Doctors Take Bribes to Prescribe Drugs

Byoliveridley

This is the headline I would have used on this story. An incentive scheme to use a paticular product in a situation like this is a bribe.

Doctors Reap Millions for Anemia Drugs – New York Times

Two of the world’s largest drug companies are paying hundreds of millions of dollars to doctors every year in return for giving their patients anemia medicines, which regulators now say may be unsafe at commonly used doses.

The payments are legal, but very few people outside of the doctors who receive them are aware of their size. Critics, including prominent cancer and kidney doctors, say the payments give physicians an incentive to prescribe the medicines at levels that might increase patients’ risks of heart attacks or strokes.

Industry analysts estimate that such payments — to cancer doctors and the other big users of the drugs, kidney dialysis centers — total hundreds of millions of dollars a year and are an important source of profit for doctors and the centers. The payments have risen over the last several years, as the makers of the drugs, Amgen and Johnson & Johnson, compete for market share and try to expand the overall business.

So how does this kickback scheme work?

Federal laws bar drug companies from paying doctors to prescribe medicines that are given in pill form and purchased by patients from pharmacies. But companies can rebate part of the price that doctors pay for drugs, like the anemia medicines, which they dispense in their offices as part of treatment. The anemia drugs are injected or given intravenously in physicians’ offices or dialysis centers. Doctors receive the rebates after they buy the drugs from the companies. But they also receive reimbursement from Medicare or private insurers for the drugs, often at a markup over the doctors’ purchase price.

Medicare has changed its payment structure since 2003 to reduce the markup, but private insurers still often pay more. Combined with those insurance reimbursements, the rebates enable many doctors to profit substantially on the medicines they buy and then give to patients.

The rebates are related to the amount of drugs that doctors buy, and physicians that agree to use one company’s drugs exclusively typically receive higher rebates.

Wow, that’s a scheme that would be illegal in almost any situation. I buy 10 widgets from the manufacturer for $100. The manufacturer then gives me $50 in “rebate”. I charge the person on whose behalf I am buying these widgets $200 even though I am not supposed to make a profit on this transaction, and pocket $150 from a transaction. I also promise to use more of this widget, on people who may or may not need it, but on whom I have such a knowledge gap and power gap that I know that they will use it whether it is actually good for them or not. I also promise not to use a competitor product even though I know that there are cases where one product will be better than the other. Well, who pays, all of us in increased health insurance premiums and healthcare costs so a bunch of rich doctors can drive their Range Rovers around.

The USA is no different from India when it comes to schemes like this. The money involved is greater, and somehow, this is not called a bribe by the media.

What does the pharma spokesperson have to say?

Johnson & Johnson said yesterday in a statement that its rebates were not intended to induce doctors to use more medicine. Instead, the rebates “reflect intense competition” in the market for the drugs, the company said.

Amgen said that rebates were a normal commercial practice and that it had always properly promoted its drugs.

Yes, it’s competitive out there, and to ensure that our product gets used, we will bribe people.

The “consumer” is the person who pays for the product or service. The “consumer” here is the end user, the patient. The patient does not get the rebate, instead having to pay high prices so doctors can add to their six figure incomes. Nice!

Similar Posts

  • |

    Chip Implants Linked to Animal Tumors

    Byoliveridley

    Thinking about implanting an RFID microchip under your skin? Don’t do it! Why would the FDA approve something that was linked to cancers in rats?

    Chip Implants Linked to Animal Tumors – washingtonpost.com:

    When the U.S. Food and Drug Administration approved implanting microchips in humans, the manufacturer said it would save lives, letting doctors scan the tiny transponders to access patients’ medical records almost instantly. The FDA found ‘reasonable assurance’ the device was safe, and a sub-agency even called it one of 2005’s top ‘innovative technologies.’

    But neither the company nor the regulators publicly mentioned this: A series of veterinary and toxicology studies, dating to the mid-1990s, stated that chip implants had ‘induced’ malignant tumors in some lab mice and rats.

    ‘The transponders were the cause of the tumors,’ said Keith Johnson, a retired toxicologic pathologist, explaining in a phone interview the findings of a 1996 study he led at the Dow Chemical Co. in Midland, Mich.

    Leading cancer specialists reviewed the research for The Associated Press and, while cautioning that animal test results do not necessarily apply to humans, said the findings troubled them. Some said they would not allow family members to receive implants, and all urged further research before the glass-encased transponders are widely implanted in people.

