Pharmaceutical Industry Now Fair Game

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http://www4.dr-rath-foundation.org/open_letters/chasingthepatentbillions.html

 

Pharmaceutical Industry Now Fair Game

The following article about the pharmaceutical cartel was published in Issue No.

14 of the magazine, 'Der Spiegel’ on 31st March 2003. ‘Der Spiegel', Europe's

biggest news magazine is based in Germany – the home of Bayer, BASF, Schering

and Co – and in this article publicly pillories the damage that the

pharmaceutical industry is doing to the health of millions of people and the

massive fraud that it is perpetrating on national economies.

 

The floodgates are now open and the pharmaceutical industry is fair game for all

critics. When a Spiegel journalist is able to write that 'Glucobay', the

diabetic drug from Bayer that costs billions, is no better than " muesli " without

fear of the threat of a legal backlash from the pharmaceutical industry, someone

has already smoothed the way. Someone has already removed all obstacles from

Spiegel’s path, allowing it to voice its criticism openly and fearlessly,

providing final proof that there are alternatives to the fraudulent

pharmaceutical business which are effective, affordable and free from side

effects.

 

That someone is Dr Rath.

 

It is just 6 years since Dr. Rath foretold today's events in an historic address

at the Stadthalle in Chemnitz – from the war waged on behalf of the

pharmaceutical cartel to the imminent collapse of that industry. The 'Chemnitz

Programme’ of June 21, 1997 had the prophetic subtitle " The End of the

Pharma-Cartel " .

 

The 'Spiegel’ article does not yet mean the final collapse of the pharmaceutical

‘business with disease,’ nor does it herald the end of the pharma-industry's

worldwide 'terror network' to which millions of patients fall victim year after

year. War is still raging in Iraq and the pharma-dependent Bush Administration

is doing everything in its power to turn it into a world war, so that it can use

worldwide emergency powers to prevent the whistle being blown on the

billion-dollar pharma-scam.

 

And yet, these unscrupulous investment groups around the Bush clique and its

puppets in the Pentagon and the White House will not now achieve their aim. The

people of the Earth have risen up to deliver themselves once and for all from

the stranglehold of the pharma-trade in health. The 'Spiegel’ article is an

important contribution to " Make Health - Not War!” and a landmark on the road to

a healthier and above all more peaceful world.

How the pharmaceutical lobby floats the costs - and increases the profits

A dispute between the German Health Minister and pharmaceutical-multinational

Bayer AG about a diabetes inhibitor is one episode in a conflict without

comparison in the world of politics and commerce – the battle for the

pharmaceutical industry’s billion-dollar business. The directors of these

companies rule a fabulous kingdom in which profits are all but guaranteed.

Pfizer, for example, a giant in the field, earned 28 cents from every dollar of

proceeds last year, whereas car companies such as DaimlerChrysler have to be

satisfied with 4 to 5 cents.

 

However, this apparent greed for profits is not the result of any individual

lack of morality, but is integral to the system itself. The pharmaceuticals

industry accompanies doctors throughout their professional life. Whether during

their studies, in hospitals or in independent practice, medicines salesmen are

ubiquitous and are bountiful with fees and gifts. Registered doctors in Germany

receive on average 170 visits annually from roughly 15,000 so-called

pharmaceutical advisers.

 

Still more serious is the monopoly on knowledge that the pharmaceuticals acquire

by virtue of the fact that they control almost all clinical research. Via the

professors they help finance, these companies thus control training, specialist

training and academic perspectives of the whole medical fraternity. Medical

conferences are similar to bazaars. Pharmaceuticals reps penetrate these events

with their presentations and promotional gifts, and science and promotion are

closely interlinked. It is indisputable that this system distorts medical

advances hugely.

 

In the past four years, the ten largest pharmaceutical companies alone invested

no less than 217 million dollars in candidate elections, mostly to support

Republicans, as the consumer organisation ‘Public Citizen’ discovered. This has

paid off; patent protection has been made even more secure.

 

When it comes to industry leader Pfizer, the US administration itself lobbies

Germany. Whenever the German government tries to tackle the issue of drugs

costs, the American embassy leaps into action, “to avoid irreparable damage to

Pfizer”, as it wrote in a letter to minister Schmidt. In the chancellor’s office

too, Pfizer letters with the US administration’s stamp are well known. “They

always wheel out the ambassador,” reports an official, “we’re well aware of

that.”

