3 March, 2024


The Unloved Drug Industry: Will The Current War With Industry Force Atlas To Shrug?

By W.A Wijewardena –

Dr. W.A. Wijewardena

Dr. W.A. Wijewardena

The world at war with drug industry

It appears that Society has not been kind to drug industry though it holds the entire world on its shoulders like the Giant Atlas in Greek mythology. Patients accuse it of charging beyond what their purse can buy. The governmental regulators charge it of violating drug regulations which have been imposed to protect the helpless consumers. Social action groups criticise it for undertaking unethical promotional and marketing practices. Some physicians in the curative branch of the healthcare industry bring out charges of bribery committed by those companies in order to have the drugs manufactured by them prescribed to patients. Thus, it appears that it is a war waged by the whole world against the drug industry.

Without Big Pharmas, life is unthinkable

To be fair by drug industry, if it weren’t there, the life of both patients and healthcare workers would not have been so comfortable. The pharmaceutical companies known as ‘big pharmas’ not only do new research on new drugs but also manufacture drugs and deliver them in neatly packed retail packages to patients located in every corner of the globe. Some two hundred years ago, before the onset of pharmaceutical firms in the market place, it was the responsibility of the chemists attached to pharmacies to prepare mixtures of medicine prescribed by physicians and provide to patients. If there are only a small number of patients in the whole world, this practice can be continued without a hassle. But when the number of patients treated every day runs into billions, the lonely chemists cannot accomplish their duty without getting the patients to stand in queues for long hours before they get the needed drug preparations. Since most of these cases are emergencies, such a long wait for medicines will definitely be fatal to the patients. But today when the patient walks out of the physician’s consultation room with a prescription in hand, the nearby pharmacy is ready to supply him with pre-prepared medicines – in tablets, capsules, mixtures, creams or ready-to-inject serums – cutting down the waiting period practically to nothing. If it is not available locally, courier services do the handy job of delivering essential medicines to patients in time globally. A doctor or a patient has to only pick up a phone and order the required medicine from a nearby country.

Such is the efficiency of the drug industry – not only in researching and manufacturing but also in storing, marketing and delivering.

Society’s Love and Hate approach to drug industry

Despite this beneficial role played by it, the drug industry has been the target of attack for many decades. As reported by US Senator Estes Kefauver who served as the Chairman of the Senate Sub-Committee on Antitrust and Monopoly in his 1965 book “In a Few Hands: Monopoly Power in America”, the pharmaceutical companies had been subject to close scrutiny by the US Congress with respect to the monopoly power they have developed over the years and the consequential exploitation of the patients by charging high prices on prescription drugs. Kefauver also reported that the evidence placed before the Senate Sub-Committee had revealed that the pharmaceutical companies had resorted to unethical marketing practices and bribing the doctors to prescribe their brands to patients though there had been many cheaper alternatives available. The concern of the Sub-Committee had been that the doctors too had colluded with these companies by prescribing high priced brands to cheat the US Health Insurance System. Thus, it has been alleged that these companies have been making fat profits by passing the bill finally on to US taxpayers.

Recent intensification of war efforts with drug industry

Though these charges had been leveled against the US pharmaceutical companies since the mid of the last century, any intensified action against them had been taken only recently. This is evident from the history of the fines imposed on pharmaceutical companies and the out of the court settlements they have reached with the US Food and Drugs Administration or FDA during the last four decades. In the whole of that period, the total of such fines and settlements had amounted to US $ 19 billion; of this sum, $ 17 billion had been imposed during the last 10 years, $ 14 billion during the last 7 years and $ 11 billion during the last 3 years. In the recent past, three pharmaceutical giants had been subject to enormous fines or settlements by US authorities on account of unethical marketing practices or violating the US drug regulations: Pfizer of Germany $ 2.3 billion in 2009, GlaxoSmithKline of UK $ 3 billion in 2012 and Johnson and Johnson of USA $ 2.2 billion in 2013.

