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The State of Health in America
Gary Null Interviews Dr. Peter Rost of Pfizer:
June 10, 2005

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On Friday June 10, 2005, Dr. Gary Null engaged Dr. Peter Rost in a
candid discussion on the nature of healthcare and the pharmaceutical
industry in the United States.

Gary Null: We're beginning with an exclusive Internet radio discussion
with a doctor who is also, currently, a vice president for marketing
at Pfizer. He is not speaking on behalf of Pfizer, but for himself. I
have invited him to share insights on the nature of the pharmaceutical
industry. He is Dr. Peter Rost. Nice to have you with us today.

Dr. Rost: Thank you so very much. I'm very happy to be with you.

Gary Null: We do this more like a classroom on the air, so please do
not feel that you have to give us any short answers. Give us as much
of a context to the answer as you wish.

Let us begin with a serious an important challenge, and that is: today
many Americans face the dilemma of not being able to buy food or other
necessities and buy medications they may need that can help save their
lives. I find this disturbing. I'm concerned that someone should have
to make that choice. Your position, please.

Dr. Rost: Well my position is that I think this is outrageous. We are
one of the wealthiest nations on the earth yet we have between 49 and
67 million Americans with out insurance for drugs. They pay full price
- cash, no rebates - and what that means is that they pay twice as
much as all the other people around the world - in Europe in Canada -
twice as much, and these are the ones that can least afford it.

But it gets worse. Here in America today, the other people who have
insurance and various programs, they have pharmacy benefit managers
negotiating on their behalf [or] they have the Veterans
Administration. Those drugs are sold at the same price as we're
selling them in Europe and in Canada. So really the only ones that we
charge these high prices to are the one who can't afford it.

And what that means is many of them can't take the drugs they need.
And we know that drugs save lives. So, when you can't afford your
drugs, you might die or you may stay very sick. And it might also
force you to go on buses to Canada or Mexico or to go on the Internet
to try to find a cheaper drug. But going on the Internet while it's
one solution and there are lots of very good pharmacies on the
Internet, there also bad ones. So there is a risk there, if you end up
with the wrong merchant. And this is what we re doing to the people
who built this country. It's usually the elderly in this situation.
This is what we are doing to the parents, the grandparents that built
this country for us. It's outrageous.

Gary Null: Let's continue on. A few years ago I had an opportunity to
interview the commissioner of the FDA. And I asked him, " why do we
have drugs that are so much more expensive than in other countries? "
And without blinking an eye he said, " Safety. We at the FDA value the
safety of our products and we're concerned about Americans only
getting the best quality products. " And I asked, " Well doesn't
Germany, Israel, Italy, France, Belgium, Austria, England - they also
have outstanding scientists and concerned bureaucracies and they have
something similar to our own FDA. And it was as if no one else in the
world has the quality of science nor the meticulous sense of detail
for safety and efficacy that does our FDA. So no country, literally
none would be considered acceptable to take a drug that's used in
those countries that helps those people and bring it into the United
States.

And I said, " Well are you saying then, let me be very clear on this,
are you saying that no scientist, no government, nothing in the world
compares with us? " He said, " That's correct. "

I thought, that's very arrogant, to assume that since we also have the
highest iatrogenic rate, we have the most drugs that have been
reclassified, relabeled, or banned because of adverse drug events
after FDA approval, we've had more Americans die or be injured because
of medical mistakes, that we should also be then be assuming that we
are the gold standard for safety and efficacy against the rest of the
world where many people are not suffering the same consequences in
other places as we are. Now you're in a unique position. As one of
the higher ups at Pfizer, one of the America's leading, and the
world's leading pharmaceutical companies, you can give us a
perspective that other people cannot. So give us your idea of why
these drugs are not being allowed into the United States, and is it
true that only in America do we make the safest drugs and we could not
trust that any other country could make drugs as safe. Your thoughts
please.

Dr. Rost: Couple of different issues. Number one, the drugs that we
get in the U.S. are the same drugs, manufactured by the same company,
the same factory as people get in Europe and in Canada. There is no
difference there.

Second issue, America, unfortunately, while being a wonderful country,
and being at the forefront in many areas, some of the areas we're not.
We actually have, in my opinion, one of the unsafest drug supplies,
but of course, the FDA doesn't want to talk about that.