 

Read the complete article below.

Chasing the patent billions

[spiegel-magazine / March 31, 2003] -- Power struggle in the health system:

Minister Ulla Schmidt has to confront one of the most powerful industries in the

world - the pharmaceutical groups - to bring her reforms to a successful

conclusion. Their lobby is highly organised and even the US government is on

their side.

 

When manager Winfried Rosen describes his “pitch-black brew” one cannot fail to

hear the tone of pride in this engineer’s voice. He and his staff of 20 make

alchemists’ dreams come true at the Bayer company’s ‘PH 5’ site in Wuppertal.

 

Behind disinfecting lock gates, in high-security lab conditions, a soil

bacterium “tuned up” (Rosen’s words) by Bayer researchers is multiplied in a

battery of large steel containers. The connecting labyrinth of pipes, tanks and

“chromatographic filters”, filling four floors in an adjoining building,

produces a white, 99.9 percent pure powder from the dark microbial soup.

 

Using the most refined biotechnology, Bayer workers transform billions of

bacteria each day into a substance worth its weight in gold at the chemists:

Acarbose is a substance supposed to help diabetics limit sugar absorption by the

blood. Glucobay, the brand name, is “a first-class quality product” according to

director Rosen, a “global success” in over 100 countries, with an annual

turnover of just under 300 million euros.

 

 

The production of medicines (at Bayer): “As effective as muesli”

 

 

But critical pharmacologists, on the other hand, say that each day the Bayer

group is leaching hundreds of thousands of euros away from health systems in

Germany and elsewhere, for a remedy that is “about as effective as muesli”, in

the judgement of medicines specialist Gerd Glaeske. Glucobay, as a commission of

experts appointed by the German government also found, should not be included on

the planned official “positive list” of prescription medicines – a provocation

for Bayer managers.

 

But suddenly respected professors of medicine are praising the pills from

Wuppertal as a “new resource” in the battle against diabetes. Hardly a week goes

by without local and national German parliament members getting visits and calls

from Bayer representatives.

 

The Nordrhein-Westfalen area employment minister Harald Schartau has already had

the case presented to him, as has permanent secretary Klaus Theo Schröder from

the Berlin ministry of health. “Bayer is kicking up a gigantic fuss,” says

pharmacologist Ulrich Schwabe, describing the pressure he has come to feel as

chairman of the positive list commission. An experienced health policy member of

the government coalition warns that the ban on Glucobay has put us “on full

collision course”.

 

And not only in this particular case. The dispute about the diabetes inhibitor

is just one episode in a conflict without comparison in the world of politics

and commerce – the battle for the pharmaceutical industry’s billion-dollar

business.

 

The directors of these companies rule a fabulous kingdom in which profits are

all but guaranteed. Year after year, they bring new medicines onto the market

that health insurers pay for, whatever the cost.

 

Even in the 2001 business year, when profits of the ten largest multinationals

on the Fortune 500 list slumped by an average 48 percent, the ten largest

pharmaceutical companies listed there increased profits by around 18 percent. In

2002 this industry achieved an overall global turnover of more than 400 billion

dollars, equal to almost a quarter of the total German economy. In war or in

crisis, the pill producers are always in fine fettle.

 

Health insurers, in contrast, are increasingly overwhelmed by exploding costs.

In Germany alone, expenditure on medicines by the official health insurance

companies has more or less doubled since 1990 to over 23 billion euros annually,

long since exceeding costs of fees for the 120,000 or so registered doctors.

 

Health minister Ulla Schmidt is trying to combat this fleecing of contribution

payers on several fronts at once. No later than April she wants to present draft

legislation for the planned positive list of prescription medicines, which will

exclude disputed remedies from cost reimbursement. Instead of 40,000

preparations, in future only about 20,000 are to be available on prescription.

In addition, as part of health system reforms, the minister wants to create an

institute where independent experts would check the usefulness of new medicines,

modelled on one in the UK.

 

At the same time, the aim is for health insurers to negotiate the costs of new

drugs directly with manufacturers in future, instead of being forced to pay

whatever price is demanded.

 

“We have to start dealing with the high costs of pharmaceutical products,” says

health economist Karl Lauterbach, who advises Schmidt. “Without this, health

reform will not succeed in the long term.”

