July 8

Public Ranks Drug Industry at Bottom With Oil, HMOs, Tobacco – Harris Poll

Public Ranks Drug Industry at Bottom With Oil, HMOs, Tobacco – Harris Poll

Thu, 8 Jul 2004

The New York Times reports: “No industry has fallen as far or as fast in public esteem in recent years as the pharmaceutical industry, according to the Harris Poll.”

The American public is repelled by this industry’s corrupt practices and unconscionable price gouging.

According to the Harris Poll “respondents who say they have a positive attitude about the pharmaceutical industry has fallen 35 points since 1997, more than for any other industry. Drug makers now share the bottom of the rankings with oil, managed care and tobacco companies.”

The Times reports: “The industry’s growing unpopularity has caught many executives off guard.” This validates Congressman Gutknecht’s conclusion: “The pharmaceutical companies are living in a fool’s paradise.They cannot continue to expect to enjoy free market pricing in what is, in reality, a captive market.”

To the surprise of pharmaceutical executives, who fully expected that the promotional fairy tale ads concocted by their PR firms would protect their profit margins and approval ratings, this industry’s corrupt practices have finally aroused public wrath.

Drug manufactures are being called to task for setting highest price on essential, life-sustaining drugs those who need them to live, cannot afford; for concealment of evidence linking drugs to hazardous effects; for deceiving physicians with false claims and partial evidence to prescribe drugs whose safety and effectiveness is in doubt; for fraudulent marketing of ineffective, hazardous drugs; for using inordinate political influence to craft protectionist laws that hold the American public hostage to exorbitantly priced drugs.

Even Merc’s former, chairman, Roy Vagelos, condemns drug makers for the “exorbitant” prices of new medicines and “galloping” annual increases of old ones. He predicts, government price controls “are almost inevitable.”

The Times reports that PhRMA has embarked on “a charm offensive to try to win back the nation’s affection.” We doubt they will succeed in fooling the American people with distractions and penny give-a-ways and thousand dollar take-a-ways. The American public realizes that the Medicare prescription drug program was cooked up to ensure the drug industry a captive market with no competitive bidding, and a steady flow of taxpayer funds.

Contact: Vera Hassner Sharav
Tel: 212-595-8974

July 8, 2004
Drug Companies Seek to Mend Their Image

With drug prices skyrocketing, the pharmaceutical industry has long had plenty of critics. And in a measure of just how badly tarnished the industry’s image has become, even some of its most prominent defenders are turning against it.

That could spell trouble, which is why the drug industry is about to begin a charm offensive to try to win back the nation’s affection.

Roy Vagelos, the well-known former chairman of Merck & Company and one of the industry’s most prominent boosters, now condemns drug makers for the “exorbitant” prices of new medicines and “galloping” annual increases of old ones. Government price controls, he predicts, are almost inevitable.

“This industry delivered miracles, and now they’re throwing it all away,” Dr. Vagelos said. “They just don’t get it.”

No industry has fallen as far or as fast in public esteem in recent years as the pharmaceutical industry, according to the Harris Poll.

Acknowledging its dismal public standing, Pfizer, the nation’s largest drug company, held a news conference on Wednesday to announce an effort to provide discounted drugs to the working poor and anyone without health insurance.

It was the first of what is expected to be a blitz of similar announcements this summer from drug companies worried that their unpopularity could lead Congress to pass legislation that might legalize drug imports or allow government officials to bargain for discounts – either of which could put a big dent in the industry’s profits and investments.

Pat Kelly, president of Pfizer’s American drug division, said that he was painfully aware of polls showing that Americans view drug and cigarette makers similarly. “We find it quite incredible,” Mr. Kelly said, “that we could be equated with an industry that kills people as opposed to cures them.”

In a series of presentations, executives at Pfizer, which is based in New York, said yesterday that they were starting the discount program – whose cost will not significantly affect the company’s profits, they said – because it was the right thing to do. The company played videotaped addresses from Senators Charles E. Schumer and Hillary Rodham Clinton, both Democrats, applauding its efforts.

Whether the new program and yesterday’s fanfare will halt the slide in the company’s standing with the public or slow legislation on Capitol Hill that the industry opposes is uncertain. Two years ago, Pfizer and most other major drug makers announced programs to provide free or nominally priced drugs to the poor.

The clutter of disparate efforts led to confusion. The industry’s poll numbers continued to decline.

The main reason for the industry’s unpopularity, pollsters say, is that Americans, increasingly aware that drugs are much cheaper elsewhere, are tired of digging ever deeper to pay for prescription medicine.

The cost of the drugs needed to treat colon cancer, for instance, has soared to $250,000 from $500 for the regimen of 1999. Prices for the most commonly used branded drugs rose 28 percent from 2000 to 2003, nearly three times the rate of inflation, according to AARP.

During that time, Bristol-Myers Squibb raised its prices for Plavix and Pravachol, popular heart medicines, by 35 percent. Prices this year are rising even faster, AARP found.

Patients say they fear that they may soon face a stark choice – their money or their lives.

“I see no silver lining to the dark cloud of the drug industry,” said Gary Schmidgall, a 59-year-old English professor interviewed recently while he shopped in an Upper West Side supermarket.

Robert Wittes, a former Bristol-Myers Squibb researcher who is now physician in chief at Memorial Sloan-Kettering Cancer Center, said that the industry’s skyrocketing prices “invite government price controls” and leave needy patients stranded.

“They are daring the politicians to act, daring the payers to act,” Dr. Wittes said. “They are making life very difficult for patients and institutions who want to act responsibly.”

