Pharmacetuical Companies

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I posted this in an earlier thread:

Big pharma makes more paying to keep generics off the market


News of the practice has circled for some time, but now it is hitting the mainstream. Apparently pharmaceutical companies have figured out that they can make more money by paying the makers of generic drugs to withold their products. The pharmaceutical companies are paying the generic companies more than they are estimated to make with the generics, which ends up being less than the money that the patent-holders are estimated to lose if the generics hit the market.


Good for both companies. Bad for consumers.

http://www.ftc.gov/opa/2007/01/leibowitztestimony.htm

To illustrate this problem, the testimony cited an FTC study released today containing the staff’s analysis of a “disturbing new trend” in drug settlements filed during the fiscal year ending in September 2006. According to the study – the third annual report the FTC has issued on this subject – half of all patent settlements in FY 2006 (14 of 28) involved compensation to the generic patent challenger and an agreement by the generic firm to refrain from launching its product for some time.





http://www.law.com/jsp/article.jsp?id=1169114544083

http://leahy.senate.gov/press/200211/111902.html

Senate Passes Leahy Bill
Targeting Sweetheart Deals
That Delay Low-Cost Generic Drugs

WASHINGTON (Nov. 19) – A bill authored by Sen. Patrick Leahy aimed at eliminating the secret deals between big pharmaceutical firms and generic drug makers that keep affordable prescription drugs off the market passed the Senate Monday night.

Leahy’s Drug Competition Act (S. 754) requires brand-name and generic companies to report their deals to the Federal Trade Commission (FTC) and the Justice Department’s Antitrust Division so that these antitrust enforcement agencies can promptly investigate any aspects of the deals that raise competitive concerns.

“Consumers pay the price when drug makers collude to stifle competition and drive up the cost of prescription drugs,” said Leahy, who chairs the Senate Judiciary Committee, which oversees the Justice Department and its antitrust division. “Our bill discourages these sweetheart deals by ensuring that antitrust authorities can take quick and decisive action against these companies.”

Big pharmaceutical firms have become major players in the legislative process, and the bill has been held hostage by anonymous Republican holds for more than a year after it was unanimously approved by the Judiciary Committee.

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As someone who works for a pharm company, I feel like I need to chime in here.


The high costs of drugs aren't because of marketing, but because of R&D costs. Most people don't realize that patents on drugs don't start when a drug get approved, patents on drugs start way way further back, at the very beginning. Companies start patents on general molecular structures, from there it might take another 4-5 years just to find a drug candidate. Next, comes all the clinical trials which might last another 4-5 years. After that the FDA still needs to review all the data and make a decision which could take another 4-5 years. Thus a drug company a lot of times only has about 5-6 years to make all the hundreds of millions of dollars (even billions) it spent on R&D and on top of that make a profit before the patent runs out. Do you know how many drugs the FDA approved last year? Only 11.

How much R&D goes into a drug? On average it takes 240 FTE's (full time employment years) JUST TO FIND A DRUG CANDIDATE (it still needs to go through all the clinical trials and the FDA). That's right it takes a team of 120 people working non-stop fulltime for 2 years on a single project just to come up with a candidate for a potential drug. And as you probably guessed right, 99.9% of companies don't have 120 scientists working on the same project, but more like anywhere from 10-30 scientists.


so what if drug companies advertise? how many billions of dollars per year do car companies, shoe companies, electronic manufacturers etc. spend per year on advertising? if they didn't advertise, the the prices of those good would be cheaper too.

drug prices are rediculous because of the amount of R&D not because of advertising

:laugh:

FDA only approved 11 drugs last year? Maybe its because drug companies rather develop "me-too" drugs and advertise their existing products instead of coming up with new ones.
 
:laugh:

FDA only approved 11 drugs last year? Maybe its because drug companies rather develop "me-too" drugs and advertise their existing products instead of coming up with new ones.

Don't you think the "me too" drugs are important in a free market? After all, If you think Nexium is expensive now, think of what it would cost without any competition from other PPI's.
 
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There is a HUGE economics aspect to this entire debate that 1) extends past what the vast majority of physicians would take the time to understand and 2) extends past the US alone and to other world markets. My theory is if you have a problem with the way pharmaceutical companies are operating, go forth and start your own and see where you get. It's not easy to operate a giant corporation especially in a business where your current growth is majorly dependent on innovations. And note that this is regardless of whether most of the money goes into R&D or advertising. The bottom line is that 1) this company needs to make drugs to sell, 2) this company needs to sell these drugs, and 3) this company has a responsibility to its shareholders and employees to maintain such growth so that they may continue to have jobs and prosper. You may not realize this but there is a huge partnership that occurs between public research and private industry. Do you really think that the research that is done by some public dude using a government grant magically ends up as a patent with a specific pharmaceutical company? There are deals that are made, sales that are coordinated, support that is granted, etc. I dare say that pharmaceutical companies have a responsibility to advertise their products. Either that, or we physicians should be forced to go through some amount of detail about the choice of every drug we use over other similar drugs or regimens that are similarly available on healthcare formularies at similar costs to the patient. Otherwise, aren't we being irresponsible just automatically giving our patients Protonix all the time when we don't know if in that particular patient's case the "other drug" may have been just as good, better, or worse?
 