It's very simple. In Europe they require drugs to be prepackaged in
individual bottles and blisters. Nobody touches your drug after it
leaves the factory until the patient gets it. In the U.S. we sell
drugs the way we sold sugar or flour a hundred years ago - in loose
weight. What happens here is we have big, big containers with
thousands of pills shipped from the drug manufacturer to the
wholesalers in the U.S. There are thousands of wholesalers - they are
not regulated by the FDA, but by the states. It takes a thousand
dollars and a driver's license to become a wholesaler. Anyone
listening can become a wholesaler. The wholesalers then takes the big
drums with drugs and force them into smaller bottles. Those bottles go
to the pharmacist. But it doesn't stop there. The pharmacist then has
to pour those drugs into the very little bottle the patient takes
home. Lots of entry points for contamination, mistakes, terrorists,
whatever. Again, it's shameful, the FDA has been looking at this for
many years - they have not changed anything, but they are very
concerned about re-importation.

Gary Null: Thank you. I appreciate your answer and your candidness.

Another issue. And that is, there was a time when we could trust our
physician. You went to your physician it was almost a sacred ceremony
between the openness of what you had to say, the trust you gave the
physician, and the advice the physician gave you back to help you with
your medical condition.

Today all of that has changed. Today, with HMOs people spend very
little time with most physicians, and more often than not you're
likely to get prescription for medication whether you like it or not.
And in some cases you're getting a prescription because your insisting
to the physician you want what you saw on television. You saw someone
who had a condition that you have and they were happy and jumping in
the air after taking the medication and you put pressure upon the
physician. And in the time it takes to write a prescription, you now
have an opportunity to benefit also from that, so you think.

The nature of the relationship of the physician and patient has
changed because I believe, and I'd like for you to challenge me if I'm
wrong, the relationship between the pharmaceutical company and the
physician has changed. Where today it's an incestuous relationship
between the pharmaceutical company nurturing, guiding, stroking that
physician from medical school right thorough till today - so that he
physician becomes one extension, the biggest supported of the
pharmaceutical industry.

Show me where I'm wrong.

Dr. Rost: Well unfortunately, as a physician myself I have to admit,
and I'm not doing that with an easy heart, that I'm very, very
saddened by the state of healthcare and the way physicians act today.
Being a physician has become more of being a businessperson than
actually being somebody who cares for peoples' lives.

There was a recent study where they used actors to make thousands of
calls to doctors pretending to have a depression and asking for a
particular drug. Almost all of those who showed the symptoms of
depression got the drugs. But the worrying part was that the other
half of the actors who didn't pretended to have any symptoms half of
those got the drug as well. And here we're talking about pretty strong
stuff - antidepressants - and the patient got it because they pushed
for them.

So clearly, direct to consumer advertising works, and the physician
very often just wants to satisfy the patient. But many physicians
today have stopped practicing good medicine. And we also have so many
physicians just standing with their hands out waiting for the next
trip from the drug company, the next dinner, the next freebie. So the
whole system has become so corrupted. We shouldn't expect this to be
normal. The fact that we have freedom and anybody can bribe anybody
else - that's not freedom, that is not good society and most countries
do not allow drugs reps to visit doctors as often they do here and
they do not allow drug reps to bring doctors pizzas and bagels and
everything else. I mean they are pretty much stewardesses in those
offices bring them gifts - bearing gifts. You create the relationship
that way. So we can change this - we don't have to have a system like
this.

Gary Null: I've recently interviewed a drug rep who was one of the
most popular in the United States and for two years was in the top
five most successful drug reps in the United States out of over 100,000.

And she said that she had to understand the psychology of using her
sex appeal, using her sense of care and concern, how she would
approach the doctor, how she would set up a coffee table with donuts
for his patients. And that in time no one even questioned anymore they
almost expected when they went in the office - in his office - that
there would be something there, pizzas or whatever, given out free to
his staff. And I said, " Did he at any point recognize that this was
just a different way, a more clever way, of getting him to where he
will prescribe your drug? " And she said, " No. That never came up. Sure
he prescribed the drug. And the drug I was selling, from my company,
was the drug of choice for the condition that he was a specialist in,
heart disease that he would give. It wasn't that my drug was better,
that I had studies proving it was better, it was just that I was
better able to connect with him. " Your thoughts on this.

Dr. Rost: Well there is a great book out there by Jamie Reidy, called
" Hard Sell a former Pfizer sales rep " , who describes exactly this and
he had a very funny sentence in the book, basically saying male
doctors who were very busy as soon as they got a whiff of female
perfume - their innate reproductive desire made them drop everything
else and very willingly listen to these beautiful women. I don't think
that we should have our drugs prescribed based upon male doctors'
desire for sex.

Gary Null: But that's happening.

Dr. Rost: That's the situation we have today. It works equally well
for male sales reps who can charm the office staff.