 

And this time, despite a CDU/CSU Union majority in the German parliament, there

is a chance that the legislation will be implemented. For even Horst Seehofer,

ex-minister and the CDU/CSU’s leading health policy maker, believes that the

massive increase in the costs of medicines is “not justified on purely medical

grounds”. It is true that minister Schmidt’s future negotiating partner has

other ideas about the necessary means to address this. But it is indisputable,

according to Seehofer, that the industry “has not always behaved responsibly

with its free hand in pricing”.

 

How great the need for reform actually is has been examined year after year by

the 28-member team of experts who issue the health insurers’ medicine

prescription report. According to them, manufacturers are creating enormous

wastage, costing contribution payers at least four billion euros each year,

before a single patient is cured. The authors of the report discovered that in

2001 the insurers

 

had to pay three billion dollars for costly, supposed innovations which could

have been replaced by older, more economical medicines without any harm to

patients;

paid 1.9 billion euros for medicines whose efficacy is hotly debated;

could have saved 1.5 billion euros, if doctors had prescribed replicating

medicines (generics) at a fraction of the price, instead of expensive original

products.

 

There is probably no other branch of industry in which brilliance and misery, or

social usefulness and harm, are so closely intertwined. Substances like statin,

first marketed by the US company Merck as a cholesterol inhibitor, have without

doubt saved millions of endangered patients from heart attacks and strokes. Many

millions of HIV patients have only been saved from certain death by the

antiviral products of the companies Pfizer, GlaxoSmithKline and Boehringer.

At the same time, in the view of many experts, other drugs produced by the same

companies, such as the heart medicine Norvasc (Pfizer) or the anti-diabetic drug

Avandia (GlaxoSmithKline), chiefly serve to fleece the health system of many

billions of euros, despite the fact that old, standard treatments are considered

to be equally effective if not more so. The central cause of this paradox is the

patent monopoly, the bizarre business model upon which the whole industry rests.

 

Unlike any other branch of commerce, these government-sanctioned, exclusive,

fixed-term rights are the crucial pivot on which the big pharmaceutical

companies turn. Patent-protected medicines promise maximum returns from usually

minimal manufacturing costs – for at least 6 years from the date of first

registration. According to the date of a patent application and subsequent

registration, however, this period can be extended to 10 or 15 years.

 

No wonder then, that the dozen or so multinational pharmaceutical company groups

that dominate the patent market achieve annual returns others can only dream of.

Pfizer, for example, a giant in the field, earned 28 cents from every dollar of

proceeds last year, whereas car companies such as DaimlerChrysler have to be

satisfied with 4 to 5 cents.

 

Having a real winner in this market is tantamount to a licence to print money.

Take the Pfizer Lipitor dragées, for instance. This medicine for preventing

heart attacks, sold in Germany under the name of ‘Sortis’, achieves annual

global sales of eight billion dollars. In the twelve months during which

Pfizer’s sales agents opened up the market for this product in 1997, the share

value of the company doubled.

 

When such a huge jackpot is there for the taking, abuse is inevitable. Pity

anyone who develops C-type liver illness from a viral infection and thus has a

high risk of dying from liver cirrhosis. US researchers discovered,

surprisingly, that a combination of the messenger substance Interferon with an

old antiviral preparation called Ribavirin can cure almost two thirds of all

those infected. But in 1999, the US firm Schering-Plough* drew up a 3-year

contract with developers and patent holders to assure itself exclusive rights on

the new application of this old medicine, clearly with the intention of getting

the maximum return from it during this period. Without more ado its German

subsidiary Essex raised the cost per daily dose to 37 euros, although

manufacturing costs do not amount to even a hundredth of that amount. Add to

this the further approximate cost of 26 euros per day for the required

Interferon, and a nine-month course of treatment will cost in the region of

17,000 euros

per patient, four times more than the average annual contribution from members

of official health insurance schemes. If only half of the 400,000 or so

hepatitis C patients in Germany were treated by this means, the cost of 3.4

billion euros would immediately burst the bounds of the medicines budget. In

fact, however, only about 10,000 patients are treated by this means each year,

roughly the number of new cases of the disease.

 

The great majority of hepatitis C patients are thus denied the sole effective

therapy, since doctors are wary of special checks by health insurers triggered

by high medical costs. Simply because a firm wished to make “maximum profits in

the shortest possible time”, a sinister game is being played with a

“particularly helpless patient group without a lobby”, as internist Roland

Gugler from the Karlsruhe university clinic puts it. This is an accusation that

leaves managers of the American parent company unmoved. Product prices, comments

company spokesperson Robert Consalvo, “are not based on manufacturing costs but

on the value they have for the patient”. On inquiry, Marc Princen, boss of the

German subsidiary Essex did say, however, that he wanted to offer health

insurers a reduction if they were prepared to encourage wider use of the

medicine by doctors.

