This morning I lost my cool somewhat and called into the local KQED Forum radio show, where they were discussing reimportation. One of the guests, Stephen Chang, a biotech CEO and head of a new group called Californians United for Research, Economic Development and Saving Lives (which I’d never heard of and that doesn’t seem to have a web site) was making my blood boil.
He claimed that he had patients in his group and that they opposed reimportation on safety grounds. I congratulated him on getting patient support for this canard as poll after poll shows 80% of seniors are massively opposed to the ban on reimportation. He then said that the FDA is non-political. Yet the FDA could very easily certify pharmacies in Canada or in the US that import drugs from Europe. The only thing stopping them is the absence of instruction from their political bosses, which might actually arrive soon anyway.
OK. Then after I spoke — and included the share of revenue of pharma companies given to sales and marketing (c. 30%), R&D (11%) and profits (c.18%) in my talk — Chang went on a long rant about the fact that R&D was really expensive and cost “hundreds of millions of dollars”. Actually the real number is tens of billions of dollars, but he never referred to the percentages of revenue pharma spends on what –it was just empty rhetoric. There was a similarly uninforming letter from the President of PhRMA in the LA Times last week. Chang’s opponent on the show, Jerry Flanagan, a lefty consumer advocate from the Foundation for Taxpayer and Consumer Rights, was overly kind to him. Jerry knew his stuff but hardly knew how to answer the bombast coming from Chang–I think he was looking for something more traditional to get his teeth into. He did though quote some GAO studies on how much current R&D amounts are overstated.
Big pharma was best represented on the show by a caller who said that he wanted pharma margins to stay high and that he thought foreigners should pay higher prices and Americans should pay lower prices. Well at least there’s the basis of a rational argument. He also pointed out that pharma stock prices have fallen in the last few years. True enough, but that’s because of the relative lack of success of all that R&D in producing replacement blockbusters for those going off patent–sorry, Schering!
This all drives me mad. I don’t mean to be critical of any one individual, but big pharma is in real trouble over this reimportation issue and has to get its PR into shape. Pharma innovation is responsible for curing many previously debilitating and fatal diseases and has reduced other health care costs. But no one, including Chang, even mentioned that on the show. (Note: not true, on relistening, I did!) So I’m not a basher of the industry but I do think it has to take a long hard look at itself, and the more I see of its current behavior the more self-destructive it seems to be–especially given the political vulnerabilities of the Republicans in Florida and Pennsylvania.
Somehow big pharma has to in the short-term get better PR out there — being at war with its main customers (the elderly) is no place to stay. Longer term, big pharma has to work out how to reorganize itself so that it’s spending less on marketing (but doing it more efficiently), spending the same or more on R&D and still maintaining decent margins. That’s a real challenge, and for the good of itself and the greater good too, it needs to get working on it.
UPDATE: The audio archive of the show is here. My dulcet tones appear about halfway in. You’ll notice that I was put off from my main point by something Stephen Chang said while I was on hold, and if you’re very attentive you’ll notice that I’m stalling while I try to remember what that main point was! (It was that pharmas could maintain margins by reducing marketing spending)
Meanwhile to add fuel to this fire, a group of pharmacists are suing the drug companies for overcharging them–while they claim they are losing business to pharmacies in Canada and Mexico.
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