I didn't want to write about pharmaceutical companies. They get enough bad press, and adding to it almost seems like piling on. If Valeant is the poster company for outrage about drug pricing, it's less because what they are doing is unusual than it is because we suspect they are the norm.
Honestly, I wanted to discuss McDonald's turning their Happy Meals boxes into VR headsets --I'm not making that up -- but, gosh darn it, it's almost like the pharmaceutical companies are daring me to talk about them. So I will.
What got me going was an article in The New York Times on a BMJ study about cancer drugs. According to the study, the U.S. wastes some $3b annually because drug companies distribute the drugs in vials that contain higher doses than most patients need. Doctors and nurses carefully measure out the appropriate dose for a patient, then have to discard the remainder of the vial.
As Dr. Peter B. Bach, one of the co-authors, said: "Drug companies are quietly making billions forcing little old ladies to buy enough medicine to treat football players, and regulators totally missed it."
Only in America, right?
In fact, it does pretty much appear to be only in America. The Times quoted a VP at Takeda who noted they'd worked closely with the FDA to establish their one-size vial of Velcade, even though in Europe Velcade is also available in a smaller size. The researchers estimate that 30% of Velcade's annual sales end up being wasted.
The FDA says they only care about vial sizes if they are likely to lead to medication errors or "inappropriate dosing," but they apparently don't think up to half of a drug being thrown away is inappropriate. Dr. Leonard Saltz, another of the study's co-authors, pointed out: "What's really interesting is that they're selling these drugs in smaller sizes in Europe, where regulators are clearly paying attention to this issue."
The researchers say that 18 of the top 20 cancer drugs in the U.S. are sold in only one or two sizes, leading to 10% being wasted on average. And although they focused on cancer drugs, the researchers found that the problem applies to other drugs, such as J&J's arthritis drug Remicade.
Of course, we pay for all this waste, directly or indirectly.
Speaking of the FDA, drug companies often complain about how the FDA approval process is one of the longest and most expensive ones in the world, but they don't mention that as many as one-in-five prescriptions are for off-label uses. despite the fact that such use has been estimated to carry with it a 44% higher risk of an adverse event or side effect. The drug companies like off-label use; not only does it increase a drug's revenue, but it does so without having to go through the same kind of FDA approval process as on-label use.
Dr. Walid Gellad, a RAND research and professor at the University of Pittsburgh, says: "Clinicians frequently prescribe drugs off-label without knowing how well
they work. Sometimes it’s clinicians’ fault for not knowing the
research. But sometimes the research just isn’t there.”
Score another win for the drug companies.
The FDA does require that drugs all come with warnings about potentially dangerous interactions with other drugs, but those reported interactions only scratch the surface. Something like one-in-five Americans take three or more drugs, and one-in-ten take five or more, not counting all those supplements we like to take, but drug companies' research can't test for all the various combinations. Some creative researchers recently data-mined complaints sent to the FDA and found several common combinations that could cause fatal heart rhythms.
Shouldn't the FDA been doing that, if not the drug companies themselves?
It's bad enough that we may not have the right research to make the best choices about drug safety, but another article in The Times suggests that drug companies may not be playing quite straight with the research we do have. A lawsuit filed against J&J and Bayer asserts that researchers who reported on anti-clotting drug Xarelto in NEJM didn't mention some important lab data, even though the drug companies were providing it to regulators in -- you guessed it -- Europe.
The researchers, the two drug companies, and even the NEJM claim that the missing data wouldn't have changed the results of the analysis, but many find its omission troubling -- especially since at least one of the peer reviewers had explicitly asked about the existence of such lab data. Dr. Lisa Schwartz, a professor at Dartmouth, told The Times: "It just feels like it’s a real ethical breach. If you know the direct answer to this question,
then how can you not provide it to be able to give insight?”
It makes you wonder what else drug companies aren't telling us.
Dave Chase, writing in Forbes, challenges the pharmaceutical industry to reinvent itself, like IBM did under CEO Lou Gerster, or risk looking like the smirking Martin Shkreli, who some feel epitomizes the approach of milking cash cow products for as much and as long as they can get away with it. Gerster, Mr. Chase points out, transitioned IBM from a product company that was facing extinction to a customer and service-centered company that remains highly relevant.
He argues that pharma needs to move from selling products to selling outcomes of those products, such as by moving to population health management. He isn't the first to call for this, and they are not the only health care industry that needs to move away from maximizing revenue on sick people. But their huge profits and impressive revenue growth may make it harder for the pharmaceutical industry to upset their own apple cart.
Drug companies are slow walking their way to value-based pricing, such as recent deals Novartis has done, but the pace is too slow and the scope is too small. This is, after all, the industry whose economic model has made it much more attractive for them to work on drugs that mitigate existing conditions than ones that might prevent those problems. If and when gene therapy, nanobots, or even simple exercise start replacing pharmaceuticals, the drug companies may be sorry about those smirks.
Maybe I should take a pill...or, better yet, go for a walk.