 

However, this apparent greed for profits is not the result of any individual

lack of morality, but is integral to the system itself. The drama played out by

pharmaceutical strategists is based on the fact that really useful innovations

are not there for the taking. And when patents run out, a product with strong

sales is in danger of complete collapse, since the industry’s free-riders - the

manufacturers of replica medicines - can swiftly reduce the original’s market

share to a third or even less.

 

“That is always very painful,” admits the German boss of one of the pill

producers. His colleagues at Schering-Plough have just fallen right into this

trap. Turnover from their biggest blockbuster fell by half after the patent ran

out last year and their share value slumped by almost 40 percent.

 

With their overblown share values, successful pharmaceutical companies are

therefore as dependent on new patent monopolies as a junky on the next shot of

heroin. That is why medicines strategists throw everything that the registering

authorities permit onto the market – and that is a fair amount. Because both the

American Food and Drug Administration and the EU medicines authority EMEA only

check whether substances work at all and whether no harm arises from short-term

use – and do not look further than that.

 

When a patent is about to run out, pharmaceutical managers also try to avoid the

inevitable with all means at their disposal – to the cost of patients and health

insurers.

 

The British-Swedish pharmaceutical giant AstraZeneca was particularly canny with

its stomach medicine Omeprazol. Under the names of ‘Antra’ and ‘Prilosec’, the

drug produced annual sales of five billion euros at the end of the nineties – at

that time more than any other medicine in the world. In 1999, four years before

the patent ran out, the company management therefore started ‘Operation

Sharkfin’.

 

The skills of marketing experts, lawyers and scientists were harnessed to draw

up a plan against threatened competition. Its first phase was the building of a

protective wall of additional patents, e.g. for the dragées’ supposed innovative

protective coating against excess stomach acidity. Companies usually possess

whole strata of patents, with which they try to save their monopoly over time.

 

From April 1999 onwards, as soon as imitators started to flood the market, Astra

lawyers filed suits against them for patent violation. Even the German firm

Ratiopharm had to stop supplying its replicated pills, which it was offering for

sale at a price 25 percent cheaper, because of a temporary injunction. The suit

strategy did not achieve much in Europe, because the courts did not play along,

but things were dragged out in the USA. Patients there had to wait for over a

year for the price to come down and each day that this went on brought

AstraZeneca ten million more dollars, as the ‘Wall Street Journal’ reported.

 

The real nub of patent defence, however, consists of replacing an old remedy

with a new one, which must then be purchased for years at the monopoly price.

And that is what the Astra team tried to do. It was just too bad that all their

researchers’ ideas remained fruitless, since Omeprazol could cure almost 90

percent of patients anyway. The only remaining option for them was to develop a

molecule variant of the original product, which entered the bloodstream a little

quicker.

 

From this the Sharkfin team constructed a big marketing coup without more ado.

After the patent had run out, a substance almost identical to Omeprazol, now

called ‘Nexium’, made its triumphant way into doctors’ and chemists’ cabinets

and occupied fourth position in the list of best-selling stomach medicines once

more just a year later. The company sent hordes of reps, equipped with slick

advertising patter that praised what was old hat as a “completely new chemical

substance” and a “forerunner of a new class of drugs”, to doctors’ practices.

 

Together, Antra and Nexium have meanwhile attained turnover in Germany almost

equal to that of 1998 – operation Sharkfin has been successful, and the cost to

German health insurers alone is over 50 million euros annually. Helmut Schröder,

pharmacologist on the AOK federal association, commented laconically that this

case “made clear that a manufacturer can attain a significant market share for a

pseudo-innovation, through exaggerated portrayal of marginal differences”.

 

No less widespread are competitors’ follow-ups to successful products. Only

seldom do company researchers discover a really new effective cure. More

commonly, they adopt an idea from publicly funded basic research and then

register a patent for a specific substance or application. If the remedy goes

well, competitors develop similar substances along the same lines, and pursue

this in subsequent years. For example, not just one product but nine

patent-protected remedies are available in the mass market that exists for the

artery-protecting substance statin.