    To date, about 2,000 of the so-called radio frequency identification, or RFID, devices have been implanted in humans worldwide, according to VeriChip Corp. The company, which sees a target market of 45 million Americans for its medical monitoring chips, insists the devices are safe, as does its parent company, Applied Digital Solutions, of Delray Beach, Fla.

  • |

    Snake Oil Comes a Full Circle

    Byoliveridley

    Ah, back to the good old days of snake oil..

    ScienceDaily: Snake Venom As Therapeutic Treatment Of Cancer?

    This certainly sounds unusual, but Dr. Son and colleagues report on the effectiveness of the snake venom toxin (SVT) Vipera lebetina turanica in the inhibition of androgen-independent prostate cancer (AICAP) in the journal Molecular Cancer Therapeutics.

    These novel findings suggest that SVT can inhibit the growth of AICAP through the induction of cell death.

    I am glad they put the question mark at the end, lest people extrapolate from a few cells in a petri dish (or a small animal study) to a cancer cure, as happened recently with dichloroacetate! Health reporting is very tricky because the average reader cannot understand much more than the headline. It almost seems like every health article should have the following things clearly labeled:

    1. Human, animal or cell?
    2. Clinically tested, or anecdotal?
    3. Double blinded, controlled, etc, or not?
    4. Any chance that this result applies to people?
    5. How far away are we from a real cure?
    6. DO NOT TRY THIS AT HOME!

    At least viper venom is hard to find! The Madras crocodile bank helped start a venom extraction cooperative run by the Irula Tribe, so I’ve seen viper venom being extracted, pretty cool. India is home to two vipers, the Russell’s and the Saw Scaled vipers.

    Russell's
    Russell’s viper

    saw scaled
    Saw scaled viper.

    The Russell’s is 3-5 feet long, and slow, but a big hisser! The saw scaled viper is tiny, a feet or two, but aggressive and very venomous. One of my favorite wild snake sightings was a saw scaled viper, looked very innocuous curled up in a parking lot in Pondicherry.

    Cool, snake oil and venom for all…

  • Potentially Incompatible Goals at F.D.A. – New York Times

    Byoliveridley

    The New York Times has an article on the FDA’s competing needs of safety and speed in drug approval.

    Potentially Incompatible Goals at F.D.A. – New York Times

    Safety and speed are the yin and yang of drug regulation. Patients want immediate access to breakthrough medicines but also want to believe the drugs are safe.

    These goals can be incompatible. Race a drug to market and much is likely to remain unknown when patients take it. Test a drug thoroughly to assess all possible risks and its release may be delayed by years.

    A series of drug-safety scandals has led many on Capitol Hill to question whether the Food and Drug Administration has failed to strike the right balance between speed and safety. A clear sign of this imbalance, these critics say, is the increasing number of F.D.A. drug-safety officers who say they have been punished or ignored after uncovering dangers of popular medicines.

    Safety and speed may be mutually incompatible. The biggest culprit is the Prescription Drug User Fees Act (PDUFA) which stipulated that in exchange for fees paid by pharma to the FDA for speedy approval, pharma would get a say in how that money was used. They used this say to cut down on post approval monitoring, weaken post approval data analysis and generally hide unfavorable results.

    Do patients always benefit from speed? Again, you have to make distinctions between acute life threatening conditions and chronic, life management conditions. A delay in the approval of a cancer drug may result in the immediate death of the people affected with the cancer. But, a serious safety issue overlooked in this hasty approval would not hurt a healthy person. Yes, it would affect the cancer patient, but they would accept that risk. Something like Vioxx, or Avandia, on the other hand is a drug potentially consumed by millions of people to treat chronic conditions that can be managed in other ways. Since safety issues affecting these drugs could adversely affect otherwise healthy people, the approval process needs to be much more deliberate, involving more patients, and has to include lengthy post-approval monitoring, adverse event reporting, the availability of all data for meta-analysis, etc.

    So why does this not happen? Because pharma makes much more money on that blockbuster “lifestyle” drugs taken by millions of otherwise healthy people. The pool of healthy people is much bigger than the pool of cancer victims. It is in their best interest to get a speedy approval.

    The answer I guess is to make a clear distinction between these two different types of drugs and have completely different standards, somehow, I don’t think that will happen.

  • |

    Brazil successfully hardballs Abbott on AIDs drug

    Byoliveridley

    I mentioned in May that Brazil had introduced compulsory licensing on a Merck AIDs drug Efavirenz, and heartily recommended that Brazil and other third world countries continue to play hardball with big pharma whenever they could. It looks like Merck decided to not bargain, but Abbott did on Kaletra. Note that Abbott got into a similar controversy with Thailand, and agreed to drop the price when Thailand rejected the Kaletra patent.

