THE

PHARMACEUTICAL
INDUSTRY
A DYSFUNCTIONAL
RELATIONSHIP

We try never to forget that medicine

is for the people. It is not for the
profits. The profits follow.
George Merck, 1950

A DYSFUNCTIONAL
RELATIONSHIP
239 US settlement payments amounting to $30.2b
have been paid
COI- 84% of doctors having a relationship with
pharmaceuticals.

ROADMAP
I. Profit-fixation
II. Institutional Corruption
III. the Physician Payments Sunshine Act
(PPSA)

Profit Fixation

Institutional
corruption

Analysis
PPSA

PROFIT FIXATION

COSTLY R&D

New molecular entities (NMEs)

3 clinical trial phases
Only 1 out of 20 NMEs
an average of 12 years
$5.3 billion

Profit Fixation

Institutional
corruption

Analysis
PPSA

COMPULSORY
LICENSING
Resort to compulsory licensing
Accessible to the public.
Bayer Corporation v Natco Pharma
Limited
1995 to 2011 - there were 24 cases of
compulsory licensing for drugs

Profit Fixation

Institutional
corruption

Analysis
PPSA

INSTITUTIONAL CORRUPTION

IMPROPER DEPENDENCIES

TRIAL METHODS
FDA depends on scientific data from
pharmaceuticals
Skew results to exaggerate the
efficacy. Or downplay side-effects.

Profit Fixation

Institutional
corruption

Analysis
PPSA

PHARMACOVIGILANCE
Post trial for adverse side effects.
Able to choose trial designs
Delay comparative studies
- Vioxx Gastrointestinal Outcomes
Research (VIGOR) & Weinblatt.

Profit Fixation

Institutional
corruption

Analysis
PPSA

SOURCE OF
INFORMATION
Pharmaceutical physician relationship
Continual Medical Education (CME)Talks
Medical journals
Funding to sustain operations
Physician patient relationships
Information asymmetry more pronounced
No discretion Fiduciary duty erode
Exploit the unequal relationship

Profit Fixation

Institutional
corruption

Analysis
PPSA

GOVT REGULATION
Disproportionate influence over the entire
process.
Free market non-existent
Information asymmetries

Overdependencies

High Sunken costs- first mover

disadvantage
"We don't want to do anything that puts
us at a competitive disadvantage.
Novartis CEO

PHYSICIAN PAYMENTS SUNSHINE

ACT

SUNSHINE ISMTHE BEST DISINFECTANT?

PPSA
Payments or transfers of value of more than
$10.
Knowingly failing to report- fine up to $1m.
Aug to Dec 2013.
4.4 b transactions- $3.5b
Inaccuracies & 1.7m transactions deidentified.

Profit Fixation

Institutional
corruption

Analysis
PPSA

PPSA
Disclosure is of limited use
I. Onus placed on patients with limited
means
- Need of medical knowledge
-Second opinion?
II. Doesnt minimize institutional corruption
and the disproportionate influence.

Profit Fixation

Institutional
corruption

Analysis
PPSA

REFORMS
FDA to conduct pharmacovigilance
Post trials
Separate funding for CME talks
Talks to be funded by tax
Expanding the PPSA to ban gifts
Aid vulnerable patients

Profit Fixation

Institutional
corruption

Analysis
PPSA

SUNSHINE IS NOT THE

BEST DISINFECTANT

THE END