To the Editor:
Peter W. Huber’s “Of Pills and Profits: In Defense of Big Pharma” [July-August] makes a sound economic case for the most powerful companies on earth. He lauds these mega-merged global empires for their diligent efforts to fight disease. “Sooner or later,” he writes, “the industry and its pilot fish will surely find drugs that can halt colon, breast, and lung cancers, that can curb obesity and thus heart disease, and that will not merely suppress the HIV virus but purge it from the body completely. A new pharmacology of the brain may cure depression and stop the onset of Alzheimer’s. These and other once inscrutable scourges are now—essentially—becoming problems in diligent engineering.”
This kind of optimism has always been the industry’s great strength and is almost impossible to argue with. Who does not want drugs that can cure cancer and keep a person cheerful and of sound mind into old age? The real question, then, is the cost. We are now several years into a prolonged innovation drought, and more and more people are realizing that they are paying infinitely higher prices for drugs in exchange for increasingly marginal rewards—and there is little they can do about it.
The idea that more research equals better drugs, equals higher prices, equals more research, equals better drugs, etc., rolls on. The global drug budget was able to rocket 30-fold, from $20 billion in 1972 to more than $600 billion in 2005, largely because few people questioned what goes on in the drugmakers’ pipelines. Now, when anyone begins to ask how cost-effective their research is or what new therapies the public really gets for the higher costs it must bear, the likes of Mr. Huber retort that if people want new drugs, they have to be prepared to pay for them. Fair enough. But how high must the costs go before more people ask who really gains from modern science?
Traditionally, drug companies have attributed the high prices they charge to the costs of research, figures that they keep close to their chest and that have averaged out, according to their own calculations, at $1.7 billion per new drug discovered. But these arguments no longer seem to work. “Drugs do cost a lot to develop, but [the industry was] making that argument when drugs were a fiftieth or a hundredth of the cost they are today,” says Les Toop, head of public health and general practice at New Zealand’s University of Otago. So the industry has resorted to a new argument, citing the inherent value of its life-sustaining therapies.
In any case, the hugely increased costs are jolting the foundations of many health-care systems. The national health service in the United Kingdom, for example, cannot even think about satisfying the full demand for the latest cancer drugs, which cost tens of thousands of pounds a year. As people are denied them, they begin to ask if the pharmaceutical industry really benefits the public. “The cost of human life,” says Toop, “is being cranked up by millions of dollars—but does the cost of drugs bear any relation to the cost of production?”
Mr. Huber maintains that none of this matters much because people will end up paying only what they can afford. The U.S. pays just under half of the global drug bill on its own with prices and volumes that significantly outstrip those found anywhere else in the world. When it comes to global research and development, Mr. Huber likens Americans to the business-class passengers who pay the prices that make it possible for the rest of the world to travel at all. But he does not question how long Americans will continue to be so generous. Nor is his fundamental confidence in drugs particularly convincing.
Contrary to what Mr. Huber suggests, my book, Big Pharma: Exposing the Global Healthcare Agenda, does not call for radical changes to the medical business. It simply makes a case for exploring the benefits of things that medicine cannot touch, like a solid doctor-patient relationship or a health-care infrastructure that can cut a better deal for the public with the industry than we have at present. If this sounds naïve, I believe it is less so than Mr. Huber’s dream of a pharmaceutical cure for depression, obesity, and cancer in the foreseeable future.
Jacky Law
London, England
To the Editor:
Peter W. Huber argues that the best drugs can be more effective than any actual physician: “while much hands-on care only drags things out or soothes, the best medicines really cure.” It follows for him that the pharmaceutical industry is justified in demanding a handsome price for the miracles it produces.
But Mr. Huber’s premise is flawed, and it exaggerates what drugs can actually achieve even in this era of genomic breakthroughs. Medicine functions best when its practitioners understand their limitations and aim for modest goals like control, prevention, and palliation rather than a way to turn lead into gold.
Take the example of statins, one of the most important new drug classes available in the last twenty years and highly touted for their effectiveness at lowering cholesterol and preventing heart attacks. A recent study published in the Lancet compared the effect of statins on 10,000 patients at the highest risk for a vascular event versus a placebo given to another 10,000. In the end, 6 percent of those in the drug group had fatal heart attacks as opposed to 7 percent of those in the placebo group. Hardly amounting to a miracle cure, and offering little benefit over their cheaper predecessors, statins have nevertheless raised the cost of cardiac care significantly.
Mr. Huber rejects out of hand Marcia Angell’s idea that drug developers should be required to measure new drugs against existing therapies rather than (as in the current practice) against a placebo. But practicing physicians need to know that new drugs are at least as good as the old ones. In the current climate, drug companies are free to suggest that their product is superior or just as good without the risk of having to prove it. A trial against a real therapy costs about the same amount as a trial against a placebo, but the industry fears that the former would hurt its interests.
Mr. Huber does not grasp that medicine is more than a mere business. He claims that those who want health care to be “flat”—i.e., fair to all—are going the way of the dodo bird, while those who recognize that pharmaceuticals must be run like any business are inexorably “taking over.” I beg to differ. It is not anachronistic to suggest that health care is both a public good and a basic human right. It is a public good because healthy people contribute to the economy rather than subsisting off the public purse. It is a basic human right because it is inherently demeaning to receive less of a life-and-death commodity than one’s neighbor. Surely Mr. Huber is aware of many goods that we do not depend upon markets to distribute; potable water and public roads come to mind. A business model certainly maximizes the profits of Big Pharma, but it does not efficiently produce or distribute a public good.
Adam J. Rose, M.D.
