There is little doubt today that the vast majority of us are feeling very kindly-disposed toward the big pharmaceuticals. After all, they brought us quite efficacious vaccines against Covidc-19 in record time, vaccines that will in the near-future allow Western nations to return to relative normalcy.
We wait with bated breath for that time to arrive in Canada.
While we wait, it might be good to remember a couple of things: the speed with which these miracles of medicine were developed was facilitated tremendously by the infusion of billions of tax dollars by an array of governments; the resulting profits have gone almost solely to the companies who hold the patents to these vaccines. In other words, governments assumed much of the risk while reaping none of the rewards.
But, we are told that the huge profits of big pharma wrought by its pricing regimes are necessary to fund research. After all, many promising therapies are pursued that ultimately don't pan out. To restrict drug prices would inhibit research, the story goes.
No doubt there is some truth to such assertions, but the following puts into sharp relief some other aspects of pharma's expenditures that are wholly unrelated to research costs. Katie Porter, a California Democrat who sits in the House of Representatives, had a run at AbbVie CEO Richard Gonzalez over the rising drug prices at his company. What she uncovered isn't pretty.
Given all of the revelations about how the Liberals legislated Deferred Prosecutions with SNC-Lavalin expressly in mind, it is perhaps no surprise that Big Pharma is now attempting to flex its muscles to prevent legislation that would benefit all Canadians. Andy Blatchford reports the following:
Brand-name drug companies could put off introducing new medicine in Canada and scale back research here if the country makes a major shift to cheaper generic alternatives under a national pharmacare plan, according to an internal federal analysis.
The concerns were included last year in a briefing document for federal Finance Minister Bill Morneau that explored the feasibility and costs of a pharmacare program.
For those who pay obeisance to corporate power, the document was sobering:
... the briefing note to Morneau said national pharmacare could influence the revenues of drug companies in several ways. Among the possibilities, it said a shift in favour of more generic drugs, mass-produced after patent protections for new medications expire, could lower costs.
But that could come with a cost for patients.
“For example, brand-name pharmaceutical companies may respond to a broad shift to generic drugs by delaying the introduction of new drugs in the Canadian market or by reducing the R&D activities that they undertake in the country,” said the analysis, labelled “secret,” which was obtained by The Canadian Press under access-to-information law.
“Innovative Medicines Canada, which represents pharmaceutical patent holders, has warned that a national pharmacare program focused on cost containment may result in reduced access to medicines for Canadians.”
Such a threat, if followed through, would be part of larger pattern of pharma's failure on behalf of Canadians.
The briefing to Morneau said research and development investments by pharma companies in Canada already “significantly lag” spending in other countries in the Organization for Economic Co-operation and Development, a group of 34 countries with advanced economies.
“Since 2003, industry investment in R&D has been less than 10 per cent of sales — the target that the pharmaceutical industry committed to in exchange for more favourable patent terms in Canada,” said the briefing to Morneau.
Like a predatory beast smelling blood, Big Pharma senses it has a Canadian government captured between its paws.
Time for us to show that we are not such easy pickings after all.
With corrupt corporate practices so much in the news these days, thanks to the Trudeau government's attempts at subverting justice for SNC Lavalin, I couldn't help but be struck by the naked greed so evident in the practices of a pharmaceutical called Insys Therapeutics. Several of the company's executives
... are currently on trial in Boston on charges of racketeering, fraud, and conspiracy, in connection to an alleged nationwide scheme to pay doctors bribes and kickbacks in exchange for prescribing the company’s fentanyl-based pain medication Subsys to patients who would not otherwise require the drug. The executives are also accused of conspiring to mislead and defraud insurance providers that were reasonably reluctant to cover costs for a medication designed for cancer patients when prescribed to patients without cancer.
To appreciate the depth of the company's greed and depravity, go to the 9:16 mark of the following news report, which includes a video extolling the virtues of something called titration, the practice of increasing the dose of a drug:
The 'rap' video excerpted in the above report (I will provide links to the full video at the end of this post) was created for and shown at Insys' 2015 national sales meeting. The message was clear: the more you 'push' the drug, the higher your sales commission will be.
