Should Pharma Get Out Of China? You Decide
45 CommentsBy Ed Silverman // March 7th, 2008 // 8:58 am
In recent weeks, there has been nothing but bad news coming out of China. A Chinese facility that made the active ingredient in Baxter’s Heparin blood thinner remains a key suspect behind nearly 800 serious side effects and 19 deaths. A big state-owned Chinese drugmaker, Shanghai Hua Lian, that exports to dozens of countries, including the US, caused a scandal after nearly 200 Chinese cancer patients were paralyzed or otherwise hurt last year by contaminated leukemia drugs. The company supplies the active ingredient for the RU-486 abortion pill.
Yet China has an estimated 80,000 chemical companies, and the FDA doesn’t know how many sell ingredients used in drugs consumed by Americans. Meanwhile, more drugmakers are growing operations in China. (Look here and here). And so last month, Michael Santoro, an associate professor of business ethics at Rutgers Business School, told us pharma should get out of China and Congress ought to impose an embargo on drugs made there.
Santoro, who just presented a paper at Stanford University entitled ‘Flight of the Toxic Dragon: The Global Threat to Safety Posed by China’s Underdeveloped Drug Regulation Regime,’ says the American public is increasingly at risk because of abysmal oversight. If action isn’t taken now, he warns, the number of serious incidents and fatalities will only increase. But what do you think?
Should doctors also be targeted for fraud?
- Yes (89%, 180 Votes)
- No (11%, 23 Votes)
Total Voters: 203
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Should Pharma Get Out Of China? You Decide · One Looking
[...] Howard Lindzon wrote an interesting post today onHere’s a quick excerpt In recent weeks, there has been nothing but bad news coming out of China. A Chinese facility that made the active ingredient in Baxter’s Heparin blood thinner remains a key suspect behind nearly 800 serious side effects and 19 deaths. A big state-owned Chinese drugmaker, Shanghai Hua Lian, that exports to dozens of countries, including the US, caused a scandal after nearly 200 Chinese cancer patients were paralyzed or otherwise hurt last year by contaminated leukemia drugs. The company supplies [...]
Matt
It’s bad enough that all the drugs pharmaceutical companies produce have side effects like sudden heart failure, death, psychosis, halucinations, and others, but to have those drugs produced in a country with few, if any, manufacturing standards and very little US oversight is asking for a disaster.
Scott
The cost-savings of a few dollars is not worth putting Americans lives at risk. The issue we’ve gotten ourselves into is that many of the suppliers for the raw ingredients have been put out of business because the cut-rate Chinese suppliers so we no longer have safe, domestic alternative suppliers for some of these key ingredients. Congress should impose a ban and let the drug companies scramble to find alternative, domestic suppliers. The drug business is largely responsible for this problem, and now, they need to find a solution, but they won’t do it voluntarily — it has to be forced on them.
Nathan
Banning a drug ingredient just because it is made in China is tantamount to discrimination. We should never ban any ingredient simply based on the soil on which it was produced. Bans should be based solely quality of product produced. In my mind the solution is to impose minimum regulatory oversight guidelines that all countries (including the US) must abide by and enforce. Any country not meeting those guidelines would be face a ban that would be gradually be lifted as it increases its oversight of drug manufacturing.
Gil Roth
Not to be pedantic, but the syntax of that last line — “If action isn’t taken now, he warns, the number of serious incidents and fatalities will only increase” — doesn’t work. I mean, is there a set of circumstances (outside of divine intervention) where the number of fatalities is going to DECREASE?
But, yeah, as a guy who runs a magazine about (later-stage) drug outsourcing, I’m afraid that China’s lack of oversight is going to cast a pall over the rest of that industry.
University Update - Stanford University - Should Pharma Get Out Of China? You Decide
[...] State University Should Pharma Get Out Of China? You Decide » This Summary is from an article posted at Pharmalot » News, Comment and Conversation on Friday, [...]
Jack2
Give me a break. You can’t just say no drugs (or APIs) from China.
First, it’s discrimination. Second, would you really feel that much more comfortable taking drugs made in another southeast asian country? A ban on China specifically wouldn’t move manufacturing back to the US. The only possibility, as Nathan said, would be to impose minimal regulatory standards on drug manufacturing, which could include China, and ban imports from countries that don’t meet those standards.