Boston University School of Medicine
Boston, Massachusetts
To the Editor:
Peter W. Huber has written a thoughtful and timely overview of the trials and travails of Big Pharma in the 21st century, but in the course of doing so he overstates the industry’s virtues. The fact is that too many professionals in the pharmaceutical business define themselves as product promoters first and health-care professionals second. The industry is awash with savvy marketing programs.
Having said this, I would also add to Mr. Huber’s brief in the industry’s defense. Because politics abhors a vacuum, the familiar complaint that drugs are too expensive has been replaced lately with the charge that drugs are not safe enough. A sure-fire winner, this—after all, who can be against safety? But the consequences of such politicking are scarcely harmless. Just ask the arthritis sufferers who no longer have access to Vioxx, or the many other patients who have seen the drugs on which they depended pulled from the market for safety concerns. The caution can be overdone. Absolute safety is impossible to achieve, and all drugs have risks as well as benefits. Moreover, it is by no means clear that all users of Vioxx, for example, were at risk for the drugs’ potential ill effects; yet nobody today can get a prescription for it.
More often than not, the more serious the disease, the more serious the risks associated with treatment. Consider advanced non-small cell lung cancer, a deadly condition. One of the very few available treatments, Iressa, causes death in a large minority of people who take it. But in many cases, it can prolong a patient’s life. Here, too, it is by no means clear that Iressa should never be available to anyone. A similar situation obtains with multiple sclerosis and Tysabri.
Many of those calling for more robust regulation of the drug industry seem to operate on the precautionary principle, that one-dimensional dogma dictating that nothing should be done until everything is understood. The unintended consequence can be to hurt patients and dry up drugmakers’ pipelines.
Peter J. Pitts
Center for Medicine in the Public Interest
New York City
Peter W. Huber writes:
Jacky Law states that drug companies charge too much for drugs that do too little. After four paragraphs to that effect, she tells us that Britain’s national health service cannot afford the latest cancer drugs, leaving Britons to wonder whether “the pharmaceutical industry really benefits the public.” Two paragraphs later, she dismisses the “dream of a pharmaceutical cure for . . . cancer in the foreseeable future.” In between, quoting an authority from New Zealand’s University of Otago, she asks: “[D]oes the cost of drugs bear any relation to the cost of production?”
The answer is no. As I argued in my article, the cost of a drug is, overwhelmingly, the fixed cost of discovery, licensing, and setting up manufacturing facilities. Price discrimination—i.e., finding ways (very roughly speaking) to charge wealth-adjusted prices—is the norm, as it should be, while patents last. Prices drop to marginal costs only when patents expire.
Patents can be eliminated or shortened, or their value can be reduced by appointing a single buyer, like a national government, to bargain with the patent holder. Jacky Law’s book and letter make clear that she would welcome any such effort to force the pharmaceutical industry “to cut a better deal for the public.” But it hardly seems worth the trouble when (as she sees it) there is an “innovation drought” and drugs—other than cancer drugs, apparently—offer “increasingly marginal rewards.”
Adam J. Rose misunderstands my argument: I do not suggest that high drug prices are justified because drugs are worth more than doctors. High drug prices reflect the underlying economics of high cost and high risk. Most economists would agree that health care is a “public good” when it curbs contagious disease, but not most of the rest of the time. In any event, the right way to promote sufficient production of public goods is for government either to buy them directly or subsidize their production or purchase. Curtailing intellectual property rights and regulating what producers may charge leads to less production, not more. Calling health care “a basic human right” just does not advance the discussion at all. As I argued in my article, the most effective way to spur innovation and make better drugs available to more people is to accept pricing schemes that look altogether unfair and uneven.
I agree with Dr. Rose that statins are not a miracle cure. The miracle cures for heart disease are diet, exercise, and the will power to stop smoking, and these cures are much cheaper, too. But over 1.2 million heart attacks occur each year in the United States, and about 460,000 are fatal. Even if one accepts the figures that Dr. Rose cites, statins reduce the risk of a fatal heart attack by about 14 percent (1 out of 7)—not 1 percent, as Dr. Rose’s phrasing might seem to suggest. Those same figures therefore indicate that statins save about 65,000 lives a year in the United States alone. The first statin was licensed in 1987; patents are now expiring, and prices are dropping rapidly as generic versions flood the market.
Ideally, we would compare every therapy with every other, and be as quick to abandon old, worse drugs as to embrace new, better ones. But systematic comparisons are extremely expensive, and take a long time. Dr. Rose betrays a misunderstanding of elementary statistics when he states that a trial against “a real therapy costs about the same amount as a trial against a placebo.” Many more patients must be tested to reveal statistically significant differences between two real therapies as opposed to differences between a real therapy and a placebo. Demanding that every new drug be proved “at least as good as the old ones” therefore creates a systematic bias in favor of the pharmacological status quo. The more drugs already available to treat a condition, however inadequately, the harder it gets to license a new one.
A reactionary bias of this kind can easily do more harm than good. On average, and over the long term, drugs do improve. No one seriously doubts that the drugs that have been licensed since 1986 are very much better, all in all, than the drugs that would have been used in their place in 1966 or 1946. Dr. Rose presumes that whatever has already been licensed is a “real therapy,” and whatever has not yet been licensed is not. For many serious diseases, however, the status quo is not good enough. As Peter J. Pitts notes, excess caution in the licensing of drugs is risky, too.
Mr. Pitts also points out that medicines can be oversold to a credulous public. No doubt they can be. An equally big problem is getting patients to take pills that they really do need. There is, similarly, much evidence that surgeons recommend too many procedures of the kind in which they specialize. But many other patients fail to get the early screening, testing, and follow-up surgery that would save their lives. I am inclined to doubt that minutely regulating what is said by, among, and about doctors, patients, drug companies, and drugs will make things better overall, rather than worse.