The US lead being followed by other nations

Following the US lead, India, another major drug manufacturer in the developing world, had imposed a total fine of IR 2500 crores or in US dollar terms $ 400 million in July 2013 on 9 major drug companies for overcharging the consumers. The list includes all the major drug manufacturers in India. The European Union too had imposed a fine of $ 196 million on the Danish drug maker Lundbeck and 8 other drug manufacturing companies for a different reason: Lundbeck for paying bribes and the other 8 companies for accepting those bribes for delaying the introduction of the generic version of the antidepressant drug Citalopram to the consumers in what is known in the market as “Pay-for-Delay-Deals”. After US authorities have been tough on their pharmaceutical companies for adopting unethical marketing practices and violating the drug approval rules, China is also reported to have commissioned an inquiry into their operations in that country recently.

Civil Activists: fines are not enough

The civil activists, as reported in the New England Medical Journal, have welcomed the imposition of those fines on the pharmaceutical companies but have expressed their reservations about the efficacy of those fines in disciplining them into good corporate practices. In their opinion, the fines have been too low to make an effective deterrent to the behaviour of the errant companies. Thus, all the recent developments point to one thing: The World is at war with one of its major contributors to the good health of its people.

The aborted Senaka Bibile Drug Policy in Sri Lanka

Perhaps the evidence of one of the early attempts by a developing country at saving the consumers from the high prices of brand-name drugs comes from Sri Lanka. This was the lone crusade launched by the Sri Lankan Don the late Professor Senaka Bibile in early 1970s to introduce a National Pharmaceutical Policy in Sri Lanka when he was the Chairman of the newly established State Pharmaceutical Corporation or SPC. The Policy sought to rationalise the use of medicine by identifying some essential 630 key drugs and persuading physicians to prescribe their generic forms which are available at low prices. This policy, had it been implemented fully, would have cut the burden on Sri Lanka’s taxpayers who run the country’s free healthcare system. When hospitals buy and stockpile the low cost generic drugs, they would also be able to outreach as many patients as possible making the healthcare system an inclusive one. This policy went into abeyance in his home country after his death in 1977 whilst promoting it in another developing country – Guyana. The reason was that Senaka Bibile was a lone crusader and therefore there was no “owner of the policy” to take it forward. Though there was a renewed interest in resurrecting Senaka Bibile Policy by the Government that came to power in 2004, even after 10 years, that resurrection has been limited only to just ‘talks’ without any concrete action. However, Professor Bibile’s labour has not been shed in vain since the World Health Organisation, UNCTAD and the Non-Aligned Movement have at least picked it up from him and recommended for adoption by other nations.

WOWThe drug market is different due to government regulations

Any intervention by governments in the drug market through Senaka Bibile type policy or getting tough on drug companies comes under what is known as public policy in the interest of people. If the drug market is a normal market, this intervention is minimal. But the drug market is a freak market which does not share common features with other markets, say the market for bread.

The ordinary market: consumers are payers

In the case of the bread market, it is the consumer who places the order for the bread and pays for that order. He could do so because the technical information needed to assess the quality and risk of consuming bread is simple and well established. There is no necessity for a third party specialist to make that evaluation on his behalf. Since he pays for the bread, the consumer can ensure that the supplier supplies him with the bread in the required quality. If the supplier does not do so, he can punish the errant supplier by refraining from buying bread from him. This market punishment is so severe that the choice before the supplier is either to adjust himself to the quality requirements of the consumer or vanish from the market. Hence, in an ordinary market, the buyer, payer and consumer are one and the same person and supplier has to directly deal with this single party. This direct relationship forces the supplier to follow ethical practices when he deals with the consumer. Hence, the public policy in this market is simply for the government to watch over the transaction and facilitate that transaction.

The freak drug market

But the drug market is different because there is a third party who plays a crucial role in a market transaction. This third party is the physician who has the exclusive knowledge of the use of the medicine and therefore the consumer who is the patient has to be guided by him. Because of the entry of this third party, the drug market is a freak market. In that market, the supplier is still the producer. But on the consumption side, the market operates in a different manner by making the physician the legally empowered authority to select the drug for the patient, place the order for the drug by writing a prescription and control the most important part of the demand side of the market. But the drug is paid for by the patient who has no role in placing the order for the drug. If it is the same man who places the order and pays for it, then, he has an incentive to buy it from the cheapest source. But if the person who places the order does not pay for it, he has no incentive to buy it from the cheapest source because it is not from his purse the money is paid. Any Dad who has walked into a toy shop with a kid would have experienced this. The kid wants to buy the most expensive toy because he does not care for the size of the purse his Dad is carrying. That is why the toy makers are targeting the kids through their marketing and advertising campaigns knowing that the kids have a dominant role in placing the orders for the toys.