    Keep it coming, third world countries. Bargaining is perfectly acceptable in the marketplace!

    Brazil says Abbott to cut price of AIDS drug | Health | Reuters

    razil’s health ministry said Wednesday that Abbott Laboratories Inc. agreed to cut the price of its Kaletra AIDS drug by 29.5 percent.

    The lower price for the drug, also known as lopinavir and ritonavir, will help Brazil supply free drugs for its AIDS treatment program.

    In May, President Luiz Inacio Lula da Silva authorized Brazil for the first time to break the patent on an AIDS drug, one made by Merck & Co.. It then started importing a generic version of the drug Efavirenz from India.

    Under WTO rules, countries can issue a “compulsory license” to manufacture or buy generic versions of patented drugs deemed critical to public health.

    Drug makers often reduce prices to keep countries as clients and avoid compulsory licenses.

  • Abbott Drops AIDS Drug Price in response to Thailand's hardball.

    Byoliveridley

    Moral of the story, you have to play hardball with the drug companies. Use your power as a sovereign country. You are a market to them, their threats to stop selling their drugs in your country cannot be taken seriously because if the drug is made unavailable in your country, that gives you even more right to make it yourself (or better, buy it from India!). I mean what are they going to do, invade you? The worst you will get is a scolding and lecture from the U.S ambassdor on patents and free trade, just ignore it, or better still, protest outside the embassy!

    Chemical & Engineering News: Latest News – Abbott Drops AIDS Drug Price

    Abbott Drops AIDS Drug Price, move follows compulsory licensing decision by Thailand

    Jean-François Tremblay

    Abbott Laboratories will drop its price for Kaletra, a protease inhibitor used to treat AIDS, to the equivalent of $1,000 per patient per year in 40 developing countries.

    The move, facilitated by the World Health Organization, is apparently Abbott’s response to a decision by Thailand earlier this year to resort to compulsory licensing of Kaletra, a practice that reduces health care costs in a way that pharmaceutical companies view as patent infringement (C&EN, Feb. 5, page 11).

    Following Thailand’s decision, Abbott announced that it would stop selling Kaletra and other patented drugs in Thailand, a move that the nongovernmental organization Doctors Without Borders called “a major betrayal of patients.”Abbott had already been under fire for not supplying Kaletra to several other low-income countries.

    The price of $1,000 per year per patient, Abbott says, is 55% less than the average price at which the drug is now sold in the 40 countries. The company says it wants to increase drug affordability while “preserving the system that enables the discovery of new medicines.

    Compulsory licensing is a perfectly legal option underlined by TRIPs (Agreement on Trade-Related Aspects of Intellectual Property Rights) in response to national emergencies (AIDs is a national emergency, isn’t it?). More importantly, governments in poorer countries really should invoke this provision as much as they can. Because every time they invoke it, they make big pharma come to the bargaining table.

    $1000 per patient per year is still a lot of money, though, I would encourage Thailand to play even more hardball!

  • |

    India Rejects Obvious Patents

    Byoliveridley

    Would have been my headline. Apparently, the New York Times byline writer was more concerned about a multi billion dollar company losing a small amount of money than the fact that a different ruling in this case would have made life saving drugs unaffordable for millions of people. When did American newspapers become shills for the elite?

    Setback for Novartis in India Over Drug Patent – New York Times

    Indian companies will be free to continue making less expensive generic drugs, much of which flow to the developing world, after a court rejected a challenge to the patent law on Monday.

    Aid organizations declared the ruling a victory for the “rights of patients over patents,” but the Swiss drug company Novartis, which filed the case, warned that the ruling would discourage investments in innovation and would undermine drug companies’ efforts to improve their products.

    At issue is the degree of innovation required for a drug to be regarded as truly “new”, where there is a significant enough chance for failure that the company would never develop it unless afforded monopoly rights for 10 years. A very well known tactic by drug companies is to make a slightly different formulation of an existing drug, say an extended release form of a drug which takes a little longer to dissolve, and hence is available to the body at a different time. Under US patent law, this qualifies for full patent protection on the extended release form. By now, the science of making an extended release tablet is well known, it’s just a question of formulating the drug with a different set of inactive ingredients that take longer to dissolve, or sometimes, through a differently engineered tablet. The chemistry of this change is predictable, published and not really innovative. Why should these small changes have patent protection?

    Bonus Note: Madras is my home city, so I’m glad it was decided there!

    Technorati Tags: , ,

One Comment

  1. Pingback: FDA to add warnings on Anemia Drugs « The Olive Ridley Crawl

Comments are closed.