Re: The Bull*** Parade

From: Matti Narkia (mnng1_REMOVE_THIS_at_despammed.com)
Date: 07/15/04 

Date: Thu, 15 Jul 2004 16:44:11 +0300

Wed, 14 Jul 2004 23:48:29 GMT in article
<I0v8An.KHp@campus-news-reading.utoronto.ca> "Gregory Poon"
<mk.poon@utoronto.ca> wrote:

>> Practically all drugs are _manufactured_ by big pharma, that was not an
>> issue. The question is where were they invented, who made the innovation
>and
>> basic research? Most of the major inventions originate from publicly
>funded
>> research or small bio-tech companies. Big pharma then buys
>patents/licences
>> and starts manufacturing and marketing.
>
>
>There seems to be widespread impression that big pharma does not do "real"
>drug research. Most of work required to bring a drug substance to the
>public is in fact done or funded by the manufacturer -- toxicology,
>pharmaceutics, pharmcokinetics, clinical trials, pharmacoeconomics, etc.
>Publiclly funded research in these aspects actually plays only a minor role,
>if only because the amount of money and organization required just don't
>exist in university research labs. So if academic research were to
>transcend to clinical applications, partnership (or whichever you choose to
>call it) with the pharmaceutical industry is essential. Insulin is probably
>the only notable example to date where the development of the drug can be
>attributed primarily to publiclly funded research (at the University of
>Toronto in the 1920's). And no, I don't work for a pharmaceutical company,
>but I do work at the U of T, so my plugging for insulin may be
>understandable.
>
Well, the editorial article

Angell M.
The pharmaceutical industry--to whom is it accountable?
N Engl J Med. 2000 Jun 22;342(25):1902-4
<URL:http://content.nejm.org/cgi/content/full/342/25/1902> (free for
                                                            subscribers)
<URL:http://www.mercola.com/2000/jun/24/pharmaceutical_industry.htm> (free)
<URL:http://www.karlloren.com/Diabetes/p17.htm> (free)

from the most prestigious medical journal in U.S. don't seem to agree with
you. An excerpt:

    "What about the picture of the drug industry as an exemplar of
    the free market? That image is very far from the truth. On the
    contrary, the pharmaceutical industry enjoys extraordinary
    government protections and subsidies. Much of the early basic
    research that may lead to drug development is funded by the
    National Institutes of Health. (12) It is usually only later,
    when the research shows practical promise, that the drug
    companies become involved. The industry also enjoys great tax
    advantages. Not only are its research and development costs
    deductible, but so are its massive marketing expenses. The
    average tax rate of major U.S. industries from 1993 to 1996 was
    27.3 percent of revenues. During the same period the
    pharmaceutical industry was reportedly taxed at a rate of only
    16.2 percent. (13) Most important, the drug companies enjoy 17-
    year government-granted monopolies on their new drugs -- that
    is, patent protection. Once a drug is patented, no one else may
    sell it, and the drug company is free to charge whatever the
    traffic will bear.

    Is it correct that the U.S. pharmaceutical industry is highly
    innovative? Only partly. Some recently launched drugs do indeed
    fill important, previously unmet medical needs. But it is hard
    to escape the conclusion that many other new drugs add little
    to the therapeutic armamentarium except expense and confusion.
    Consider the welter of very similar drugs to lower cholesterol
    levels. Developing genuinely innovative drugs is difficult and
    chancy. It is easier to make "me-too" drugs or minor variants
    of established products. To be profitable, the variation need
    only be sufficient to secure a new patent, and the rest is
    marketing. Critics believe drug companies are doing far too
    much of that sort of thing. They also charge that many
    industry-sponsored clinical trials are designed more to find
    small advantages that can be highlighted in promotional
    campaigns than to find clinically meaningful effects. (14)

    The industry has certainly been ingenious in finding ways to
    extend patents on its bestselling drugs. For example, a recent
    Wall Street Journal article describes a complicated business
    deal between Merck and Schering-Plough for the marketing of two
    new drug combinations, one to lower serum lipid levels and the
    other to relieve allergies. Each combination will pair one
    company's "blockbuster" drug, whose patent as a single product
    will soon expire, with a drug with supplementary action owned
    by the other company. The combination drugs will have new
    patents, and their profits will be shared by both companies.
    (15) This may be good business, but the medical soundness of
    fixed drug combinations as opposed to flexible combinations of
    separate drugs is debatable.

