Big Pharma must reinvent itself, to avoid a giant collapse, says a just-released report. Here are highlights from the report:
• Future plans for the pharmaceutical industry call for the elimination of local pharmacies, to be replaced by home delivery of medicines or dispensing from vending machines (don’t know of a pharmacy school that is telling this to their graduates).
Big Pharma’s plan for the future is being drawn by the investment community. It has little to do with making people well and bringing the high costs of medicine down, and more to do with the value of drug company stocks.
• Patients will wear devices so they can be monitored continually to make sure they take their medicines.
• Drug companies must learn to market their products to emerging countries like India, Brazil and China, since this is where population and economic growth is occurring.
• The report says much more money must be spent in research and development since the pipeline of unique drugs is running dry, but just how long can molecules be rearranged to gain patents to justify over-charging Americans for medications?
Patents used to gouge the public
Reading the report prepared by Price Waterhouse Coopers entitled “Pharma 2020: The vision: Which path will you take?” one would think Big Pharma is ready to collapse and that the country had better rally around Big Pharma or we won’t have any overpriced patentable drugs left (as drug patents expire, over a period of about a decade and a half, pharmaceutical companies are forced to continually reinvent themselves or get thrown to dungeon of generics where drug prices are subject to competitive pricing). Drug companies have to have new drugs in their pipeline to replace others as patents expire. Older drugs, which may work better and cost less, are stuffed in the closet, even taken out of production, so only new drugs are available to physicians.
The patents on many drugs are due to expire soon, exposing an estimated $157 billion worth of sales (measured in 2005 terms) to generic erosion. Shall we take pity now at Big Pharma’s plight?
Pharmaceutical stocks have carried the stock market for some time now. Between 1985 and 2000, the industry’s market value increased 85-fold, far outpacing the stock market as a whole. But in the six years to March 30, 2007, the FTSE Global Pharmaceuticals Index rose just 1.3%, while the Dow Jones World
Index rose by 34.9%. This means investors could soon shift their money to better yielding stocks. What sector will prop up the stock market now?
What about the uninsured?
Some 16% of the 300 million people living in the US currently have no medical insurance coverage, and the report says “Democrats are keen to redress the situation by introducing a universal health system.” With U.S. public debt reaching a half million dollars per household, just where will the money for such an insurance plan come from?
It could come from Big Pharma’s own pocketbook. In 2005, the US spent almost $2 trillion on healthcare, about $50-60 billion of which went on providing medical treatment for the indigent. One study suggests that it could cost between $125 billion and $150 billion a year to provide medical care for the uninsured.
Drugs in America are so overpriced and better buys could be had. The Federal government estimates that the average level of volume discounts and rebates in 2006 was about 27%. Research by the Congressional Budget Office shows that average discounts for the six federal programmes which negotiate prices directly with manufacturers range from 51% to 59%. If the government were to secure similar discounts for Medicare Part D, its net expenditure on medicines under the programme would therefore fall from $794 billion to $532.9 billion – a total saving of $261.1 billion – by 2017. That sounds like enough savings to shift funds to provide some level of health care insurance for the needy. No politician has suggested such an idea.
Unsafe, but profitable
In the wake of the Vioxx scandal where the FDA colluded with a drug company to keep an unsafe drug on the market, and hid other unsafe drugs from physician review until Dr. David Graham blew the whistle on this impropriety, and the continued revelation there are unsafe drugs still on the market (Avandia anti-diabetic drug is another recent example), the pharmaceutical industry needs to improve its public image. But just how? Apologies don’t make up for dead bodies.
How to regain trust?
The Price Waterhouse Coopers report quotes Billy Tauzin, PhRMA’s president and chief executive, who recently said: “There is one great problem that seriously challenges the ability of America’s research-based pharmaceutical companies to continue doing what they do better than any other entity on the globe: research and develop new cures and treatments. In a word, it is ‘trust’.”
The report cites a recent Harris Interactive poll which ranked Pharma thirteenth out of 17 industries for honesty, behind life insurance companies and carmakers. Oddly, the public keeps coming back for more of these unsafe drugs, and doctors keep prescribing them. An estimated 14% to 21% of US patients never fill their original prescriptions. It’s amazing this figure isn’t even higher.
News reports about the lack of drug safety are always followed by advice not to stop taking a drug without consultation with a physician. If relatively unsafe, why aren’t these drugs removed from the marketplace rather than perpetuated with “black box” label warnings? Black box warnings appear to be written to get drugs companies off of a legal hook, not prevent side effects or death.
No mention here of the hundreds of thousands of patients who have died needlessly from properly prescribed drugs over the past decade. Big Pharma is facing a financial crisis, but the fact that consumers die from using their products gets little mention. How is Big Pharma going to avoid repeating drug safety problems like Vioxx with its efforts to further speed up drug approvals?
Unless Pharma improves its
Farming by Pharma
reputation, political, commercial
and clinical credibility will be
eroded, with serious
implications for its future success
Big Pharma sees dollar signs in caring for the super aged, those over age 80. Older people typically consume more medicines than younger people; four in five of those aged over 75 take at least one prescription product, while 36% take four or more. “So the grey factor will boost the need for medicines dramatically,” says the report. Huge national discrepancies in health care spending for the super-aged exist. For example, in Spain and Sweden, the average level of healthcare spending on patients aged 80 or older is twice as much as it is on patients aged 50-64; in the US, by contrast, it is 11.5 times more.
The report subtly suggests that pharmaceutical companies might think of over-pricing their products and then bargaining with governments to extend the patent life of their product, let’s say for 50 years instead of the current 17, in exchange for a reduced price. You mean the realistic price that should have been charged in the first place? The example used in the report is Gardasil, the human papilloma/cervical cancer vaccine that costs $360 for 3 rounds of injections, a most costly vaccine.
