Friday, December 26, 2014

The un-free market for prescription drugs

To no one's surprise a large, multinational study published this month concluded that the per capita price for branded drugs in the US is as much as double what other advanced countries pay. The researchers from the London School of Economics and Johns Hopkins University looked at US prices for branded drugs versus those in Australia, Canada, France, Germany, Switzerland, and the United Kingdom. Their finding is consistent with many earlier studies, as well as common experience.

The un-free market for prescription drugs

To no one's surprise a large, multinational study published this month concluded that the per capita price for branded drugs in the US is as much as double what other advanced countries pay.  The researchers from the London School of Economics and Johns Hopkins University looked at US prices for branded drugs versus those in Australia, Canada, France, Germany, Switzerland, and the United Kingdom.  Their finding is consistent with many earlier studies, as well as common experience. 

The interesting point to emerge from this current study concerns the authors' assertion that "a contributor to higher US per capita drug spending is faster uptake of new and more expensive prescription drugs" in this country.  Other countries use various approaches such as retrospective database analysis to gradually introduce new brands in an evidence-based fashion.  By contrast the US's partiality toward a yahoo-cowboy market for health care makes newly approved brands immediately reimbursable.  The belief here is that the omniscient market will decide what's best.

So the question naturally emerges of just how wise, fair, and democratic the market really is when it comes to prescription drugs.  That was addressed in a study published in the European Journal of Clinical Investigation at the end of March.  Written by researchers from the University of London, the University of Sydney and Stanford University, the article was a rarity for academic publications because its title accurately and concisely summarizes the study's conclusion: "Undue industry influences that distort healthcare research, strategy, expenditure and practice."

According to Melissa Davey (see here), an Australian reporter who spoke to the authors, the study found that the market deceives patients "into taking drugs they do not need, that do not work and even put lives at risk." 

The drug market is not the Smithian fantasyland, beloved by the right wing, of numerous producers and self-determining consumers, where no segment is able to unduly influence how the overall system operates.  In reality the enormous profits made by pharma companies give them the "power to influence every stage of the health system."  They use this power to exaggerate the benefits of new drugs and downplay the potential harms.

To take one example, physicians and their reference peers rely on the results of clinical trials as the principal basis for making therapeutic decisions.  These studies influence choices about which drugs to prescribe, when and how.  Yet pharmaceutical companies fund the major portion of clinical research.  The European Journal article found that trials funded by the industry are four times more likely to show positive results for the sponsoring company's drug than studies subsidized by not-for-profit organizations.

Then physicians, the ostensible "gatekeepers" who serve the purpose of looking out for patients' welfare, are influenced by favors from the pharmas that range from dinners and conference trips to research grants, speaker fees and equity shares in the drug companies. 

Even the scrupulously honest physicians who disdain the bribes are deceived by drug reps as a result of using flawed evidence.  Only half the number of studies sponsored by drug companies ever see the light of publication, so the chances are overwhelming that any articles the reps show to physicians will favor the brands they're promoting.

Even the formal guidelines for clinical practice established by the various medical societies come under the sway of pharma companies.  The top researchers and opinion leaders in academic medicine who serve on the committees that write these guidelines receive substantial funding from the drug makers.  As a result the "clinical practice guidelines are often heavily focused on costly interventions and only loosely follow the available evidence."

So much for the market as the eminently democratic, free choice and ultimately wise mechanism for developing and distributing medication.  The researchers from London, Sydney and Stanford write that under the present system, drug companies "put profits over lives."

Still think that regulation is for sissies and only the shiftless 47% of the public needs government?


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Daniel R. Hoffman, Ph.D. President, Pharmaceutical Business Research Associates
About this blog

Check Up covers regional health news and a wide array of healthcare topics from pharmaceutical happenings to patient safety. Read about some of our bloggers here.

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
Hooman Noorchashm, M.D., Ph.D. Cardiothoracic surgeon in the Philadelphia area
Amy J. Reed, M.D., Ph.D. Anesthesiologist and Surgical Intensivist in the Philadelphia Area
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