Category: Pharmaceuticals

My From the Editor page in the July/August issue of my day job:

Who Knew?
Cancer drug prices explained! (and the Gell-Mann Amnesia effect, to boot!)

In June 2004, Robert Bazell, the chief science correspondent for NBC News, wrote an article called Strange Medicine on Slate.com. I’ve read Slate, which is owned by Microsoft, for a few years now. It has its partisan turns, which can drive me to distraction, but I find its articles pretty informative, in general.

In his article Mr. Bazell attempts to explain why cancer drugs are so expensive. He writes, �[T]he simplest answer is that drug companies can charge whatever price they want.� Who knew it was that simple? I certainly didn’t, so I kept reading, to find out why Pharma doesn’t charge $1 million per dose of every drug (a prospect which surely would’ve made this year’s Top 20 Pharma Companies Report even more entertaining).

Well, I discovered, it’s because Medicare has failed to rein in costs by setting fees for treatment. Since private insurers follow Medicare’s lead (until they don’t, in Mr. Bazell’s world), new MAbs for cancer like Erbitux and Avastin are ridiculously expensive because drug companies want to charge lots of money for them. He writes, “Like all pharmaceutical companies, [Bristol-Myers Squibb] and Genentech cite research costs and the huge risks involved in drug development (many drugs fail; clinical trials are expensive . . . but haven’t we heard it all?) as explanations for the high prices of their drugs. But the real reason is that market forces do not apply to drugs.” Who knew? Perhaps the $2 billion that B-MS committed to ImClone to co-market Erbitux simply grew on a tree, too.

Referring to manufacturing those same drugs, he writes, “True, these antibodies are more expensive to produce than most pills, but only slightly–the technology can be replicated in any college biology lab. Production costs amount to few dollars a dose at most.” (You can go back and read those lines again; I’ll wait.)

Again, who knew? All this time, I was under the impression that my readers and advertisers were manufacturing and purifying multi-step chemical and biological processes under cGMPs at large scale, then storing, packaging and distributing them, while educating doctors and other prescribers about the uses and benefits of their products (e-mail me to let me know what additional steps I missed, like formulation and validation). Now I realize that a bunch of college kids could make Erbitux to treat the 106,000 annual colon cancer diagnoses that Mr. Bazell cites, and there wouldn’t be any problems at all!

At this point I rapidly concluded that my AppleCare warranty likely wouldn’t cover damage to my nifty new laptop caused by hefting it across the room. Then I was reminded of something I read a few months ago. At the risk of turning this space into the �Michael Crichton page,� I’d like to A) note that I’ve never read a book of his, and B) cite another of the writer�s speeches (to the International Leadership Forum, in April 2002):

[T]he Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well.

[. . .] You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward–reversing cause and effect. I call these the “wet streets cause rain” stories. The paper�s full of them.

[. . . .Y]ou read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate about Palestine than the baloney you just read [about your field]. You turn the page, and forget what you know.

That is the Gell-Mann Amnesia effect. [. . . I]t does not operate in other arenas of life. In ordinary life, if somebody consistently exaggerates or lies to you, you soon discount everything they say. In court, there is the legal doctrine of falsus in uno, falsus in omnibus, which means untruthful in one part, untruthful in all. But when it comes to the media, we believe against evidence that it is probably worth our time to read other parts of the paper. When, in fact, it almost certainly isn’t. The only possible explanation for our behavior is amnesia.

Smart guy, this Crichton. If he applies himself, he may just amount to something in this world.

Gil Roth
Editor

According to a Harris poll, the industry I write about–which develops drugs and vaccines to heal the sick and improve quality of life–is regarded as poorly as oil companies and tobacco marketers.

I’m writing up my profile of Aventis, going over the company’s late-stage drug pipeline to see what might be a good revenue source, when I come across a drug called Sculptra. What is it meant to treat, I wonder?

“Indication: Facial lipoatrophy”

Okay. I’m a smart guy. I guess it means “fat in the face is wearing out.” But I HAVE to look it up to see what it’s all about.

And now I know.

No blogging for me. I’m sick as a dog (summer colds suck), and have to put together the annual Top Companies report (top 20 pharma, top 10 biopharma) for my magazine.

Now if you’ll excuse me, I have to explain why last year’s optimism about Merck was misguided . . .

Wow. I come across this take on the Iraqi flag during breakfast this morning, then I get an e-mail from new VM reader Nancy with a great link critiquing flags from all over the world (Angola: Machete on flag nicely depicted but not wise idea).

