It is no consolation to the
roughly one out of 600 families who lost their homes in the U.S. but Wall Street made a lot of money slicing and dicing mortgages it knew would implode, while hiding risks. Financial giants, like AIG, are still
buzzing along and neither penalties or new laws will prevent a future crash, say financial analysts, because the risky business models have not really changed.A similar Big Pharma bubble, leavened with risky blockbuster drugs that also blew up, is now bursting. Like Wall Street’s bundled high risk loans, the “tide” created by Big Pharma’s high risk drugs raised many ships during the 2000s from advertising, public relations and medical communication agencies to TV and radio stations, medical journals and doctor/pitchmen who shoveled in its marketing budgets. But now the joy ride is over and Pharma is shedding jobs and settling billions in claims without changing its risky business model, like Wall Street.
In Europe, governments are no longer willing to pay the high prices for drugs that they once did say
published reports
and some countries are drafting laws making drug makers “prove their drugs are effective or risk having them dropped from the coverage list, or covered at a lower rate.” Imagine!
Germany has already saved 1.9 billion euros in 2011 by refusing to pay higher prices for drugs unless they are clearly superior to existing medicines, and Pharma worries that other countries will also get tough and want scientific proof for drug effectiveness instead of marketing and spin. In the U.S. and elsewhere, a drug only needs to be superior to no drug (placebo) to be approved by regulators — yet “new” is conveyed as “better than any drug to date” in advertising. Some clinicians say Haldol, an inexpensive antipsychotic, and lithium, a similar affordable bipolar drug are
better than blockbuster antipyschotics and bipolar drugs that created Pharma’s 2000 bubble.Before the
Vioxx scandal and major settlements over blockbuster drugs like
Zyprexa,
Bextra, Celebrex, Geodon and
Seroquel, being a Pharma rep was probably the next best thing to working on Wall Street. Direct-to-consumer advertising did your pre-sell for you, and all you had to do was show up with your snappy Vytorin tote bag and samples case. Some Pharma reps had their own reception room with ice water, swivel chairs, and laptop ports at medical offices, and most waltzed in to see the doctor right in front of waiting and sick patients. (It didn’t hurt that reps were usually “hotties,” both men or women).
But, by 2011, the bloom had fallen off Pharma reps’ roses. The number of prescribers willing to see most reps fell almost 20 percent, the number refusing to see all reps increased by half, and eight million sales calls were “nearly impossible to complete,” reported
ZS Associates. Blockbuster drugs that were found to be unsafe after their big sales push or even withdrawn altogether, did not help the reps’ credibility with doctors. After the aggressively marketed hormone therapy was linked to high incidences of cancer, stroke and heart attack, Wyeth (now Pfizer)
announced it was eliminating 1,200 jobs and closing its Rouses Point, New York plant where Prempro products were manufactured.
As government and private insurers increasingly say, “You want us to cover what?” about expensive, dangerous drugs that are not even proven effective, Pharma bubble jobs are evaporating. Almost 20,000 jobs have vanished at
AstraZeneca,
Novartis and Pfizer in the last 12 months alone. (AstraZeneca scrapped 21,600 more since 2007). Meanwhile, Pharma is outsourcing more of its operations to poor countries.
Workers and people willing to be trial subjects are both a bargain in poor countries where many can’t understand drug risks or refuse them if they did (and most can’t afford the very drugs they help sell). In January the Argentinian Federation of Health Professionals
accused drug maker GlaxoSmithKline of misleading participants and pressuring poor families into joining a trial for the Synflorix vaccine, which the company says protects against bacterial pneumonia and meningitis, reported CNN. In 2010,
10 deaths occurred during Pfizer and AstraZeneca drug trials at the Bhopal Memorial Hospital and Research Centre which was ironically built for survivors of the 1984 Bhopal gas disaster, reports MSNBC. 3,878 workers perished in Bhopal when chemicals leaked at a
Union Carbide pesticide plant.
Outsourcing drug manufacturing to cheap venues also contributes to Pharma’s cascade of “quality control” problems in which drugs are mislabeled, contaminated or otherwise made dangerous. It is speculated that Johnson & Johnson’s CEO William Weldon “was pushed to retire because of all of the quality issues at McNeil as well as with the company’s hip implant products, which have resulted in a raft of litigation,” reports
FiercePharma.
