Drug Industry Must Change Its Ways To Improve Its Image

Posted December 3, 2004 at 4:35pm

Instead of spending hundreds of millions of dollars on ads showing men grinning and leaping for joy as a side effect of Viagra, or telling people to ask their doctors about little pills without any hint of what disease they’re intended for, the U.S. pharmaceutical industry needs to start selling itself.

[IMGCAP(1)] It needs to remind Americans that, unlike the tobacco and gun industries, it is producing life-saving products, not lethal ones. Beyond PR, though, drugmakers need to take action to lower costs — and to convince the public and Congress that they are not putting profits ahead of the nation’s health.

Polls show that public attitudes toward drug companies have cratered and, despite the fact that Republicans gained strength in the last election, chances are greater than ever that Congress will pass a law permitting mass importation of U.S. drugs from abroad.

One indication of trouble: USA Today reported last week that Republican Billy Tauzin III, a candidate for his father’s Congressional seat in Louisiana, favored importation.

Tauzin’s father, Rep. Billy Tauzin (R), former chairman of the House Energy and Commerce Committee, is widely expected to be the new president of the Pharmaceutical Research and Manufacturers Association.

In other words, political pressures are such that the top-lobbyist-in-waiting for the brand-name drug industry can’t convince his own son to oppose the industry’s top threat.

President Bush indicated in a presidential debate with Sen. John Kerry (D-Mass.) that he might support importation if it can be done safely. USA Today quoted Senate Finance Chairman Chuck Grassley (R-Iowa) as flatly predicting that importation would pass.

The administration is conducting a new study, due out this week, on whether importation can be done safely. The report’s conclusions are said to depend as much on political judgments as medical ones.

In reality, despite overwhelming support in polls, importation is a terrible idea. Drug costs are lower in other countries because they impose price controls, so importation amounts to imposing price controls in the United States.

Foreign countries contribute little or nothing to the huge costs of researching new drugs — estimated to be $800 million per product — and they produce few medical breakthroughs. Price controls would slow down medical progress here, too.

And Canada, the first country of choice for importation, can’t handle a major upsurge in demand from the United States. Its drug market is only 10 percent the size of ours, so prices there would skyrocket if millions of Americans started buying. Canada’s health minister has said Canada doesn’t want to be America’s drugstore.

So, if mass imports are to be permitted, they would have to cover Europe and Latin America as sources. The U.S. Food and Drug Administration conceivably could monitor warehouses in a few nations, but the cost of doing so all over the world would be prohibitive.

Adulterated and fake products — or poisons planted by terrorists — would inevitably find their way into the United States.

Regardless of logic or danger, however, there’s a tidal wave of popular support for drug importation, driven partly by high U.S. drug prices and falling respect for the drug industry.

A Harris poll last year showed that only 13 percent of respondents said that drug companies were “generally honest and trustworthy.”

The poll showed that 57 percent considered drug prices “unreasonably high” — a view bolstered when The New York Times quoted the one-time chairman of Merck, Roy Vagelos, as saying that prices were “exorbitant.”

The industry’s reputation is taking a new hit from the current Vioxx scandal, in which Merck and the FDA are accused of ignoring evidence that the arthritis pain pill caused heart attacks, allegedly resulting in 55,000 deaths.

The revelations about Vioxx have led to other articles indicating that the FDA and academic researchers are unduly influenced by the drug industry. Indeed, it’s hard to remember the industry’s last favorable story.

What to do? Part of the answer is for the industry to tell its own story better, with ads modeled on those that feature champion cyclist Lance Armstrong affirming that he would not be alive were it not for cancer drugs.

Millions of Americans have been saved from chronic heart disease, diabetes and depression by the products of drug companies. Most Americans take that for granted and have no idea what it costs to produce a new drug.

Various drug companies have mounted deep-discount programs to make their products available more cheaply to low-income patients, but the public doesn’t know about it. An industry-wide program is supposed to be launched next year. It can’t come too soon.

Moreover, journalist Alan Murray, writing in The Wall Street Journal last week, advised the industry to stop saying “No” to new ideas — such as a 12-state registry that compares the effectiveness of various drugs. The industry should be helping patients compare products, not thwarting the process.

The industry also needs to be more open about how it makes its money. Are marketing costs hidden in its claimed investments in research? If so, that practice ought to stop.

Tauzin, if he takes the reins of PhRMA next year, has a big job ahead of him: He’s got to convince industry CEOs to settle for somewhat lower profit margins, in exchange for making what Murray rightly called “a national treasure” a respected industry once again.