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PHARMA: WSJ’s new blog, NCAA and The Industry Veteran‘s handicapping

The WSJ has a new health blog. Should be good to keep tabs on—focusing mostly on the business of health care. No posts from Barbara Martinez as yet (pity!). One of their earliest posts is a comparison of March Madness basketball with Pharmabrackets. The Industry Veteran is amused but not too impressed:

The March Madness tournament in NCAA basketball has made millions of office workers with too much time on their hands look at the world through elimination brackets.  I don’t know if this is an improvement over their tendency over the past 20 years to conceive all existence in terms of spreadsheets.  What it has done is taken their parlor trick pastime into some unusual substantive areas.  The other day the Wall Street Journal published elimination brackets showing how they believe Big Pharma will devolve into a Final Four.  It’s amusing, but as with spreadsheets, regression analysis and other idiot-savant endeavors, it shows a thorough detachment from commonsensical reality.

PharmaBracketAny consummation of their elimination pairings runs afoul of some major impediments.1. GSK + AZ.  No way, Jose.  GSK’s biggest product is Advair and AZ is hoping Symbicort will be its second biggest.  A combination would have to axe one of the two.2.  Sanofi-Aventis + Novartis.  Not in this century.  S-A is France’s stake in the ground for a presence in Pharma while Daniel Vasella and his director allies at Novartis are devout Swiss nationalists.  More likely the US of A and France would merge to form one country.3.  Merck + S-P.  Makes sense in that Fred Hassan admits S-P needs pipeline and while S-P can bring marketing acumen to Merck, try getting the latter to admit they need that.4.  Pfizer + Amgen.  Amgen’s stock is down now because of their shenanigans on Aranesp, but as of 12/31 their market cap was just under $80 billion.  Pfizer didn’t do so well with its last megabuy when they acquired Pharmacia for around $60B.  I think Pfizer’s CEO Kindler and CFO Shedlarz would be out on their asses if they tried this.  Besides, Amgen chairman-CEO Kevin Sharer is the new president of Big Pharma’s lobbying group, PhRMA, and he wouldn’t sell his own company while he’s serving as the industry’s figurehead spokesman.

PHARMA: Media bias against big Pharma? The Industry Veteran responds

Last week I got an email from a group I’d never heard of called The Business and Media Institute promoting their new study of how TV news media was biased against Big Pharma. Their main complaint is that while the news media are always harping on about high drug prices, but they never mentioned the cost of bring a new drug to market—which of course as anyone who believes in the industry-funded center at Tufts knows is $800m, $2 billion or $50 billion—all depending on what else the pharmaco would have done with the money it invested in year 1 of the 20 year development process. (The $50 billion number is my understanding that for a development started in 1986 the typical pharmaco was deciding between investing in researching a new molecule or buying Microsoft stock at the IPO).

And to be fair the news media didn’t even mention the amount Public Citizen admits it actually does cost to develop a new drug.  (Clue: that number is a just a leetle beet lower than Tufts says it is). On the other hand the news media didn’t mention what happened to the Federal Office of Technology Assessment  (OTA)when it put out a study also rebuking the Tufts numbers. (Hint: the OTA didn’t make political contributions and PhRMA does, so guess which one is still around!).

But none of this is surely anything new. News media understand that we the public are dumb and only have 6 seconds to understand any story. And there are a smattering of front groups on both ends complaining about bias in the media. I tend to be a scad more sympathetic to those on the left who think that the media is biased towards big corporations—after all the TV news media is owned by big corporations (Disney, GE, Viacom) whose CEOs meet those of big Pharma, or at least pass their corporate jets as they fly in and out of Jackson Hole. But I remain hopeful that some people watching the news are smart enough to see through the misinformation, at least eventually.

I did email back and forth with the PR flack from the “Business and Media Institute” which put out the study. I asked him the obvious question of who paid for the study and where the organization’s money came from. I didn’t exactly get the transparent response I was looking for. He said, “Prescription for Bias” is the latest study in a series of special reports analyzing media coverage of specific issues and industries. No one paid for it. Our general funding comes from individual donors, none of whom represent the pharmaceutical industry.

Of course armed with a couple of minutes and Google you can find that the Business and Media Institute is part of a conservative group called the Media Research Center, and you don’t have to be Hillary Clinton to guess where their money comes from. I wasn’t going to get too excited about all this, but luckily for you all who think that THCB has gone soft in recent weeks, The Industry Veteran decided that he would instead. He also sees a bigger conspiracy theory at work. Here are the Veteran’s dulcet tones on the matter:

I see that the poor, bedraggled pharmaceutical industry feels itself unfairly vilified by the yellow-liberal media and other birds of the same flock whose true purpose lies in subverting our sanctified capitalist system.  Pharma’s aggrieved cry from the heart began late last year when the industry’s big anoos’s, as Borat would call them, convened in Washington to develop a strategy for dealing with a Democratic-controlled Congress and a public, which at one time had been at Pharma’s feet, but is now at their throats.  Did these knifemen of the Avantine Collegium decide to assuage Congress and the public by reducing prices on their me-too, palliative products?  Did they deign to permit transparency into their clinical trials and their actual costs of drug development?  Perhaps, one might plaintively hope, they developed innovative approaches for increasing public access to medication, reducing costs or improving the outcomes for people who use their products?  If you believe that, it is probable you are also convinced that Saddam had weapons of mass destruction. Rather than altering the realities underlying their abysmal public image, Pharma’s capos relied upon the first refuge of scoundrels, that is, they decided to launch a PR campaign. Now on the heels of Pharma’s Washington parlay, we have a front group, Business and Media Institute in Arlington, Virginia, distributing a flack report that purports to show a “bias against drug companies” from ABC, CBS and NBC news during the first nine months of 2006.  Their analysis does not justify close scrutiny any more than similar screeds such as Protocols of the Elders of Zion.  A principal funding source for this Pharma champion is the Scaife Foundation, the right wing tank that brought us Whitewater, Kenneth Starr, the Contract on America and other quasi-fascist machinations during the Clinton years. The Business and Media Institute appears to possess all the requisite elements of a right wing, scorched earth campaign.  They start with the self-pitying cry that liberal elitists in the media and academia discriminate against them.  They then proceed to the Know-Nothing assertion that the “real people,” in their homespun wisdom, support Pharma’s predatory practices and, finally, there is the Dick Cheney implication that people who perceive greed at the core of Pharma are doing the anti-Christian work of terrorists or other subversives. This crude attempt to elevate Pharma’s lower-than-whaleshit image is only a first, sputtering attempt by a resolute group that maintains the largest lobbying army in Washington. Subsequent refinements are apt to be more insidious.

PHARMA: Merck’s Miracle Vaccine –What Is This Story Really About? By Maggie Mahar

GardasilYesterday, Merck announced that it is no longer going to try to persuade states to make its new $360 cervical cancer vaccine mandatory for all pre-teens. (At least, not publicly). The company wouldn’t divulge how much it has spent, to date, on its lobbying campaign.

Virtually everyone has heard about “Gardasil.” Planned Parenthood backs it. Women in Government extols its virtues. (Both organizations receive significant contributions from Merck). Not long ago, a glowing New York Times editorial congratulated Texas governor Rick Perry for mandating “A Vaccine To  Save Women’s Lives.”( So far as I know, Merck makes no contributions to The New York Times, but Perry’s former chief of staff is a Merck lobbyist.) At this point, twenty states have drafted plans to follow Perry’s example

Last summer, I wrote about the vaccine on American Prospect Online. At the time, I tried to make two points. First, while Merck’s vaccine could cost U.S. patients, insurers and state governments billions of dollars, it will not be saving millions of lives—because, in the countries where it will be available, there are not millions of lives to be saved.

Continue reading…

PHARMA: The Future of Non-Profit Drug Development By Merrill Goozner

Merrill Goozner has been writing about economics and health care for many years. The former chief economics correspondent for the Chicago Tribune, Merrill has written for a long list of publications including the New York Times, The American Prospect and The Washington Post. His most recent book, "The $800 Million Dollar Pill – The Truth Behind the Cost of New Drugs " (University of California Press, 2004) has won acclaim from critics for its treatment of the issues facing the health care system and the pharmaceutical industry in particular. Today he has something to say about a familiar topic : the relationship between public sector R&D investment and innovation in the pharmaceutical and biotech industries. You can read more pieces by Merrill at  Gooznews.com

The United States is the world leader in investing in biomedical
research and development. In the public sector, the National Institutes
of Health spent $28.6 billion in 2005, largely for basic science
research. The pharmaceutical industry spent an estimated $39 billion in
2004. This includes investment in the U.S. by U.S.-based firms,
investment overseas by U.S. firms, and foreign companies’ R&D
expenditures in the U.S. Indeed, over the past quarter century, the
private sector’s investment in the search for new medicines has grown
eight percent per year on average, faster than the industry’s growth in
sales and profits.

Despite this massive public and private effort, output, as measured
by the number of new drugs, biologics, vaccines and devices approved
for use by regulatory bodies like the U.S. Food and Drug
Administration, has slowed in recent years. Last year, the FDA approved
just 21 new drugs and biologics, the second lowest total since 1993.
Moreover, about half of these new drugs were not given priority status
by the FDA, which meant they were not considered a significant new
advance in medicine. This significance ratio has held steady for over a
decade. Clearly, the steady increase in private and public R&D
spending is generating diminishing returns, whether measured by return
on investment or public health.

Continue reading…

PHARMA/BLOGS: Jim Edwards torpedoes own career!