Also, any sudden ban though would do more harm than good by causing drug shortages.
PharmaFraud
Big Pharma companies, in the US and Europe, bury their ownership of manufacturing plants in China, via hundreds of subsidiaries and off-the-books joint ventures.
Our drug supply will never be safe, regardless of where the ingredients are manufactured, until Big Pharma and the FDA are held accountable for their corrupt business practices.
CMC guy
With all the pressure to provide cheap drugs do not think can avoid sourcing from China and India or other places as I doubt public and government have willingness to pay for reduced risks at higher costs from more developed countries. At the same time it is more the responsibility under GMP of the company who buys a starting material or API to assure quality and having good systems and relationships are key to establishing the controls rather than reliance on an overstretched FDA. Unexpected or unintentional contaimination can happen in the best of plants. Fraud or sabotage motivated by greed can also occur at any plant although lack China infrastructure may make easier.
I do not classify it as discrimination to buy something at price and quality chosen but a ban seems to be extreme and overly generalize for drugs. However bans may be required for situations where less control/more uncertainty such a mad cow.
Justice in Michigan
Nathan or others - I would also not be in favor of a ban on a country. The issue is whether FDA has the resources to cover relevant issues, understanding counterfeits are always extremely hard to pick up.
Assuming we were at that point, would you support “reimportation”? The FDA/industry argument has always been that the safety of even products from Canada are beyond their capacitiy to oversee.
What do you think?
Nathan
Justice,
I oppose reimportation, but that has nothing to do with manufacturing practice. I oppose it because I think that reimportation is the first step toward pharmaceutical price controls. Price controls would be devistating to this industry and devistating for pharma innovation. Maybe it’s inevitable, but I want to hold it back as long as we can…
Jack2
I personally don’t oppose reimportation from Canada, despite working for the pharm. industry. If it were my script, I’d feel much better about getting it filled at a Canadian pharmacy than some random internet pharmacy (where counterfeits abound). How can I deny that to other patients?
Plus, while I suspect reimportation would hurt industry profits some, I also suspect it would raise prices in Canada a bit as well. I’m also the guy who commented here about how I’m tired of Canadian’s benefiting from American subsidized industry research without paying their fair share for that research.
So, JIM, while I can see how the issues are connected (import the components and import the final product), I also think they’re two very different issues. Regardless, my personal views are consistently aligned - importation okay.
Even though as an American who works for the pharm industry I suppose my personal interests should oppose both ex-US manufacturing (to protect my job) and ex-US reimportation (to protect my companies profits). I don’t want to start discriminating against a whole country though, and I don’t want people to have to take crummy drugs with no active ingredient bought on the internet when they could buy them from Canada (plus I don’t care for the free-loading Canadian government - but that’s a tangent on top of this tangent).
Justice in Michigan
Interesting responses. As you both know, the industry and FDA have generally stressed the safety issue. But, yes, I never believed it, particularly since so many AIs are already made abroad and a good deal of what is “reimported” is literally that - made in USA.
Is is price controls versus free trade, then? A NAFTA-like issue, in which there are also winners and losers here and beyond here? How does one ethically decide who wins and who loses?
I don’t have good answers.
Dave
One major concern I have, other then I would be losing my job, is, what I call the Hugo Chavez Syndrome. What would happen if China decides to nationalize the drug industry there:All the Pharma companies get their sites and intellectual property taken over. Look at what happen to ExxonMobil. They took a 6B loss. Granted Exxon can afford (or go to court over it) but could Pfizer? I don’t think so.
Also, in a paranoid frame of mind, they could cut off supply of drugs like Tamiflu, to the US . Remember where Bird Flu started. Also remember the run on Tamiflu during the Bird Flu frenzy.
Jack2
You could say that about any industry. With the steel industry moving to China could the US fair well in a conventional war? While maintiaining domestic drug production could become a national security issue in an outbreak, I think importing large amounts of food (the US is still a net-exporter), or large amounts of fuel (the US is the number 1 or 2 importer) also exposes the country to risk - I would say more risk than overseas medication production.