    The marketing budgets of the drug industry are enormous -- much
    larger than the research and development costs -- although
    exact figures are difficult to come by, in part because
    marketing and administrative expenses are often folded together
    and in part because some of the research and development budget
    is for marketing research. According to its annual report,
    Pfizer spent 39.2 percent of its revenues on marketing and
    administration in 1999 (16); Pharmacia & Upjohn is reported to
    have spent about the same. (12) The industry depicts these huge
    expenditures as serving an educational function. It contends
    that doctors and the public learn about new and useful drugs in
    this way. Unfortunately, many doctors do indeed rely on drug-
    company representatives and promotional materials to learn
    about new drugs, and much of the public learns from direct-to-
    consumer advertising. (17) But to rely on the drug companies
    for unbiased evaluations of their products makes about as much
    sense as relying on beer companies to teach us about
    alcoholism. The conflict of interest is obvious. The fact is
    that marketing is meant to sell drugs, and the less important
    the drug, the more marketing it takes to sell it. Important new
    drugs do not need much promotion. Me-too drugs do."

If you work at the University of Toronto you naturally are familiar with the
fact that research leading to the discovery of insulin was conducted there.
What amazes me is that you don't seem to be aware that most major medical
breakthroughs originate from publicly funded research. How many percent of
the Nobel Prize winners in Physiology or Medicine have worked for the big
pharma at the time they have done the work which earned them the prize?
And how it is possible that you fail to remember that the research effort
which started the rise of modern medicine, the invention of the first
antibiotic, penicillin, was totally publicly funded? Sir Alexander Fleming,
who first discovered penicillin, worked at the St. Mary's Medical School,
London University, and Sir Howard Florey and Ernst Boris Chain from Oxford
University, were the scientists who developed penicillin further and were
chiefly responsible for the research which led to its success as a drug. See
for example

<URL:http://www.nobel.se/medicine/laureates/1945/fleming-bio.html>
<URL:http://www.nobel.se/medicine/laureates/1945/>
<URL:http://www.time.com/time/time100/scientist/profile/fleming.html>
<URL:http://www2.sjsu.edu/depts/Museum/flemin.html>
<URL:http://www.bbc.co.uk/history/historic_figures/fleming_alexander.shtml>

Finally, during the World War II an obscure outpost of a U.S. government
agency, the Department of Agriculture's laboratory in Peoria, Illinois,
figured out how to mass-produce penicillin, took out a patent on the method,
and then made all of its patents available to any producer without charge.
R. Moss gives some details about this process in the book "The Cancer
Industry" (ISBN 1-55778-439-6):

  It was only with the approach of World War II, when huge
  casualties loomed and the Allies faced the loss of German sulfa
  drugs, that some British scientists began campaign to develop
  penicillin commercially [1]. Two British scientists were brought
  to United States in 1941, under the auspices of the Office of
  Scientific Research and development (OSRD), to try to get private
  pharmaceutical companies interested in working on the projects.
  "They had almost no luck," Richard Harris wrote in _The Real
  Voice_, summarizing the results of an investigation by Senator
  Estes Kefauver's staff [2].

  A few weeks after the Japanese attacked Pearl Harbor, Dr.
  Vannevar Bush, director of OSRD, personally brought a number of
  drug companies into the research effort. A year and a half later
  he wrote:

        "Now the pharmaceutical companies have cooperated in this
     affair after a fashion. They have not made their experimental
     and their development of manufacturing processess generally
     available, however [2]."

  The problem, Harris remarked, "was that most firms were too busy
  trying to corner patents on various processes in the production
  of penicillin to produce much of it ..." [2]. On January 19,
  1944, the coordinator of the penicillin program of the War
  Production Board wrote that he could not "with a clear conscience
  assume the responsibility for coordinating this program" because
  of the refusal of the drug companies to exchange information, a
  refusal that was costing thousands of lives on the battlefield.

  The deadlock was broken only when an obscure outpost of a
  government agency, the Department of Agriculture's laboratory in
  Peoria, Illinois, figured out how to mass-produce penicillin,
  took out a patent on the method, and then made "all of its
  patents ... available to any producer without charge" [2].

   Even so, drug companies never showed much enthusiasm for penicillin.
   "The synthesis of penicillin brought laurels to the scientists," wrote
  _Fortune_ (March 1976), "but precious little else." For this reason,
  John McKeen, the president of Pfizer, said in 1950, "If you want to
  lose your shirt in a hurry, start making penicillin and streptomycin"
  [3]. Economics professor Alek A. Rozental commented further:

        "Pfizer announced that it would henceforth concentrate on
     the development of new and exclusive antibiotic specialties.
     Other firms had the same idea. Today the few that control
     production of the broad-spectrum antibiotics (Achromycin,
     Terramycin, Aureomycin, and tetracyclines) have managed to avoid
     repetition of the "unhappy" penicillin experience [3].""

References:

[1] Bäumler, Ernst. A Century of Chemistry. Translated by David Goodman.
     Dusseldorf: Econ Verlag, 1968.

[2] Harris, Richard. The Real Voice. New York: Macmillan Publishing
     Company, 1964.

[3] Rozental, Alek A. "The Strange Ethics of Ethical Drug Industry."
     In Crisis in American Medicine, edited by Marion K. Sanders. New
     York: Harper & Row, 1961 

-- 
Matti Narkia
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