According to former Senator Claire McCaskill, who helped investigate Insys last year,
"What they are saying to their sales representatives is, 'It's not enough that you get a doctor to prescribe it," said McCaskill, now an NBC News analyst. She said the company was telling its employees, "'We're going to pay you five times as much if you can get him to prescribe the strongest dose possible.'"
Interestingly, the company's response to these charges echoes the one heard from SNC Lavalin about the 'rogue employees' who acted without company authority in bribery of Libyan officials to the tune of $48 Million - (their petty cash reserves must be a marvel, eh?):
"The company in no way defends the misconduct of former employees and is fully cooperating with the government."
Nothing to see here, eh?
NEW: Here's the internal Insys video to the tune of A$AP Rocky's "F--kin' Problems" in which employees dance around former sales VP Alec Burlakoff, who is dressed as a life-size bottle of fentanyl spray. It was shown to a jury in Boston federal court today. pic.twitter.com/0SPIEDRpnX
Here's Part 2. They're singing about "titration," a reference to the process of doctors increasing the dosage for patients as they build tolerance. pic.twitter.com/J60hYQw0PA
Daniel Dale recently wrote a piece about how a provision in the new NAFTA could lead to higher drug costs in Canada.
Some Democrats are demanding a change to a rule that would require the U.S., Canada and Mexico to protect the intellectual property behind sophisticated and expensive drugs known as biologics for at least 10 years.
These Democrats, like Canada’s generic drug industry, warn that the new biologics rule would keep drug prices high by requiring citizens to wait longer before they can get their hands on lower-cost similar drugs known as biosimilars.
We would be wise to heed the warning.
If you have seen the Netflix documentary series Dirty Money, the episode on Valeant Pharmaceuticals is quite revealing, illustrating the rapacity of an industry whose interests lie in maximizing profits, often at the very real expense (literal and figurative) of the people it is supposed to serve. If you watch the episode, you will see that Valeant became little more than a hedge fund, buying up other drug companies for their patents, slashing R&D while at the same time rasing drug costs exorbitantly.
The following video is another story of pharmaceutical corporate greed, one that should serve as a wake-up call to all of us. It tells the tale of a drug that had been provided free of charge but is now available only for those who can pay $375,000 per year.
We are constantly told that business does things better. If that involves exploiting human misery, you will get no argument from me.
Anyone who reads my blog regularly and has drawn the conclusion that I am anti-capitalism would be completely wrong. I have nothing against business, entrepreneurship, nor corporations, per se. And I do believe that those who take risks should be appropriately rewarded.
What I am against, however, is extreme imbalance. I have nothing but withering contempt for the winner-take-all attitude that sees life as a zero-sum game. Such thinking betrays an unschooled mind and a woefully underdeveloped character, in my view. And that is exactly the mentality pervasive in so many realms today, be they political, economic, social, business, etc. Capitalism, yes. unfettered capitalism, no.
During the weekend I read a story in The Star about the development of drugs to treat what are known as orphan diseases, those maladies that afflict a relatively low number of people. Traditionally avoided due to high development costs and low market potential, pharmaceutical firms are now turning increasingly to them as a potential source of new profits.
Patents expire on drugs that have become standard treatments for afflictions such as heart disease, diabetes, etc., and drugs to replace tried and true therapies are not needed. The revenues arising from treating those standard diseases, while still substantial, have limited growth potential, something that is anathema in a fiscal culture that demands continual corporate profit growth.
The beauty of orphan diseases, from a profit perspective, is that the majority of them are genetically-caused, which means that those for whom the drugs are developed will be life-long customers. It is this fact that makes the development of such drug treatments not only a literal life saver for some, but also an everlasting curse for the governments that will be called upon to fund them.
“There is a big crunch coming in terms of the new (orphan) products being developed and in terms of cost,” says Dr. Michael Rieder, who holds a research chair in pediatric pharmacology at Western University’s Schulich School of Medicine and Dentistry.
“We’ve only seen the tip of the iceberg and it’s not going to go away.”