Like the Wall Street bubble, the Pharma bubble was built on products that industry, but not the public, knew were risky, sold for quick profits. Now regulators are examining some of these “assets” more closely and with disturbing findings. The
FDA now warns that bestselling statin drugs like Lipitor and Crestor, even approved for
children, are linked to memory loss and diabetes associated with. The equally well selling proton pump inhibitors like Nexium and Prilosec for acid reflux disease (GERD) are now believed to increase the risk of
bone fractures by 30 percent.
In March, the FDA even rejected a Merck drug that combines the active drug in Lipitor with the active drug in Zetia and Vytorin, a drug that
Forbes
calls Son of Vytorin. Vytorin (the father) was advertised to treat both food and family “sources of cholesterol” until results from a study that Merck and Schering-Plough appeared to withhold from regulators showed the drug had no effect on the buildup of plaque in the arteries (believed to correlate with heart attack and stroke). There was such a gap between marketing and science, Sen. Chuck Grassley (R-Iowa)
asked the General Accounting Office to investigate why the FDA was approving “drugs that appear to have little to no effect in protecting lives and increasing health.”
Yet even as clouds develop over Pharma’s top-selling drugs, some say the FDA is too hard on new drugs, not too easy. “
The FDA is impeding useful innovations in the U.S.,” says former FDA deputy commissioner Scott Gottlieb in the a
Wall Street Journal
oped and lagging behind other countries. Former FDA commissioner Andrew Von Eschenbach, also writing in the WSJ, agrees. The FDA should improve U.S. drug competitiveness by
allowing drugs “to be approved based on safety, with efficacy to be proven in later trials,” while the public is already taking the drugs. Isn’t that what’s happening now?
March 07, 2012
Drug Company Coupons Are Illegal Bribes Used to Dupe Consumers, Lawsuit Alleges
Three health plans in Community Catalyst's Prescription Access Litigation coalition today filed class action lawsuits in four federal courts against eight major drug companies
BOSTON, MA - Three health plans in Community Catalyst's Prescription Access Litigation coalition today filed class action lawsuits in four federal courts against major drug manufacturers for illegally subsidizing co-payments for expensive brand-name prescription drugs such as Lipitor and Nexium through the promotion of co-pay coupons.
The lawsuit alleges that the payments by eight drug makers -- Abbott, Amgen, AstraZeneca, Bristol-Meyers-Squibb, GlaxoSmithKline, Merck, Novartis, and Pfizer -- are illegal under a federal statute that prohibits commercial bribery because the undisclosed payments to patients and pharmacies are made through a ‘shadow claims system' designed to keep information about the presence or amount of these payments from health plans.
Community Catalyst, a national consumer advocacy organization, warns that while prescription drug coupons appear to save consumers money by reducing or eliminating co-payments, in reality they dramatically increase the cost of health care by driving up health insurance premiums and potentially causing consumers to hit benefit caps or lose coverage altogether.
"Pharmaceutical corporations are duping consumers with misleading coupons that are more about increasing corporate profits than actually reducing the cost of drugs for consumers" said Wells Wilkinson, director of the Prescription Access Litigation project at Community Catalyst. "If not stopped, the use of these deceptive coupons will increase costs for consumers' health plans by billions of dollars, contributing to higher premiums and the increasing loss of coverage and benefits for Americans."
A recent report by the Pharmacy Benefit Manager trade association (PCMA) estimates drug coupons will increase drug costs by $32 billion nationwide by 2021. Federal government health plans like Medicare consider these coupons kickbacks and have banned them; they are also banned in Massachusetts under an anti-kickback law.
The lawsuits were filed in New York, Chicago, Philadelphia and Newark by the AFSCME District Council 37 Health & Security Plan Trust, Sergeants Benevolent Association, the New England Carpenters, and the Plumbers and Pipefitters Local 572 Health and Welfare Fund. These health plans provide drug benefits for civilian and uniformed municipals workers, retirees and their dependents throughout the City of New York, plumbers from Florida to Ohio, and carpenters throughout New England. All of these health plans are struggling to keep up with continually rising drug costs.
"Our members are harmed by these unlawful practices by drug companies because coupons offering discounts off of brand drugs don't save consumers money in the long run." says Lillian Roberts, Executive Director of AFSCME, District Council 37, a plaintiff in the lawsuit.
