"Dr. Jeanne Bramhall" - The "Me-Too" Drug Rip-Off

http://www.opednews.com/articles/The-Me-Too-Drug-Rip-Off-by-Dr-Stuart-Jeanne-B-110514-761.html

June 6, 2011

By Dr Stuart Jeanne Bramhall

In addition to the billions of health care dollars drug companies waste on disease mongering -- convincing the public that everyday human problems are actually illnesses requiring treatment -- billions more are wasted on developing and marketing hundreds of "me-too" drugs. By definition, a "me-too" or "copycat" drug is a very slight variation of an existing drug that is already on the market. The main downside of me-too drugs is that they are a primary factor in skyrocketing health care costs, which in turn, are the main reason hundreds of thousands of Americans can't afford to see a doctor when they are ill. Other drawbacks of Big Pharma's fixation with copycat drugs include the neglect of hundreds of untreatable fatal and disabling illnesses and hundreds of cases of premature death and/or permanent disability related to inadequate safety profiling. Nearly all the major drug recalls in the last few years have involved copycat drugs that were assumed safe because they were chemically similar to medications already on the market.

An Issue First Raised by Ralph Nader

I first learned about me-too drugs when Ralph Nader raised the issue in his 2000 presidential campaign. Dr Marcia Angell, Harvard Senior Lecturer in Social Medicine covers the subject extensively in The Truth About the Drug Companies: How They Deceive Us and What To Do About It (2004) and in "Excess in the pharmaceutical industry" in the Canadian Medical Association Journal http://www.cmaj.ca/cgi/content/full/171/12/1451

According to Angell, it's quite common for a drug company to manufacture their own copycat drugs when their patent is about to expire on an older drug (which means most doctors and patients will opt for the cheaper generics that become available). She gives the example of AstraZeneca reformulating the ulcer drug Priloxec to bring out Nexium, a nearly identical replacement and then increasing the price of the Prilosec to get people to switch.

She then gives the example of three identical cholesterol lowering drugs - Provochol, Zocor and Lipitor - being introduced a few years apart following the immense success of Movochol. As of December 2010, we now have eight extremely virtually identical medications for the exact same indication: lowering cholesterol levels.

Billions Spent on Marketing Identical Drugs

Angell goes on to point out that of all the drugs the FDA approved between1993 and 2003, 78% were similar to already marketed drugs. Even more shocking was that 68% weren't even new compounds but a reformulation (change from capsule to tablet, short to long acting, etc) or a recombination of existing drugs (in psychiatry this is a common ruse to extend a patent on a brand name drug)

Angell is also extremely concerned about the billions of dollars drug companies spend persuading doctors (and now patients through direct-to-consumer advertising) that their new me-too drug is more effective or safer than the older versions on the market. This is done without a shred of scientific evidence to back up their claims, as the FDA only requires pre-approval trials to compare me-too drugs to placebo and not to existing medications. Occasionally drug companies will do a head-to-head trial with a competitor's drug, but this is only years after approval. AstroZeneca, for example, spent $500 million persuading doctors to substitute Nexium for Prilosec.

Refuting Drug Company Allegations

The drug companies and pharmaceutical industry analysts that pimp them claim that me-too drugs are beneficial for the US health care system in two ways. First they allegedly lower prescription costs by increasing competition. Secondly they provide doctors a range of back-up drugs when the first-line medication doesn't work or isn't tolerated.

The claim about lowering prescription costs is utter rubbish, as copycat drugs are always priced the same or higher than the older drugs they supposedly compete with. And drug companies never, ever market their me-too drugs to doctors or patients on the basis of cost savings. The reality is that the price for brand name prescription drugs continues to soar through the roof. Only the ready availability of quality generics has kept prescription costs affordable for the vast majority of patients.

Moreover it makes no sense to apply free market competition principles to the prescription drug costs, as drug prescribing is never a standard market transaction. Nearly all prescriptions are at least partially subsidized, either by insurance or Medicaid. The heaviest users of prescription drugs are vulnerable geriatric, mentally ill and disabled patients who hold virtually no sway in making a price-driven choice between competing products. Even their doctors, who ultimately make the choice, must go to a lot of extra effort to ascertain price differences between brands, as drug companies don't voluntarily provide it.

The Sad Saga of SSRI Copycats

To justify the value of providing doctors a range of similar drugs to choose from, most analysts give the example of all the copycat SSRIs available to treat depression. In doing so, they claim that some patients who fail to respond to Prozac, may respond to Paxil, Zoloft, Celexa, Przac, Priligy, Lexapro, Zelmid, Viibyrd or Upstene. This is yet another marketing claim with no scientific data whatsoever to back it up. After prescribing SSRIs for twenty years, I, like most of my colleagues, have never found a differential response to different brands. My own clinical experience coincides very closely to recent meta-analyses of three decades of SSRI efficacy studies: about 35-40% of patients (only slightly higher than the placebo response) get a positive response to any SSRI, while 60% fail to improve or experience horrible side effects (http://www.oregoncounseling.org/ArticlesPapers/Documents/TherapyVsRx.htm).

I agree with Angell's view that having one therapeutic equivalent for a patient who develops and allergic reaction to the first drug invented in a therapeutic class - but approving eight is enormously wasteful (especially in view of the billions of dollars spent on marketing them), as well as posing major safety risks.

