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!

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    Sugar Pills, now more effective!

    Byoliveridley

    Well, all sugar is not bad for you. Apparently, when given to you in pill form by someone wearing a white coat with a pleasant demeanour, it can cure all kinds of ills.

    It’s not that the old meds are getting weaker, drug developers say. It's as if the placebo effect is somehow getting stronger.The fact that an increasing number of medications are unable to beat sugar pills has thrown the industry into crisis. The stakes could hardly be higher. In today's economy, the fate of a long-established company can hang on the outcome of a handful of tests.

    Via Wired

    An interesting article that takes the reader through a recent history of placebos, why they seem to work better now than they used to, and tangentially, why the competitive research paradigm of the pharmaceutical industry delayed recognition, and continues to delay possible fixes and therapies.

    A few things about the placebo effect:

    1. There appears to be a physiological and neurological basis to the effect, something that can actually be turned off by deactivating the body’s natural production of opioids.
    2. This effect is triggered by various patient stimuli, including exposure to advertising, faith in the medicine, doctor bedside manner, etc. It appears that for minor ailments, these effects could be as strong as the medication prescribed.
    3. It is not short lived, the effects can linger well after consumption of sugar pills.
    4. Despite all this, the article states that we are no closer to finding the most appropriate way to administer placebos (Hmm, or are we? Read on!).

    Pharmaceutical companies conduct hundreds of clinical trials every year. They are not required to publish them in most countries, so negative results, failures, etc. which reflect badly on the company’s stock price are routinely hushed up. This means that the mounds of data that show tested drugs as no better than placebo are not accessible for research. This is one of the greatest drawbacks of competitive research paradigms, the lack of cooperation, the inefficiency that comes from duplication of negative results, and the lack of statistical power that comes from inability to use all the data available. In a milieu where knowledge = stock price, this is the logical approach, but something to note next time an Ayn Rand acolyte comes bleating to you about the beauty and perfection of the market. You might ask “What are some options to the current patent exclusivity driven regime”? My favourite economist Dean Baker of the Center for Economics and Policy Research has written extensively about the drug development process and alternatives in his excellent (and free to download) book The Conservative Nanny State, I suggest reading at least the chapter on drug development and patents!

    Anyway, back to placebos, what to do? How to administer sugar pills in a quasi-official setting for minor ailments. It’s almost like you need a parallel paradigm of medicine that dispenses sugar pills that did not have to go through double blind randomised clinical trials. it would help if this paradigm uses vaguely scientific terminology while doing very little harm. It would work in conjunction with the conventional approach, not in competition so there is little danger of people taking sugar pills for malaria!

    I give you, Homeopathy!!! This blog(ger) is no stranger to this wonderful form of medicine, involving concepts such as the memory of water, similars, dilution, etc. When I wrote about homeopathy last year, it was more in relation to the psychological aspects of my experience with it. I (and I assume you did not click through to read!) wrote about my parents’ great and enduring relationship with their homeopath, and the benefits it brought them. Back in India this time around, it was suggested that I take some homeopathy for a cold I was developing, which I did (yum, sugar!). The cold went away in a few days 🙂 There was some swine flu medicine being passed around as well (I did not partake), which worked too, nobody at home got swine flu 🙂

    So, how to make it work? It already works in India because belief in the efficacy of homeopathy is well established. As long as the homeopath is well qualified in basic diagnosis, and crucially, knows when to punt the patient into conventional therapy, the system works to a certain extent. But what about a society with no such foundation? Do you go to a clinic with both an allopath and a homeopath, and if your ailment is one where placebo works about as well, let the homeopath make some well diluted similars for you to consume? How to settle turf wars? Would it be better for the allopath to feign develop an expertise in homeopathy and make that work for her in treating the patient? Would they apply the most important lessons in homeopathic treatment, Listen, Empathise, Soothe?

    I don’t know. It is not my nature to believe in sugar pills, faith, or advertising. So it is hard for me to say what would work. But given that sugar pills work well, it is vital for society to find a way.

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    Colonialism, Pharmaceutical style

    Byoliveridley

    Legal wrangle puts India’s generic drugs at risk – health – 29 January 2007 – New Scientist

    Tens of thousands of people being treated for AIDS will suffer if Swiss pharmaceutical company Novartis succeeds in changing India’s patent law, the humanitarian agency Medecins Sans Frontieres warned on Monday. Novartis is challenging a specific provision of India’s patent law that, if overturned, would see patents being granted far more widely, heavily restricting the availability of affordable generic medicines, MSF says.

    In 2000, antiretroviral (ARV) treatment cost was estimated at $10,000 per patient annually. But the availability of generic drugs produced mainly in India, allowed costs to plummet to about $70 per patient per year, Mwangi adds.

    You’ve got to love the friendly multinational arguing to make extra billions while people die. But I don’t think any Indian judge will overthrow Indian patent law. And there is a national interest  exemption built into most patent statutes, per the TRIPs agreements.

  • FDA to add warnings on Anemia Drugs

    Byoliveridley

    Oncologists are being bribed to over-prescribe these drugs, which seem to cause more harm than good when over-prescribed. The FDA is going to add a “warning” label. Let’s see what it does.

    FDA panel urges curbs on 2 anemia drugs – The Boston Globe

    Best-selling anemia drugs from Amgen Inc. and Johnson & Johnson should have their use restricted because of dangerous side effects, a US advisory panel said. Amgen shares fell the most in five years.

    The panel of expert advisers to the Food and Drug Administration voted 15-2 in favor of new prescribing restrictions and 17-0 for new clinical trials during a meeting yesterday in Silver Spring, Md.