"By combining direct-to-consumer marketing and supermarket ‘coupon clipping,' pharmaceutical companies are steering consumers to higher priced drugs in the pursuit of greater profits" said Edward Mullins, President of the Sergeants Benevolent Association, also a plaintiff in the lawsuit.
Under most health plans, consumers pay a larger co-payment for expensive brand-name drugs. By subsidizing all or the majority of a consumer's co-payment, drug companies promote the sale of these expensive products over less expensive, equally effective medications. This drives up the cost of care for health plans, employers and, ultimately, consumers. In addition, consumers who stay on expensive brand-name drugs run the risk of reaching their coverage caps sooner, forcing them to either pay out of pocket or forgo important care when they need it.
"Drug company coupons are not coupons. They are high-interest loans. We save money now, but we pay the loan sharks later," said Dr. William Jordan, a practicing physician in New York City serving low-income patients.
In 2009, half of the 109 best-selling U.S. brand-name drugs were promoted by coupons, and the number of coupon subsidy programs has skyrocketed since then, from 86 in July 2009 to 362 in November 2011. Coupons are aggressively marketed to consumers by TV, radio, Internet ads, and through physicians and pharmacists. And consumers are using them up, unaware of the negative impact on their premiums. In 2010 alone, co-pay coupons were used in one-eighth of all brand-name drug purchases, or 100 million prescriptions, according to the PCMA report.
Coupons also threaten anticipated savings from so called "patent cliff drugs," the dozens of brand-name drugs going off-patent between 2010 and 2013 and competing for the first time against generic counterparts.
Aside from cost concerns, consumer advocates and policymakers are also concerned about coupons for safety reasons. For instance, the FDA is currently studying whether drug coupons can mislead consumers concerning the safety and risks of drug products.
###
About Community Catalyst
Community Catalyst is a national non-profit consumer advocacy organization dedicated to quality affordable health care for all. Community Catalyst works in partnership with national, state and local consumer organizations, policymakers, and foundations, providing leadership and support to change the health care system so it serves everyone - especially vulnerable members of society. For more information, visit www.communitycatalyst.org. Read or comment on our blog at http://blog.communitycatalyst.org/. Follow us on Twitter @healthpolicyhub.The 130-member Prescription Access Litigation coalition, a project of Community Catalyst, has played a major role in bringing lawsuits challenging illegal pharmaceutical industry pricing or promotional tactics. One lawsuit resulted in over $360 million in settlements with 29 of the country's largest drug makers.
The government in India has granted the rights to an indigenous pharmaceutical group to manufacture a generic version of the cancer treatment drug Nexavar.
For the first time, an Indian drugs firm has been approved to produce a medication under licence when the original's still patent-covered.
As a result of the agreement, the firm - Natco Pharma - is obliged to forward six per cent in royalties back to Bayer, which presently markets Nexavar alongside Onyx Pharmaceuticals.
Bayer, meanwhile - according to reports - isn't best pleased with the Indian government's move. "We are disappointed about this decision", company representative Sabrina Cusimano stated in comments made to the Associated Press. "We will see if we can further defend our intellectual property rights in India".
Nexavar Cancer Drug
Nexavar is the market name for sorafenib, an orally-taken medication now approved to treat two types of cancer - advanced hepatocellular carcinoma (liver cancer) and advanced renal cell carcinoma (kidney cancer).
The kidney cancer approval came first, in 2005, when the US FDA declared its satisfaction with the product. It did the same for the drug as a liver cancer treatment two years later and, with clinical trials now in progress, thyroid cancer could be the next condition added to this approved treatment list.
Controversially, the drug's not available as a
UK liver cancer treatment, after being rejected - on grounds of cost - by the National Institute for Health and Clinical Excellence in November 2009.
Natco Generic Nexavar Approval
The Natco generic Nexavar approval decision will see the production of drug copies priced at the equivalent of £112 for a box of 120: less than £1.00 each. This is dramatically cheaper than the original drug, with the same quantity presently priced at over 30 times that cost.
The Indian pharmaceutical firm believes that the drug's availability is key to the treatment of close to 9,000 cancer patients in India.
"This is a victory for Indian patients and for India's generic manufacturers, which are under attack", Natco Pharma's General Manager, Madineedi Adinarayana, stated according to the BBC, adding: "many more such cases will follow."