What the Congressional Budget Office Found

In 2004 Angell could only estimate what drugs companies were spending on marketing, as this is proprietary corporate information. However in 2009, the Congressional Budget Office (CBO) investigated and came up with the following findings:

• Drug companies spent approximately $20.5 billion on promotional activities (10.8% of total revenue) in 2008.
• In 2008, drug companies spent $38 billion on research and development (20%).
• Drug marketing costs, which grew at rapidly pace between 1988 and 2006 had slowed and had been steady for three years at 10-11%. The CBO felt this was directly related to decreased rate of new drugs coming to market.
• In 2008 drug companies spent only slightly more on promoting new drugs than they did marketing copycat drugs.

The Only Solution: Medicare for All

In my view, the only solution to the mess "corporatization" has made of the US health care system is to follow the example of other industrialized countries and establish a single, nationally funded health program. Three decades of cost studies, including research by the Congressional Budget Office and America's foremost health policy experts, show this could be accomplished quite easily by expanding Medicare (as under the new bill proposed by Senator Bernie Sanders and Congressman Jim McDermott). Under the Medicare program, doctors, hospitals and lab bill the federal government (instead of a private insurance company) for health services to seniors and the disabled. Expanding this program to all age groups would result in a streamlined, efficient system comparable to the Canadian Medicare program, in which doctors, hospitals, labs and pharmacies bill the government for the health services they deliver. US health providers, who currently bill hundreds of different private insurance plans, would simply bill Medicare for all patients, as they currently do for their 65+ patients.

This would immediately take nearly a trillion dollars out of America's $3 trillion health care bill, as it would massively reduce the cut private insurance companies take for profit, CEO salaries, marketing, administration and billing. Under the current system, this administrative waste siphons off 31% of every health care dollar. In contrast to the 3.6% it costs to administer the Medicare program (see http://www.pnhp.org/single_payer_resources/administrative_waste_consumes_31_percent_of_health_spending.php).

Reducing the Cost of Prescription Drugs

The experience in other industrialized countries is that this model also drastically reduces the cost of prescription drugs. The purchasing power enjoyed by a single agency purchasing medications for millions of citizens forces pharmaceutical companies to agree to major cost concessions. In fact it is the one true example in health care delivery where market competition leads to price reductions - especially when four or five manufacturers are producing eight virtually identical drugs for the same condition. The main reason prescription drugs are so much cheaper in Canada and Europe than the US is because of the bulk discounts their hard bargaining has won from drug companies (in the US, the Pentagon and Veterans Administration use their purchasing power to negotiate similar bulk discounts).

It Works in New Zealand

This model works exceptionally well in New Zealand, where the government has set up a semi-autonomous corporation called PHAMAC to contain prescription drug costs (which are one of the main reasons developed countries are blowing out their health budgets). See the 2004 Australian Health Review http://www.publish.csiro.au/?act=view_file&file_id=AH040171.pdf

In New Zealand, medications on PHARMAC's approved medication list are subsidized, with the patient paying a $3 co-pay. The formulary consists mainly of generic drugs, where they are available, and for brand name drugs where the manufacturer has agreed to a volume discount. If the drug company won't agree to a discount, the drug doesn't appear on the PHARMAC formulary. One example is Pfizer, which refuses to discount the price of the antidepressant Zoloft. Because patients must pay the full cost of a Zoloft prescription at the pharmacy, it's very rarely prescribed in New Zealand.

Obviously there are exceptions. If credible medical research indicates a new, non-discounted drug fills a distinct clinical need, it will be included on the formulary as a "special authority" drug. This means the prescription will only be subsidized if the doctor fills out a "special authority" application certifying that the patient meets specific diagnostic criteria and has failed to respond to one or two comparable drugs on the formulary.

The Envy of the Industrial World (and under attack - see * below)

Thanks to PHARMAC New Zealand, unlike most of the industrial world, has been relatively successful in limiting the growth of prescription costs to the rate of inflation - despite a significant increase in demand. As the Australian Health Review describes, its formation in 1993 was followed by near constant litigation from drug companies, which meant that legal costs accounted for 18% of its budget in early years. Drug companies complain that New Zealand is failing to pay its fair share of research costs, a claim I find pretty self-serving, given record profits the pharmaceutical industry recorded in 2010 (averaging more 15-20% of revenue -- see http://en.wikipedia.org/wiki/List_of_pharmaceutical_companies), their exorbitant CEO salaries, the billions spent on developing and marketing me-too drugs, and marketing criminal penalties for fraudulent business practices (see http://www.huffingtonpost.com/2010/03/20/drug-companies-shrug-off_n_506962.html).

Especially as the taxpayers funded the research, at the National Institutes of Health and Veterans Administration, for some of the pharmaceutical industry's most profitable drugs (for example, Taxol and several HIV drugs). After covering the lion's share of the costs (i.e. research), the federal government turned these discoveries over to drug companies to be mass produced - and earn them billions of dollars in profits.

*A recent Wikileaks cable release reveals New Zealand's National-led government is contemplating scrapping PHARMAC as a condition of a new free-trade agreement with the US