Wednesday, September 14, 2016

Pharmaceutical Company Leaders Pretend to Advocate for the Public Interest - But Maybe it's All "For the Love of Money"

In this political season, the US public is confronted with a blizzard of protestations from candidates who claim to want to serve their interests.  We ought to be used to this, because leaders of big health care organizations have been protesting for years about how they are always in it for the public and the patients' health.  Yet as we have repeatedly discuss, such leaders often manage in ways that subvert their own mission.

Recently, there were two striking examples of pharmaceutical leadership saying they were all about the public interest, despite evidence to the contrary.

It's All About the Children Says Insys Therapeutics, or Perhaps the Market Share

In the Intercept, Lee Fang reported the touching concern of the executives at Insys Therapeutics for America's children.
On August 31, Insys Therapeutics Inc. donated $500,000 to Arizonans for Responsible Drug Policy, becoming the single largest donor to the group leading the charge to defeat a ballot measure in Arizona to legalize marijuana.

The drug company, which currently markets a fast-acting version of the deadly painkiller fentanyl, assured local news reporters that they had the public interest in mind when making the hefty donation. A spokesperson told the Arizona Republic that Insys opposes the legalization measure, Prop. 205, 'because it fails to protect the safety of Arizona’s citizens, and particularly its children.'

However, it turns out the company admitted it had other compelling reasons to want to fight the legalization of marijuana.

Investor filings examined by The Intercept confirm the obvious.

Insys is currently developing a product called the Dronabinol Oral Solution, a drug that uses a synthetic version of tetrahydrocannabinol (THC) to alleviate chemotherapy-caused nausea and vomiting. In an early filing related to the dronabinol drug, assessing market concerns and competition, Insys filed a disclosure statement with the Securities and Exchange Commission stating plainly that legal marijuana is a direct threat to their product line:
Legalization of marijuana or non-synthetic cannabinoids in the United States could significantly limit the commercial success of any dronabinol product candidate. … If marijuana or non-synthetic cannabinoids were legalized in the United States, the market for dronabinol product sales would likely be significantly reduced and our ability to generate revenue and our business prospects would be materially adversely affected.
Insys explains in the filing that dronabinol is 'one of a limited number of FDA-approved synthetic cannabinoids in the United States' and 'therefore in the United States, dronabinol products do not have to compete with natural cannabis or non-synthetic cannabinoids.'

The company concedes that scientific literature has argued the benefits of marijuana over synthetic dronabinol, and that support for marijuana legalization is growing. In the company’s latest 10-K filing with the SEC, in a section outlining competitive threats, Insys warns that several states 'have already enacted laws legalizing medicinal and recreational marijuana.'

Insys insists on its web-site
We are an innovative organization with a focus on providing therapeutic solutions helping to improve the lives of patients. 

Our commitment to better patient care is measured not only by our focus on bringing innovative technologies to patients and physicians, but also by the importance we place on making an impact within the communities where we work and live.

But it really more seems to be all about market share, which drives the revenue, which drives the executive compensation (which was $3,862,000 for outgoing CEO Michael L Babich in 2015, per the 2016 proxy statement). 

Pfizer CEO Advocates for the Public Who Do Not Support National Health Insurance, or Maybe They Do

Bloomberg reported that Ian Read, the CEO of Pfizer, "America's biggest drugmaker," said
that Democratic presidential nominee Hillary Clinton’s proposals to contain the price of pharmaceuticals would be 'very negative' for the industry and are a step toward single-payer health care.

Pfizer CEO Ian Read criticized Clinton’s plan, which she released earlier this month, at an investor conference hosted by Wells Fargo in Boston. Clinton’s prescription drug policy would give the government a broad role in overseeing drug prices, including a board to monitor sharp cost increases, and would specifically target price hikes on older medicines.

It is pretty obvious why the CEO of Pfizer would not like any policy that might reduce the prices of his products.   However, Mr Read in addition stated that

'The Clinton approach to health care drives you to a one-payer system, and drives you to rationing, drives you to a place where most consumers don’t want to be,' Read said. “In its totality it would be very negative for innovation.”

One might be suprised that Mr Read, who received $17,987,962 in total compensation in 2015 (per the 2016 proxy statement), would be in touch with what most consumers want.  But maye he was just following the strategic imperative described in the 2016 proxy statement:

Earn greater respect

Earn society’s respect by generating breakthrough therapies, improving access, expanding the dialogue on healthcare and acting as a responsible corporate citizen.

However, it appears that Mr Read did not know what the public really wants.

There is at least some systematic evidence to the contrary, that the US public generally supports single-payer government health insurance, aka national health insurance.  A Gallup poll this year found 58% support for a federally funded health system (look here).  A 2013 survey of people visiting emergency departments in safety-net hospitals in in Massachusets, which has had a longer experience with an "Obamacare" like system than most of the US, showed that 72% would prefer national health insurance. (Saluja S et al. Support for National Health Insurance Seven Years Into Massachusetts Healthcare Reform: Views of Populations Targeted by the Reform. Int J Health Serv 2016; 46: 185-200. Link here.)  For more discussion, see this.

So was Mr Read's insistence that he did not like the Clinton policy on the pharmaceutical industry because he was advocating for the public who did not want national health insurance?  Or was it all about the Benjamins?


Unfortunately, the US, and perhaps other western countries are beset by rising distrust of increasingly powerful elites.  It seems that this may be in response to those elites grabbing an ever increasing share of the nations' wealth.  More unfortunately, this distrust may lead to support of outsider politicians who claim to be on the side of the people, and who may have quick, but often very dirty solutions.  Before grabbing at such easy fixes, or applauding figurative men on white horses, perhaps we need to focus more attention on the leaders who should have inspired mistrust in the first place.

Health care leaders often inspire trust, since they frequently claim to be in it for patients' and the public's health.  We have frequently shown, however, that they may instead do what is best for their personal interests, even if that is hostile to their ostensible health care mission.

Now we have just two more quick, and also dirty examples of leaders, this time of pharmaceutical companies, pledging their support of the public while managing to so what is best for their corporate bottom lines (and presumably thus their personal compensation).

As we have said far too many times - without much impact so far, unfortunately - true health care reform would put in place leadership that understands the health care context, upholds health care professionals' values, and puts patients' and the public's health ahead of extraneous, particularly short-term financial concerns. We need health care governance that holds health care leaders accountable, and ensures their transparency, integrity and honesty.

For our musical interlude, here is "For the Love of Money," by the O'Jays, as used in the introductory sequence for the "reality show," The Celebrity Apprentice, hosted by, well, you know...

1 comment:

Brad Evans said...

If you've not seen it, I recommend watching the documentary "Merchants of Doubt."