 

Health insurance providers and health policy makers regard these so-called

“Me-too-medicines” as a double annoyance. While price competition between

patented products always remain suspiciously curtailed, these analogous

medicines ensure that many patients continue to receive products at excessive

prices, by force of habit, even when more economical generics have long been

available. That is why, for instance, patented remedies still account for almost

half of the mass market in blood-pressure reducing ACE-inhibitors, although

equally good replicas, over 60 percent cheaper, have been available for the past

six years . The cost to the German health insurers: at least 120 million euros

per year.

 

The sum total of pharmaceutical progress was therefore dealt a heavy blow in the

report published last December by Harvard doctors Arnold Relman and Marcia

Angell, two former chief editors of the renowned ‘New England Journal of

Medicine’. . According to this, just 15 percent of 1035 drugs newly registered

since 1990 contain new active ingredients that measurably improve patient

treatment. The strength of innovation which pharmaceutical industry

representatives like to cite to justify their high prices therefore turns out to

be so much PR theatre.

 

This is not only costly but also dangerous. Barely a single one of the parallel

ingredients is still tested for possible long-term side effects – a risk that

has come close to ruining the pharmaceuticals division of the Bayer Group. At

the beginning of the nineties, its management decided to put all its energy into

competing with Merck for the mass market in cholesterol lowering statins.

Company researchers therefore developed a Bayer statin, which came onto the

market as ‘Lipobay’ in 1997 and immediately began selling well.

 

But in the spring of 2001, cases of life-threatening muscular degeneration,

linked with long-term intake of Lipobay, suddenly started to pile up in the

USA.. In the States, Bayer had brought the substance onto the market at a dose

double that of the European product. The swifter reduction in cholesterol levels

achieved in consequence served as a marketing ploy.

 

This turbo-charged effect clearly also speeded up side effects, and the medicine

mutated from the bright new hope of the Bayer company into a billion-dollar

disaster. Over 8,000 compensation claims have currently been filed, more than

400 employees lost their jobs in the research department and a partner with a

strong capital base is now being sought to buy up a majority holding in the

company’s pharmaceutical division. In the Lipobay case “a whole company

collapsed due to exaggerated marketing promises,” suggests the pharmacologist

Peter Schönhöfer, co-editor of the pharmaceutical journal ‘Arznei-Telegramm’.

 

In fact, marketing rather than research is the real core business of the

pharmaceutical industry. The big brand companies use a third of overall revenues

- twice as much as for research – and also a third of their staff, solely to

promote their medicines in the market place. In consequence, the pharmaceuticals

critic Schönhöfer believes, “doctors are extensively corrupted”. That sounds

exaggerated, but the indications are overwhelming.

 

The pharmaceuticals industry accompanies doctors throughout their professional

life. Whether during their studies, in hospitals or in independent practice,

medicines salesmen are ubiquitous and are bountiful with fees and gifts.

Registered doctors in Germany receive on average 170 visits annually from

roughly 15,000 so-called pharmaceutical advisers.

 

Such contacts also frequently bring doctors interesting invitations, for

instance to so-called therapeutic working groups, with which companies pretend

to undertake secondary research. This was how Bayer introduced the now contested

Glucobay to patients. Supposedly in order to gather “verbal recommendations from

doctors”, Bayer representatives organised working group meetings at which a

“verbal report on five cases of treatment” was rewarded with 700 Marks as

“advisory fee”, while the advisors themselves were paid up to 3000 Marks.

 

An internal circular to the sales force made clear what was really going on.

There it said: “The target group are GPs and internists and the aim is to

encourage them to prescribe Glucobay more intensively… two doctors who regularly

use Glucobay should also be invited to each working group, but not doctors who

reject Glucobay.”

 

There’s no trace of actual scientific research: “They just wanted to show us how

to write the name correctly on the prescription form,” said one participant,

describing the content of such events. This is also confirmed by findings of the

Dutch health inspector Hans ter Steege, who investigated questionable sales

practices in this field up to the summer of 2002. Armed with public prosecutor

authorities, he confiscated the marketing plans for 28 medicines that were

selling well, and discovered that almost a fifth of the budget was spent on

these pseudo studies, regarded within the companies as “a pure sales tool”.