The drug market too gets converted to a normal market if the government regulations are removed. This is clear when one observes the operation of the market for narcotics which is illegal and therefore not subject to government regulations. There, the consumer places the order and pays for it direct to the supplier. Hence, the quality and prices are ensured by the operation of the demand and supply forces.

Pharmas target physicians and not patients

Similarly, pharmaceutical companies too advertise, lobby, and canvass not among the patients but among the physicians who place the orders for the drugs. The information involved is so technical and the patient is so ignorant of it that he is unable even to correctly pronounce the name of the drug if he is to go and place the order at a pharmacy. Since the competition among the pharmaceutical companies is very tough, they have all the incentives to bribe the physicians into prescribing the drugs manufactured by them. These bribes come in the form of legally permissible expenditure by the pharmaceutical companies such as sponsoring physicians for knowledge enhancement seminars and conferences arranged in top leisure cities in the world and illegal payment of commissions on the basis of the prescription of the drugs manufactured by these companies. These expenses are subsumed in the advertising and promotional expenses of pharmaceutical companies and therefore escape review by auditors who just make a financial compliance audit of their accounts. In some cases, the pharmaceutical companies as a part of their corporate social responsibility initiatives sponsor major art or sport events; the physicians are issued with free tickets for them and their families to attend those events. As reported by Senator Kefauver, an important link between the pharmaceutical company and the physician is the so called “detail man” whose job is to meet the physicians regularly and educate them of the new drugs which companies are introducing to the market. Kefauver says that though the physicians are technically qualified professional men, they are at the same time human beings who are unable to resist the flood of the advertisements which these detail men bring to educate them.

Regulate the market but don’t kill it

Is the currently intensified war against the pharmaceutical companies good or bad for the future of the healthcare industry? Anyone who would look at it from the side of the patients’ purse might say that it is good. But if the pharmaceutical companies are punished too much as demanded by some civil society activists the end result will be bad for the future of the whole healthcare industry. This is because pharmaceutical companies plough back a significant portion of their revenue for research and development, sometimes as high as 20 percent of their profits, and if these companies are brought to their knees through heavy fines, society will lose all those possibilities of curing the illnesses that take a tough response to prevailing drugs. Thus, societies have to strike a careful balance between their ethical values and their future development. If the going is too tough for pharmaceutical companies, as Ayn Rand, the Russian-Émigré American Novelist and Philosopher, has said in her novel “Atlas Shrugged”, Atlas who has been shouldering the burden of the world may one day decide to strike back by shrugging. Then the world may have good ethics, but not the drugs which those unethical companies have been supplying to it in increasing numbers.

*W. A Wijewardena can be contacted at waw1949@gmail.com  

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Latest comments

  • 0

    The real question is why does the CORRUPT Minister of Health, Maithreepala Sirisena, whose brother has stolen huge acres of State reservation land in Pollonaruwa and built a massive Hotel called Sudu Araliya which should be boycotted by all – lack the political will to pass the “Senaka Bibile Bill”? In this age of computers he persisted in blaming a single ministry employee for “loosing the bill? Seems that has been bought by the big pharma industries and lacks the political will to pass the bill to protect consumers who are being exploited today by MNCs since the Rajapassa regime has a very silly notion of development – Casinos, fast cars, and OILY and UNHEALTHY FAST FOOD outlets (TGI Fridays, MacDonalds, Burger Kind, KFC etc) that cause life style diseases (diabetes, heart attack etc. and various “life-style” drugs to control them. Instead the Health Ministry ran a huge marketing campaign recently for FLORA Margarine while the US is in the course of banning TRANSFATS which is what margarine consists of!

  • 0

    This is an over-generalized, totalizing and hence simplistic picture of the Pharmaceutical industry today. In any field including medical research, growth will reach a plateau and thereafter there will be diminishing returns with regard to research, its products and profits – once the most common illnesses have been taken care of… innovation is not endless in any field..
    Pharma companies are being criticized for a lack of ethics and it is hence the Belinda and Bill Gates Foundation is investing in research for common illnesses in the global south.
    Today the Pharma industry manufactures scares (FLUs) to market its new flu viruses every year to sell its medicines and flu shot stock piles. Flu-fighting antibiotics have been refined to such an extent that there is little more to be done.. and this is by far the most common sickness..

