Latest Legal Settlements Suggest Hazards of Making Pharmaceutical Regulation More Lenient, as is Apparently Favored by New FDA Leader

The new US Food and Drug Administration (FDA) commissioner Dr Scott Gottlieb is promoting making the agency's mechanisms to approve new drugs more lenient, according to the Cardiobrief blog.  Blogger Larry Husten wrote:

Gottlieb’s entire career has centered on loosening regulatory restrictions to enable industry to thrive. At the core of his philosophy is the view that with fewer restrictions the force of unbridled capitalism will unleash a torrent of industry innovation. In this view negative consequences, should they occur, will be quickly addressed by an efficient marketplace.

Should we trust pharmaceutical companies to innovate in such a light-touch regulatory climate?  On Health Care Renewal we have noted ethical violations by most of the major pharmaceutical companies, often involving deception in marketing, manipulation and suppression of clinical research, and distortions of dissemination of medical information, such as articles ghost-written by authors paid by industry.  We have documented numerous legal settlements of cases arising out of such misbehavior.

It is no surprise that more legal settlements have marched into view during the last few months to add weight to concerns about making regulation of the pharmaceutical industry more lax.  To summarize them, in chronological order...

Celgene Settled Allegations it Deceptively Marketed Thalidomid and Revlimid for $280 Million

Per the New York Times, July 25, 2017:

The pharmaceutical company Celgene has agreed to pay $280 million to settle claims that it marketed the cancer drugs Thalomid and Revlimid for unapproved uses, the company said on Tuesday.

Under the terms of the settlement, which resulted from a lawsuit filed by a whistle-blower — a former sales representative at Celgene — the company will pay $259.3 million to the United States and $20.7 million to 28 states and the District of Columbia.

In particular, years before the company got approval to market its drug Thalidomid (generic name: thalidomide, the same drug that caused severe birth defects when marketed in Europe in the 1950s)

sales of Thalomid quickly took off, in part because — as [whistle blower] Ms. Brown claimed in her complaint — Celgene 'flooded the country' with sales representatives who were under heavy pressure to pitch the drug to oncologists for a variety of cancers. The F.D.A. sent Celgene two warning letters, in 1998 and 2000, claiming the company had been marketing the drug to treat cancer. In 2000, one Wall Street analyst estimated that 90 percent of Thalomid’s sales were to treat cancer, according to Ms. Brown’s complaint.

However, the drug was not approved for use in cancer until 2006. Also,

in 2005, the company received approval to sell Revlimid for a rare cancer, and Ms. Brown’s complaint claims that the company — as it had with Thalomid — marketed it to treat a broader range of cancers. It also pressured doctors to switch Thalomid patients to Revlimid, which is more expensive.

Ms. Brown’s complaint also claimed that Celgene’s inappropriate marketing of Thalomid exposed patients to heightened risks that included potentially fatal blood clots and other side effects. Those risks were added to the drug’s warning label only after it received the approval for cancer treatment, Mr. Guttman said.

Thus the company's actions may well have harmed patients.

We previously discussed, most recently in 2010, the immense price Celgene charged for Thalidomid, despite the fact that this compound, developed about 60 years ago, is available for pennies in many countries.  

Nonetheless, and also despite the amount of money that Celgene was making selling its drugs for unapproved uses (e.g., Revlimid's sales last year were nearly $7 billion), the US Department of Justice declined to get involved in this case.  Also, like most legal settlements involving big health care organizations, the company did not admit any wrongdoing, and no person who enabled, approved, or directed the misbehavior suffered any negative consequences.

Insys Settled Allegations of  Promotion of Narcotics for Unapproved Uses for $4.5 Million to Illinois

Per the Chicago Tribune, August 18, 2017:

An Arizona drug company has agreed to pay Illinois $4.45 million to settle allegations that it deceptively marketed and sold a prescription opioid drug for uses not approved by the U.S. Food and Drug Administration.

Insys' actions may well have contributed to the current opioid epidemic.

The company heavily marketed the drug to Illinois doctors with records of prescribing high volumes of opioids regardless of whether those doctors were prescribing opioids to treat cancer pain, the state alleged.

In particular,

According to Madigan's office, the top prescriber of Subsys in Illinois was Dr. Paul Madison, who wrote about 58 percent of all prescriptions for the drug in the state despite treating few, if any, cancer patients. Madison, an anesthesiologist and former owner of the Watertower Surgicenter on North Michigan Avenue in Chicago, was indicted in 2012 by the U.S. attorney's office in Chicago for billing insurers for procedures he didn't perform, and his medical license was suspended in November, according to Madigan's office.

