REGULATORY BLUES FOR BIG PHARMA

Max Gastone

2004 saw the stream of bad luck for the pharmaceutical companies expand. More blockbuster drugs have been withdrawn or questioned, bringing in turn more billion-dollar class-action lawsuits against the pharmaceuticals. In response the insurance industry is also cutting back the coverage they will provide to pharmaceuticals.

The Big Pharmas deserve little sympathy, given the untold deaths and suffering their medicines have caused - in the UK alone 10,000 people die every year because of 'adverse drug reactions'.1 Also, many drugs are introduced, not because of increased effectiveness, but as it allows the developers to make greater claims and charge higher prices. However, the real problem is with the system leading everyone into the current mess in the first place.

The Food and Drug Agency (FDA) is the regulatory body for medicine in the USA. Its standards and rulings on the drugs are influential around the world. However, the pharmaceuticals have spent years building up a cosy relationship with the FDA, often 'seconding' staff to it, or sponsoring the work of connected scientists. On paper, seconding and sponsoring look like altruism, helping to support an agency whose mission is to protect the public. The reality is that it creates a system of patronage. The flow goes both ways, with senior officials getting, if not actively expecting, well paid jobs in the pharmaceuticals when they leave the civil service.

For the pharmaceuticals, this makes sense. They get the best service from the regulators, and in theory that is a good thing. After all, in theory, everyone wants the best for the patients. Indeed, a strong regulatory body is actually a beneficial to industry as its purpose is to provide a useful check preventing dangerous medicines from reaching the market, or at the very least with the right warnings for doctors prescribing them to rely on.

For the pharmaceuticals, this makes sense. They get the best service from the regulators, and in theory that is a good thing. After all, in theory, everyone wants the best for the patients. Indeed, a strong regulatory body is actually a beneficial to industry as its purpose is to provide a useful check preventing dangerous medicines from reaching the market, or at the very least with the right warnings for doctors prescribing
them to rely on
.
The pharmaceuticals have not realised that tainting the FDA damages their own credibility. Now, with deaths for blockbuster drugs being claimed in the hundreds of thousands, they are attempting to stand behind the regulatory process. The problem is that the regulatory bodies are also suffering a similar crisis for having allowed the drugs through in the first place. The FDA is not doing itself any favours either. In one case, it threatened to fire one of its scientists who was refusing to back down on an experiment which would have held up a major new drug. A survey showed that about two thirds of the FDA's own staff are 'less than confident' in the agencies monitoring processes.2

The pharmaceuticals are in a vicious circle. As drugs are withdrawn, profits and share-prices fall. Their share price is closely connected to the strength of their upcoming drug pipeline. To keep their stock options and shareholders happy, executives need to get their next big drugs through the regulatory process faster. Hence they pull on the FDA in the wrong direction at a time when support for a stronger regulatory regime would be sensible. Thus there is the prospect of yet more recalls from deaths and other undesirable side-affects.

This inherent failure to think strategically, even in the medium term, is recognized by the insurance companies; they offer coverage to the pharmaceuticals should they face drastic payouts due to the effects of a drug. As claims continue to mount there are major reviews underway.3 Much coverage was offered on the strength of the regulatory process protecting everyone,so the likelihood of payout was low. Now it is clear the process is failing,the insurers are halving the amount of coverage they offer the pharmaceuticals. Without that financial backup, a law suit could actually prove fatal to a pharmaceutical in the future.

The doctors also have to shoulder some blame for bowing to influence from the companies. A source in one, GlaxoSmithKline (GSK), placed the blame for its Seroxat disaster on doctors not following guidelines for prescribing the drug.4 GSK is also the company exposed for giving doctors freebies in Italy, encouraging them to prescribe its drugs.5 The pharmaceutical companies also ensure the experiments given to the FDA are worded in their favour, even when the experiments are not completely favourable.6 They also actively lobby on the exact wording of the guidance notes accompanying each drug. Thus those doctors who resist the companies' generosity are in some cases still misled into potentially fatal decisions.

Belatedly, the FDA and pharmaceuticals are acting to deal with the collapsing trust in them. The FDA is demanding the pharmaceuticals pull misleading ads. The pharmaceuticals are answering stringent criticism from within the industry by creating publicly available databases on all their drug trials, and not just the ones favourable to them. But until the underlying regulatory process is sorted out, the cycle will just repeat itself.

1 http://news.bbc.co.uk/2/hi/health/3856289.stm
2 Discrediting FDA whistleblowers http://www.healthtalk.ca/fda_whistleblower_11252004_2396.php
3 The Times, 15th January, 2005, 'Insurers cut cover to drug firms admid fear of lawsuits', Richard Irving
4 Seroxat http://news.bbc.co.uk/1/hi/health/1382551.stm
5 GSK bribery of doctors http://bmj.bmjjournals.com/cgi/content/full/326/7386/413/a
6 http://www.monheit.com/vioxx_celebrex/problem.shtml