  • 0

    The purpose of Osusala and SPC was to make quality drugs available to the public at an affordable price. This has not happened because SPC has not done its job and imported sub standard drugs. It is a question of having a proper regulatory system in place.

    Instead of competing with the private sector they are trying to control the whole market and taxing the patients. Why can hospitals provide the required drugs at a affordable price instead of asking patients to go outside to pharmacies? many of these pharmacies are owned jointly by doctors. A corrupt lot who keep screaming for their pound of flesh.

  • 0

    I worked for Big Pharma for over 10+ years, finally landing a cushy job giving global IT solutions to increase the profits.

    Here are some facts I know:

    1. Vaccines are given away free to third world countries for the purpose of human trials.

    2. R&D is mostly outsourced to research companies that are paid Billions of dollars to come up with some kind of cure for a disease. These companies somehow always comes up with a solution, even if there are side effects to humans. Not to mention that the new drug might and may cause another disease.

    3. These new drugs are put into the medical journals so Drs who are interested can read up on the ‘new discoveries’.

    4. Drs prescribe the drugs to patients having full trust in the medical journals.

    All I can say is there is a hell of a lot going on in the drug business. Forget ethics guys, the only concern is the share price…

    The only way to change a human being is by these artificial vaccines or medicines. I understand fully about the Pharma industry and it’s a bit sad that all most everyone is fooled by their propaganda. There is nothing wrong with Ayurvedic medicine, don’t forget these have been clinically tested on humans for 1000s and 100s of years. It’s unfortunate that the ‘Veda Mahathyas’ are disappearing slowly from our world and the new generation scoffs or laughs about ancient treatments.. It’s very sad..

    Of course there’s a lot of new diseases arising, God only knows how they appear though. I think you can take your pick on this one, naturally or man made (be it through a new medicine or purposely build).

    You know I have my anti-virus on my computer for the sole purpose of stopping man made viruses. I guess if the viruses were never created there would be no need for anti-virus on my PC. But i guess that’s not that great for the AV Companies……

    • 0

      “There is nothing wrong with Ayurvedic medicine, don’t forget these have been clinically tested on humans for 1000s and 100s of years”

      Let me explain you this as one being in ClinResearch. You just add the view that Ayu medicine have long been tested on human subjects. This is right no doubt about that, but the bottom line is newly form herbal drugs and their applications do need to be tested on specific indications. Like for example, aspirin is being used on western medicine today as fever senking, blood thinning etc, but the very same simple drug could help in other indications too.
      At the time, lanken papaya extracts were used to elevate the levels of platelets of dengue patients, one or few doctors had worked with their patients, but not to a manner that ICH-GCP guidelines instruct them to do. The mentioned head hunting companies would work with lankens if the heath care sector of the country would be shaped up accordingly. In a country where the health system is reported to be far better than that of current day russia (according to WHO), if our authorities would create appropriate environments enabling above companies to work with lankens in finding new drugs, i have no doubt, our populations can contribute a lot in that area. This can also pave the way for new jobs for local uni graduates. Indians work hard on these areas, but their quality performance is criticised by many today.

  • 0

    The problem is Sun, if there’s no money to be made from the drug Big Pharma wouldn’t touch it, meaning if the cure can be made at home using herbs. Anyone with the sickness would invest in the ingredients needed if the price of a packaged pill is too high.

    But very true about the potential of Sri Lanka to come up with brand new solutions in medicine. I personally would say no to any big pharma companies but for the government itself to be the proud owner for R&D and Commercial. These are the things this corrupt government needs to invest on.

  • 0

    Monthly Index of Medical Specialties – MIMS
    The British National Formulary BNF
    are available online and are perused regularly by doctors worldwide.
    These give all details about almost every pharmaceutical product.
    Prices and Names of Manufacturers too are given.

    In sri lanka,a few drugs are imported in bulk and repackaged into capsules,tablets etc.