We previously discussed Insys' stealth public relations campaign against medical marijuana here.

However, as in the previous case, the US DOJ was not involved, the company did not admit wrongdoing, and no individual involved in the misbehavior paid any penalty.

Novo Nordisk Settled Allegations it Minimized Risks of Victoza for Nearly $58.7 Million

Per Reuters, September 5, 2017:

Novo Nordisk will pay nearly $58.7 million to resolve claims the drugmaker’s sales staff downplayed the importance of U.S. Food and Drug Administration-mandated warnings about the cancer risks of its diabetes medication Victoza.

The U.S. Justice Department said Tuesday’s settlement would resolve claims Novo Nordisk supplied its sales representatives with information to give to doctors that created the false or misleading impression that warnings were wrong or unimportant.

In particular,

The lawsuit said that program required Novo Nordisk to provide doctors information about the potential risk of a rare form of cancer associated with the drug, which gained FDA approval in 2010.

Victoza’s FDA-approved labeling also contained a boxed warning related to that form of thyroid cancer, the lawsuit said.

Novo Nordisk’s sales force employed messages and tactics that created a false or misleading impression with doctors regarding the cancer risks, leading some physicians to be unaware of them, the lawsuit said.

Thus, again this company's actions appeared to pose a risk to patients.

This company also has a track record of ethical misadventures.  In 2011, we discussed several previous settlements by Novo Nordisk.  Nonetheless, the US DOJ decided not to be involved in this litigation, which, as in the other cases above, did not result in admission of wrongdoing, nor any penalities for individual involved in the misbehavior.

Novelion Subsidiary Aegerion Pleaded Guilty, Fined $40 Million for Misbranding Juxtapid by Minimizing its Adverse Effects

Per Reuters, September 22, 2017:

Aegerion Pharmaceuticals Inc will plead guilty to two misdemeanors and pay $40.1 million to resolve investigations into its marketing and sales of an expensive cholesterol drug, U.S. authorities said on Friday.

The settlements will resolve long-running investigations into Aegerion, a subsidiary of Canada’s Novelion Therapeutics Inc, by the U.S. Justice Department and the U.S. Securities and Exchange Commission related to its drug Juxtapid.

In particular,

Prosecutors said after the U.S. Food and Drug Administration in 2012 approved Juxtapid for treating a rare genetic condition that causes high cholesterol, Aegerion promoted it for patients who had not been diagnosed with the condition.

Juxtapid, which cost $250,000 to $300,000 annually per patient, featured a black box warning on its label that it could cause serious liver and stomach problems, prosecutors said.

Sales representatives also were trained to tell doctors and patients that Juxtapid would 'take patients out of harm’s way' and prevent 'impending' heart attacks and strokes, despite the lack of data supporting those claims, prosecutors alleged.

Numerous patients discontinued using Juxtapid after suffering conditions including liver toxicity and gastrointestinal distress, prosecutors said.

Thus, once more, the company's actions appeared to result in patient harm.

The company also signed a deferred prosecution agreement.  By pleading guilty, it admitted the misbehavior in this case.  However, again no individual involved in the misbehavior faced any penalties, despite the severe nature of the adverse effects the company deceptively minimized.

AmeriSourceBergen Settled For $260 Million Allegations of Illegally Selling Repackaged, Perhaps Adulterated Drugs so as to Avoid FDA Regulation

Per Modern Healthcare, September 27, 2017:

AmerisourceBergen Specialty Group, a wholly-owned subsidiary of the major wholesale drug distributor AmerisourceBergen Corp., pled guilty to illegally distributing misbranded drugs and agreed to pay $260 million to resolve criminal liability for skirting regulatory oversight.

Between 2001 and 2014, according to court records unsealed Wednesday, the group's now-defunct subsidiary Medical Initiatives prepared millions of syringes that had been filled with cancer drugs and shipped them to providers in all 50 states.

Medical Initiatives removed the drugs from their original glass vials and repackaged them into plastic syringes in an unclean and unsterile environment, allowing the company to sell excess drug product in the vials known as 'overfill,' according to court records. It combined the contents of multiple vials in a process known as 'pooling,' despite many of the vials carrying a 'single-use' designation.