Gary Null: The next area and I only have two more questions for you
because I know you're on a short schedule. But it's a very important
one. I own a food store. It's a natural food store. There are about
twelve different departments - from produce, organic produce, whole
grains, breads, the deli, and groceries. At the end of the day I know
my markups and they range from about 25% to as high in some areas as
about 75%, but average about 40%. That's not a lot and it's real hard
to make a living. It's hard to stay in business with the rent you're
paying, the staff, the insurances, taxes, etc., but you manage to etch
out a living. It's not going to make you rich.

I'm also an author and I've published a lot of books, and I've been
fortunate enough to have some very popular selling books. But I know
exactly to the penny how much that book costs my publisher. I know how
much the binding, the ink, and everything and I know the markup. I
know if I want to buy my book I get maybe a 40% discount unless I buy
a humungous amount then I get 50%. But I know the actual cost of the
book because I frequently buy a lot of those books and give them away
free to the poor and for years to non-commercial radio stations I gave
books.

And then recently I did some research on pharmaceuticals because I was
listening to a debate, this goes back about a year, and the debate was
this: The reason we have the most expensive drugs in the world in
America is because so much money goes into research and development -
upwards of a billion dollars and I'm thinking, " Is that possible? " I
didn't know - I wasn't going to make a decision until I had my facts.
And I began to look carefully at this and here's what I have and I'm
willing to put this on the record and have it challenged.

Let me take a few products. Let me take for our arguments sake take
two. I'm going to take Prozac, 20mg, 100 tablets. Retail price
currently is $247.47. The actual generic active ingredient for 100
tablets, for all hundred tablets for Prozac is 11 cents. Do the math -
that is a 224,783% markup. One more, Xanax - 1 mg, 100 tablets,
currently as of today $136.79. The actual cost for those 100 tables of
the generic active ingredient is two tenths of 1 penny. That means the
markup is 569,858%. Let me say that again -569,000% markup from the
cost of the generic active ingredient in that 1 mg dose of Xanax to
$136.79 for the actual retail price. I have never in my life seen
markups like this. I know of no other business that has markups like
this and as a person who knows something about pricing and economics
I'm absolutely flabbergasted by that. Your thoughts please.

Dr. Rost: Well this is what you get when you don't have a free market.
Drug companies claim that the U.S. is the only free market. That's
really untrue. The U.S. drug market is a monopoly - they can charge
whatever they want. What are you going to do? If you have car that
costs too much you can walk away, but when you're sick you can't walk
away, you need the drug to survive, to live, to go on. And when you
don't have a good partner, a strong partner to negotiate with as you
can imagine you're going to pay the highest prices.

Where does this money go? Very simple - it goes into two areas. Number
one - profits. Number two - into marketing and selling even more
drugs. As a mater of fact in 2002, if you look at the fortune 500 list
of the largest 500 companies, you take just the drug companies, the
top 10 drug companies, together the top 10 drug companies had a higher
profit than all the other 490 largest U.S. corporations. That's what
you get.

Gary Null: Wow. That I was not aware of - I appreciate that insight.
My final question for you - why is it that the board of directors, the
top executives of these pharmaceutical companies are not put to the
task of acting, not just responsibly for their company and their
products, which they have a responsibility both fiduciary and a moral
responsibility, but also the issue should they not charge a reasonable
price to make a reasonable profit so that the public that may need
that drug can actually afford it instead of having to not be able to
afford it. Why isn't there some moral equation that is not discussed?
And as a medical doctor, as an executive one of the largest
pharmaceutical companies in the country I'm sure at some point this
issue has arisen somewhere in the corporate headquarter system has it not?

Dr. Rost: Well you know the problem we have is that when you are that
wealthy, you're also equally powerful and there are many people and
many politicians with their hands out asking for assistance. One
example is the Medicare drug bill, which was going to give free drugs
to the elderly in 2006 - it's still going to cost $3000 out of your
own pocket for the first $4000 of drugs. But in addition to that, that
drug bill included legislation that made it illegal for the government
to negotiate drug prices. You know it's so completely
counterintuitive. Why should the taxpayers pay full price when the
government could have negotiated? When you have a powerful industry
that can buy its way into a democratic government that's what you get.

Gary Null: I want to thank you for your candor, your openness, and
your honesty. It is a refreshing discussion instead of the normal
propaganda and defensiveness that I would hear from other individuals
from within the industry. Dr. Rost I thank you very much for being
with us today.

Dr. Rost: You're very welcome. It was really a delight.

Gary Null: That was Dr. Peter Rost. He is also senior vice president
at Pfizer, medical doctor and answered some very important questions
for me. So I hope you enjoyed that.

Transcript, courtesy of Roman Bystrianyk, Health Sentinel