The medical-industrial complex at work

by Daniel R. Hoffman, Ph.D.

It isn't often that the toils of daily journalism permit a single story to specifically demonstrate how a major social institution works.  Occasionally when it does happen, however, the learning opportunity can be spectacular.  That sort of fortuitous circumstance occurred late last week when Washington Post writer Peter Whoriskey published a well-researched article detailing a 20-year history of the dubious promotional efforts by two pharmaceutical companies for their three anemia drugs.

In 1989 the FDA approved two branded versions of the same compound, Epogen from Amgen and Procrit from Johnson & Johnson.  Both are synthetic versions of a naturally occurring hormone, erythropoietin, which stimulates the body to make red blood cells. The therapeutic versions go under the description of erythropoiesis-stimulating agents (ESAs). 

This unusual arrangement, where two companies both promote the same compound, each under its own brand name, came about because Amgen at the time had only a small sales force that it knew was inadequate to fully promote a product with enormous moneymaking potential. For that reason Amgen licensed it to J&J and the two companies agreed to promote their respective brands for different uses. 

This faith in the ESAs was well rewarded because eventually they earned $8 billion a year in sales for the two companies.  Revenues didn't reach those lofty levels, however, simply because physicians or patients fell over one another, demanding to buy more of it. In the Post's account, that 20-plus year span of exorbitant profitability came about because the two companies set in motion a process of payoffs, political lobbying, shady promotion and dishonest clinical research that illustrate how the for-profit, medical-industrial complex works in the United States.

Although anemia, especially when it results from anti-cancer regimens or kidney dialysis, is a genuinely serious condition, Amgen and J&J promoted the use of larger ESA doses, over longer periods, by claiming quality-of-life benefits for it.  The companies promoted the idea that higher concentrations of red blood cells make people happier and livelier, and for that reason, they claimed larger doses of their products, over longer periods, could create quality-of-life for patients and financial gain for physicians.

By 1994, the erythropoietin label approved by the FDA advertised a range of benefits: “statistically significant improvements for . . . health, sex life, well-being, psychological effect, life satisfaction, and happiness.”  According to the Post, the companies then began "pushing it in larger doses, for milder anemia and for patients with a wider array of illnesses."

Amgen and J&J were aided in their promotional efforts for ESAs by the fact that the products were a huge profit source for oncologists.  In 2007 the New York Times published a front-page story mentioning that a substantial segment of those specialists derived over 80 percent of their income from profits they were making on ESAs. Last week's Post story showed that oncologists each typically make between $100,000 and $300,000 a year from ESAs because the companies sell the drugs to them under volume-discount deals. Oncologists then submit reimbursement claims at full price to Medicare, Medicaid and private insurers. 

Infusion clinics and dialysis centers also earn enormous profits from administering ESAs. Together with oncologists, they maintained a vested interest in keeping the gravy train on anemia drugs rolling.

Amgen and J&J agreed to conduct studies that would assess potentially harmful effects of giving ESAs at higher doses, for longer periods. For well over a decade, however, they dragged their feet and never reported the results. Due to its lax oversight and failure to hold Amgen and J&J to their post-market study agreements, the FDA made regulatory agencies an important component of the medical-industrial profit machine. 

Eventually the FDA was able to conclude that Amgen and J&J lacked any solid proof, under regulatory guidelines, for claiming that ESAs lead to “statistically significant” improvements in happiness and other benefits. So the agency then forced the two companies to remove those moneymaking claims from the product labels.

Around the same time, independent researchers began finding that using ESAs in high doses, for extended periods, could stimulate tumor growth, heart problems and eye damage. That's when the FDA tried to limit the recommended dosing and the Centers for Medicare & Medicaid Services also tried to reduce the reimbursements it would pay providers. 

Undaunted, Amgen and J&J merely decided to add another component to the medical-industrial complex: politicians. They did this by heavily lobbying Congress to force a reversal of agency decisions. One Senator who proved especially receptive to such lobbying was Pennsylvania's Arlen Specter, then the chairman of the committee in charge of the FDA's budget. The Post's story documented that Specter received campaign contributions from Amgen and J&J.

Pharma is not unique in this process of co-opting disparate constituencies into its moneymaking scams.  The defense industries, tobacco, oil, gun manufacturers and investment banking have all run their own rigged systems on American society. With increasing justification, some people would add universities to that rogues list. 

Some of us have been so naive as to hold out higher standards for pharma and academia. After all, the end products here don't involve either war making, killing people, destroying their health or gambling with someone else's money. Instead, pharma and the universities pursue the noble goals of improving the world's health and elevating the mind. Yet it seems noble ends can include shady doings just as easily as venal purposes. In the case of drug companies and higher education, that recognition raises a question about what is really an industry's purpose and what is just its cover story.

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