Pharmaceutical Manufacturing
Pharmaceutical companies, which develop both over-the-counter and prescription drugs, have been among the biggest political spenders for years. While the industry has traditionally supported Republican candidates, some key players have recently increased donations to Democratic candidates as the GOP’s power in Washington erodes.
The pharmaceutical manufacturing industry will likely fair better this decade now that President Barack Obama’s initial plan to institute a public health insurance did not become a part of sweeping health care reform legislation signed into law in 2010. A government-run plan, because of its size, would have had considerable negotiating power to draw down drug prices. [ Read more Background]
Top Contributors, 2011-2012
Contributor Amount Pfizer Inc 
$702,391
Amgen Inc AstraZeneca PLC Abbott Laboratories Merck & Co GlaxoSmithKline Eli Lilly & Co Novartis AG Bayer Corp Endo Pharmaceuticals Perrigo Co Mutual Pharmaceutical Allergan Inc Teva Pharmaceuticals USA Sanofi-Aventis Bristol-Myers Squibb Pharmaceutical Rsrch & Mfrs of America Nostrum Pharmaceuticals Cephalon Inc Takeda Pharmaceuticals North America
Contribution Trends, 1990-2010
Lobbying Totals, 1998-2010
Party Split, 1990-2010
Top Recipients, 2011-2012
Candidate Office Amount Obama, Barack (D) Romney, Mitt (R) Upton, Fred (R-MI) House Brown, Scott P (R-MA) Senate Hatch, Orrin G (R-UT) Senate
Average Contributions to Members of Congress, 1990-2010
Data for the current election cycle were released by the Federal Election Commission on Monday, February 13, 2012
Feel free to distribute or cite this material, but please credit the Center for Responsive Politics.
On March 9, the Drug Enforcement Administration ("DEA") filed its
opposition to Cardinal Health, Inc.'s ("Cardinal's") appeal of a recent United States District Court
ruling. At issue is the DEA's Immediate Suspension Order ("ISO") revoking Cardinal's Lakeland, Florida facility's registration to ship controlled substances, which has been previously reported
here and
here. The DEA alleges that Cardinal did not adequately stop diversion of oxycodone, an often-abused pain medication (diversion exists when controlled substances are distributed to an entity that does not have a valid DEA registration). Cardinal is not accused of diversion itself, but instead is accused of not adequately preventing diversion at four pharmacies. Because the ISO was issued prior to an administrative hearing, Cardinal requested that the suspension be halted pending the resolution of this upcoming hearing. The district court denied this request.
Typically, the DEA revokes a distributor's registration after providing the registrant notice of the intent to revoke and a hearing. The DEA may issue an ISO without a hearing, however, when there is an "imminent danger to the public health or safety." Cardinal's
appeal argues that the DEA was "arbitrary and capricious" when it issued the ISO because the DEA never met the "heightened standard" Cardinal argues is required to find that the Lakeland facility posed an imminent danger to public health or safety. Additionally, Cardinal argues that it already took remedial measures that obviated any imminent danger, including suspending or sharply curtailing shipments to the four pharmacies specified in the ISO. Consequently, Cardinal argues, issuing the ISO was contrary to law and denied Cardinal its due process right to be heard before the DEA suspended its registration.
The District Court, however, stated that "the DEA's issuance of the ISO easily passes the arbitrary and capricious standard of review." The court noted that the DEA considered the following factors: "(1) the rampant pharmaceutical drug problem in Florida, (2) Cardinal Lakeland's history of inadequate anti-diversion controls, (3) the large and increasing amounts of oxycodone distributed by Cardinal Lakeland to the four pharmacies from 2009 to 2011, (4) the sizeable amounts of oxycodone distributed to 25 other pharmacies in 2011 that exceeded state and national averages, and (5) the evidence of Cardinal Lakeland's failure to monitor its chain pharmacy customers, despite clear warning signs of inadequate anti-diversion controls at those pharmacies . . . ." Based on these factors, the court found that the DEA had a reasonable basis to conclude that the Lakeland facility's continued registration posed an imminent danger to public health or safety. This, combined with the DEA's explanation for the action and consideration of Cardinal's remedial efforts, led the court to conclude Cardinal was unlikely to succeed in proving that the ISO was arbitrary and capricious.
