In a commentary in STAT and a scientific report in SSM-Population Health, Adam Dean and Simeon Kimmel explore the connections between the opioid epidemic and free trade agreements. They argue that the trade crisis and the opioid crisis feed on each other. Economists have explained how free trade lowers wages and employment levels for less-educated manufacturing workers in the U.S. Relatively good jobs with high wages and benefits are disappearing, while factory closings damage the social fabric of their surrounding communities.Continue reading Beyond the Sacklers: Free-trade policies contributed to the opioid epidemic
The opioid crisis has been called the worst drug epidemic in American history, writes Nino Monea in the Urban Law Journal. It has already killed thousands and scarred millions more. Over the last few years, there has been a rise in affirmative litigation by municipalities, proactive suits that seek to vindicate some public interest, not merely the municipality’s corporate interests. This article examines the recent wave of lawsuits by cities and counties against the opioid industry.
Overt the last several years, the pharmaceutical industry has been accused of inappropriately and misleadingly advertising prescription drugs to consumers, charging exorbitant prices, paying competitors not to release less expensive generic drugs, and negotiating trade agreements that benefit the industry at the expense of the public. As public concern about these practices grows and as the 2020 election gets closer, Big Pharma is getting closer scrutiny.
A few recent actions illustrate this new climate. Earlier this month, reports The New York Times, the Trump administration announced that for the first time will, it will require pharmaceutical companies to include the price of prescription drugs in television advertisements if the cost exceeds $35 per month. The move is the most visible action the administration has taken so far to address the rising cost of prescription drugs. It has been a key issue for American voters and one that both Republicans and Democrats have vowed to address.
In Congress, Reps. Judy Chu (CA-27) and Devin Nunes (CA-22) last month introduced the Sunshine for Samples Act of 2019. This bill would amend the Sunshine Act, which requires pharma companies to report payments to doctors, to require companies that manufacture drugs, devices, biologics, or medical supplies to publicly make available the number and value of free drug samples given to health care providers and charities each year. The bill closes a loophole in the Sunshine Act and does not prevent drug and device manufacturers from continuing to provide free samples, nor does it add any new burdens to providers under the Open Payment Programs.
Both the Federal Trade Commission and Congress have also acted to oppose “pay for delay” a costly legal tactic that more and more branded drug manufacturers have been using to stifle competition from lower-cost generic medicines. These drug makers have been able to sidestep competition by offering patent settlements that pay generic companies not to bring lower-cost alternatives to market. Last month , Congressman Jerrold Nadler introduced H. R. 2375 , the Preserve Access to Affordable Generics and Biosimilars Act. The bill proposes to prohibit prescription drug companies from compensating other prescription drug companies to delay the entry of a generic drug, biosimilar biological product, or interchangeable biological product into the market.
These recent actions suggest that the 2020 election will provide public health professionals and advocates with opportunities to educate the American people and elected officials about the practices of the pharmaceutical industry and to counteract pharma’s extensive spending to influence Congress.
In another story, The Washington Post writes that facing rejection from three major art museums, the philanthropic trust of the Sackler family, which built its wealth from Purdue’s sale of opioids, announced that it would stop making donations. “I remain fully committed to all the causes the Sackler Trust supports, but at this moment it is the better course for the trust to halt all new giving until we can be confident that it will not be a distraction for institutions that are applying for grants,” Theresa Sackler, chairwoman of the trust, said in a statement on its website. The decision by many nonprofits to stop accepting Sackler donations may contribute to a de-normalization of the marketing practices of big pharmaceutical companies, a change that could set the stage for stronger public health regulation of these practices.
We have seen a sharp increase in cancer drug prices in recent years, far exceeding the rates of inflation, writes Bishal Gyawaliin a chapter in a new book Cancer and Society. This increasing cost of cancer drugs has many adverse consequences not only for the economy of the country but also in clinical outcomes of cancer patients, a phenomenon referred to as “financial toxicity,” Indeed, the increasing cost of cancer drugs is no longer just a policy issue; it is also a clinical issue with clinical consequences such as increased risk of mortality, poor quality of life, and lack of adherence to medications among others. The author explores the causes and consequences of high cancer drug prices in detail and explores different strategies that have been proposed to control these costs.
Gyawali B. Causes, Consequences, and Control of High Cancer Drug Prices. In Cancer and Society 2019 (pp. 39-57). Springer, Cham.
“What is an ethically responsible relationships between obstetrician-gynecologists(ob-gyns) and the pharmaceutical and medical device industries”, asks Lewis Wall in an editorial in Obstetrics & Gynecology? He notes the inherent conflicts between the worldview of the pharmaceutical-medical device industry, where pursuit of profit overrides all other considerations, and the overriding obligation of physicians to put the health interests of their patients first. When the trust that obligation engenders is lost, he writes “medical practice breaks down.”
Industry Payments to Obstetricians and Gynecologists Under the Sunshine Act
Another article in Obstetrics & Gynecology examines industry payments to ob-gyns. To evaluate financial relationships between obstetrician–gynecologists (ob-gyns) and industry, including the prevalence, magnitude, and the nature of payments, the authors of this report conducted a cross-sectional study using a list of industry contributions to U.S. obstetricians and gynecologists obtained through the Centers for Medicare and Medicaid Services Open Payments Database from August 1, 2013, to December 31, 2015. They concluded that obstetricians and gynecologists receive a substantial amount of payments from industry. Most of these payments were for honoraria, faculty compensation, or consulting and totaled less than $400 per health care provider. Although this total amount is less than typically received by surgical providers, the median payment value for obstetrics and gynecology subspecialists surpasses the median payment to orthopedic surgeons, the highest compensated specialty group in total. These financial relationships warrant further exploration with future research.
