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Prescription Drugs: The Insiders
The Insiders
By
Patricia Barry
November 2004
The powerful pharmaceutical industry has recently been
hammered by new books denouncing its strategies in keeping
U.S. prescription drug prices high and challenging its
arguments against proposals to lower them. But now those
criticisms are being reinforced by unlikely sources—insiders
who know how drug companies work and are willing to speak out
publicly against some of their practices. Three such
insiders—a top marketing executive in the world's largest drug
company, a salesman who promotes products to doctors and an
ex-lobbyist who left the business in disgust—recently talked
to the AARP Bulletin about their experiences.
Speaking more in sorrow than in anger, all three paint a
picture of a once-admired industry that has lost its ethical
way, more concerned to protect its bottom line than patients'
health.
'It is obvious to me that probably tens of thousands of
Americans are dying today because they can't afford drugs. And
once you recognize that is the case, if you don't speak up,
you're really part of the problem.'
Their comments come at a time when the industry is taking a
nosedive in public opinion. Two in three Americans now believe
that drug prices are "unreasonably high," and 60 percent favor
federal price controls as a solution, according to the latest
Harris polls. Only 44 percent think drug companies serve
consumers well, down from 79 percent seven years ago, the
sharpest drop in esteem of any industry. Big Tobacco, the most
reviled group, now rates only 14 points lower than what is
increasingly called Big Pharma.
THE EXECUTIVE
"The drug industry saves lives, and tobacco does quite the
opposite, yet they are being compared in public perceptions,"
says Peter Rost, M.D. "That is an absolutely terrible
testament to the people who have led this industry over the
past few years. It is so sad."
If
a politician or an academic had said these words, they
wouldn't be remarkable. But Rost is vice president of
marketing for the endocrinology division of the giant
drugmaker Pfizer. He is the first senior executive to break
rank with Big Pharma's party line. And his public
comments—mainly that drugmakers are untruthful when they
insist that importing drugs from abroad is unsafe or that
lowering U.S. prices would hurt research—have stunned the
industry.
Rost, a Swede who immigrated to the United States in 1987 and
later became an American citizen, has built a successful
career on the business side of medicine for over 20 years.
Entrepreneurial to the core, he's no stranger to
whistle-blowing, either. A few years ago, he reported
widespread tax-dodging frauds among senior managers at the
company he then worked for as a top executive.
Rost's current high-wire act began in August when he read
Marcia Angell's scathing book The Truth About the Drug
Companies and posted a favorable review of it on amazon.com.
"I guess I'm not supposed to like this book", he wrote. "But
the truth is I thought it was fantastic." His short but
damning critique ended on a challenging note. Drug companies
"have antagonized grannies all over the U.S. with their work
to stop reimportation of cheaper drugs," he wrote, "and anyone
in marketing or public relations can tell you that no money in
the world can help you win against millions of mad
grandmothers."
When the media tracked Rost down, he had to make a critical
decision about speaking out more publicly. With a wife and two
young sons to support, "I didn't want to lose my job," he
recalls, "but I also felt an obligation to do what is morally
right."
He
points out that more than 700,000 Americans die each year from
heart disease and refers to studies showing that 50 percent of
people on cholesterol-lowering drugs don't use them as
prescribed, and the more they have to pay, the more they stop
taking them. "So it is obvious to me that probably tens of
thousands of Americans are dying today because they can't
afford drugs. And once you recognize that is the case, if you
don't speak up, you're really part of the problem."
In
criticizing high drug prices, Rost makes it clear he will not
talk for or about his company, Pfizer, but is merely
exercising his First Amendment rights to speak as a private
citizen about the industry as a whole.
Pfizer isn't mollified. When Rost spoke at a press conference
on Capitol Hill in September, joining members of Congress who
want to give Americans the right to buy lower-cost drugs from
abroad, the company sent each lawmaker a four-page letter.
"Dr. Rost has no qualifications to speak on importation," it
said. "[W]e believe he is doing a disservice to the American
public … by issuing a series of personal opinions and asides
that bear no resemblance to the facts regarding the risks of
drug importation."
But Rost says he has more knowledge of importation than most.
As head of Scandinavian operations for another American drug
company, Wyeth, from 1999 to 2001, he had firsthand experience
of parallel trade—the legal European practice of importing and
exporting lower-cost drugs across 18 national borders.
"I
know that parallel trade is safe," he says. "No safety
problems have ever been reported. It has to meet all the
manufacturer's standards, and it does." He believes such a
system would be safer here than the status quo because the
traders "sell approved drugs directly to pharmacists, so
people don't go on the Internet."