The industry had expected critics to be mollified by last year’s passage of the Medicare drug bill, which provides for tens of billions of dollars from the government to pay drug costs for the elderly who are not poor. That has not happened.

So executives undertook what some hoped would be an extreme makeover. A committee of top executives chaired by Karen Katen, president of Pfizer’s pharmaceutical group, are meeting regularly to discuss how to improve the industry’s image.

The committee is focused on “improving access and affordability of drugs,” Ms. Katen said. She said they would soon announce the conclusions and declined to discuss it further. But a participant said to expect initiatives similar to Pfizer’s, aimed at providing drugs for the uninsured and increasing awareness of the industry’s free drug programs.

If yesterday is any guide, the reception for the efforts will be mixed.

Within hours of Pfizer’s announcement, the Medicare Rights Center released a statement saying Pfizer’s program “will help only a small fraction of those in need.”

The pharmaceutical industry earns nearly two-thirds of its profits in the United States since drug prices in the rest of the industrialized world are largely government controlled. Those profits rely almost entirely on laws that protect the industry from cheap imports, delay home-grown knockoffs, give away government medical discoveries, allow steep tax breaks for research expenditures and forbid government officials from demanding discounts while requiring them to buy certain drugs.

But Congress, prodded by unhappy constituents, is becoming restive. To begin with, proposals to legalize drug imports and to allow government health officials to negotiate discounts are proliferating.

In the past, lawmakers, typically from the Republican Party, led the effort to protect the industry from such proposals. But now, some conservative Republicans are among the most vocal backers of the bills.

Representative Gil Gutknecht, a conservative Republican from Minnesota, has called the drug industry greedy and has been pushing to legalize imports.

“The pharmaceutical companies are living in a fool’s paradise,” Mr. Gutknecht said recently. “They cannot continue to expect to enjoy free market pricing in what is, in reality, a captive market.”

While nothing is expected to emerge from Congress anytime soon, executives say that they have reason to worry.

To forestall government intervention, said Raymond V. Gilmartin, Dr. Vagelos’s successor as Merck’s chief executive, the industry must do more to prove the value of its medicines. “We also have to become more efficient,” he said, “and drive down our cost structure.”

The industry’s growing unpopularity has caught many executives off guard.

Most say they see themselves as dedicated to the public good and committed to finding cures, an image increasingly at odds with those held by the rest of the country.

John Landis, senior vice president for pharmaceutical sciences at Schering-Plough, said he attended a cocktail party at a college last year that was filled with scientists.

“You would think that a party with scientists and their wives would be a friendly, safe gathering,” Dr. Landis said. “But the conversation quickly got around to why the costs of medicine are so high, why does the drug industry spend so much on marketing and why is there greater access to medicines outside of the United States.”

Dr. Landis explained that drugs were difficult to discover and expensive to research. His audience was not convinced. “I finally had to say, ‘Soooo, how about that football game?’ ”

The share of Harris Poll respondents who say they have a positive attitude about the pharmaceutical industry has fallen 35 points since 1997, more than for any other industry. Drug makers now share the bottom of the rankings with oil, managed care and tobacco companies.

Just 13 percent of poll respondents described pharmaceutical companies as “generally honest and trustworthy.” Some 57 percent said that drug prices are “unreasonably high” and an equal share said that the drug industry should be more regulated by the federal government, even though 7 percent said that they found it “very difficult” to pay for drugs.

Marcia Donen, who lives on the Upper East Side, said that the price of her 16-year-old daughter’s asthma inhaler went from $80.59 in December 2002, to $177.99 last June, to $203.99 a few days ago. The inhaler, called Maxair, is made by 3M.

“I couldn’t believe it,” Ms. Donen said. “You need this to live. This is why people are going to Canada for drugs.”

John Cornwell, a spokesman for 3M, said that the company increased Maxair’s price by almost 10 percent in each of the last three years, because the increases “were important in order for 3M to continue to make this product.”

Pharmacies or wholesalers may have accounted for any increases beyond that, Mr. Cornwell said.

Stories of large price increases tend to crystallize negative sentiment against the industry. When Abbott Laboratories decided late last year to quintuple the price of its H.I.V. drug, Norvir, AIDS activists mobilized.

The price increase led to a hearing by the National Institutes of Health on whether to allow generic versions of the drug on the market years before its patent expires.

Erbitux, a cancer drug from Bristol-Myers and ImClone Systems, costs up to $30,240 a patient. Treatment with Avastin, another drug for cancer from Genentech, costs $46,640.

Bristol-Myers and Genentech explained that the prices take into account costly research and manufacturing expenses. But Dr. Vagelos and Dr. Wittes said that the prices of the two medicines are inexcusable.

In the short-term, most patients who need Erbitux or Avastin and are insured will be able to get them by paying relatively modest co-payments, said Joseph Raduazzo, medical director of pharmacy programs at Tufts Health Plan.

But as more such drugs are introduced, something is going to give, he said. “We’re going to have to find a way of rewarding the pharmaceutical companies for developing these drugs in a more rational way,” Dr. Raduazzo said.

But for now the industry remains so unpopular that Andrew Sandler, a cancer researcher for Berlex Laboratories, cannot persuade even his 68-year-old mother that drug prices are reasonable.

“I tell her that we need that money to invest in research,” Dr. Sandler said of his frequent phone conversations. “She listens, but I’m sure she’s rolling her eyes.”

Copyright 2004 The New York Times Company |

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