There is a HUGE economics aspect to this entire debate that 1) extends past what the vast majority of physicians would take the time to understand and 2) extends past the US alone and to other world markets. My theory is if you have a problem with the way pharmaceutical companies are operating, go forth and start your own and see where you get. It's not easy to operate a giant corporation especially in a business where your current growth is majorly dependent on innovations. And note that this is regardless of whether most of the money goes into R&D or advertising. The bottom line is that 1) this company needs to make drugs to sell, 2) this company needs to sell these drugs, and 3) this company has a responsibility to its shareholders and employees to maintain such growth so that they may continue to have jobs and prosper. You may not realize this but there is a huge partnership that occurs between public research and private industry. Do you really think that the research that is done by some public dude using a government grant magically ends up as a patent with a specific pharmaceutical company? There are deals that are made, sales that are coordinated, support that is granted, etc. I dare say that pharmaceutical companies have a responsibility to advertise their products. Either that, or we physicians should be forced to go through some amount of detail about the choice of every drug we use over other similar drugs or regimens that are similarly available on healthcare formularies at similar costs to the patient. Otherwise, aren't we being irresponsible just automatically giving our patients Protonix all the time when we don't know if in that particular patient's case the "other drug" may have been just as good, better, or worse?

I've stayed out of this debate because most of what's been written here are just numbers taken out of context.

But - your point is absolutely correct! This is a huge economic issue which is a global one & one which most folks don't know much about. We might get offended because of marketing on TV - but those are often life-style drugs which are soon to come to the otc market or drugs marketed directly to patients because studies have shown they've not been used enough in a particular pt population which could benefit (ie Plavix).

Are you even aware that many generic drug houses are actually owned by large pharmaceutical companies? Pfizer owns Greenstone, Schering owns Warrick, Novartis owns Sandoz. Additionally, brand companies enter into distribution agreements for authorized generics, often to settle patent disputes due to premature entry. Thats why it doesn't matter if you order Paxil or paroxetine - it all comes from the same place. The whole pricing structure of drugs is tremendously complicated & involves changing from the average wholesale price to the average manufacturers price all the while using spread pricing to get the best benefit possible. Then throw in the PBM's - some of which are drug company owned (Merck-Medco) - now you have huge economic complications.

The complications of whats involved in bringing a drug to market - when 9 out of 10 fail bring huge costs & little involves marketing. Most of it is R&D, drug trials & compliance issues within countries it is being studied in. Currently there are more than 3000 chemicals or biologicals at some point in their NDA in the US only. In 2006 - 18 significant new drugs were approved by the FDA, 9 significant new biologicals were approved, 24 significant new dosage forms were approved & 1 approved drug was withdrawn after marketing.

The projected pharmaceutical sales in the US for new drug entities is 321 billion dollars which lags significantly behind the $800 million-$1 billion dollars it is estimated to actually bring a completely new entity to market.

Fortunately, the costs & reimbursements are not all borne by the US since drug development is world wide. That is why, although the lunches, pens & pads seem to be significant to your world - it is very, very small when it comes to what these companies are actually spending worldwide to not just bring this drug to the point of approval, but to go thru the approval process of multiple countries - each with its own study requirements, labeling requirements, distribution requirements & post-marketing survelliance requirements.

That $1 pen or $3 sandwich or even the $50 dinner is very, very small change. One small error or glitch & I can take thousands of dollars of a drug off my shelf due to a recall which would make your "perks" seem miniscule - and I'm just one pharmacy!

As a prescriber - set your own standards. If you don't want their perks - don't take them. If you don't want their samples - don't take them. If you don't want their study reprints don't take them. Get your own information & make your own judgements. But...if you do take their perks, samples or reprints - all of us expect you to indeed make your own judgement since that is how you were trained - to use objective data.

For the poor individual whose physician would not consider changing to a less expensive medication - you might want to look for another physician. Recent studies of prescribing habits in 2005-2006 have shown that 88% of physicians made a drug change based on pts ability to pay for the medication. Your doctor is swimming against the tide. Since, he's more willing to use subjective data....I might question other recommendations or judgements he makes as well.

And just in case you think US pharmaceutical research companies are all villanous - I'll give you this link which might help some of your patients (or you). www.pparx.org is the Partnership for Prescription Assistance (PPA) & is the only program that provides a single point of access to more than 475 patient assistance programs available nationwide. It is sponsored by US Pharmaceutical research companies & it connects low-income, uninsured or under-insured patients to prescription assistance programs, many of which provide medications for free or nearly free. The website quickly locates patient assistance programs based on a few simple eligibility questions then links them to an application form.