 

The companies spend at least as much money as this on trips and hospitality

offered to doctors who provide them with sufficient revenue. Expenditure of

4,500 euros per person at a conference was “no exception” as ter Steege

discovered. He suggested that this type of sales promotion should be made a

punishable offence – a threat that probably caused Holland’s pharmaceutical

managers many a sleepless night. In an interview given in March 2002, this

pharmaceuticals policeman said, “there are attempts behind the scenes to block

our investigative powers”. Five months later, this became reality. Ter Steege

was cut out of the picture; his department was shut down and today this official

is not even allowed to speak about his former work.

 

Still more serious is the monopoly on knowledge that the pharmaceuticals acquire

by virtue of the fact that they control almost all clinical research.

Astonishingly, research ministers at a regional and national level have so far

shown little interest in what the flood of medicines actually involves. Since

there is no government money available for such investigations, there are no

experts in Germany – apart from a few dissenting voices – who are not dependent

on research funds provided by the pharmaceutical industry.

 

Via the professors they help finance, these companies thus control training,

specialist training and academic perspectives of the whole medical fraternity.

Medical conferences are similar to bazaars. Pharmaceuticals reps penetrate these

events with their presentations and promotional gifts, and science and promotion

are closely interlinked. “The industry people even sit on the committees that

determine which event is to be recognised as a certified further training

course,” says the chief doctor of a university clinic indignantly, and then

immediately requests anonymity: “We need the money, otherwise we’d have to give

up research.”

 

Something similar is at work in so-called professional associations, whose

guidelines are regarded by many practitioners as a touchstone. But anyone who

expects independent expertise from the ‘German high-pressure league’ is

deceiving himself. The society whose specialist field relates to the second

largest medicines market is mainly financed by the pharmaceutical industry. Ten

top pharmaceutical companies are represented as sponsors on the board of

trustees. The spokesman for the medicines section is the Lübeck professor of

medicine Peter Dominiak, who represents the firms Aventis and AstraZeneca at

conferences.

 

Whenever a medicine is criticised, the companies can therefore wheel out “highly

qualified pharmaceutical advisors” (ridicule from doctors), who supply the

appropriate testimonies. Bayer’s Glucobay had hardly been struck off the

positive list, when Munich professor Eberhard Standl and his Berlin colleague

Thomas Unger leapt into the breach to laud the medicine as a “breakthrough” at a

“festive symposium”.

 

German doctors therefore only have a single body, the ‘medicines commission’,

that is free from the industry’s influence. Unlike their colleagues on

professional associations, its 40 members have to sign a written statement of

independence, and declare any links with pharmaceutical companies. This body’s

recommendations therefore emerge accordingly: of more than 3000 active

ingredients permitted and registered, the commission considers only 755 to be

advisable.

 

It is for this very reason that the committee leads a shadowy existence.

“Unfortunately we face very great resistance,” admits Chairman Bruno

Müller-Oerlinghausen. This is an understatement. The German doctors’

association, under its chief Jörg-Dietrich Hoppe, even refuses to include

information provided by its own commission in the ‘German medical newsletter’

and thus send it to all doctors.

 

It is indisputable that this system distorts medical advances hugely. The US

doctors Curt Furberg and Barry Davis recently succeeded in exposing such a

medical worst case scenario. Commissioned by the National Institute of Health,

they aimed to test the real effectiveness of the many constituents used to

combat high blood pressure.

 

For this purpose 42,000 patients suffering from high blood pressure were divided

into four groups and given four different drugs over six years. Their clinical

progress was monitored and recorded. The result of this mass study struck the

pharmaceuticals world like a bolt of thunder: “innovative” medicines developed

over the last two decades to reduce high blood pressure are not only much more

expensive than the 50-year-old substance Chlorthalidone, but also less effective

and protect fewer people from severe illnesses.

 

“We spend ten billion dollars annually on ACE inhibitors and calcium

antagonists, and now we know that we gain no added value from this,” Furberg

summed up when presenting the results. Still worse: the disadvantages of the

newer remedies have a drastic effect because of the large number of patients

with high blood pressure. Each year an additional 60,000 Americans suffer heart

attack or stroke, because they have been treated with worse medicines,

calculated study director Davis.

 

The Cologne institute for evidence-based medicine, under the direction of the

internist Peter Sawicki, then investigated what the US study would mean for

Germany. According to its findings, at least five million patients are treated

there with the more expensive medicines, leading to worse than useless costs of

one and a half billion euros per year. At the same time this treatment is

responsible for an additional 17,400 cases of heart failure and stroke.

