Trial and error: why we should drive the drug industry out of the clinical test business

Washington Monthly, Oct, 2004 by Merrill Goozner

The Truth About the Drug Companies: How They Deceive Us and What To Do About It By Marcia Angell Random House, $24.95

A few years ago, Brooklyn-born Rep. Bernie Sanders (I-Vt.) compared the pharmaceutical industry's large and well-connected lobbying team to the hated New York Yankees. He noted one glaring exception. Unlike the drug lobby, the Yankees occasionally lost.

Are things about to change? The signs are certainly there. First, the Bush administration's deeply-flawed Medicare drug benefit, which passed late last year after an unprecedented all-night session of arm-twisting, has proved unpopular with the public, and especially with seniors, largely because of the giveaways to pharmaceutical companies insisted upon by the GOP. Not only does the bill ban the increasingly popular importation of drugs from Canada, but it also bars the federal government from using its buying power to bargain down the price of drugs (as every other advanced democracy does), thereby ensuring that seniors will pay more for medication than they might otherwise. But more significantly, the rising cost of health care and its damaging consequences--from seniors unable to afford life-extending medicines to companies unable to hire because of rising health-care premiums--is shaping up to be one of the top domestic issues in the current presidential race. And one of the chief reasons for the rising cost of health care is the higher cost of drugs.

Sen. John Kerry (D-Mass.) is already exploiting the drug angle, bashing the Bush administration for not allowing drugs to be imported from Canada. That attack has clearly hit a raw nerve with the public, which is why there's a chance that bipartisan legislation could be passed this year on this high-profile, if modest, reform.

But that's just one more sideshow on the road to true reform. On the campaign trail, Kerry is talking about everything from rewriting the Medicare drug benefit to fighting the skyrocketing prices of employer-based health insurance by having the federal government pay for employees's catastrophic costs. Should Kerry win, then, the hottest policy book in Washington is likely to be Marcia Angell's The Truth About the Drug Companies: How They Deceive Us and What To Do About It.

Angell, a former editor of the New England Journal of Medicine, believes that many of the problems with (and much of the unnecessary cost of) our health-care systems derive from a single source: the pharmaceutical industry's role in sponsoring the development of new drugs. She argues that this leads to corruption of the clinicians who conduct research, misleading and sometimes faulty science, and more importantly, a tendency for the industry to dedicate its resources to producing slightly-improved versions of existing drugs which have proven to be profitable, rather than exploring new territory.

Angell proposes to sever entirely the ties that bind clinicians to the drug companies, forbidding the industry from any involvement in the testing of new drugs and handing those functions over to a new branch of the federal government. It's perhaps the boldest call yet for reform. Angell's prescription has some good in it but as well as some overreach. But some reforms--including Angell's more modest initiatives--are essential if we're going to stop the health-care system from becoming the whale that are the economy.

The amount of money Americans spend on drugs each year has tripled in the past decade and is the single largest reason the cost of health care is rising at double-digit rates each year. Industry analysts, like the consultancy IMS Health, project that drug costs will nearly triple again over the coming decade. Once a minor adjunct to improving health, pharmaceuticals today drive every aspect of our health-care system. Where sick people may have once spent weeks in the hospital or undergone expensive surgery, today their inpatient visits may last only days or even hours because new and improved drugs and drug therapies have replaced numerous, once-difficult procedures.

So the complex system that generates new drugs (and to a lesser extent new devices and procedures) is the technological leading edge of medical innovation. The process begins with basic research undertaken by laboratory researchers (mainly working at universities) who aim to understand the biology of a particular disease and to identify the biochemical mechanisms for intervening. These expensive steps are largely funded by taxpayers through the National Institutes of Health.

As this fundamental work yields conclusions published in academic journals, scientists working for both universities and industry try to identify potential therapeutic agents which might help attack a given disease. (When these therapies are found lay university or NIH researchers, the university itself or the government usually patents the discovery, and then licenses it to drug companies. When a pharmaceutical manufacturer's scientists discover such an agent, the patent is taken out by the company.) Then industry scientists develop those agents into drugs that can be taken by patients and marketed to physicians and hospitals. The products must then go through a series of clinical trials mandated by the federal Food and Drug Administration. Drug companies foot most of the bill for the trials, and hire physicians to run them. The law requires the companies to prove only that their drugs are better than placebos. If the FDA agrees that such a drug meets the "better than nothing" benchmark, it grants a license. If not, the money the drug company put into development is lost.