Some of the best reporting on the pharma business in the last few years has come not from the mainstream press but from Jim Edwards, a reporter buried in the marketing industry trade press at Brandweek. Given the fact that certain Manhattan-based major press publications could use to improve their pharma and health care journalism (and I’m not talking about the WSJ, think more of dogs and sores!), I was hoping and expecting to get an email one day from Jim telling me of his new gig.

But instead, he’s decided to not only stay at BrandWeek but also to commit journalistic suicide and become one of us. His new blog is called BrandweekNRX. Pity. But I look forward to reading it!

PHARMA: Off label marketing and the 2008 election, by The Industry Veteran

For those of you bitter at not seeing enough of The Industry Veteran, he’s back! This time he’s complaining about Pfizer’s off-label marketing and linking it to the Presidential race. For those of you who’ve had too much of him…..sorry!

The daily press has obviated the need for Wes Craven, George Romero and other fright film creators.  Now we have this article from Brandweek where the chief counsel at Pfizer argues that the FDA violates free speech rights under the First Amendment by restricting Pharma companies from promoting their drugs off-label, i.e., for unapproved uses. Now I’m a big First Amendment guy, card-carrying ACLU member in good standing, but this is a libertarian perversion of the First Amendment that is typical of Reagan-Bush corporate lackeys. It reminds me of arguments from the right wing legal cabal, the Federalist Society, that claim the income tax is unconstitutional. Given that the client here is a Big Pharma company, it is also reminiscent of the fact that lawyers for Mafia dons are major proponents of Fourth, Fifth and Sixth Amendment rights. So this is how Jeff Kindler will deploy the lesson he learned at GE about making a proactive legal counsel’s office as big a success factor as R&D or marketing. Big Pharma is in the midst of a long down cycle and, I suppose, when the devil is hungry, he eats flies. That means while the literature in management studies has whittled down the value of Jack Welch’s contributions, a slavish aping of GE is quite the rage in Big Pharma. An  ex-GE guy (and former favorite son of Welch) runs Amgen, another is effectively the COO at Merck, and Jeff Kindler, whose only non-GE management experience was at McDonald’s, is the top guy at Pfizer. The epigones at these places talk about Six Sigma in the hallways despite the fact that production efficiency is a marginal success factor in Pharma. The other buzzwords that became parody and then were eliminated at GE ten years ago have now reappeared at the drug companies. What will come next? Polluting a major American river? Hell, Novartis already did that in Switzerland. I know. What about electing as US president some lucky airhead who was your television pitchman? Now if Mandy Patinkin is Jewish but not enough of a warmonger to please the Christian right, who does that leave? Dammit, Sally Field for president!! You want a strong woman, right? You want the women’s vote? You want to take issues such as health care, education and peace away from the Democrats?

I like her. I really like her.

PHARMA/PHYSICIANS: Big joke-Free CME: Pharmed out doesn’t impress The Industry Veteran

THCB regulars will be missing the delicate tones of The Industry Veteran. But never fear, he’s back and none the less caustic for his lay-off from these hallowed electrons. Here’s his take on the new CME for doctors.

No doubt you saw this article in the Washington Postdescribing the efforts of PharmedOut to make no-cost, continuing medical education sessions available to physicians.  As pharmaceutical companies sponsor a large proportion of CME sessions for physicians, the ostensible purpose of PharmedOut’s campaign lies in removing Pharma’s undue influence on prescribing behavior.It seems PharmedOut.org was created through a $21 million grant from Warner-Lambert (now Pfizer).  The money represents part of Pfizer’s 2004 settlement of the whistle-blower suit involving W-L’s off-label promotion for Neurontin.

Now it’s inevitable that if pharmaceuticals are discovered and distributed through a competitive market and a gatekeeper system, the competitors will try to influence the decision makers and compromise the latter’s fiduciary responsibilities in the process.  Is it too simple to suggest, however, that regulation should remove CME as a means for undue influence over prescribing by making the damn physicians pay their own way?  Do any of the influentials who peruse THCB see a sick absurdity in the fact that physicians need to receive their CME free if they are to remain current?  I’m not aware of settlement grants going for the continuing professional education of lawyers, accountants, or other self-employed professionals.  Instead of using that $21 million to pay for health care programs for the indigent, someone thought it a good idea for six-figure physicians to receive free CME. I’ll wager a used examination glove that physicians will irrationally offer more resistance to paying for their own CME than to many other things that have a far larger impact on their wallets.  The reason is their sense of entitlement. The boys and girls who cloak their black souls in white gowns feel they’ve worked so hard and “sacrificed their 20s” (as one cardiologist told me), that society owes them and should cover their CME.I’ll say it again.  At some point genuine health care reform will require breaking the power of organized medicine, making the profession overwhelming female, and reducing it to the status of government paid professionals akin to school teachers.  Until then, efforts to control cost, increase access and improve quality will have marginal results at best.

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