Back to my other point about why we, as a global society, should/should not sustain differential global pricing for medications. I agree with it as far as poor countries go. I just don’t agree with it as far as Canada goes. If you’re pro-pharma then you can interpert the current situation as “Canadians need to pay more for their meds.” If you’re anti-pharma you can interpert it as “people in the USA get ripped off for their meds.” I think reimportation from Canada would reduce the price differential between the US and Canada by simultaneously raising prices in Canada and lowering them in the US.
It wouldn’t cause a dramatic enough shift to revolutinize things in either country, just a nudge. And it would probably increase the safety risk for US drugs slightly, but in my not-an-expert-opinion, that risk would not amount to a whole lot.
You can read a great article about differential pricing here. Hope the link works…
http://www.nature.com/nature/journal/v449/n7159/full/449176a.html
henry
China has the same attitude as pharmaceuticals to human rights and/or patient rights. It seems fitting that bigpharma would be attracted to such a country where human rights abuses are mandated by the government. They will fit in well there and can take advantage of chinese in their manufacturing sweat shops and abuse patients by testing drugs on them.
It is the same as mass production toys we are buying here is the US. But as with all items made in china we buy in the US because they are cheaper, will this apply to prescription drugs as well?
AV Block
Back in the mid-to-late 19th century, Europeans fretted over the lack of quality of American goods.
More recently, it is the Americans who are complaining over Chinese quality. Don’t worry, the China, like other N. Asia countries, will get it right. We are so anti-capitalist to our own drug companies that inevitably, non-US drug manufacturing companies, like other manufacturing companies, will be thriving while our own pharma and biotech companies languish. Incidentally, we’ll continue to outsource our intellectual capital overseas, since it doesn’t really pay (or it is too hard) for Americans to get PhDs in rigorous technical disciplines.
Former pharma Marketing Exec
Nathan,your comments about price controls being devastating for pharma innovation is absurd. As you will remember from our back and forth of yesterday, I can remember back to a time when the industry was less focused on pricing and profits. We were truly focused on providing effective solutions for major diseases. There was some real innovation that came from that era.
To JIM, as for the safety issues and “off-shore” manufacturing some of this is genuinely a smoke screen, but then again some of it is real. The situation is that we here did not do our due diligence. If we are going to partner with anyone it is up to us to ensure that we are capable of ensuring the consistency in the over all product. Failing to do so is our problem and we need to face the music on it.
As for re importation from Canada I am opposed to it as I believe it would erode Canada’s ability to continue to provide good healthcare - far better than we can deliver to our people here in the US. Furthermore why should any American benefit from the lower drug pricing in Canada if they are not willing to demand a better healthcare system in our own country?
Jack2 - interesting points and I will always remain on the side of “we Americans are getting ripped off”. Unfortunately we are ripping ourselves off! This is precisely why we need more governmental controls - we need someone to step in and protect us from ourselves.
Otherwise can anyone tell me when we step over the line and this becomes a case of genocide. If you are old and poor and you can’t afford drugs to sustain you then you die - too bad for you….Tell me, is this any different then denying treatment and medications to a person because they are of different color/race or religious faith. No it isn’t.
I am not quite sure how we in the pharma industry can help our nations sick, when we are so sick ourselves…
Nathan
Former pharma “marketing exec” says:
“your comments about price controls being devastating for pharma innovation is absurd. As you will remember from our back and forth of yesterday, I can remember back to a time when the industry was less focused on pricing and profits.”
I’m begining to think that you were a supervisor of 5 Tylenol sales reps. This hardly qualifies as being an “executive” and certainly doesn’t qualify you to be speaking with such seeming authority.
You are the first person I think I have ever heard say that price controls would be good for innovation. Maybe they would be good for society in the short term (bringing down the price of drugs), but simple logic defies your assertion that it would be good for innovation. We are already seeing massive layoffs in pharma R&D in order to maintain historical profit margins that Wall Street expects. What do you think price controls would do?
I’m absolutely sick of your classification of pharmaceuticals as somehow “more important” than other essentials of life such as electricity, food, water, oil and transportation. Yes, those essential services (including pharmaceuticals) should be (are are) heavily regulated. But they are still in the realm of private industry competing in a free market.
We don’t live in a socialist society. If somebody wants world-class health care, then they are going to have to pay for it. Are heating oil companies obligated to give heating oil to the poor? Are grocery stores obligated to give free food to poor? Do towns give free water/sewar to the poor? No, no and no. Yes, they give ASSISTANCE — but there are no freebies in our society.