In order to avoid the Food and Drug Administration's regulatory oversight, AmerisourceBergen Specialty Group did not register Medical Initiatives as a repackager or manufacturer with the agency, records show. Instead, the group portrayed Medical Initiatives as a state-regulated pharmacy, exploiting an exemption to the FDA registration requirement that is reserved for legitimate pharmacies, not for manufacturers or repackagers, authorities said.

Given the problems with sterility, again the company's actions possibly could have harmed patients.

However, yet again, this settlement did again involve a guilty plea, but again no individual involved in the repackaging and adulteration suffered any negative consequences.

Discussion

All the cases discussed above were of behavior that could have harmed patients.  Many of the companies involved had records of previous ethical misadventures.  While a few cases resulted in corporate guilty pleas (to misdemeanors), none resulted in monetary penalties that would have much impact on the companies' finances, and none resulted in any negative consequences for people who enabled, authorized, directed or implemented the bad behavior.


These, just the latest in the march of legal settlements by large health care organizations, again demonstrate how often and how seriously pharmaceutical companies (and other organizations) may misbehave, and how the leaders of these organizations exhibit continued impunity, never having any legal accountability for their organizations' actions.  These settlements again demonstrate the relatively light touch US regulators, including the FDA and DOJ, have exhibited when dealing with these organizations.

So what could happen if that touch is lightened still more, particularly by the ongoing initiatives of the current US FDA leader?  I submit the results will be higher drug prices, more use of minimally effective and/or seriously risky drugs, and larger compensation for top managers of pharmaceutical companies.  Will the public actually also get access to "life saving" drugs?  Perhaps, but most of the offerings of drug companies in the last years have had minimal efficacy, and rarely have been proven to extend life.

Why is Dr Gottlieb pursuing these initiatives?  Is he a true believer in market fundamentalism, perhaps untrammeled by lack of evidence supporting it?

Maybe he as he become intoxicated by all the money he previously made from the pharmaceutical industry.  Prior to his approval by the Senate, his extensive financial dealings with the pharmaceutical industry were detailed by the New York Times, and Stat News, among others.  The NYT article said:

The nominee, Dr. Scott Gottlieb, has spent the bulk of his career working in the drug and health care industry, which experts say raises the potential for myriad conflicts of interest. If confirmed to head the F.D.A., he would wield considerable power over companies and investment firms that have paid him millions of dollars over the years. From 2013 to 2015, for example, Dr. Gottlieb received more than $150,000 to advise Vertex Pharmaceuticals, a company whose two approved drugs are seen as breakthrough treatments for cystic fibrosis but carry list prices of more than $250,000 a year. He’s the acting chief executive of Cell Biotherapy, an early-stage cancer biotech firm that he helped found. He has served for years as a consultant to pharmaceutical giants like GlaxoSmithKline and Bristol-Myers Squibb and is paid by other companies for his expertise.

So Dr Gottlieb's move to the FDA was yet another example of the revolving door pheonomenon.

The Stat article concluded,

It also reflects the normalization of conflicts of interest in medicine, which has been debated in the pages of the New England Journal of Medicine and in the Lown Institute blog.

Gottlieb has criticized government efforts to shed light on conflicts of interest, such as the Physician Sunshine Act, as 'federal tinkering' leading to “the demise of American medicine.” We believe his confirmation will lead to the demise of some FDA rules that are already barely keeping a lid on useless or dangerous medical products.

That may not be so far in the future, if Husten's concerns mentioned at the top of this post are true. And when conflicts of interest start having such real world effects, they cease to be merely conflicts of interest, but become corruption.

We have long been railing against conflicts of interest and corruption.  Until recently we noted only some conflicts of interest affecting US government leaders, most often in the form of the revolving door.  Most of the conflicts we discussed involved health care professionals and leaders of health care organizations.

So we used to write things like this (in July, 2016):

True health care reform would first make transparent the web of institutional and individual conflicts of interest that seems to tie together nearly all big health care organizations, and open discussion of how to make health care organizations better serve health care rather than the narrow financial interest of their top leaders.

Or this (in June, 2016):

True health care reform would first expose these conflicts, then reduce or better yet, eliminate them, and make health care more about helping patients and less about making money by marketing commercial products.

However, since the last presidential campaign, more and more conflicts of interest and apparent examples of corruption involving President Trump, his family, and his ongoing business interests have appeared, so that at this time the Trump regime seems to be riddled with conflicts of interest and corruption (for example, see these lists compiled by the Sunlight Foundation and Newsweek).  Conflicts of interest and corruption involving the highest levels of US government have even more potential to damage patients' and the public's health than those involving, say, physicians or hospital CEOs.