The issue came to the forefront again last week when young Madi Vanstone and her mother, Beth, visited Ontario Premier Kathleen Wynne to seek assistance in getting Madi's drug, Kalydeco, listed so that her costly treatments would be covered under the province's drug plan. It was approved by Health Canada in late 2012, but costs $300,000 a year per person and works only for a certain genetic variant of cystic fibrosis. It’s estimated about 20 people in Ontario need it but do not have private coverage.
Fifteen countries cover the medication, but so far Ontario’s drug-purchasing consortium has failed to negotiate what it sees as a “fair” price with manufacturer Vertex Pharmaceuticals.
Consequently, Madi's family currently must rely on fund-raising for the treatment which has left her symptom-free.
The problem, as you can see, lies in the extreme pricing that big pharma attaches to what can be sometime regarded as miracle drugs. These exorbitant rates are justified by what they claim are the high development costs of the therapies, coupled with their limited market.
Jared Rhines, vice-president of scientific and strategic affairs for the group Rx&D, which represents Canada’s research-based pharmaceutical companies, says,
“The development process from discovery to development to clinical research is the same, whether it’s a drug that treats a high number of patients or a drug that treats a rare population,” Rhines says. “And when you get to orphan drugs, it’s all those same requirements and development costs and profits spread over hundreds of patients versus what is a traditional drug that treats tens of thousands of patients.”
By the way, the industry claims, but refuses to offer any supporting documentation for 'competitive reasons,' that the average cost of drug is $1.3 billion.
This is a figure hotly contested by some:
Some experts, however, say drug companies grossly inflate their R&D costs, with the oft-cited $1.3 billion-per-drug figure out of whack with reality.
Trudo Lemmens, chair of health law and policy at the University of Toronto law school, says industry uses these claims to justify “unconscionable prices.”
He says that a credible New Jersey study claims that average drug development costs could actually be in the $45 million to $55 million range.
“The claim of $1.3 billion or higher costs of drug development is industry mantra,” he says. “But it’s based on things that the industry keeps close to its (chest) and it’s very hard to critically analyze.”
As well, such claims are misleading, if not downright untruthful, for other reasons:
Jillian Kohler, director of global health at the U of T’s Leslie Dan Faculty of Pharmacy, has this to say about the issue:
... these numbers, for people who are actually in the field, are highly controversial and industry doesn’t like to be honest about what goes into their R&D.”
Kohler says drug companies may routinely pack marketing costs into their estimates as well as lost investment returns — opportunity costs — from the money they actually do sink into research.
“They (also) don’t talk about the public funding that contributes to some of the development of these (drugs),” she says.
And so to conclude, I repeat what I said at the outset: I am not opposed to capitalism, only the unfettered kind which, it would seem, the charges attached to the treatment of orphan diseases are but egregious examples.
While much has already been written about the economic threats to Canada inherent in the Canada-European Comprehensive Economic and Trade Agreement currently being negotiated in secret by the Harper regime, a new development in those negotiations has come to light that will cost all of us dearly.
Ottawa is prepared to give the Europeans, and the pharmaceutical industry, at least part of what they asked for on drug patents – a move that could cost Canadians up to $1 billion a year.
As McBane points out, thanks to a deal brokered by Brian Mulroney in the 1980's, Canada already pays 15 to 20 per cent more than the international average for new brand name drugs; at the time, the justification was the promise by the pharmaceuticals to invest 10 per cent of R&D (Research and Development)-to-sales in Canada, a figure that has never been realized. In fact, it currently stands at only 5.6 per cent of R&D-to-sales.
Yet despite pharma's betrayal of its undertaking, Canada is once more preparing to give away more of the shop through CETA; reports indicate
Canada will extend monopoly drug patents from 20 to 21 years. This patent extension will come without any conditions. In other words, we get nothing in return for this major concession. No jobs, no research, no innovation, no benefits whatsoever – only higher drug bills.
Prime Minister Harper is found of promoting the message that Canada is open for business. What he doesn't tell us is that it is the business of plundering and pillaging, hardly the basis for a domestic economic revival.
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