You say:
“We were truly focused on providing effective solutions for major diseases. There was some real innovation that came from that era.”
It seems you have been out of the industry too long. There is still real innovation taking place and major diseases are slowly being beaten back all the time. The science is marching ever forward. But you wouldn’t know that since from what you have written I don’t believe you have ever set food in a pharma R&D laboratory.
Former pharma Marketing Exec
The lay offs in pharma are Pharma’s own fault and the fault of our outrageously greedy society. The suggestions I have made here in this forum would certainly help to improve the situation…
Nathan, are you aware that there are some cancer drugs that cost over $100,000 a year? This is way more than food, water and oil. Sorry if you think I have been thinking only about benign little drugs like cough syrup (which is probably what you are working on..eye for an eye..)
Don’t give me any garbage about how the price is justified by the innovation, I am a lot closer to the “innovation” than you think.
Again you bring up the idea that being able to provide for citizens is a socialist ideology and we need to be very afraid of it. This is blatant fear mongering. What do you hope to achieve with that kind of thinking?
I have spent many long hours in R&D and I know more of what I speak then I would ever share with you here. The difference between us is that you lack vision.
You can’t come up with any great American innovation from Pharma in the last five years can you? I didn’t think you could… But we do have lots of “me too” and minor improvements.
And for the record, I might not be out of the industry…
I have stated before and I state again, I am talking about the serious diseases (cancer, diabetes,ets). I have also stated that I work in International Marketing and I am very aware of how healthcare is delivered in other countries. In my opinion we, here in the US, are full of hot air. Other countries have us beat and take far better care of their citizens than, judging by your comments anyway, we could ever IMAGINE… And guess what? They are not socialist countries - hmm, I wonder how they managed that?
Worrying about Wall street? Yup, that is the problem with pharma…
CURE is not a bad four letter word…But Pharma seems to think it is. We don’t do enough in this area, we constantly look for something to exploit drug dependency. The patients live longer and buy more drug and we are virtually guaranteed sales of drug at artificially inflated prices - we don’t give a dam about the patient, they are just revenue units for us. As long as we don’t kill them or seriously harm them (which we frequently do, but this business does have risks involved - as we all know).
We are never going to agree Nathan - Agreed?
henry
International law? I am not a lawyer. The FDA does not have jurisdiction over manufacturing standards/laws in china. The company not the FDA has the obligation to oversee safety standards. The US can only regulate what arrives at our borders. They can inspect but not regulate. Is this true? What are pharmaceuticals going to do in China? I don’t know. China is a poor country they can’t afford our medications, I would think, they are not a socialist country unlike Candada!
I understand that Pfizer, if I am correct are expanding in Asia because they want to provide them with medications for cancers for example we don’t have in the western world, an unmet need in china, per pfizers CEO. (He did not mention manufacturing of drugs for importation, which McCain a republican supports!) This is fine if they can manage to do so above board and not violate ethical standards. I am not so optimistic though: GSK hiding data of suicides in children demonstates how the current system doesn’t work without a law i.e. $$fine and bad publicity. This issue is very complicated and in my opinion, needs to be looked at, as well as current pharmaceutical practices to make sure that we are doing the right thing. I being a pharmaceutical employee was devastated by the recent GSK paxil news. I find it so troubling that children lives were put at risk intentionally. But that’s life. Poor china.
Nathan
Marketing exec says:
“CURE is not a bad four letter word…But Pharma seems to think it is. We don’t do enough in this area, we constantly look for something to exploit drug dependency.”
Agreed. We will never agree. This statement alone demonstrates that you have no idea what you are talking about. I don’t know what pharma company you are associated with, but I’m can assure you that it isn’t mine. We work on cures. We are innovative. You are parading around as if you know what goes on in pharma R&D. You have no idea how foolish you are.
Nathan
“And for the record, I might not be out of the industry…”
It’s my assertion that you have never even been in the industry. Prove me otherwise. Give us some more details of your supposed vast array of experience that makes you qualified to pass such judgement on this industry.
ErnestR
Drugs are a lot like money. They are an idea backed by confidence. Take away the confidence and you undermine the drug (or the currency). China just doesn’t have the regulatory oversight or even the business ethics currently in place to be a trusted source of quality pharmaceuticals. They can’t even be trusted to make pet food or tooth paste. That may not always be the case but they need to put their house in order before I would trust any medications Made in China.
