Correspondence
The Pharmaceutical Industry — To Whom is It Accountable?
N Engl J Med 2000; 343:1415-1417November 9, 2000
- Article
To the Editor:
In a brief letter, it is impossible to refute all of Dr. Angell's misleading charges in her editorial on the pharmaceutical industry (June 22 issue).1 To answer her question about accountability, the industry is accountable to physicians and their patients who are waiting for cures and better treatments, and it is also accountable to patients who need access to the medicines the industry has already developed. The large number of medicines being developed — more than a thousand are in the pipeline — proves our commitment to the first group, and company-sponsored patient-assistance programs and the industry's support of expanded drug coverage for senior citizens through a choice among competing private-sector plans proves our commitment to the second group. Because we are accountable to patients, we will continue to fight proposals for price control, which would hurt patients by reducing our ability to fund the search for treatments and cures.
Angell's prescription of additional regulation for an already highly regulated industry would mean fewer medicines for patients in the future. Ironically, her innovation-chilling prescription coincided with the announcement of the human genome map.2 The price constraints Angell advocates could deprive patients of the potential benefits of the genome map. Companies and investors would be unable or unwilling to fund as much research to turn scientific knowledge into medicines if there were price controls at the end of the 12-to-15-year, $500-million development period.3,4 Investment will flow elsewhere, as it did the last time price controls were seriously considered, during the debate over health care reform in 1993 and 1994. Every year since 1980, pharmaceutical companies have increased research expenditures by double digits — except in 1994 and in 1995, when there was only single-digit growth.5,6
Angell notes that the portion of health care expenditures that outpatient prescription drugs account for — now under 8 percent7 — is growing. As medicines increasingly prove to be the most effective and cost-effective treatment for many patients, why shouldn't we spend more on them? Even when expenditures for drugs do not lower the overall costs of care, drug treatment often remains the most cost-effective option and has large benefits in terms of the quality of life.
The knowledge gained from the mapping of the human genome will accelerate this trend by facilitating the development of more preventive medicines and of medicines that may turn some diseases, such as cancer, into manageable conditions. Undoubtedly, this will mean spending more of each health care dollar on prescription medicines, but the benefits to patients will be enormous.
7 ReferencesAlan F. Holmer
Pharmaceutical Research and Manufacturers of America, Washington, DC 200051
Angell M . The pharmaceutical industry -- to whom is it accountable? N Engl J Med 2000;342:1902-1904
Full Text | Web of Science | Medline2
The race is over. Time. July 3,2000:19-23.
3
DiMasi JA . New drug development: cost, risk, and complexity. Drug Inf J 1995;29:375-3844
Sustaining innovation in U.S. pharmaceuticals: intellectual property protection and the role of patents. Boston: The Boston Consulting Group, 1996.
5
New drug approvals 1994. Washington, D.C.: Pharmaceutical Research and Manufacturers of America, 1995.
6
New drug approvals 1995. Washington, D.C.: Pharmaceutical Research and Manufacturers of America, 1996.
7
National health expenditures tables. Rockville, Md.: Health CareFinancing Administration, 1999. (See http://www.hcfa.gov/stats/NHE-OAct/tables/.)
To the Editor:
Drug companies are accountable to their stockholders, and that is how it should be. The fact that an industry develops products that by virtue of their excellence become indispensable does not mean that the industry has an additional responsibility to society. Such responsibilities belong to the government. If society decides that everyone is entitled to new and effective drugs, then it will have to make the necessary political and financial sacrifices. The argument that a company that develops a desirable product must give it away means punishing the innovator — a bad economic policy. Merck's donation of ivermectin to underdeveloped countries was laudable, but the company was by no means obliged to do this.
Max C. Reif, M.D.
University of Cincinnati Medical Center, Cincinnati, OH 45267-0565To the Editor:
I thank Dr. Angell for succinctly describing the current drug industry. As a family physician practicing in a rural community, I have reached the same conclusions. I let my patients know almost daily the problems with the drug industry; they do not have to be told how it affects their pocketbooks. I hope some way can be found to implement Dr. Angell's suggested reforms.
J. Steven Schwarting, M.D.
Abilene Family Physicians, Abilene, KS 67410To the Editor:
One of Dr. Angell's proposed solutions seems almost certain to make the problem worse rather than better. After criticizing the number of marginally different “me-too” drugs, Angell suggests legislation that would limit such drugs by granting the Food and Drug Administration (FDA) discretionary authority to require comparisons with the best available drug as a condition for approval. Although it may be true that many of the industry's research-and-development efforts are devoted to the relatively low-risk development of related compounds, any attempt to limit such drugs would have the perverse effect of giving the manufacturer of a previously approved drug a much broader and more effective monopoly.
For the newer cholesterol-lowering drugs, whatever price competition there is exists precisely because there are several statins of roughly equivalent efficacy. What would the price of a statin drug be if there were only one compound available for 8 to 10 years?
Robert A. Bohrer, J.D.
California Western School of Law, San Diego, CA 92101To the Editor:
Nuances of metabolism and pharmacodynamics among members of a class of drugs are rarely discovered early in the lengthy process of drug development. Later, however, these subtle differences may be found to cause important drug interactions or determine the frequency of adverse effects and may influence compliance with treatment. Among products for which clinical trials involving a placebo group for comparison are ethically suitable, making approval contingent on showing the product's efficacy as compared with that of the best available drug would dramatically increase the number of subjects required, thereby further increasing the costs of development.