At back to back briefings on Capitol Hill late last week, the Center for Science in the Public Interest and the Center for a Livable Future presented a panel of experts to House and Senate staffers with a straightforward message on whether the overuse of antibiotics in animal agriculture is a human health issue: "the science is clear."
"The science is so clear that the political pressure on the FDA won't be able to keep us from moving forward," said founding director of the Center for a Livable Future, Robert Lawrence, a professor of environmental health at the Bloomberg School of Public Health and a professor of medicine at the Johns Hopkins School of Medicine. "The pharmaceutical and animal industries continue to deny the scientific evidence. We believe that the science is clear."
At the meetings, dozens of staffers were briefed on a new white paper put out by CSPI focused on these so-called superbugs and foodborne illness outbreaks. CSPI reported that in 2011, 167 illnesses, 47 hospitalizations and one death were linked to antibiotic-resistant foodborne pathogens.
Two of the outbreaks were connected to ground turkey -- one contaminated with Salmonella Hadar and one with Salmonella Heidelberg -- and one outbreak was connected to ground beef contaminated with Salmonella Typhimurium. "All of those bacteria were resistant to treatment from several antibiotics that are critically important to human medicine, including drugs in the penicillin, cephalosporin, and tetracycline families," CSPI reported.
The white paper also noted that since 2000, 38 outbreaks tied to resistant pathogens sickened 20,064, hospitalized 3,108 and killed 27 -- a count that includes an "enormous" 1985 outbreak of Salmonella Typhimurium caused by milk, which sickened 16,659, hospitalized 2,777, and killed 18.
"Antibiotics are the crown jewels of modern medicine, and they are critical to treating diseases in both humans and farm animals," said CSPI food safety director Caroline Smith DeWaal. "We must not continue to jeopardize the effectiveness of these drugs by using them recklessly for non-therapeutic uses on farms and in animal factories. Otherwise, consumers may face longer illnesses, more hospitalizations, and more fatalities when exposed to resistant strains of common foodborne pathogens."
CSPI quoted World Health Organization's position on the issue from last year: "WHO has long recognized that antibiotic use in food animals, which seems to outweigh antibiotic use for human therapy in many countries, contributes importantly to the public health problem of antibiotic resistance."
In the United States, around 80 percent of all antibiotics sold are given to food animals each year.
At the briefings, public health advocates called on Congress to pass legislation to limit antibiotic use in agriculture, by passing the Preservation of Antibiotics for Medical Treatment Act (PAMTA), and asked the U.S. Food and Drug Administration to take greater leadership on the issue.
"I would just love to see the United States taking a lead on this issue and show global leadership like we do on so many issues," said Lance Price, an associate professor at the Translational Genomics Research Institute in Arizona. "On this one, we are lagging far behind the rest of the world. All the warning signs are there...and the good science is there and we're doing nothing. It's a shameful thing. I hope that we can turn this and start taking the lead."
Adriane Fugh-Berman was stunned by the question: Two graduate students who had no symptoms of mental illness wondered if she thought they should take a powerful schizophrenia drug each had been prescribed to treat insomnia.
“It’s a total outrage,” said Fugh-Berman, a physician who is an associate professor of pharmacology at Georgetown University. “These kids needed some basic sleep [advice], like reducing their intake of caffeine and alcohol, not a highly sedating drug.”
Scrutiny of the supply chain has grown since fake versions of Roche's multibillion-dollar cancer drug Avastin turned up at U.S. oncology practices late last year, sparking an international investigation that so far stretches from southern California back to Turkey with a stopover in a Cairo suburb.
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Scott Hensley reports on NPR:
You might be tempted to chuckle about some Norwegian researchers peering back at experiments done during the '60s and '70s with LSD as a treatment for alcoholism. But don't. Their rigorous
analysis, combining data from six different studies, concludes that one dose of the hallucinogenic drug might just help. The past studies randomly assigned patients to get a strong dose of LSD or something else (another drug, such as amphetamine, a low dose of LSD or nothing special). And the results provide evidence for a beneficial effect on abstinence from alcohol. For what it's worth, the analysis, just published online by the
Journal of Psychopharmacology,
was funded by the Research Council of Norway, not exactly a fringe outfit ...
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