Should Pharma Get Out Of China? You Decide | Pharma Night Fever
[...] Pharma Giles wrote an interesting post today onHere’s a quick excerptAnd so last month, Michael Santoro, an associate professor of business ethics at Rutgers Business School, told us pharma should get out of China and Congress ought to impose an embargo on drugs made there. … Tags: Pharma, Night [...]
Former pharma Marketing Exec
Nathan,
You should tell us what company you work for, although I think I can take a guess.
You would do us all a service as we would completely avoid anything that comes from you…
I have been in the business a very long time and I am certainly not giving you any information about myself.
You are a prime example of what is wrong with pharma.
Thanks for sharing your thoughts and ideas with us all, it has certainly underscored what we already knew..
AA
Nathan,
Until every drug company has an assistance plan for people like me who can’t afford meds due to lack of health insurance, it is so wrong for you to oppose drug reimportation, especially when Canadian prices are 1/3 the cost of what you pay in the US for many drugs.
You keep advocating how wonderful psych med drugs like are. But you’re nowhere to be found when we’re declined health insurance because of our history of psych med use. And then you rub our nose in salt by taking positions that we should pay exhorbatant costs for drugs that we can barely afford. When we find a way in which we can afford the meds, you’re against that simply due to our own financial concerns.
Sorry Nathan, I don’t mean to start a flame war but your post rubbed me the wrong way and is so cruel even though I know from your previous postings, that wasn’t your intention.
AA
Bob Freeman
A few comments, which I admit are somewhat oversimplified:
Legal reimportation, or parallel trade, has been legal within the EU since the mid-80s. It is legal because of the EU’s IP laws which are based on the concept of international exhaustion of patents, a legal principle that is not part of US patent law. Therefore, to a great extent, illegal parallel trade is a patent issue. If pharma companies don’t oppose parallel trade into the US it potentially runs the risk of losing rights and also incurs legal liability associated with misbranded, adulterated and counterfeit drugs entering the US.
Parallel trade is not the bogeyman pharma presents it to be. European affiliates have learned to cope with economic losses, which at the industry level are large, by quietly working with parallel traders and attempting to use the existing law to control supply in low price countries. (again, this is a gross oversimplification). European countries’ pricing and reimbursement policies are set at the individual country level and will always have different prices although there has been some movement to a European average reference price.
Canadian imports into the US cannot lower prices here. Canada is simply too small to supply the US market and much of the trade remains foot traffic. The safety issue is related more to the lax enforcement, or lack thereof, of trans-shipments coming through Canada. This means you don’t know the country of origin of drugs supplied via the internet.
Finally: multi-national pharmas do quite well in price- and reimbursement-controlled markets because pharmas don’t have the bloated sales and marketing infrastructures they have in the US. You can make profits in Canada and elsewhere and they do. Price controls also mean that price competition from generics does not exist (another oversimplification) and, therefore, profits can be made far after patent expiry.
Bob Freeman
The other reality facing global pharma is that the US, The EU and Japan are mature markets. Emerging markets of Asia and Latin/South American offer the greates growth opportunties.
I would add that these are markets that we don’t understand: the criteria for decision-making are different, regulations are not transparent and unequally apllied to foreign firms, and their governments are notoriously corrupt. While the future is promising, pharma is still early in its collective learning curve.
Brian
Former pharma marketing exec
With all due respect: I’ve served with competent pharma marketing exec.. I know experienced former pharma marketing execs.. Visonary pharma marketing execs are friends of mine..Sir you’re no Former pharma Marketing Exec.
Drug discovery begins and ends with marketing. I put the blame for big pharma’s current woes at your creaking doorstep. You have taken otherwise beneficial products and used ketchup and burger king sales tactics to trivialize their value to the American public..
China is the world’s biggest market but in many ways it is a third world country. The Chinese are a very industrious people much in the same way we used to be. I look forward to working with them as they improve their drug discovery process..
Nathan
Former aspirin salesman,
I already told you my background, and I’ll even give it again: I am a PhD medicinal chemist at a top-ten company. I’ve been in the industry for 7 years at two companies. If you worked at a major pharma company you would know full-well why I don’t give you any more info than that. Telling you my employer would give the impression that somehow I am speaking for my company — I don’t. Only for myself and I can get fired for implying otherwise.
