Annual Press Audit: Front Page Pharma - Pharmaceutical Executive


Annual Press Audit: Front Page Pharma

Pharmaceutical Executive

Drug safety and data disclosure Articles on drug safety dominated the nation's top newspapers, undoubtedly tied to allegations and court proceedings about Vioxx, Bextra (valdecoxib), and related drugs. These allegations represent additional examples of the risk of product liability for the pharmaceutical industry. The "calculated" risk of developing a new drug from a large number of development compounds is a known risk, which companies choose to accept (10 to 15 years and an average of $800 million to bring a new medicine to market). At this time, however, product liability can be considered an "uncalculated" risk with profit-consuming and stock-devaluing implications. To cite just one example, Wyeth's involvement in the diet drug cocktail known as fen-phen (fenfluramine, phentermine, dexfenfluramine) cost the company and its stakeholders billions of dollars.

If ever there was a time to introduce an impeccable standard, such as Six Sigma, to clinical data collection and post-approval monitoring, it is now. Pharma can consider this an opportunity and work with FDA for more efficient ways to achieve data reporting. This has the potential to not only help prevent future drug liability crises in our litigious climate, but also improve healthcare delivery consistent with the goals of PhRMA's chairman—better access, affordability, information, and education

Drug prices/Medicare Although it was a distant second to drug safety, there is still sensitivity about the cost of prescription medicines. As mentioned earlier, the new Medicare Drug Benefit received very little coverage as an ethical issue, primarily because it is seen as a vehicle to alleviate a financial problem for many seniors. The complexity of the new program, however, presents an opportunity for pharma to provide patient assistance and understanding of the potential benefits and use of the program. Information on PhRMA's Web site, and programs such as the Partnership for Prescription Assistance, provide an excellent starting point.

Negotiations with Medicare, Medicaid and other payers/providers Pharma companies need to be prepared for a new level of price negotiations with the federal government, because Medicare can become their largest customer, depending on the company's product line. Even more competitive negotiations among all companies with drugs on state Medicaid formularies may be the result. Hopefully, these negotiations will not require resolution in the courts by PhRMA as it has had to intervene on behalf of the millions of patients trying to gain access to pharma drugs.

Finally, it is also interesting to see issues become more prominent and merit enough attention to be monitored as a potential impact on business in 2006. These are issues related to vaccines (for those companies with vaccine-production capability), NIH Ethics Rule (for all companies working with NIH) and Right to Life/Contraception (for negotiations with pharmacy providers and certain pharmacy buying organizations).

We recognize the tangible commitment made to healthcare by pharma companies—including R&D expenditures of $33.2 billion by PhRMA member companies, which represents almost 18 percent of domestic sales and is more than the amount sent by NIH and the international pharmaceutical industry combined (based on 2003 financials). That's an important commitment—and one that makes it essential that the industry address the ethical issues and achieve more favorable media coverage.

The authors wish to thank research assistants Meghan Kelly, Sarah Poole, and Camille Siochi, and business librarian Cynthia Slater for their contributions to this article.

Stephen J. Porth, PhD, is a fellow of the Arrupe Center for Business Ethics and professor at Saint Joseph's University in Philadelphia. He can be reached at
George P. Sillup, PhD, is an Arrupe Fellow and assistant professor at Saint Joseph's University. He can be reached at


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