Why Canada Needs a Public Inquiry into the Pharmaceutical Industry

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CANADIAN HEALTH COALITION CALLS FOR PUBLIC INQUIRY INTO BIG PHARMA- PDF FILE

http://www.healthcoalition.ca/pharma-inquiry.pdf

 

 

 

Why Canada Needs a Public Inquiry into

 

the Pharmaceutical Industry

 

Presentation to the Standing Committee on Health

 

House of Commons

 

October 23, 2003

 

By Michael McBane

 

Canadian Health Coalition

 

www.medicare.ca

 

______________________________\

________

 

1. On behalf of the Canadian Health Coalition I want to thank the members of the

Standing Committee on Health

 

for holding public hearings to discuss various issues relative to prescription

drugs in Canada. Your Committee

 

has identified many important and disturbing issues including: the rising costs;

the review and control of prices;

 

the approval of new drugs; the monitoring of adverse effects and prescribing

practices; the marketing to and

 

lobbying of prescribers and dispensers; direct-to-consumer advertising; the

access to drugs; the misuse, abuse

 

and addiction within the general population; and international comparisons.

 

2. It is difficult to appreciate the full extent and consequences of the

pharmaceutical industry's hold on our health

 

care system, the medical profession, Health Canada's Therapeutic Productsate, and our political

 

institutions. The pharmaceutical giants are among the most powerful corporate

institutions in the world.

 

3. In the value system of the marketplace, only those with money are respected.

Pfizer is a $48 billion a year

 

business and made $9.1 billion in profits last year (Fortune Magazine, April 14,

2003). Drug profits are twice the

 

R & D costs. In a typical example, GlaxoSmithKline spent 37% of its revenues on

marketing and administration

 

and only 14% on R & D, while making a 28% profit.

 

4. The brand-name pharmaceutical industry touts itself as being " innovative " .

While it has brought important new

 

drugs to market - first in the United States, not Canada - over the past few

decades, many of them stemmed from

 

basic research that was publicly funded at the U.S. National Institutes of

Health. According to Harvard's Arnold

 

Relman, the number of innovative drugs reaching the market in the past five

years has actually declined. The

 

pharmaceutical giants are now putting a major part of their resources into the

development and marketing of

 

" me-too " drugs - variants of drugs already on the market, but introduced at

inflated prices. According to Fortune

 

Magazine, the industry has a woeful underachievement in R & D: " most puzzling for

an industry supposedly in the

 

vanguard of 21st century science " . Indeed, drug research is quite possibly the

least efficient endeavour in the

 

world of business " (April 14, 2003).

 

5. Far from being an exemplar of competition and the " free " market, the

pharmaceutical industry enjoys

 

monopoly patent protection and many other forms of government protection,

subsidies, and significant tax

 

breaks. Government intervention in the workings of the market is obviously not a

problem for big pharma. It is a

 

symptom of the drug industry's political clout that even basic cost-benefit

analysis is not carried out before

 

governments invest massive amounts in pharmaceutical subsidies. What are we

getting in return? The reality is

 

we don't know. What is the therapeutic value of the approximately $18 billion

Canadians spend on prescriptions

 

drugs each year? The Canadian Institute of Health Information cannot answer this

question. Where else in

 

government do we approve multibillion expenditures annually without any evidence

that we are getting value for

 

money?

 

6. The lack of accountability is far worse than it may appear. There is also the

fact that Health Canada has no

 

monitoring in place for adverse drug reactions in Canada. In the U.S., death by

adverse drug reaction (estimated

 

at 106,000 people in 1994), is the fourth most common cause of death, after

heart disease, cancer and stroke.

 

7. The drug industry has products that enjoy a 17 to 20-year monopoly patent.

Once a drug gets this patent

 

protection and given a brand name, no one else can sell it and the company is

free to charge whatever the market

 

will bear without fear of competition. Prescription drug costs have skyrocketed

over 300% (unadjusted for

 

inflation) from 1985 to 2000. Over the same period, total health spending as a

percentage of GDP was 0.8%. No

 

wonder the brand name industry devotes enormous sums of money protecting their

interests. They have the

 

largest lobby in Washington, and are well represented in Ottawa, as you know.

 

8. In the year 2000 in the U.S. alone, drug companies spent $8 billion and

employed 83,000 sales representatives

 

to woo doctors with gifts, meals, trips, and spent another $8 billion in free

drug samples. When Dr. Relman

 

appeared before the Kirby Committee in February 2002, he said: Remember what

'Deep Throat' said to the

 

investigators of the Watergate scandal: 'follow the money' " . The total amount

that is spent by pharmaceutical in

 

the form of financial contributions to members of Parliament and political

parties in Canada is not publicly

 

available information. In Ottawa, like Washington, big pharma spends huge sums

to ensure that no regulatory

 

barriers stand in the way of its profits.