Now, on to your background. So far as I can tell from you writing, you have never managed a pharmaceutical research project and likely never even set foot in pharmaceutical lab. You’ve never even worked at a pharmaceutical manufacturing company with an R&D department, have you?
So far, you’ve claimed (without any evidence) that:
1) Price controls will increase innovation
2) Pharmaceutical companies seek only long term treatments, not cures.
3) Nothing innovative has come out of the industry within the last 5 years (you seem to have forgotten HPV and pneumococcal vaccines, new treatments for fybromyalgia and Alzheimer’s with more in late stage development, stem cell treatments entering clinical development, avian flu vaccines, Chantix, advances in gene therapy, and the list goes on. You wouldn’t know a medical innovation if it hit you in the face)
Go get a science degree and try to make a positive difference if you’d like. Stop your wining – you have no idea how a research laboratory functions and I would appreciate it if you stop misrepresenting what type of work and quality of work goes on in research laboratories.
Nathan
AA,
I hear you. Thanks for your comments.
For the record, I don’t believe that I’ve advocated “how wonderful psych med drugs are”. I’ve asserted that they are effective in some cases and aren’t the “toxins” that some claim that they are. But I have stated several times on this site that I think pharma companies have over-marketed them. (that’s hard to deny these days)
Bob Freeman
Nathan & Marketing Exec, I have a policy of not interjecting myself into debates but I offer a few observations:
1. When I joined the industry many companies were still “family”-owned industries and had a far different set of values as seen today. Not only did the very senior execs eat and take coffee breaks in the commissary there was a general concern not only about prices (and price increases) but also about the kinds of therapies pursued. As the industry transitioned into multi-nationals and leadership stopped listening to employees in favor of the McKinseys and Accentures of the world, we lost our sense of social orientation. I was with one company back in the mid-80s when a decision was made to pursue the development of a life-style drug, one that would require direct promotion to patients. This was a painful, agonizing decision because the resources required would take away from “cures” for serious conditions (with high medical need and commercial value as well.) R & D, Medical Affairs & Marketing people knew each other socially and not in the context of godawful matrix meeting.
While all products have to have marketing support, the excesses have to be controlled or the industry will find remedies it doesn’t want.
The pandering to Wall Street, the reliance on amoral (unethical in my view) consultants and a distorted sense of reality and accountability are largely responsible for the loss of faith by politicians and the public. It is deserved.
Althought this appears to be a non sequitur to the discussion, innovation is a relative term: Europe has an entirely different perception of value than Americans do. Regardless, innovation is a social good not a consumption good, which makes medical innovation somewhat like education, public transportation and other goods/services. This doesn’t mean the government has to, or should, regulate all aspects of the business, but it means the industry has to be a better corporate citizen that it is in the current environment.
Lisa Van S
Robert Freeman,
AMEN!!
AA
Nathan,
Fair enough about your position on psych meds.
But I am very tired of seeing people like you oppose drug reimportation acts when you’re not the ones who are paying the costs of meds when you don’t have health insurance.
To tie it to the topic, people opposing it were doing it on the flimsy ground of drug safety. Yeah, those Canadian pharmacies are really dangerous and unsafe.
All sarcasm aside how, how ironic is it that there is concern about drugs that had ingredients make in China. But you don’t hear a word from the drug reimportation opponents since the drugs end up being sold in the US.
AA
Lisa Van S
Nathan,
Psyche Drugs are Toxic in Children!!
Two Companies in 7 years,… is that something you really want brag about?
Nathan
AA,
You’re right — I oppose drug reimportation largely because of my own economic welfare (I want to stay employed). However, like Jack2 said in a previous post, I don’t believe that reimportation alone will address most of the concerns that its supporters think that it will. If we suddenly allow reimportation from Canada, then drug suppliers will simply limit shipments to Canada. This will force Canadians to stop re-selling drugs to other nations.
Drug reimportation might (slightly) bring down prices in the short term, but in the longer term I think Jack2 is correct: it will probably just raise prices elsewhere. When price drops don’t occur like reimportation supporters think that they should, then suddenly they are going to demand that the government legislate lower prices like the Canadian government does. That’s how reimportation leads to price controls.
