Only the bad times are good for pharma

May 27, 2009

The one good thing about a potential global pandemic is that it puts drugmakers in an extremely favourable light. Even if the dangers of swine flu are not as dire as first thought, it is comforting to know agents like Tamiflu and Relenza exist and that governments around the world are buying them.

Pharmaceutical situations where everyone is happy are rare. Companies hitherto seen as money-grabbing and disease-mongering are suddenly acknowledged as saviours, using their expertise to protect the public from unknown and possibly fatal threats. Scientists go into over-drive, manufacturing capacity is notched up a few gears, distributors are busy, shareholders are cockahoop. The only people sidelined are those in marketing because when something is really needed it doesn't need selling.

In that scenario is a painfully simple truth: that what people want from the pharmaceutical industry is products that don't need selling. People want things that work. And what is true for vaccines against viruses the human world has never seen is true for all pharmaceuticals. People want things that make them better. They don't want to pay for them. They don't want side-effects. Ideally, they don't even want to know they are taking them. The bottom line is they don't really want to acknowledge they need them.

This widespread blindness to the fact that people do age, get sick and, heaven forbid, die, has far-reaching consequences for the industry. It puts enormous pressure on governments and insurance companies to pay truly astronomical monopoly prices to give people suffering from cancer a few weeks, perhaps months, of life. These premium prices accelerate the innovation mill to the extent there are now 861 new cancer drugs and vaccines in human trials or awaiting approval by the FDA. Whether those governments and insurance companies are able to pay for the products that are approved remains to be seen.

On another level, this quest to be fixed, whatever the cost, can be seen in nurses being employed to text overweight patients on their mobile phones to remind them to take their obesity pills. Or in the UK's NHS providing smokers with alternative means of maintaining their nicotine addiction in patches and chewing gum at prices that are set in line with tobacco and it's associated high taxes to help people stop people smoking in the first place.

Because people so much want to be made better, the distribution of healthcare resources is highly illogical. Palliative care workers and cancer surgeons would love just a fraction of the money that is poured into cancer drugs. And just about anyone would benefit from the healthcare resources spent urging people to take pills to help them lose weight (one would think they could do this for themselves), or maintain a nicotine habit that allows people to continue puffing in private and chewing in public.

Not only are they illogical but some think they are also not fair. In a recent CNN interview former US president Bill Clinton was not the first to point out that US drug prices are significantly higher than anywhere else. "At our AIDS clinic down the street here in Harlem, the taxpayers pay $10,000 a year to treat people with the big pharmaceutical companies' AIDS medicine," he said. "That medicine costs about $3,500 a year in Canada and Europe, countries with per capita incomes as high as America."

As the US grapples with how to absorb no less than 46 million uninsured Americans into state-funded programmes, different conclusions are drawn from the fact that everyone else pays lower prices than they do. Some, for example, insist it is because no-one else (except New Zealanders) can advertise direct to consumers; others think that everyone else freeloads on the back of Americans, who pay the lion's share of R&D costs. What no-one mentions is the propensity of a culture to take medicine and, with that, all the implications about how responsible people are for their individual health, how much they want to be fixed, and what they will allow (television advertising, for example) to make that fix as widely available as possible.

Cultural factors also go some way to explaining how the World Health Organisation can show Cubans and Americans expecting to live roughly the same number of healthy life-years while the former pay just over $225 a year for their healthcare and the latter more than $5,000.

Cultural or lifestyle factors are hard for healthcare systems to deal with, because, as said, people, generally speaking, just want to be made better as imperceptively as possible with products that work, that don't need advertising, that don't cost an arm and a leg and don't draw attention to the fact they are ill, fat, old, dying or any other condition they don't want to face up to and properly acknowledge. Which is why, in the normal course of events, they only view the industry positively when something like a global pandemic looms on the horizon.