    Prof. Senaka Bibile who taught pharmacology to many generations of students at the Faculty of Medicine,University of Ceylon,wrote the first National Formulary for Sri Lanka.
    There was a quarterly “Prescriber” published later.
    He identified and listed Essential Drugs for all countries,as requested by WHO.
    The Civil Medical Stores became the State Pharmaceutical Corporation,sole importer of drugs and dressings – on contracts with producers/suppliers worldwide.
    Many corrupt deals are/were alleged,which artificially increased prices of drugs which thus became a ‘luxury’ for the common man.
    Now there are tales of representatives of firms even being present inside operation theatres of hospitals during cardiac surgery,to promote sales of ‘stents’ used to re-open blocked coronary arteries.
    Replacement Artificial Lenses for eye cataracts are sold at inflated prices.

    The Health Ministry should consult the Sri Lanka Medical Association’s Drug Committee in the purchase of Drugs & Dressings – but apparently,this does not happen.

  • 0

    You know one thing Sun and Justice, I am so glad and will rest better knowing there are others that know about this industry.

    I remember having the MIMS in digital form back to the late 90s, giving them the MIMS plus a prescription software to Drs to woo in the sales for our company. I remember how good I thought this was for the patient back then.

    I worked in the sales and marketing side of the business for most of time in Pharma and realised how politics are in these companies.. Once I was drawn a picture on the whiteboard by a director suggesting/saying this is the figures I need for this month. i did not change the figures for this guy, I do remember I felt pressured, but I couldn’t go against my morals. This guy kept moving up and up the ladder in the company, that’s when I realised what kind of person you need to be to climb the corporate ladder..

  • 0

    Ladies and gentleman; we, all talk about the money side of this burning pharmaceutical issue in our country. As an expert in economics, I hope the author would be able to explore the potential damage done to the public health and our economy due to uncontrolled and unregulated pharmaceutical quality and their usage in the country. This is much more serious and potentially dangerous. Over the years, we have become a “sick” nation that we feel we need Western treatment even for a minor ailment.

    • Every drug is a poison. Even Panadol or paracetamol can be fatal if not properly used. General public use drug products as they wish for self-medication. Concurrent use of herbal drugs is not controlled. This situation can create more problems to our health and economy.
• Drugs can be obtained freely in Sri Lanka without prescriptions. If one pharmacy refuses to sell a drug without prescription the customer can obtain it from the next pharmacy in the same street.

    • Unlike other countries, there are no pharmacists in all pharmacies in the private sector in Sri Lanka. Even if pharmacists are available they are not educated enough to give the correct and complete advice to patients on clinical pharmaceutical issues.

    • Pharmacists in other countries are trained in the university for 4 to 7 years. It is not known why pharmacists are not given adequate training to perform their duties correctly in Sri-Lanka.

    We have well developed Ayurvedic a treatment in the East over 5000s years and sadly it is disappearing gradually due to unethical marketing practices by the Western sector, poor regulation and standards of Ayurveda in Sri Lanka. The annual budget allocation for Ayurveda also about Rs.1.4 Billion and Rs.104 Billion per year for Western Medicine. This huge difference may be due to poor demand for Ayurveda and also Ayurvedic practitioners are not trying to improve the standards of their profession. The time has come to rejuvenate Ayurveda in the country.

    Having worked over 35 years in the formulation development of existing drug formulations and new synthetic drug compounds in Western pharmaceutical organizations, Research & Development of pharmaceutical products for developing countries, packaging and drug distribution for tropical countries, distribution storage and dispensing prescribed medications in line with principles of clinical pharmacy to suit local population and obtained a PhD on the subject, I volunteered to support local manufacture of pharmaceuticals in line with Good Manufacturing Practices (GMP) Good laboratory Practices (GLP) and Good Clinical Trial Practices (GCP) and improve the safety, efficacy and availability all generic drugs to the nation but nobody is interested.

    Even today, Sri Lanka can save about Rs.15 Billion per year from the drug budget, if we manufacture the essential drugs locally. We have drug formulation experts, analytical experts, drug policy experts but nobody wants to use their expertise and they were frustrated and left the country last year. They never expected a single cent in return to serve the country.

    It is very sad that we do not realize our own strength and still value only foreign goods and listen only to people white skin or does not listen to anybody.

    • 0

      I second that Piya.

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