Unless Wall Street suddenly becomes altruistic, pharmaceutical manufacturers will continue to provide hefty profit margins. (that’s what investors expect, and that’s the basis of the current stock prices) If sales shrink, then R&D will shink proportionally in order to continue the good profit margins. R&D accounts for ~30% of the cost of medication. If overall sales shrink by 30%, then R&D will also shrink by 30%. Believe me, I wish it were different. There just isn’t any economic way around it. (short of forcibly socializing drug companies)
Justice in Michigan
Of course, the scenario Nathan describes is just what happened - cos. cut supplies of drugs to Canada, and Canadians responded with understandable tightening of export. Call that what you will. I _think_ reimportation is only legal (in Canadian law) from pharmacies in some provinces at this point - could be wrong.
Former pharma Marketing Exec
Nathan,
Go back to your cough syrup…
You’ve made lots of guesses and assumptions about what I might do and who I am- but you are way off base. For someone who researches, this is a critical skill you are obviously lacking in.
Additionally you have made wrong assumptions, wrongly rephrased the questions and inaccurately summarized what I have stated. You seem to twist things around so that you can bring your point (the only one you think is worth listening to) to this discussion.
You refuse to admit that there are major problems with the way companies are run and the lack of trust we Nathan, WE who work in this industry have generated through our unethical practices. You have forgotten that I did state that some good things have come out of research and are genuinely helpful.
I’ll give you the HPV vaccines for now - my fingers are crossed that it works like it is supposed to…
The reference to stem cell is very good, and by the way, can I say, this is surely one area where our government must step up to the plate. Other countries are leaping ahead of us on this front. In between playing with your cough syrup formulations you might want to read ” Cell of Cells - The Global Race to Capture and CONTROL the Stem Cell” you might actually learn something…
Chantix (a newer improved Zyban?)
You should stick to science and may we all be spared if your company actually lets you out of your lab and lets you play in management.
You still seem to think that working with government would be like having to deal with a big bad bogey man?
I cannot share with you some of the top projects the government has involved themselves in that has yielded amazing results - it would give too much information about myself. Governments seem to want to push R&D and technology. I do not know why you do not see this. You keep calling it socialist thinking - it isn’t.
To Bob Freeman - you’ve got it right!
To JIM - This is exactly my understanding. In Canada, the more the provinces subsidize the cost of the drugs, the more they influence the price of the drug. Makes sense, since they are paying the tab..Ergo, they do not allow cross border shopping.
Another point: The Canadian Government did away with compulsory licensing but introduced the Pharmaceutical Marketing Pricing Review Board. This allows them to look at the price of any given drug in other markets and ensure that Canada pays a fair price. They probably give priority to drug prices in Europe as the health care systems are very similar. The other part of the agreement was that Pharma was supposed to invest more money in R&D in INNOVATIVE drugs, but that isn’t happening.
The other huge problem is Drug distributors. I am all for pharma’s making fair profit on their drugs. The gouging from Drug distributors is a big problem. Most patients think that the price they pay at the pharmacy is what goes back to the drug company - this isn’t true. Drug Distributors do have, to a certain extent, a strong hold over pharma’s and take way too much profit. This artificially increases the cost of the drugs. When it comes to some cancer drugs for instance, the final cost to the patient includes a 50% markup in some cases. Drug distributors shouldn’t be allowed to do this. They do nothing in the way of research and innovation. They take this just to cover logistics…
Nathan, you say that if pharma doesn’t stay profitable then cuts will happen to R&D - think about that! Don’t you think it is ludicrous. Lack of funds to R&D just continues the spiral down into the long dark pit and no hope of recovery.
But then again, if this is really what happens and you say it is - I rest my case, it underscores the problem in the industry. I am in Marketing and I say the slashing should happen in sales and marketing. When/if a product comes out of the lab and it does what it is really intended to do - trust me on this one - you don’t need marketing and sales.
Nathan, you’ve been doing nothing but name calling and hurling insults at me. Yet all along I have stated and re-stated what would/could be the right approach.
I say it again - step out of the box you’ve allowed yourself to get stuck in..
Nathan
Exec says:
“I cannot share with you some of the top projects the government has involved themselves in that has yielded amazing results - it would give too much information about myself. Governments seem to want to push R&D and technology. I do not know why you do not see this. You keep calling it socialist thinking - it isn’t.”
