An American Sickness (Part II): The Age of Pharmaceuticals

Subtitled “How Healthcare Became Big business and How You Can Take It Back” here are excerpts from the pharmaceutical chapter of the book.

[T]he Bayh-Dole Act of 1980 permitted scientists, universities, and companies to obtain patents on products that evolved from research funded by the government. (page 94)

With the race to treat HIV, a virus that had infected more than a quarter million Americans by 1991, the FDA relaxed its rules for what constituted proof that a drug was effective, allowing for greater use of what are called “surrogate measures”: Drugmakers no longer had to show that their product actually cured the symptoms of illness over months or years or extended life. Instead they could measure things like blood markers that were felt to correlate with such benefits. That made good sense for HIV, because the virus attacked CD4 immune cells, so measuring their levels was a great proxy for the patient’s condition and the drug’s success. But it made little sense for trials of drugs to treat many other conditions for which surrogate endpoints are now the norm, such as type 2 diabetes, providing a fast track to approval. (pages 98-9)

An in-depth data investigation by the Milwaukee Journal Sentinel and MedPageToday in 2014 revealed that, thanks to surrogate endpoints, 74 percent of cancer drugs approved by the FDA during the previous decade ultimately did not extend life by even a single day. (page 99)

[D]rug advertising is now a constant in our lives. The Supreme Court has protected drug advertising under the guise of free speech. We are one of two countries that allow it, along with New Zealand. Media companies, and particularly cable television stations, are ever more dependent on it for survival. (pages 100-1)

This practice of comparing new drugs with placebos rather than other currently available treatments as a criterion for licensing has also led to both a plethora of expensive me-too drugs and a dearth of trials and published efficacy studies. (page 104)

The FDA say the fees, permitted under the 1992 Prescription Drug User Fee Act, allow it to staff up to keep drug reviews moving expeditiously through the approvals system. Critics say the half billion dollars in fees it collects annually makes the FDA beholden to pharma. (page 106)

Getting a patent costs only $20,000, and applications are unlimited. (page 106)

Many of the same drugs in Europe still cost $15,000 a year because countries there bargain with the pharmaceutical companies for a national price, which Medicare is not legally allowed to do. (page 115)

Physicians are not permitted to waive patient co-payments because they are part of insurance contracts: if a doctor routinely “forgives” patients’ required 20 percent co-pay, insurance law considers that fraud. (page 115)

According to antitrust law and under contractual gag clauses, insurers cannot compare prices they pay for medicine. But pharmacy benefit managers (PBMs), who each represent large swaths of the healthcare industry, know all the deals and have huge negotiating power. The PBMs are for-profit companies that make money by pocketing a percentage of the discounts they negotiate. The items that end up on the formularies of covered drugs and devices aren’t always the ones patients need most or those that work best, but rather the ones on which the PBM has wrangled the best deal, with the best negotiated profit margin. (page 119)

A promising new noninvasive stool test for colon cancer, called Colonguard, is now on the market. You can imagine how the colonoscopy industry is fighting acceptance. (page 127)