 

“Every new medicine that is used long-term is a risky field trial with an

unknown result,” states Sawicki. It was therefore no longer acceptable, he said,

that everything that fulfils registration criteria can be massively prescribed

at health insurers’ expense.

 

The health reform that minister Schmid has set her sights on aims to approach

the problem from four angles at once:

 

The planned ’institute for quality in medicine’ should in future act as a

kind of ‘health test foundation’, using systematic data evaluation to propose

which new medicines are worth prescribing at the expense of health insurers.

The positive list of medicines that can be prescribed should finally acquire

legal status to relieve the insurers of costs for ineffective cough medicines,

varicose vein ointments and pseudo innovations.

Despite patent protection, health insurers should be empowered to categorise

over-costly analogous remedies in the same groups, with generics that have the

same effect, and fix a common price for them.

Drugs manufacturers should no longer have a free hand in setting prices for

innovative medicines. Instead, the insurers should be obliged to negotiate

prices.

 

Yet is it is still extremely uncertain whether even one of these measures will

ever become reality. Reformers, whether from the SPD or the CDU/CSU are battling

with a highly organised adversary. Governments almost everywhere in the world

intervene in the supply of medicines, because health care provision is always a

public task.. In consequence, every larger pharmaceutical company employs a

broad team of people to direct and control such intervention.

 

Above all, this holds true in the original homeland of uncritical pill

consumption, the USA. President George Bush has, it is true, announced measures

against misuse of patent rights by the pharmaceutical industry, because

Americans pay the highest medicine prices in the world.. But the latter simply

bought itself off. In the past four years, the ten largest pharmaceutical

companies alone invested no less than 217 million dollars in candidate

elections, mostly to support Republicans, as the consumer organisation ‘Public

Citizen’ discovered. This has paid off; patent protection has been made even

more secure.

 

These companies are campaigning with similar chutzpah in Europe. At the

forefront of this is, in Berlin, is Cornelia Yzer, the former research minister

of the Kohl government. As head of the association for medical research and

medicines manufacture (VFA), whose 44 member companies control two thirds of the

market, she directs an organisation of 50 staff.

 

Besides this all large companies have their own representatives in the political

domain. Rolf Reher, for instance, previously advisor to chancellor Helmut Kohl

and former opponent of the industry in the AOK federal association, is now

employed as a Bayer representative. In relation to Glucobay he personally warned

many health commission MPs of the “serious consequences for one of the last

German pharmaceutical companies engaged in research”. Other substances whose use

had not been better proven had got onto the list, and that is why Bayer was

right to insist on “equal treatment”, urged the Wuppertal MP Manfred Zöllmer to

his SPD colleagues.

 

When it comes to industry leader Pfizer, on the other hand, the US

administration itself lobbies Germany. Whenever the German government tries to

tackle the issue of drugs costs, the American embassy leaps into action, “to

avoid irreparable damage to Pfizer”, as it wrote in a letter to minister

Schmidt. In the chancellor’s office too, Pfizer letters with the US

administration’s stamp are well known. “They always wheel out the ambassador,”

reports an official, “we’re well aware of that.”

 

Since the red-green coalition has been in power, however, the Mining, Chemicals

and Energy Union, with their chairman Hubertus Schmoldt - who is on close terms

with the Chancellor – has been the focus of the pharmaceutical network. For

years Schmoldt and his troops have been battling against the positive list,

still more so since minister Schmidt has decided to bypass the Bundesrat and

adopt the project through direct legislation. “Now works committee members are

once more continually knocking on constituency colleagues’ doors in areas where

firms are affected,” says SPD politician Klaus Kirschner, chair of the health

commission.

 

Like no other issue, the list project has demonstrated the impotence of health

policy. Chancellor Kohl, friend of the BASF Company, originally took the project

out of the hands of Seehofer his health minister, together with the SPD

minister-president [prime minister] Gerhard Schröder and Hans Eichel, in the

Bundesrat. Subsequently, the Schröder government first wrote it into the

coalition contract and then did all they could do sabotage it.

 

This started with the most embarrassing lobbying sin by the Greens so far. Their

minister Andrea Fischer gave way to the urging of more esoteric elements in her

party and ensured that all sorts of drivel about “special therapy orientations”

was included in the draft positive list, to legitimise prescription without

having to satisfy the efficacy criteria to which normal medicines would be

subject. For this reason, in future, you’ll be able to get pig testicles, or

‘'Anus bovis’ – cow excrement - in powdered and diluted form on prescription, as

well as the million-fold diluted homeopathic solutions whose effect has never

had to stand the rigorous test of comparison with placebos.