These companies are not all bad! They are not without fault nor greed, but they are truly not all bad.
 
the only question i have is why do they need to employee so many sales representatives at salaries that can climb over 100k a year. All they do is pretty much reiterate a product sheet, they little to no scientific knowledge at all and are just annoying at times. Of course the companies need to advertise but why not send out information packets to physicians along with samples and instruction on where to get more. it would take the Doc's under five minutes to get all the info the rep could give them. If the reps actually had a science background to talk about the drugs maybe id feel different. I have actually seen a Doc ask a rep a question about a drug where he just made something up and the guy was like "yeah the drug has great coverage for that"
 
the only question i have is why do they need to employee so many sales representatives at salaries that can climb over 100k a year. All they do is pretty much reiterate a product sheet, they little to no scientific knowledge at all and are just annoying at times. Of course the companies need to advertise but why not send out information packets to physicians along with samples and instruction on where to get more. it would take the Doc's under five minutes to get all the info the rep could give them. If the reps actually had a science background to talk about the drugs maybe id feel different. I have actually seen a Doc ask a rep a question about a drug where he just made something up and the guy was like "yeah the drug has great coverage for that"

I agree that this would be ideal. Also, I think that if a drug rep says something incorrect rather than just saying "I'm not sure let me find out for you and get back to you" that the enterprising physician should go back to the company saying that the rep is giving incorrect information about the product.

The only thing is imagine how many JAMA's you or your colleagues may have thrown out. Imagine now getting mailings of pharmaceutical product fliers. To be honest, I totally lose focus when some drug rep starts talking to me about some drug product. But I'm honestly even less likely to read a flier they send me in the mail. I'm already overloaded with information from every angle and don't want some flier that's usually geared towards patients, no matter how colorful.

And if they sent us journal articles, you know that the first reply would be "but so much research is tainted anyway." From a company perspective, I agree, they should pursue the most cost-effective means of advertising to physicians. Unfortunately, while the common person might pay an iota of attention to ads and fliers, I honestly could see a doctor paying even less attention to it. The point of advertising to physicians is to pursue "active" advertising rather than "passive" advertising. Part of the issue is also that physicians will not necessarily read everything that comes to them. They will look at something and if something catches their interest (usually because it's somehow pertinent to something they're interested in or were happening to be wondering about) they might look at it. So if you send a bunch of information about a particular product, they might or might not read it even if the product could potentially factor in someway into their practice. By having people actively go in and talk to physicians it forces the issue a bit more.

On the other side, yeah it would be great if we could get people with a scientific background talking to us. And, in fact, they often do have these types of people in conferences or locations where they are presenting the product for "bigger people" in the field. But think about this - they're trying to interject their product into common practice, and to obtain that many people with the scientific background necessary and who are willing to go around doing footwork and this kind of "liaison" work for the company would be very impractical. After extensive scientific education and with enough knowledge of any product made by a pharmaceutical company and competing products within that area, would you want your job to be driving around to physician offices trying to market the drugs to people? It's not only bad for the person, but the company would have much better use for such a person in a laboratory setting or at the very least reviewing or setting up scientific studies.

All in all, we have to ask ourselves about the practicality of forms of practice versus the reality of them. Marketing to physicians, especially PCP's, is a unique and evolving field, because the goal is to somehow induce enough change in common prescribing practices to make your drug sufficiently profitable. I honestly don't think that fliers or papers describing the drug is the best way to do it.
 
i just brought up the phamphlet thing because i have heard that from like 3 docs i have spent time with that they would rather have 5 or so 1 page info sheets a week and take 5 minutes to read them all then to have their practice being disrupted by a salesman with no science background telling them about a drug. I just dont get the high salaries that some of them make since no Doc should ever prescribe a drug based soley on the sales pitch of a rep. It seems you could get a high school kid to do the same job, just memorize a fact sheet and be able to recall it. To me they are nothing more than white collar drug dealers.
 
the only question i have is why do they need to employee so many sales representatives at salaries that can climb over 100k a year. All they do is pretty much reiterate a product sheet, they little to no scientific knowledge at all and are just annoying at times. Of course the companies need to advertise but why not send out information packets to physicians along with samples and instruction on where to get more. it would take the Doc's under five minutes to get all the info the rep could give them. If the reps actually had a science background to talk about the drugs maybe id feel different. I have actually seen a Doc ask a rep a question about a drug where he just made something up and the guy was like "yeah the drug has great coverage for that"

Some may climb to over 100K, but very few - I've known a few & they've been pharmacists who've gotten to the point where they are actally presenting to meetings & are board certified (within my own practice field of pharmacy).

But....your basic 28 yo female (or male - very few!) with an english lit degree won't make more than 45K & that's in CA!

If you don't want to listen to him/her....just ask for the reprints & the pens (or not!) - they don't mind. All they want is a signature on their form from your receptionist or anyone in your office that they were there.

Seriously....they come to us about 3 months after a new drug is introduced to see who is prescribing (which, btw...we don't give out!). But..they get the info from different sources.

You're making a really, really big deal about this. You can be as involved or not as you want to be with the reps - its all your choice!
 
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