Enjoy.

PS: Cut me some slack, okay? I don’t have a lot of blogging-time at present, as I’m busting ass on the Top 20 Pharma Companies report at my magazine. And it was either this or a rant about the report on how 10 million women continue to have pap smears after they’ve had hysterectomies. Which is to say, they’re getting tested for cancer in organs THEY NO LONGER HAVE. And people complain that drug companies are fucking up healthcare costs? Grumblegrumblegrumble . . .

Update: Both my girlfriend and my mom called to complain about this entry, because not every hysterectomy includes removal of the cervix. Now, notwithstanding the fucked-up freudian issues involved in those two people calling me to discuss this subject, I want to note that the NYTimes article on this subject indicates that the 10 million women in the study don’t include that sub-population. So, yeah, there are 10 million women getting checked for cancer in organs they don’t have. There are also 1.1 million who’ve had hysterectomies and retained their cervixes. They should still get pap smears. Right now.

(Here’s the From the Editor page of my magazine this month)

A recent New York Times article, “Fraud Kicks in Months Ahead of Medicare Drug Discount Card,” discussed the practice of con artists going door-to-door selling ‘Medicare-approved’ drug discount cards, despite the fact that the drug discount program has yet to be instituted and enrollment doesn’t begin for a few more months. This con preys on the fears and vulnerabilities of the elderly and the infirm, for whom prescription drugs are an utter necessity. People who perpetrate this scam are base, venal liars who should go to jail.

Who on earth can wake up in the morning, look in the mirror, and say, “I’m going to go out today and defraud desperate, uninformed people’? I mean, besides Congress and the White House. After all, what should be done to the people who pushed the Medicare prescription plan through Congress while lying about its projected cost? There’s fraud, and then there’s $134 billion dollars in costs that were conveniently ignored till the bill was passed.

President Bush, who’s already run budget deficits beyond the wildest dreams of any supply-side economist (please note that I’m referring to massive growth in domestic, discretionary spending, not military spending, which I believe is warranted), contended that he would only promote a plan with a total cost of $400 billion. So the plan was shoe-horned to fit that number and gain approval, but “revised estimates” now show it will reach an estimated $534 billion.

A few weeks ago, a friend of mine asked me how much I think the Medicare prescription drug benefit plan would ultimately cost. I facetiously replied, “All the money in Moneyville.” It’s my belief that the plan will never actually come to fruition and has been pushed through Congress as a means to win the votes of senior citizens. To the best of my knowledge, I haven’t always been this cynical, but this level of mendacity is maddening, regardless of which political party perpetrates it.

The vote to approve the plan largely fell on partisan lines. I write ‘largely’ because some Republicans did fail to vote for the White House’s program. One of those Representatives, Nick Smith (R-MI), claimed he was offered $100,000 toward his son’s Congressional campaign in exchange for a vote in favor of the plan. As Robert Novak, a right-wing political columnist, wrote last November:

“On the House floor, Nick Smith was told business interests would give his son $100,000 in return for his father’s vote. When he still declined, fellow Republican House members told him they would make sure Brad Smith never came to Congress. After Nick Smith voted no and the bill passed, [Rep.] Duke Cunningham [R-CA] and other Republicans taunted him that his son was dead meat.”

Why did Rep. Smith stick to his guns and vote against the plan? Because he feared the White House was underestimating (not necessarily lying about) the cost of the plan!

As Bob Dylan once ‘sang,’ “Steal a little and they throw you in jail / Steal a lot and they make you king.”

–Gil Roth

P.S.: In a similar vein, I’m happy that ImClone’s Erbitux received FDA approval for treating advanced metastatic colon cancer, and I hope that the drug helps extend the lives (and the quality of life) for cancer patients and shows effectiveness in treating other types of cancer. The former chief executive officer of ImClone, Samuel Waksal, was also pretty happy about the approval. In a recent statement, he wrote, “My drug is everything I said it was and it would not be here were it not for me.”

The only problem I can find with this remark is this: Dr. Waksal wrote it from jail, where he will spend seven years of his life for trying to illegally dump every last share he owned of ImClone, because he knew the FDA was going to reject the drug’s initial NDA.

Don’t get me wrong; we’re all delusional in our own way, but when your words disconnect that much from your actions, you belong in one of two places: jail or Washington, D.C.