    Shares of Amgen fell $5.77, or 9.1 percent, to $57.33 in Nasdaq Stock Market composite trading. J&J shares fell $1.61, or 2.5 percent, to $62.50 on the New York Stock Exchange.

    The drugs raised the risk of heart attacks, strokes, and death when used at high doses, studies released in the last six months showed. An FDA warning in March prompted the US health program for the elderly and disabled to stop paying for treatments in certain patients, and doctors cut back on use. The products accounted for $6.6 billion, or 47 percent, of Amgen revenue in 2006.

    “Many of us are concerned on the committee and have a lot of questions,” said Gail Eckhardt, an oncologist at the University of Colorado in Aurora, and the advisory panel’s chairwoman.

    The questions concerned the design of trials, why regulators have limited access to results from company studies, and why the drugs have been marketed for improving quality of life if there isn’t sufficient evidence for the claim, Eckhardt said.

    The FDA usually follows the recommendations of its advisory panels, although it isn’t required to do so.

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    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!

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    Indian firms push down global vaccine prices – Lessons for Canada

    Byoliveridley

    Cheaper vaccines from India are forcing global giants to slash prices. GSK announced its rotavirus vaccines at $2.50 per dose — or $5 to fully immunise a child — in response to a current tender administered by UNICEF.The offer is a 67% reduction in the current lowest available public price.

    Hindustan Times

    This is good news for many reasons. Preventable diseases kill over a million people every year, and one of the biggest factors in getting vaccinated is cost. India’s healthcare spending was estimated at US$ 40 billion in 2008, going up to 300+ billion in 2023. Forty billion is less than $40 per person, so saving 7-8 dollars on vaccinations alone for every one of the 26 million children born every year is a huge deal.

    Development costs of vaccines and drugs are high and success is often uncertain. Pharmaceutical companies have used this to justify government enforced monopolies and per dose prices that are sometimes a 1000 times higher than the incremental cost of production. While this makes for good profits, it means severe lack of access in India, many African countries, and many excess deaths that could have been prevented. For years, India had what was called a process patent, not a product patent, which meant that if you could make a drug with a slightly different process, it would not get patent protection any more. How did this help India?

    1. Affordable drugs – Indian companies could make and sell drugs at a fraction of the cost without paying for drug development.

    2. Pharmaceutical Industry – This enabled the industry to grow and mature.

    Of course, this also meant that India was considered an outlaw, and Indian pharmaceutical industry came under great pressure from the WTO to tighten patent laws, which it did. At the time, the concern (rightly) was that tightening patent restrictions would harm India’s pharmaceutical industry and reduce access to drugs. Has this come to pass? In some ways, yes. But the Indian pharmaceutical industry has also matured, and with government help, has been able to do its own development, clinical trials and production (which it was always good at). The focus on tropical diseases like rotavirus also means that US, European Companies, which have since moved away to treating chronic conditions like high cholesterol, erectile dysfunction, etc., have much more competition in the tropical diseases area and cannot charge premium prices to poor people any more.

    So dear Canada, while you are negotiating with Europe about “free trade”, and trying to give European companies much greater patent protection for their drugs, know that this will very surely raise costs in the short term. Two important questions:

    1. Will Canada’s drug companies benefit?

    2. Will Canada’s consumers benefit?

    Um, let’s take a look at Canada’s top 10 in 2009:

     

    Rank Leading Companies Country Market Share (%)
    1 Pfizer US 13.4
    2 Apotex Canada 7
    3 AstraZeneca UK 6.6
    9 Merck US 6
    4 Johnson & Johnson US 5.3
    6 Novopharm (Teva) Israel 4.2
    7 Novartis Switzerland 4
    5 GlaxoSmithKline UK 4
    8 Abbott US 3.9
    10 Roche Switzerland 3.1
    Source: IMS Health

    There is one Canadian company in the top 10, and four European companies. Our pharmaceutical industry is not well positioned to be independent, or work to reduce Canadian drug prices, especially if laws strengthening patent protections for European companies come into effect. This will serve to weaken Apotex, and Canada does not have a big independent pharmaceutical company network born out of years of “isolation” to take advantage of any competition, or competitive advantages. So, while patent “reform” seems to not have hurt Indian industry as much as feared, it sure will hurt Canadian consumers.

     

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    An off patent miracle cancer cure?

    Byoliveridley

    Interesting news coming out of Canada from a Dr. Anselm at the University of Alberta about a well known chemical dichloroacetic acid (like vinegar with two chlorines!).

    Cheap, safe drug kills most cancers – health – 17 January 2007 – New Scientist

    It sounds almost too good to be true: a cheap and simple drug that kills almost all cancers by switching off their “immortality”. The drug, dichloroacetate (DCA), has already been used for years to treat rare metabolic disorders and so is known to be relatively safe.

    It also has no patent, meaning it could be manufactured for a fraction of the cost of newly developed drugs.

    Here’s the PubMed citation for the article, filled with biology I will have no hope of understanding! I read the press release on sciencedaily a few days back and did a little background digging.

    A clinical trial conducted by Colombia University studying the effects of dichloroacetate on MELAs (stroke like symptoms) was halted early because everyone taking the medication showed significant effects of neural toxicity. This study was commented on by Dr. Anselm who theorized that the effect could be caused by a specific gene mutation not seen in a lot of the patients he works with.

    So, there is some reason for caution on this wonder drug, it may be toxic at certain doses to certain people. Most chemotherapetic drugs are horrendously toxic too. But if this is not a concern, Dr Anselm, meet Sunil Shaunak and his wonderful proposal to setup an alternative pipeline for drug approval that does not involve big/small pharma. I Am sure between Bill Gates, or George Soros, a few million bucks can be rustled up for a cancer cure.

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