Robust competition usually keeps the price of generic drugs well below that of brand-name drugs. When there is little or no competition, however, generic-drug manufacturers can substantially increase prices, and drug shortages may occur. Such market failures can compromise care and negatively affect patients, health care providers, government insurance programs, and private health plans. We believe that market-based solutions are an important alternative approach to stimulating competition in generic-drug markets. One such solution is to establish a nonprofit generic-drug manufacturer with the explicit mission of producing affordable versions of essential drugs and ensuring a stable supply of such products. A consortium of hospitals and health plans, including Intermountain Healthcare, Trinity Health, SSM Health, and Ascension, in collaboration with the Department of Veterans Affairs and philanthropists, is following this approach and developing a nonprofit generic-drug manufacturer code-named Project Rx. Citation: Liljenquist D, Bai G, Anderson GF. Addressing Generic-Drug Market Failures -The Case for Establishing a Nonprofit Manufacturer. N Engl J Med. 2018;378 (20):1857-1859.
Pharmaceutical Industry Financial Penalties, 1991-2017. Credit and source
A new report from Public Citizen concludes that the number and size of federal and state settlements against the pharmaceutical industry remained low in 2016 and 2017, with federal criminal penalties nearly disappearing. Financial penalties continued to pale in comparison to company profits, with the $38.6 billion in penalties from 1991 through 2017 amounting to only 5% of the $711 billion in net profits made by the 11 largest global drug companies during just 10 of those 27 years (2003-2012). To our knowledge, a parent company has never been excluded from participation in Medicare and Medicaid for illegal activities, which endanger the public health and deplete taxpayer-funded programs. Criminal prosecutions of executives leading companies engaged in these illegal activities have been extremely rare. Much larger penalties and successful prosecutions of company executives that oversee systemic fraud, including jail sentences if appropriate, are necessary to deter future unlawful behavior. Otherwise, the illegal but profitable activities will continue to be part of companies’ business model.
Reuters reports that U.S. Food and Drug Administration chief, Scott Gottlieb, criticized pharmacy benefit managers, health insurers and drug makers for “Kabuki drug-pricing constructs” that profit the industry at the expense of consumers. The comments, made at a conference organized by a leading U.S. health insurer lobbying group, stoked speculation over what steps the administration of U.S. President Donald Trump may take to rein in lofty prescription drug costs. “Patients shouldn’t face exorbitant out-of-pocket costs, and pay money where the primary purpose is to help subsidize rebates paid to a long list of supply chain intermediaries,” Gottlieb said at the meeting of America’s Health Insurance Plans (AHIP). “Sick people aren’t supposed to be subsidizing the healthy.”
As journalistic and legislative scrutiny of the role of the pharmaceutical industry in the opioid epidemic continues, several new reports focus on the potential of litigation to curb Big Pharma abuses.
In The New England Journal of Medicine, Rebecca Haffajee and Michelle Mello, two public health lawyers, examine drug companies’ liability for the opioid epidemic. They describe five legal rationales for litigation against opioid makers and distributors that federal and state government agencies have used:
- Blaming the industry for unreasonably interfering with public health by oversaturating the market with drugs and failing to guard against misuse and diversion,
- Charging the industry with deceptive marketing that makes false claims about effectiveness and addictiveness,
- Accusing the industry for lax monitoring of suspicious opioid orders, a potential violation of the federal Controlled Substance Act,
- Asserting that the industry continued to promote opioid use despite mounting evidence lining the product to adverse health outcomes,
- Alleging that the industry accrued profits at the government’s expense through unfair business practices.
The authors outline some of the challenges facing litigation against opioid manufacturers but conclude that “litigation could help alleviate the opioid epidemic by changing industry practices and building public awareness.”
In an Oklahoma lawsuit recently described in The New York Times, a lawyer is using the Cherokee Nation tribal court to sue Walmart, Walgreens and CVS Health, as well as McKesson and other major drug distributors, for violating federal drug monitoring laws(reason 3 above) and enabling prescription opioids to flood into the Cherokee nation. “I believe these companies target populations” Todd Hembree, the Cherokee Nation attorney general, told The New York Times. “They know Native Americans have higher rates of addiction. So when they direct their product here, they shouldn’t be surprised to find themselves in a Cherokee court.”
The Washington Post and 60 Minutes investigated the failure of the U.S. Department of Justice to follow the recommendation of a Drug Enforcement Agency task force working across 11 states to revoke registrations to distribute controlled substances at some of the 30 drug warehouses of The McKesson Corporation, the nation’s largest drug company. The DEA team wanted to fine the company more than $1 billion and bring the first criminal case against a drug distribution company. Instead, reports The Post, “top attorneys at the DEA and the Justice Department struck a deal earlier this year with the corporation and its powerful lawyers, an agreement that was far more lenient than the field division wanted…. Although the agents and investigators said they had plenty of evidence and wanted criminal charges, they were unable to convince the U.S. attorney in Denver that they had enough to bring a case.”
Note to Corporations and Health Watch readers: Our next post will be on January 3,2018. Happy New Year!