PriceWaterhouseCoopers (PWC) released one of their periodic surveys of perceptions of the pharmaceutical industry, titled “Recapturing the Vision: Restoring Trust in the Pharmaceutical Industry by Translating Expectations into Actions.” The press release reports a number of interesting findings. Perhaps one of the most interesting, however, is this one:
94 percent of consumers and 81 percent of industry stakeholders said that drug companies are too aggressive in promoting unapproved uses of their product. Fewer than half (47 percent) of pharmaceutical company executives agreed.
It’s interesting to note that PWC chooses to characterize this fact in this way — it is true that 47% is fewer than half. It also can be characterized as “nearly half,” as I’ve done above. Isn’t it notable that “almost half” (yet another way to characterize 47%) of pharmaceutical executives think that their industry is too aggressive in promoting offlabel uses? Promoting a prescription drug for a use that is not approved by the FDA (so-called offlabel uses) is illegal, and such illegal offlabel promotion campaigns have gotten drug companies in significant hot water in recent years, resulting in criminal and civil settlements of hundreds of millions of dollars (e.g. $430 million for Neurontin, $704 million for Serostim, etc.)
If almost half of pharmaceutical execs think the industry is too aggressively promoting offlabel uses, it’s very safe to say that the industry is in fact being too aggressive. These executives are perhaps the ones most likely to cast the marketing activities in a positive light, and to downplay or underestimate the prevalence of illegal or improper marketing. So what do we make of the fact that 47% feel this way?
Other findings of the survey that are worthy of comment:
Three out of four (74 percent) consumers underestimate the average financial investment required to research and develop a new drug by more than 50 percent.
[and later in the release] Almost nine out of ten (86 percent) consumers underestimated the cost of bringing a new drug to market. Independent studies place the cost of developing a single marketed pharmaceutical product in excess of $800 million.
This “finding” assumes that the supposed $800 million cost of developing a drug is correct. Author Merrill Goozner dispelled this myth quite handily in his book, The $800 Million Pill: The Truth Behind the Cost of New Drugs. For instance, a good chunk of this $800 Million estimate represents not a true cost of bringing a drug to market, such as clinical trials, but rather the “opportunity cost” of the money invested in doing so. The “opportunity cost” represents what the drug company would have earned if they hadn’t decided to develop the drug, but had instead, for instance, invested that same money in the stock market. There are other components of this $800M figure that are arguably inflated.
So the public may not be that far off in its assessment of the costs of developing a new drug.
Consumers are split between believing that pharmaceutical companies consider important unmet medical needs when deciding to develop a new drug (55 percent) instead of choosing to develop “me-too” and “lifestyle” drugs with the greatest sales potential (45 percent). This compares to 71 percent of industry stakeholders and 91 percent of pharmaceutical executives, respectively, who say health needs are a top priority for pharmaceutical companies.
In this area, it would appear that perhaps both the public and the industry are not accurately perceiving the industry’s priorities. We can assume that the drugs that the industry chooses to seek FDA approval for reflect the strength of their consideration of important unmet medical needs. One need only look at FDA drug approvals in the past ten years to see that the majority of new drugs are in fact “me-too” and “lifestyle” drugs.
62 percent of stakeholders agreed that drug companies often manipulate or suppress negative clinical trial results to maximize sales. Four out of five pharmaceutical executives disagreed.
I wonder why 62% of stakeholders (including physicians, health plans and others) think this? Perhaps the recent suppression of negative clinical trial results (e.g. Vioxx, Paxil, Avandia) has something to do with it? The only surprising thing here is that only 62% believe this. Also conspicuously absent is what percentage of consumers feel this way. It makes one wonder if the percentage of consumers was so high that it was deliberately omitted. There’s no link to the full results from the press release, so I guess we’ll never know.
More than seven in 10 stakeholders (73 percent) agreed that drug companies spend too much money and effort attempting to prevent generic drugs from competing with their branded products. Consumers strongly agreed that drug companies should be working with generic drug manufacturers to make generics available upon expiration of their branded drug’s patent.
The best thing that drug companies could do to “work with” generic drug manufacturers to make generics available is to get out of their way — to stop filing frivolous patent infringement lawsuits and bogus FDA “citizen petitions,” to stop introducing fake “authorized generics” to try to undermine the first generic on the market, to stop introducing “successor” drugs (e.g. Nexium, Clarinex) that offer no advantage over their now-generic predecessors (Prilosec, Claritin).
[O]nly 10 percent of stakeholders and consumers think that direct-to-consumer advertising provides complete and useful information, compared with 40 percent of industry executives. Furthermore, nearly 94 percent of stakeholders agreed that drug companies spend too much money on drug promotion overall, including direct-to-consumer advertising as well as physician education and overall sales force initiatives. Surprisingly, nearly three-quarters of industry executives agreed.
Another notable finding — if nearly three-quarters of industry executives think their industry spends too much on promotion, then why don’t they do something to reduce it? These surveyed executives are not low-level employees in their companies — they’re “executives!” By definition, they’re in positions of leadership. We need more of these executives to stand up and challenge the convential wisdom within their companies and their industry. People within the industry need to shout that underneath all those drug ads and samples, the Pharma Emperor has no clothes.