Rost insists he's a businessman who loves profits and has made
"literally billions of dollars" for his employers over the
years. But when asked about the drug industry's consistent
argument that reduced American prices and government price
controls would decimate profits and destroy vital research, he
responds: "It's just not true."
Drug companies "are not suicidal," he explains. "Research is
the last expense they'd cut, not the first as they claim." If
price controls came in, he adds, at first "there'd be a
one-time fall in profits, but then they'd start climbing
again, and life would go on."
According to Jeff Trewhitt, an industry spokesman: "Well over
half the world's new medicines are researched and developed by
U.S. companies … and not by those in countries with price
controls." [See
Pharma Responds.]
But half the world's innovative drugs are invented in
countries that have "what is called price control," Rost says.
"But that term implies you're forced to sell a drug at a
certain price. It's not true. You negotiate with governments."
He cites his own experience: "I once had a really good drug
and personally negotiated with the pricing authorities in
Sweden. I got a price approved that was 100 percent higher
than in the U.S. market!"
How about dropping prices voluntarily? Rost recalls the time
when one of his Wyeth products had a 5 percent share of the
Swedish market compared to AstraZeneca's 95 percent for its
blockbuster heartburn medicine Prilosec. He was also losing
sales to cheaper drugs from southern Europe coming in via
parallel trade. So, doing the unthinkable in industry terms,
he dropped his drug's price by 30 to 40 percent. "The result
was amazing," he says. "In 18 months, my market share went
from 5 to 30 percent in value and probably to 45 percent in
volume, and the competition from parallel trade vanished."
Rost's point is that creative and fair competition—and, yes,
cutting prices—can benefit companies as well as reduce
patients' costs. "But we don't have competition in the United
States," he says. "Instead we have an oligopoly, where
companies pretty much set the price."
His wider point, he says, is that Pharma's relentless campaign
of misinformation—"the hollow arguments that are put forward
to protect profits short term"—will in the end backfire. "This
is basically a good industry, but I think they've gone
terribly wrong."
Rost returned to his office in New Jersey amid widespread
speculation on how long it would take Pfizer to fire him.
Company lawyers interrogated him for a full day on what he'd
told lawmakers and reporters in Washington. But, as the
Bulletin went to press, Rost still had his job.
THE SALES REPRESENTATIVE
Arthur Kuebel had a 13-year career promoting drugs to
physicians in Washington state until 2000, when he quit out of
distaste for what he felt the job had become.
The industry describes this work—called "detailing" in the
trade—as a valuable way of educating doctors who have little
time to follow scientific journals. Kuebel says that was once
true, in the days when many sales representatives, like
himself, were recruited from science backgrounds. But now it's
"absolute nonsense," he says. "There are reps with business
backgrounds who don't possess the academic skills to
understand or discuss scientific data with physicians. I've
met one trained in fashion design."
By
2000, the last year the industry released employment figures,
more than 87,000 drug sales reps were already targeting
American doctors. Basically, "the entire enterprise is about
creating dominant market share for your product," Kuebel says.
"That's how you're evaluated and compensated, with bonuses
driven by product sales. And that creates a lot of problems,
in terms of representatives' conduct within physicians'
offices."
A
sales rep typically enters an office armed with information
about the doctor's prescribing habits that the company has
purchased from wholesalers or other firms that track such
data, Kuebel explains. Then the rep makes a sales pitch and
departs, leaving the office "awash in free drug samples." The
samples benefit patients who can't afford the drugs. But, he
says, "it's also a competition for shelf space," a way of
implying that the doctor "doesn't even need to think about
prescribing an alternative product at all—never mind whether
it's clinically appropriate."
When a potential blockbuster drug is launched, the sales force
goes into hyperdrive. Doctors are identified, trained and paid
honorariums to talk up the new product to other doctors.
Kuebel was working for Merck in 1999 when it launched Vioxx,
the heavily promoted anti-inflammatory drug that earned
billions of dollars before being withdrawn from the market
last month after being found to increase the risk of heart
disease. [See
Vioxx: Downfall of a Superdrug.]
Doctors were paid $250 to $2,500 to promote Vioxx at
'roundtable' discussions or larger dinner meetings.
"We spent around $55,000 in this area alone [in central
Washington state] on what are called peer influence meetings
in the first six months of the Vioxx launch," he says. Doctors
were paid $250 to $2,500 to promote Vioxx at "roundtable"
discussions or larger dinner meetings. "Many doctors had
little or no idea," Kuebel says, "that the information they
were giving supported the promotional strategy devised by the
marketing group."