If the fourth or fifth statin drug approved for marketing is shown to be unequivocally more effective than the others, should all its predecessors lose their patent or reimbursement status?
Thomas A. Hayes, M.D.
98 Poplar Ridge, Grand Haven, MI 49417To the Editor:
The price of medicines is only the most obvious proof of a fundamental flaw in the way we currently provide medical care: the idea that somehow market forces can be used to shape a wise and efficient system. Poppycock. All the market forces are in one direction, because nobody wants to die, so there is no price point that slows demand much. This is very good for insurance companies and drug companies — and for nobody else. It is high time for a new approach.
Ned Rightor, M.Div.
MXCIX, Needham, MA 02492-4525To the Editor:
The most important reason for the high cost of drugs is the pre-marketing cost per drug of more than half a billion dollars. Up to 90 percent of this cost is due to excessive regulations imposed by the FDA.1 These hurdles place small companies, cheap drugs, and drugs with a small market at a serious competitive disadvantage. The pre-marketing costs are recouped for only 3 of 10 drugs. The drug company must attempt to recover costs within the five-year period before another drug supplants the product. Under these conditions, aggressive marketing is a necessity.
Dr. Angell complains about inequities in pricing. Europeans pay less than Americans, but drug prices in Europe are regulated. This means that the cost of drug development is unfairly passed from Europe to America.
A shift in the FDA's focus to post-marketing surveillance would dramatically reduce the cost of drug development. The safety of a drug is more accurately assessed after the drug has been marketed.
1 ReferencesWilliam K. Summers, M.D.
Alzheimer's Corporation, Albuquerque, NM 87110James Driscoll, Ph.D.
Log Cabin Republicans, Washington, DC 20036Jane M. Orient, M.D.
Association of American Physicians and Surgeons, Tucson, AZ 85716To the Editor:
The wide differences between the budgets of pharmaceutical companies for research-and-development activities and the budgets that are purely for marketing purposes are particularly troublesome. Could one propose to limit the marketing budgets at a given level (with the means of determining the level carefully defined)? This would resemble the procedures in several democratic countries for limiting the funding of presidential or parliamentary election campaigns.
Claude Jacobs, M.D.
Hôpital de la Pitié, 75013 Paris, FranceTo the Editor:
Dr. Angell points out that the pharmaceutical industry has been notably uninterested in developing drugs to treat tropical diseases that afflict millions of people who cannot afford to buy medications. Is she completely deaf to the educational needs of the large majority of physicians and institutions in many areas of the world who cannot afford the annual subscription to the Journal ($199 a year for individual physicians and $370 for institutions)? The Journal does not lower its price depending on the purchasing power of people within a country. Where has Angell expressed her outrage that it is financially impossible for about 75 percent of physicians throughout the world to get this outstanding journal for their continuing medical education?
Dilip J. Mehta, M.D., Ph.D.
870 United Nations Plaza, New York, NY 10017Author/Editor Response
Dr. Angell replies:
To the Editor: Mr. Holmer's assertions notwithstanding, Dr. Reif is correct that drug companies are accountable to their stockholders; that is their fiduciary responsibility. The question is whether the consequent drive for profits, with its adverse effects on the availability of drugs for the neediest patients, should be tempered by external regulations. I believe it should, especially given that this industry benefits greatly from taxpayer-funded research, government-granted monopolies, and large tax breaks.
Mr. Holmer engages in the usual protestation by the industry that any restraints on pricing would cripple research and development and leave us bereft of important new drugs. The implication, echoed by Dr. Summers and his colleagues, is that the industry is just squeaking by because it plows its revenues back into research and development. As I explained in my editorial, that is far from the case. The large drug companies spend about 40 percent of their revenues on marketing, reap about 30 percent in profits, and spend a comparatively small 20 percent on research and development. No doubt, important new drugs are on the horizon, but so is a cornucopia of copycat drugs directed toward people who can be persuaded by dint of that gigantic marketing budget that the next antihistamine or statin or lifestyle drug is somehow better than the last. The less important a new drug, the more marketing is required to sell it.
Mr. Bohrer's argument that competition among “me-too” drugs keeps prices for each one lower may be true, but the total spent for the class of drugs is almost certainly higher, as are the marketing costs.
Dr. Hayes is correct that comparisons of new drugs with the best available treatment, instead of placebo, would require larger trials, which would be more likely to reveal the nuances he mentions. If a new statin drug were shown to be “unequivocally more effective than the others,” it would replace them (unless it were priced much higher). The patent question is irrelevant.
In answer to Dr. Mehta, my editorial was about the prices of drugs, not medical journals. However, to set the record straight, the Massachusetts Medical Society sends free subscriptions of the Journal to a variety of institutions in underdeveloped countries. I see little analogy between vital drugs for which uninsured patients may be charged thousands of dollars a year and an excellent but not vital journal priced at $199 a year.
Marcia Angell, M.D.
- Citing Articles (2)
Citing Articles
1
T.A. Faunce. 2012. Social Responsibility Principle. , 160-166.
CrossRef2
T. A. Faunce, H. Nasu. (2009) Normative Foundations of Technology Transfer and Transnational Benefit Principles in the UNESCO Universal Declaration on Bioethics and Human Rights. Journal of Medicine and Philosophy 34:3, 296-321
CrossRef