The NIH and the NSF do fine research. I haven’t seen a single drug come out the work… but the research is just fine. I’m saying that the government shouldn’t be in the buisness of telling companies how to spend their research dollars. There are various ways that the government can influence the direction of private research - I’ve already suggested a few ways in previous posts.
Nathan
Marketing exec,
Ok — I’ll cool it with the insults. I’m sorry. Your comments about pharma looking for chronic treatments rather than cures really pissed me off. That just isn’t true at all. Here’s a couple comments about that assertion:
1) “Cures” often mean eradication of the disease, which generally is only possible with diseases linked to viruses or bacteria.
2) Non-infectious diseases generally have their origins in either genetics or injury. True “cures” can only come through gene therapy or stem cell therapy. This is being pursued, but typically through biotech rather than big pharma.
3) In more recent history, Pharma is turning to something even more important than cures: Prevention. Think vaccines or cholesterol modification.
We aren’t perfect — the system isn’t perfect. You are correct about that. But it isn’t as dire or evil as you imply.
Bob Freeman
Exec, it isn’t the government’s job to do drug development–it’s to transfer the technology to the private sector. The skill set, as you know, for drug development is different from basic research and NIH has no expertise in this area. Yes, they can do clinical trials that exceed any one company’s resources, but that’s another topic yet not one done for commercial purposes.
Justice, when I read one of these reports I neither believe or disbelieve the story. It’s too complex to be described in the limits of a newspaper.
As an ex-industry person and one who teaches pharmacoepidemiology, I know some of the difficulties in sifting through data trying to find association and causality. There’s no denominator in spontaneous AE reporting and it takes time to do case-series analysis and conduct more valid study designs. I should think that the drug safety people would want to be on firm ground before making a final determination. (I’ve also found “real” epidemiologists (I’m not one) to be very demanding re the quality of both the data and the analysis and they will not be rushed. So, I have no empiric basis to evaluate the article other than to do follow-up work.
Also, I would like to know when the FDA knew what. It’s not just the company who reports AEs to the FDA: it’s physicians, hospitals, pharmacists, etc. This is an issue that needs further reporting.
Former pharma Marketing Exec
Nathan,
Apology accepted. However, I am sticking by what I said about the inertia in finding cures. This might not be the case in your company - fine. It may not apply to the industry in general. I wish I could say more and I apologize for being so secretive.
I do not disagree with what you are saying about the difficulty in finding cures. I will come back to this issue later.
The entire pharma industry isn’t always entirely evil. But our collective track record kind of stinks. I am sure you would have to admit we’d be hard pressed to find one pharma giant that hasn’t been caught doing something they shouldn’t have done. This makes it difficult to defend ourselves.
Only recently we’ headed down the path of prevention - vaccines - this is a step in the right direction.
Bob Freeman: The government does back research that appears very promising that is happening in public institutions. If the government is notified early enough - sorry I am not going to site instances that would be too much info at this time. My point is there needs to be more of this collaboration.
I also agree with your comments about AE’s. There are instances when physicians do not report them, particularly if they are feeling loyal to the company. Sounds ridiculous - I agree, but I am aware of two cases. If I am aware of two cases, you can believe there are more.
Nathan, it isn’t just the pharma that is bad, we’ve done a good job of undermining our physicians. There are some pretty famous cases that we are all aware of.
I cannot and will not change my position, Government and industry need to better align themselves. Industry cannot do the job of the government - protect and defend the people and government cannot do the job of industry - generate profit. Government can do a lot to stimulate the economy and we in pharma need them very much at this time. But hopefully we can hold out a little longer and wait until the Democrats get back in…
Justice in Michigan
Sorry to interrupt, but I’m hoping some of the pharma folks here will take a crack at the question I raised on the Zyprexa thread. You are the folks whose views I am most interested in understanding (also understanding they are certain to be various).
Sam Schiffman
President Bush made it illegal for seniors to get cheaper American made
drugs from Canada. Why can corporate American import poorly inspected
raw drugs from China and the rest of the world?
The second major problem is direct to consumer ads at a cost of over
$4.8 Billion a year. Sales reps who “parrot” PHARMA” data from studies
designed by the company and are written to show only positive outcomes.