[Ip-health] Outsourcing the Drug Industry

Riaz K Tayob riaz.tayob at gmail.com
Tue Mar 13 02:13:23 PDT 2012

March 12, 2012
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As "Blockbuster Drug" Bubble Bursts, Big Pharma Takes Jobs Overseas

  Outsourcing the Drug Industry


It is no consolation to the roughly one out of 600 families 
who lost their homes in the U.S. but Wall Street made a lot of money 
slicing and dicing mortgages it knew would implode, while hiding risks. 
Financial giants, like AIG, are still buzzing along 
and neither penalties or new laws will prevent a future crash, say 
financial analysts, because the risky business models have not really 

A similar Big Pharma bubble, leavened with risky blockbuster drugs that 
also blew up, is now bursting. Like Wall Street's bundled high risk 
loans, the "tide" created by Big Pharma's high risk drugs raised many 
ships during the 2000s from advertising, public relations and medical 
communication agencies to TV and radio stations, medical journals and 
doctor/pitchmen who shoveled in its marketing budgets. *But now the 
joyride is over and Pharma is shedding jobs and settling billions in 
claims without changing its risky business model, like Wall Street.*

In Europe, governments are no longer willing to pay the high prices for 
drugs that they once did say published reports 
some countries are drafting laws making drug makers "prove their drugs 
are effective or risk having them dropped from the coverage list, or 
covered at a lower rate." Imagine.

Germany has already saved 1.9 billion euros in 2011 by refusing to pay 
higher prices for drugs unless they are clearly superior to existing 
medicines,//and Pharma worries that other countries will also get tough 
and want scientific proof for drug effectiveness instead of marketing 
and spin. In the U.S. and elsewhere, a drug only needs to be superior to 
no drug (placebo) to be approved by regulators--yet "new" is conveyed as 
"better than any drug to date" in advertising.  Some clinicians say 
Haldol, an inexpensive antipsychotic and lithium, a similar affordable 
bipolar drug are /better/ than blockbuster antipyschotics and bipolar 
drugs that created Pharma's 2000?s bubble.

Before the Vioxx scandal 
and major settlements over blockbuster drugs like Zyprexa 
Celebrex, Geodon and Seroquel 
being a Pharma rep was probably the next best thing to working on Wall 
Street. Direct-to-consumer advertising did your pre-sell for you, and 
all you had to do was show up with your snappy Vytorin tote bag and 
samples case. Some Pharma reps had their 
reception room with ice water, swivel chairs, and laptop ports at 
medical offices, and most waltzed in to see the doctor right in front of 
waiting and sick patients. (It didn't hurt that reps were usually 
"hotties," both men or women).

But, by 2011, the bloom had fallen off Pharma reps' roses. The number of 
prescribers willing to see most reps fell almost 20 percent, the number 
refusing to see all reps increased by half, and eight million sales 
calls were "nearly impossible to complete," reportedZS Associates. 
Blockbuster drugs that were found to be unsafe after their big sales 
push or even withdrawn altogether, did not help the reps' credibility 
with doctors. After the aggressively marketed hormone therapy was linked 
to high incidences of cancer, stroke and heart attack, Wyeth (now 
was eliminating 1, 200 jobs and closing its Rouses Point, New York plant 
where Prempro products were manufactured.

As government and private insurers increasingly say, "You want us to 
cover what?" about expensive, dangerous drugs that are not even proven 
effective, Pharma bubble jobs are evaporating. Almost 20,000 jobs have 
vanished at AstraZeneca 
and Pfizer in the last 12 months alone. (AstraZeneca scrapped 21,600 
more since 2007). Meanwhile, Pharma is outsourcing more of its 
operations to poor countries.

Workers and people willing to be trial subjects are both a bargain in 
poor countries where many can't understand drug risks or refuse them if 
they did (and most can't afford the very drugs they help sell). In 
January the Argentinian Federation of Health Professionals accused 
maker GlaxoSmithKline of misleading participants and pressuring poor 
families into joining a trial for the Synflorix vaccine, which the 
company says protects against bacterial pneumonia and meningitis, 
reported CNN. In 2010, 10 deaths 
during Pfizer and AstraZeneca drug trials at the Bhopal Memorial 
Hospital and Research Centre which was ironically built for survivors of 
the 1984 Bhopal gas disaster, reports MSNBC. 3,878 workers perished in 
Bhopal when chemicals leaked at a Union Carbide pesticide plant 

Outsourcing drug manufacturing to cheap venues also contributes to 
Pharma's cascade of "quality control" problems in which drugs are 
mislabeled, contaminated or otherwise made dangerous. It is speculated 
that Johnson & Johnson's CEO William Weldon "was pushed to retire 
because of all of the quality issues at McNeil as well as with the 
company's hip implant products, which have resulted in a raft of 
litigation," reports FiercePharma 

Like the Wall Street bubble, the Pharma bubble was built on products 
that industry, but not the public, knew were risky, sold for quick 
profits. Now regulators are examining some of these "assets" more 
closely and with disturbing findings. The FDA now warns 
<http://www.prweb.com/releases/2012/3/prweb9252425.htm> that bestselling 
statin drugs like Lipitor and Crestor, even approved forchildren 
are linked to memory loss and diabetes associated with. The equally well 
selling proton pump inhibitors like Nexium and Prilosec for acid reflux 
disease (GERD) are now believed to increase the risk of bone fractures 
by 30 percent 

In March, the FDA even rejected a Merck drug that combines the active 
drug in Lipitor with the active drug in Zetia and Vytorin, a drug that 
/Forbes /calls Son of Vytorin. Vytorin (the father) was advertised to 
treat both food and family "sources of cholesterol" until results from a 
study that Merck and Schering-Plough appeared to withhold from 
regulators showed the drug had no effect on the buildup of plaque in the 
arteries (believed to correlate with heart attack and stroke). There was 
such a gap between marketing and science, Sen. Chuck Grassley (R-Iowa) 
asked the General Accounting Office 
to investigate why the FDA was approving "drugs that appear to have 
little to no effect in protecting lives and increasing health."

Yet even as clouds develop over Pharma's top-selling drugs, some say the 
FDA is too hard on new drugs, not too easy. "The FDA is impeding useful 
innovations in the U.S.," 
says former FDA deputy commissioner Scott Gottlieb in the a /Wall Street 
Journal /oped, and lagging behind other countries. Former FDA 
commissioner Andrew Von Eschenbach, also writing in the WSJ, agrees. The 
FDA should improve U.S. drug competitiveness by allowing drugs 
be approved based on safety, with efficacy to be proven in later 
trials," while the public is already taking the drugs. Isn't that what's 
happening now?

/*Martha Rosenberg's* first book, Born With A Junk Food Deficiency: How 
Flaks, Quacks and Hacks Pimp The Public Health 
will be published by Prometheus Books next year.


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