Thought Leader: Better Business: Balancing Benefit, Risk, and Cost - Pharmaceutical Executive

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Thought Leader: Better Business: Balancing Benefit, Risk, and Cost
Losing track of patient welfare and failing to address important safety problems isn't just bad science and bad ethics, it's also bad business.


Pharmaceutical Executive


What it will take to get the industry back to that state of grace may be exactly what we are seeing now: Companies that are seen as emphasizing marketing more than patient welfare suffer in the marketplace as well as in the courts (witness Merck's loss of about $40 billion or 40 percent of market cap after Vioxx). I suspect the lesson of the current crises is that losing track of patient welfare and failing to address important safety problems isn't just bad science and bad ethics, it's also bad business.

What other marketing shifts would help? First, to consider the possibility that lower-priced drugs used by much larger numbers of patients may meet public health needs, as well as business needs, better than the often rapacious pricing we now see. This will become clearer with likely cutbacks in the drug spending of Medicaid this year, and in the planned Medicare benefit next year. Second, to make sure that each company has an effective strategy for following up on signals of risk with appropriate targeted new studies. Third, to show a bit more restraint and common sense in avoiding the self-serving over-the-top gimmickry and claims that now characterize promotion to both doctors and patients. It's unseemly and makes its purveyors look tacky. Loss of respect leads to push-back from doctors, consumers, and legislators.

What's ahead for the pharmaceutical industry? The COX-2 crisis could be the trigger for some very healthy reforms that would serve the public and the industry. Or, it will die down once the headlines are over, and things could return to the status quo. Given the prevailing politics, I'm concerned that the latter is more likely.

Should the public expect pharma companies to work like nonprofit entities? It's naive and untenable to pretend that a large [drug companies] should be expected to act according to rules and incentives different from those that GM or IBM have to live with. Some of that misperception, though, is the industry's own doing, in that many of its institutional ads create the image of holier-than-thou companies that are somehow on a moral plane higher than that of other large corporations. When a product has life-and-death consequences, the public stakes are higher, and that does justify a higher level of regulatory control and public expectation. But we need to regulate the industry with the understanding that its management's fiduciary duty is to its shareholders. But because the business involved affects the public health so much, we need to have particularly rigorous regulations, and especially strong sanctions is negligence or malfeasance are found.

Who should be on FDA's proposed Drug Safety Board? The real question is whether the nation will have an entity that has the independence from FDA to second guess its approval decisions (this doesn't), the clout to compel manufacturers to conduct safety studies post-approval—whether clinical trials or observational studies (this doesn't)—and a budget to conduct or commission such safety studies on its own (this doesn't). As it is now constituted, maybe the new Drug Safety Board should include only dermatologists and plastic surgeons, since its effect may be totally cosmetic.

Jerry Avorn, MD, is professor of medicine at Harvard Medical School and chief of the division of pharmacoepidemiology and pharmacoeconomics at Brigham and Women's Hospital. An internist, geriatrician, and pharmacoepidemiologist, he is director of the Program for the Analysis of Clinical Strategies, past president of the International Society of Pharmacoepidemi-ology, and an advisor on the Consumer Reports Best Buy Drugs project. He also invented "academic detailing." His latest book is Powerful Medicines: The Benefits, Risks, and Costs of Prescription Drugs (Knopf, 2004).


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