Shot in the arm needed
What Big Pharma needs is a shot in the arm. They are hoping new biotech companies will cure what ails an otherwise dim financial future. Gene targeted drugs and nanotechnology, and maybe even stem cell technology, are heralded to be the antidotes. Stem cell technology has technical roadblocks that may currently be insurmountable, or ethical issues that cannot be side stepped. Fetal stem cell therapy is quietly being performed in China, and patients are travelling there from across the globe to have brain or spinal cord problems treated, with some success. But the stem cells are derived from aborted babies.
Gene-targeted cancer drugs, like Herceptin, Erbitux, Avastin, are a disappointment, cost a near fortune (thousands of dollars a month), and yield little benefit (maybe a few months more life to a terminal cancer patient). But don’t bring this issue up with a hopeless cancer patient, they will take the extra few months of life regardless of the cost, especially since health plans are paying, not the patient directly.
Drug companies have already reached dead-end streets. Many of their drug patients today are just versions or combinations of the same old problematic drugs that have been on the market for years. Despite millions of dollars of research, there are few if any new antibiotics to replace the current array of germ-killing medicines that are no longer effective against antibiotic-resistant germs. Pharma can continue to spend billions on R & D, as many companies currently are today, but money doesn’t guarantee success.
Botanicals threaten Big Pharma
There is a library of natural molecules that are far less problematic, that can potentially out-perform current drugs, at far less cost. These go unmentioned in the Price Waterhouse Coopers report.
If Pharma can goad and bribe politicians to reclassify non-patentable botanical drugs as prescription-only products, this may bail out the industry. The most promising natural molecules are small – so small they can pass through cell walls, enter the cell nucleus and switch genes on and off. Some of these are resveratrol from grapes, quercetin from onions, allicin from garlic, butyrate, hydroxytyrosol from olives, and polyphenols derived from cranberries, pomegranates and blueberries. Some of these natural molecules are effective germ fighters that do not promote germ resistance. Others are promising molecules against heart disease and cancer.
Resveratrol has such broad biological action it could replace most drugs in a modern pharmacy, as it exerts anti-inflammatory, antibacterial, anti-viral, anti-fungal, blood thinning properties, and favorably controls cholesterol, works as an antidepressant, pain reliever, bone preserver, brain plaque eradicator, and blocks cancer at every known stage of development. Resveratrol would replace more than 100 current drugs on the market today. Any potential side effects posed by resveratrol are self limiting and transient since it is rapidly metabolized in the liver and is attached to molecules produced in the liver which prolong its half life and deliver resveratrol to tissues only an as-needed basis.
Vaccines: just how many shots can a person take?
One attractive market for drug companies is vaccines. These can be mandated in public schools, the workplace, or fear drummed up by paid-off public health agencies like the Centers for Disease Control that “cries wolf” ever flu season and advises the public to get vaccinated to prevent an imagined epidemic (only 100 million flu shots are dispensed for a population of 300 million, but there is never an epidemic in the unvaccinated). Big Pharma, in league with the World Health Organization, is now scheming to vaccinate entire human populations against an “inevitable” Bird Flu epidemic, a virus that is self limiting, primarily affects birds, not humans, and which many people have already developed natural antibodies against.
It is unconscionable that the world is spending billions against an imagined flu virus that has yet to kill off large populations of birds, and only a few humans, while a bacterium, mycobacteria tuberculosis, kills millions of people, infects a third of humanity, and extreme drug-resistant TB could encircle the globe and reduce the human population on earth by a billion or two.
Vaccine making is so tempting for drug companies. Here you don’t even need to get sick, the vaccine is prescribed because of the threat of future disease. There are now 245 pure vaccines and 11 combination vaccines in clinical development. Some industry experts estimate that the market could be worth as much as $42 billion by 2015. Given that many vaccines are purchased and underwritten by public health agencies and then re-sold to clinics and doctors’ offices, collusion between government and vaccine makers becomes nothing more than a political payoff. Gardasil, the human papilloma virus vaccine, is unproven and not likely to prevent a single case of cervical cancer, yet its maker continues efforts to mandate young school girls get this shot. Hidden from view is the fact that folic acid and vitamin C eradicate the papilloma virus.
Continually-monitored care
The report raises eyebrows when it talks about “pervasive healthcare” – the use of remote devices to monitor patients on a real-time basis wherever they are – which the report says will allow the industry to test new medicines outside a clinical setting. At issue are patients who either don’t fill prescriptions, or throw their pills in a drawer and don’t take them. The industry thinks it could generate another $30 billion if patients took their drugs as prescribed. Remote patient monitors will first be employed under the guise they are for clinical studies, but the real agenda is likely to address the problem of non-compliance. George Orwell is turning over in his grave.
The report says “by 2020, robust portable monitoring devices and the wireless networks across which the data they collect can be sent will both be in place. Together with EMRs (“smart cards” containing details of patients’ individual health records) pervasive healthcare will create a day-to-day environment that equates with the controlled environment in which clinical trials are conducted today.”
With all of the gloom, the report predicts a $1.3 trillion global pharmaceuticals market by 2020. The output of pharmaceutical companies is not measured in lives saved, quality of life preserved, or cost effectiveness. When mortal threats to life occur, drug companies swoop in with unbelievably overpriced remedies that patients and their families lobby for, knowing there is no other hope available. There may be no way to stop this run-away freight train. To read the Price Waterhouse Coopers report, go to:
http://www.pwc.com/gx/eng/about/ind/pharma/pharma2020final.pdf
Copyright 2007 Bill Sardi, Knowledge of Health, Inc.
