Saturday, August 23, 2014
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Pharma goes to court to defend high prices, deceptive marketing

Earlier this month the online pharmacy information company, PharmacyChecker.com, compared prices on fifteen of the top-selling brand name medications made in the U.S. (see here). They found that U.S. consumers can save an average of 76% on these domestically produced products by buying them from verified international pharmacies rather than in this country. Amazingly, three of these fifteen brands (Merck's Singulair, AstraZeneca's Pulmicort and Mission Pharmacal's Urocrit-K) are available here as generics, yet the brand prices abroad were still lower than those for the U.S. generics.

Pharma goes to court to defend high prices, deceptive marketing

Earlier this month the online pharmacy information company, PharmacyChecker.com, compared prices on fifteen of the top-selling brand name medications made in the U.S. (see here).  They found that U.S. consumers can save an average of 76% on these domestically produced products by buying them from verified international pharmacies rather than in this country.  Amazingly, three of these fifteen brands (Merck's Singulair, AstraZeneca's Pulmicort and Mission Pharmacal's Urocrit-K) are available here as generics, yet the brand prices abroad were still lower than those for the U.S. generics.

A spokesman for PharmacyChecker.com claims they looked strictly at medications made in the U.S., "because we found it so compelling that the same drugs made here are about 76% less expensive abroad."

According to a Commonwealth Fund study referenced by PharmacyChecker.com, these enormously higher U.S. prices take their toll because, in 2012, fifty million people here failed to fill their prescriptions due to costs.  That number included more than one in five of people with health insurance (see here).

Of course the difficulty that many Americans face in obtaining health care is not confined to prescription drugs.  The Commonwealth Fund study goes on to state that nearly half of U.S. adults between the ages of 19 and 64 (i.e., 84 million people) either did not have insurance for the full year of 2012 or were underinsured, while two out of five adults either reported problems paying their medical bills or were in the process of paying off medical debt.

As more Americans begin obtaining coverage under the Affordable Care Act with policies that meet minimum standards, the ranks of the uninsured/underinsured and those in medical debt will decline.  These better policies, in the vast majority of cases, will contain more generous prescription drug benefits than the previous junk policies that right wingers claim most Americans prefer.

But the better benefits related to drug and other costs from policies under Obamacare may prove short lived.  That is because carriers will increasingly move to coinsurance plans and away from those offering defined benefits.  If someone develops a condition such as rheumatoid arthritis, MS, ulcerative colitis or cancer, where a year's medication costs between $50,000 and $250,000, the need to pay 30% of that will again put treatment out of reach for many people.

That is why the state of Maine passed legislation with bipartisan support that allows residents there to purchase medications from a Canadian broker via licensed retail pharmacies in the UK and Commonwealth countries such as Canada, Australia and New Zealand. 

Naturally, pharma trade groups and U.S. pharmacists have sued the state of Maine because they fear this initiative will catch on elsewhere.  So affordable drug prices be damned, pharma and U.S. drug retailers want the courts to protect their racket.

In other litigation initiated by pharma, Johnson and Johnson just concluded one set of court proceedings by paying several billion dollars in fines and penalties.  Those were connected with giving bribes for Risperdal and selling defective hip replacement devices.  Then just as that story began to fade, news surfaced about the company receiving a subpoena from the city of Chicago.  Windy City officials want to see several years worth of documents pertaining to J&J marketing for the pain medications Duragesic and Nucynta (see here).

The US Centers for Disease Control and Prevention, the US Senate's Finance Committee, as well as other government and professional agencies have noted substantial increases in abuse and overdose deaths connected with the growing use of prescription painkillers.  The Chicago initiative claims J&J marketed its opioid products for long-term pain control without adequate scientific evidence, thereby "minimizing the serious risk of addiction and overdose."

So what is J&J's defense?

This company which considers itself "part of the daily rituals people follow to care for themselves and their families," (see here) resents the fact that Chicago is using an outside law firm on a contingency retainer to pursue the case.  Law firms that represent their clients on a contingency basis receive a percentage of any settlements they win.  J&J feels this arrangement compromises their due process rights and provides the law firm with too much incentive to pursue the case.

Merck tried making the same argument last year against the Kentucky state Attorney General in connection with a Vioxx lawsuit.  GSK also countersued Louisiana's Attorney General for using an outside firm with a contingency fee when he charged them with deceptively marketing Avandia.

So pharma vigorously seeks justice from the legal system when it tries to prevent foreign countries from exercising compulsory licensing (i.e., breaking patents), while it also claims the public's representatives shouldn't be allowed to obtain first-rate legal counsel.  Similarly, the industry regularly delivers fulsome praise for the unfettered market when it charges exorbitant prices on products that lack competition as a result of government-bestowed patents.  At the same time it seeks to close down the free market of international exchange by going to court if consumers want to partake in it by buying medications overseas.

None of this should appear as a surprise.  When industries regularly produce new products that customers consider good values they want to buy, there is little need for economic hypocrisy and legal sophistry.  But pharma hasn't been producing such products for several years.  As marketing and sales demonstrate their declining ability to sell marginally different, me-too brands, the leprous hands of finance, accounting and lawyers increase their control over pharma's operations. 

That's not the pharmaceutical industry that originally attracted many of us.


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Daniel R. Hoffman, Ph.D. President, Pharmaceutical Business Research Associates
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Check Up covers major health events in our region and offers everything from personal health advice to an expert look at health reform. Read about some of our bloggers here.

For Inquirer.com. Portions of this blog may also be found in the Inquirer's Sunday Health Section

Michael R. Cohen, R.Ph. President, Institute for Safe Medication Practices
Daniel R. Hoffman, Ph.D. President, Pharmaceutical Business Research Associates
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