The pharmaceutical industry: friend or foe?

Abstract

Thank you for inviting me to be here today. It is a great honor to be president of the American Gynecological and Obstetrical Society. First, I would like to thank my escorts, who have been my mentors and colleagues for many years. They are as follows: Richard Berkowitz, MD, Steven Gabbe, MD, Irwin Merkatz, MD, John Queenan, MD, Gloria Sarto, MD, PhD, and Joe Leigh Simpson, MD. I would also like to acknowledge the late Dr J. Donald Woodruff, who brought me to my very first meeting of this organization, and who was my mentor at Johns Hopkins Hospital. In this address I intend to show you the degree to which the drug industry is profit motivated and ultimately responsible to shareholders. However, we, as physicians, have primary responsibility to our patients. I want to remind you that drug representatives are sales people, not educators. They live by quotas and they track the prescribing habits of physicians to whom they market their drugs. Gifts, meals, samples, seminars, and advertising all influence our prescribing habits. In addition, I will briefly mention some issues about the Food and Drug Administration (FDA). It is paid by the pharmaceutical industry to approve drugs and has limited resources for postmarketing supervision of companies with regard to misleading advertising, or side effects of drugs discovered after FDA approval. Drug representatives may find speakers, pay speakers, bring lunch, and bring gifts and samples. All of these behaviors influence physician prescribing and drive up the drug costs for hospitals and patients. That is, of course, why the drug companies pay for them. Industry responds by pointing out that prescription drugs are expensive because they are valuable, and that they have large research and development costs. Indeed, drugs may enhance quality of life and lengthen life, and marketing may sometimes influence physicians to prescribe otherwise underprescribed drugs. However, the costs of drugs in this country are significantly increased because of the large marketing budget and profit margin of the drug industry. Much of what I am going to say today came from the book by Dr Marcia Angell, The Truth About the Drug Companies: How They Deceive Us and What to Do About It . She is the former editor-inchief of the New England Journal of Medicine, a physician trained in both internal medicine and pathology. In 2003 in the United States we spent $250 billion on outpatient prescription drugs. That figure is growing 12% per year, and is the fastest growing part of health care costs. For example, the price of Claritin was raised 13 times over 5 years, a 50% increase, 4 times the rate of inflation. I will use the term “Big Pharma” to refer to PhRMA, the Pharmaceutical Research and Manufacturers of America. This is the industry’s trade association, an organization of all the drug companies around the world, including 5 giant European companies. In the United States, the pharmaceutical industry enjoys the rapid approval of drugs by the FDA and free pricing with no price controls. They also have long periods of exclusive marketing rights, and huge tax breaks. Increased drug expenditures have come from 3 sources: 39% from increased numbers of prescriptions, 37% from the increased cost of drugs, and 24% from the shift to more expensive drugs. The average price per drug per year currently is approximately $1500. Industry charges Medicare recipients without supplemental insurance more than HMOs or the Veterans’ Administration, as the latter can buy in bulk. However, the Medicare Reform Bill of 2003 forbids Medicare to bargain for lower prices. From the Department of Obstetrics and Gynecology, University of Iowa Hospitals and Clinics, Iowa City, IA Reprints not available from the author. Presidential address presented at the American Gynecological and Obstetrical Society Meeting, Chicago, IL, Sept. 28, 2007. 0002-9378/$34.00 © 2008 Mosby, Inc. All rights reserved. doi: 10.1016/j.ajog.2007.11.055 Meeting Papers www.AJOG.org