FDA if they had done any consulting with companies. My thinking is that we should apply this thinking to all fields. Accordingly, Hinchey should recuse himself from making any statement or voting on any bill that involves tort reform since he receives so much PAC money from the trial. And NY Times reporters who receive a $500 bonus for writing such articles should disclose as such. Ironically, FDA advisory committee members have asked for more disclosure of their financial holdings in an effort to ally concerns. But view this too has not been disclosed by Hinchey or the New York Times. That alone underscores an important consideration which we should weigh in evaluating their claims: Intellectual or ideological bias may be more difficult to ferret out than financial conflicts, but they can be politically more destructive.
Once again into the abyss. This time the issue is Guidant defibrillators. Solid reporting by Barry Meier of the New York Times raises some troubling and important matters. The first, of course, is what did Guidant know, when did they know it, and why did they delay reporting important adverse events to the FDA? The second, more troubling question, isn’t when the FDA knew — it’s why didn’t they act sooner. Or, to be more precise, how long did the report reside in a CDRH in-box before it was read and acted on. The first set of questions raise the specter of disquieting corporate shenanigans. But the issue of CDRH timeliness is, in the broader scope of the public health, more important, more troubling and, believe it or not, easier to address and remediate. The “front end” of CDRH functions well enough. The “back end,” the part that deals with post-market surveillance issues, not as well. The dedicated career staff at CDRH, under the respected leadership of Dan Schultz work hard — but they (like the rest of FDA) are under-funded and under-staffed. Let me be clear. There is no excuse for delay — but human beings can only do so much. Minus an increase in funding (which doesn’t seem to be in the cards any time soon) something else must be done, from a process perspective, to eradicate delays of potentially life-saving information. Even if Guidant had submitted its report on time, it’s likely the FDA would have taken the same amount of time to read it, digest the implications and issue the same public health advisory. The question isn’t confidentiality. That’s not even relevant. The issue is timeliness. And the answer is for the FDA to take a hard look at its existing processes and make them better. The New York Times, editorializing on its own report, recommends an interesting option — separate the wheat from the chaff. Ask device companies to provide a separate “hot sheet” that directs the FDA’s attention to the most crucial information — rather than burying it deep within the bowels of a more lengthy report. Drugs have risks and devices fail — that’s the world in which we live. And it’s all the more reason for device manufacturers to step up to the plate and be a more senior partner in protecting the public health. But corporate behavior is no excuse for an FDA process issue. A problem has been identified and a solution suggested. Now it’s time for the dedicated public servants at the FDA to solve it — and fast.
When asked why he robbed banks, Willy Sutton, the depression-era desperado replied, “because that’s where the money is.” And, as my former boss Mark McClellan used to say, if Sutton were alive today he’d be selling counterfeit prescription drugs. The bad news is that international prescription drug counterfeiting is on the rise. The worse news is that pending US legislation could make it even worse. Two news items crossed the wire late this week that illustrate this growing problem — and its truly global nature. The first story, from China, tells of eleven Chinese nationals and one American arrested in a counterfeit medicine scheme that spanned eleven countries, 440,000 bogus pills and $4.3 million US dollars. The drugs being peddled were Lipitor, Viagra, Cialis and Levitra. The nations involved were the US, Great Britain, Switzerland and Israel. (Note to Senators Dorgan and Vitter: Drug importation from the EU is dangerous.) The second, more frightening news item comes from Hamilton, Ontario where a registered pharmacist, Abadir Nasr, was charged with selling counterfeit Norvasc (a medicine used for the chronic treatment of hypertension and angina). Congressman Bernie Sanders (I, VT) and others, when asked about the dangers of drug importation are fond of quipping, “Show me the dead Canadians.” Well, the regional coroner in Hamilton is currently investigating the deaths of five people who filled prescriptions for Norvasc at Mr. Nasr’s pharmacy. All five died of a heart attack or stroke. (Note to Governors Pawlenty, Blagoevich and Doyle — and a big red warning to Governor Perry: Drug importation from Canada is dangerous.) Attention must be paid to this very serious problem and the way to make it better is not to make it worse by opening up American borders to medicines not under the jurisdiction of the FDA. Here’s another question — why haven’t either of these news stories been reported by any major American media. (Note to The Washington Post and the New York Times: Google “Hamilton, Ontario.”)
In 2006 the Center for Medicine in the Public Interest (www.cmpi.org), estimated that counterfeit drug commerce will grow 13% annually through 2010. The CMPI study is cited by the WHO on its updated counterfeit pharmaceuticals fact sheet.
Counterfeit sales are increasing at nearly twice the rate of legitimate pharmaceutical sales and they are a money machine. In 2010 CMPI estimates that fake drugs will generate $75 billion in revenues — a 92% increase from 2005. And the risks of detection and prosecution are low.
Our original estimates were made based on conservative projections of counterfeit medicines manufacture and sales issued by the WHO, the FDA, the EU Commission and other global bodies.
But we now feel these numbers are too low – because an entirely new criminal enterprise has emerged – counterfeit ingredients. While counterfeit API (active pharmaceutical ingredient) isn’t a new issue, there is a new and frightening manifestation. In the past, counterfeit API was purchased by criminals making counterfeit drugs. Today a new, significantly more dangerous and difficult to fight enterprise is underway – the sale of counterfeit (“tainted”) ingredients to legitimate pharmaceutical manufacturers. The most high profile example of this is the deadly case of Heparin.
It is impossible to believe that the case of Heparin was an unfortunate mistake – a quality lapse, a one-time and unique circumstance. The facts speak otherwise. This was a case of fraud. Criminal fraud. So let’s call it by its proper name -- counterfeiting.
Counterfeit medicines, according to the WHO are “deliberately and fraudulently mislabeled with respect to identity or source. Counterfeiting occurs both with branded and generic products and counterfeit medicines may include products with the correct ingredients but fake packaging, with the wrong ingredients, without active ingredients or with insufficient active ingredients.”
It’s time to rethink and broaden that definition to include the potential for fake ingredients (“tainted” is both too polite and too inaccurate a term) that insidiously find their way into legitimate pharmaceutical manufacturing.
And, unfortunately, it means that CMPI must recalculate its global estimates for counterfeit medicines and their profits upwards.