 

After saving “shamanic medicine” (ridicule from doctors), at a cost to

contribution payers of roughly half a billion euros annually, the criteria for

all other pharmaceutical products also became “much more lenient than planned,”

as a ministerial official remembers. Despite this, Ulrich Schwabe, the chairman

of the committee, hopes that the less rigorous selection can still lead to

savings of 800 million euros – provided it gets past the SPD’s lobbyists.

 

Doubts are appropriate. For, hardly had the SPD taken control of the ministry in

2001, when Minister Schmidt delayed the project until after the Bundestag

election. Soon after this, permanent secretary Schröder cut back posts in the

relevant department; its director resigned angrily and the remaining three

members of staff took months to battle their way through several thousand pages

of statements by the pharmaceuticals industry.

 

But the pill lobby achieved its masterstroke in the autumn of 2001. Alarmed by

exploding medicine costs, minister Schmidt tried to set a general price

reduction of four percent, valued at 245 million euros – at which the

pharmaceutical industry went on red alert. Its losses would no doubt have been

more than three times higher, since eight other EU states take their lead from

the high German prices in their negotiations with manufacturers.

 

The Bundestag had already introduced the bill when, on 8 November, the minister

was invited to the Chancellor’s office. There, besides Gerhard Schöder, she met

three top pharmaceuticals managers and their party friends Schmoldt and finance

secretary Alfred Tacke. Together, they all forced Schmidt into a crazy deal: the

44 VFA companies would pay 200 million euros to the health insurance providers.

In return, the minister had to withdraw her bill and promise to relinquish

“price regulation” for the next two years.

 

But this discount trading condemned by the opposition as “baksheesh politics”

(Seehofer) was possibly the beginning of the end of the pharmaceuticals’

unbroken reign in Germany, because the minister did not forget this humiliation.

 

One year later, she used emergency measures to slap a compulsory six percent

reduction, valued at 420 million euros, on the firms chasing their patent

billions and imposed a two-year price freeze. The pharmaceuticals princes were

up in arms that she had “broken her word”, but Schmidt is no longer going to let

anything deflect her, and even Chancellor Schröder recently promised that the

reforms urged by Schmidt would have to come, even if “this does not please my

friends in the Chemical Union”, in a conversation with the unions.

 

VFA boss Yzer, in alliance with medical officials, still condemns the planned

cost and usefulness test for medicines as “state medicine” and threatens again

that “Germany will decline as a base for pharmaceutical companies”. But this

argument, repeated for years on end, cannot be defended. It is true that only 10

out of 130 global pharmaceutical research sites are in Germany. But the

industry’s highest European investments are being directed to Great Britain,

with its chronically underfunded health system.

 

“The argument about being a research base is something only fools believe,” says

Schmidt-advisor Lauterbach. Multinational companies don’t carry out research

where they hope to earn the greatest returns, but where research conditions are

good. The British do have a great deal to offer in that field. The British

government funds medical research to the tune of almost a billion euros each

year.

 

To this extent, a reform of medicines could even be of help to company groups

with the really productive research departments, says Lauterbach. The checking

of industrial trials by independent experts would not only raise scientific

standards. If “less money were spent on superfluous and inefficient medicines,”

he says, “there would be more in the pot for useful innovations”.

 

Many pharmaceutical company managers see things in a similar way. Stefan

Oschmann, for instance, German director of the US company group Merck,

acknowledges that unlike his Berlin chief lobbyist, he is “not in the least

afraid of usefulness and cost checks”. That, he says, is something that has long

since become the norm in Britain and Scandinavia.

 

“Those who supply quality products find their status is enhanced,” says Oschmann

reflectively, even if he rejects central assessment, linked to price controls,

by a semi-governmental body. The basic mistake of the German system so far, he

says, is that “a great deal of money is spent on medicines without regard to

quality”.

 

It is to be suspected that this basic mistake will continue to assure job

security, at least for Winfried Rosen and his staff at the Bayer Wuppertal

Acarbose production site. It is likely, as a member of the positive list

commission signalled, that Glucobay will be put back on the prescription list

again after all. The exclusion could not be justified – for reasons of “equal

treatment”.

 

 

 

 

 

 

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