 

9. In the United States, half of the Food & Drug Administration's budget for the

evaluation of new drugs now

 

comes from drug company user fees, making the agency dependent on the industry

it regulates. This same

 

conflict of interest (cost-recovery) exists at Health Canada's Therapeutic

Products Directorate (TPD). The

 

difference in Canada is that Health Canada hides the budget figures for drug

evaluation and only provides

 

Parliament with the budget for the entire Health Products and Food Branch. Why

is this? The TPD is one of 15

 

sub-sections of the Branch. Gross planned expenditures for the entire Health

Products and Food Branch for 2003-

 

2004 is $189.9 million. Cost recovery ( " expected respendable revenues " ) is $40.7

million. This Committee may

 

want to ask Health Canada what percentage of the TPD budget does the $40.7

million in cost-recovery represent.

 

10. Cost recovery at Health Canada for drug evaluations ushered in a new

operational principle in the

 

Therapeutic Products Directorate: CLIENT = INDUTRY. The public is now relegated

as one of many

 

" stakeholders " . The cost-recovery policy came at the expense of in-house,

independent scientific and laboratory

 

research. The entire Bureau of Drug Research was disbanded in 1997. Before the

systematic erosion of the

 

scientific capacity in drug evaluation, Health Canada drug scientists used to be

recognized internationally for

 

research on drug quality, toxicity, bioequivalence, and clinical application of

drugs. Now, the pharmaceutical

 

industry doesn't even bother sending top scientists to drug review meetings at

Health Canada.

 

11. The industry is now entering commercial agreements with universities and

hospitals that threaten the

 

objectivity and credibility of clinical research. Cash starved universities are

marketing themselves to wealthy

 

corporations because the federal government no longer funds independent

research. The government of Canada

 

now has a policy whereby the goal of health research is " commercialization " . If

an area in health research can't

 

be commercialized then it appears that the government of Canada does not want to

fund it.

 

12. The federal policy of commercializing of research agenda may well lead to

the end of independent scientific

 

research in Canada. In making the commercialization of health research -

proprietary and secret research - a

 

primary policy objective, Canada will cut itself off from the scientific

process. An endeavour is " scientific " when

 

it is transparent, systematic, peer-reviewed, independent, accountable, and open

to learning. When health

 

research is opaque, ad hoc, partisan, secretive, and unaccountable, you are not

dealing with science anymore. It is

 

something else that negatively affects the integrity of research, academic

freedom, and patient safety.

 

13. The threat to the integrity of clinical research is illustrated in the cases

of two internationally eminent medical

 

researchers, haematologist Nancy Olivieri

(http://www.caut.ca/english/issues/acadfreedom/Olivieri and

 

psychiatrist David Healy (http://www.healyprozac.com/). The institutional

players in the scandal are the

 

University of Toronto, the Hospital for Sick Children and the Centre for

Addiction and Mental Health. The

 

Olivieri and Healy case studies have become international reference points for

discussing the threat to academic

 

freedom, research integrity and patient safety posed by university-industry

" partnerships " .

 

14. The lesson learned form the Olivieri and Healy cases is simple: if

universities and teaching hospitals are for

 

sale, then the buyers will call the shots. They decide what research will be

conducted, and which finding will see

 

the light of day. They decide which researchers will be rewarded, and which

castigated from the profession. This

 

may be a clever policy for the pharmaceutical industry, but it is neither

" scientific " nor ethical.

 

(www.doctorsintegrity.com).

 

15. When Dr. Olivieri attempted to communicate an unexpected risk discovered in

her research on a particular

 

drug, as she was legally and ethically obliged to do, she was issued a legal

warning from the drug company

 

developing the drug. The Hospital for Sick Children and the University of

Toronto did not provide effective

 

support for Dr. Olivieri. To make a bad situation worse, the regulators at

Health Canada also refused to provide

 

any support to Dr. Olivieri in the performance of her legal duty. In fact,

Health Canada had officials from the

 

drug company present when they finally agreed to meet Dr. Olivieri at her

request. Why was the Minister of

 

Health silent in the face of this situation?

 

16. Dr. Olivieri said: " It shouldn't be this difficult to win support for the

safety of my patients and the integrity on

 

my research " . She is right. It isn't the time or the place today to fully

describe the predatory nature of the

 

pharmaceutical industry in Canada, its undue influence on medical research, as

well as the regulatory and

 

political processes. What's needed is a full public inquiry.

 

RECOMMENDATION:

 

Establish an independent public inquiry into the pharmaceutical industry in

Canada.

 

Areas to be investigated include:

 

- the integrity of clinical research and commercialization of health research;

 

- the pricing and profitability levels in the industry and its impact on

Medicare;

 

- the abuse of patent protection measures and IP's impact on access to essential

 

medicines and the sustainability of Medicare;

 

- independent assessment of the costs and benefits of pharmaceutical " R & D " ;

 

- the integrity of the federal regulatory process and cost-recovery;

 

- the lack of independent scientific research capacity at Health Canada;

 

- the lack of post-market surveillance and adverse drug reactions; and

 

- the effects of promotion, marketing, advertising, and prescribing practices.

 

The Public Inquiry into the Pharmaceutical Industry in Canada must precede any

decisions pertaining to the

 

federal government plans to: a) " renew " health protection legislation; b) speed

up drug approval process; c)

 

permit direct-to-consumer drug advertising; and d) " adapt its intellectual

property framework to enable Canada to

 

be a world leader on emerging issues such as new life forms " .

 

 

 

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