The aggressive and unethical methods that some drug reps have
used to encourage doctors to prescribe their wares are now
well known—lavish dinners, gifts, tickets to ball games and
golf tournaments, cruises and vacations only thinly disguised
as "medical education." After such scandals erupted in
headlines two years ago, the industry introduced voluntary
guidelines to set limits on acceptable behavior.
"But this is the third time in my career that the industry,
like a group of alcohol abusers, has agreed to take the cure
voluntarily to sidestep any sort of mandatory compliance,"
Kuebel says. The second time it happened, back in 2000, "a
manager was describing how we should be 'careful,' and there
was to be no inviting doctors to play golf. But, nudge-nudge,
wink-wink, we could just indicate which physicians would like
to golf and the managers would take them out golfing instead."
It
was such attitudes that made Kuebel quit the business. Knowing
how much money was spent on promotions, he says, he felt
personally "uncomfortable sitting in the waiting room next to
patients who didn't have two pennies to rub together and
realizing what they were being asked to pay for."
On
a wider level, he says, the culture of detailing has changed.
"Helping physicians make patients' lives better through good
practices has given way to a maniacal obsession to increase
market share at any cost, and the well-being of patients be
damned."
Kuebel recently returned to the same line of work, hoping the
industry had cleaned up its act by following the most recent
ethical guidelines. Fully aware that talking to the Bulletin
could jeopardize his new job, he still feels it's important to
speak out for change in the industry. "Medically and
financially, a higher interest would be served if the
companies used more resources for developing innovative drugs
than for excessive marketing of those that arguably do not
advance medicine significantly."
THE LOBBYIST
At
his peak, Kurt Furst earned $600,000 a year working as chief
Washington lobbyist for the now-defunct drug company G.D.
Searle and at other times lobbied state governments on behalf
of Pfizer and Merck. But four years ago he quit "in disgust"
and later used his talents working against Pharma lobbyists,
trying to beat them at his old game.
At
critical times for the drug industry—when it wants a bill
passed or defeated—it mobilizes a small army of lobbyists on
Capitol Hill, more than one for each member of Congress. And
whenever a state tries to lower the cost of prescription
drugs, it sends in rapid-response reinforcements to state
capitols to argue its case.
Furst remains proud of his lobbying career but draws a clear
line between what he regards as ethical and nonethical
conduct. For him, the crunch came in 2000 when his company,
Merck, was among those fighting to keep an open formulary in
Florida's Medicaid program—meaning that patients would still
have access to all medications, and companies would be paid
for any new, expensive drug. "If you have all the money in the
world, that's fine, that's how it should be," Furst says. But
Florida needed to curb costs, and so the legislature and drug
lobbyists agreed on a policy that became law. It limited
Medicaid patients to having only three brand-name drugs unless
they went through a lengthy preapproval process to get more.
"These were the poorest and sickest people in Florida, often
needing seven or eight drugs," Furst recalls.
'All the money is going into marketing the Nexiums and
Celebrexes of the world, because that's where the easy money
is...'
At
that point, "I realized I couldn't look at myself in the
mirror and justify what I was doing for a living," he says.
"It was taking a concept I had been so proud to
represent—giving doctors the freedom to decide treatment—and
turning it on its head." He refused to support the lobbying
effort and resigned.
Furst believes there's been a cultural sea change in the drug
industry. It came, he says, "with the advent of consumer
television advertising. It overwhelmed everything. All the
money and energy of these great companies is going into
marketing the Nexiums and Celebrexes of the world, because
that's where the easy money is, instead of into Alzheimer's
research or the next generation of schizophrenia drugs."
Lobbying changed, too, as the industry invested more heavily
in front groups—fake grassroots organizations that conceal
their Pharma funding. Most unethical of all, Furst believes,
"is the manipulating of disease groups, like families of
mental health patients, to say with absolutely no evidence
that a government policy is going to take away a drug from
them, and to do it in a way that truly terrifies them."
So
Furst went over to the other side. In 2001 he joined the staff
of Oregon's then-governor, John Kitzhaber, and helped pass a
law that set up the nation's first "evidence-based" drug
evaluation program. This makes head-to-head comparisons of
drugs used for the same medical conditions, based on the best
scientific research, to determine the most effective ones and
publish the results.
Still a work in progress, the program will eventually offer
doctors, patients and health care insurers a chance to see
which drugs work best and, therefore, which to pay for. "It's
the silver bullet," Furst says. "It's the only real way of
containing prescription drug costs, and the pharmaceutical
industry has done nothing but fight it."
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