 So we now must say that true health care reform in the US first requires vast reduction in the conflicts of interest and corruption of the leaders of US government.  

Trumping En Masse Through the Revolving Door - the Trump Advisory and Transition Teams

We have frequently posted on the revolving door as a type of severe conflict of interest, if not corruption, affecting health care.  Our posts have covered various cases of people going from influential positions in or related to health care and some anti-health corporations, and government positions that make health care policy or regulate health care. 

Donald J Trump, the president elect, has pledged to "drain the swamp," that is, to generally reduce crony capitalism, conflicts of interest, the revolving door, and government corruption (e.g., look here.)  However, it appears that his campaign advisory/ transition team has been full of people who had just traversed the revolving door.  Examples I have found so far follow, in alphabetical order.

Rich Bagger

Back in July, 2016, per BioCentury Extra

EVP of Consumer Affairs and Market Access Rich Bagger has taken a leave of absence from Celgene Corp to work on the transition team for presidential candidate Donald Trump....

Mr Bagger recently left the transition team, apparently as part of the purge of Chris Christie associates.  Celgene is a pharmaceutical company that was one of the leaders in pushing the envelope in drug pricing (upward that is, e.g., see this post). 


Stephen Feinberg

the co-founder of Cerberus Capital Management LP ... was relieved by Mr. Trump’s victory, a person familiar with the matter said. Mr. Feinberg came on board as an economic adviser [per the Wall Street Journal, November 10, 2016]

As we have discussed here, Cerberus Capital Management bought the former Caritas Christi Health system in Massachusetts, which it renamed Steward Health Care, and subsequently managed, or some would say mismanaged so that Cerberus could extract as much money as possible from Steward.

Mike Ferguson

Reported by Stat News, November 15, 2016,

Not long after Trump’s victory, the law firm where he works, BakerHostetler, circulated an email touting former Representative Mike Ferguson’s 'genuine connection' to Trump, Vice President-elect Mike Pence, and others on the transition team.

The message noted the firm’s 'in-depth relationships' with 'many people who are positioned for senior roles in the incoming administration' at the Department of Health and Human Services, Food and Drug Administration, and the Centers for Medicare and Medicaid Services.

Ferguson, a Republican who represented New Jersey for eight years, 'is in close contact with members of the Trump transition team during this critical time,' said the note. The law firm lobbies for Celgene (see above), Advaxis, and the Children’s Hospital Association — and is ready for more customers. 

 Newt Gingrich

Former House Speaker Gingrich early on was chosen as a Trump insider. Not so well known are his previous health care activities, including financial ties to big health care corporations. As we posted in 2011, Mr Gingrich set up a for-profit consulting group, the Center for Health Transformation, which

brought in dues of as much as $200,000 per year from insurers and other health-care firms, offering some of them 'access to Newt Gingrich' and 'direct Newt interaction,' according to promotional materials. [per the Washington Post]

As we noted then,  The Center for Health Transformation was largely funded by big health care corporations. The Post first noted,

The biggest funders, ... [included] firms such as AstraZeneca, Blue Cross Blue Shield and Novo Nordisk,...

Also,

The center has listed scores of firms and industry groups as members over the years, amounting to a Who’s Who of the medical field, from GE Healthcare to the American Hospital Association to Wellpoint, [now Anthem] the nation’s largest health insurer.

Other clients were listed in a Bloomberg article,

Among the member companies were drugmaker Johnson & Johnson (JNJ) and health insurer Blue Cross and Blue Shield Association....

Also,

Pfizer Inc. (PFE), the world’s largest drugmaker, had consulting contracts with Gingrich, according to two people familiar with the arrangements. Pfizer spokesman Ray Kerins didn’t respond to requests for comment.

The Pharmaceutical Research and Manufacturers of America, the industry’s trade group, was also a client. His firm 'was retained by the PhRMA general counsel’s office at one time to provide advice on a positioning project,' the group said.

In addition, clients included important firms in the health care information technology (IT) sector, including GE, IBM, Microsoft, Allscripts, and Siemens.


We also then wrote about several cases in which Mr Gingrich apparently intervened on behalf of his clients to promote their business interests in the guise of promoting his views on health policy solutions.  In some cases, the views he promoted did not fit with what is generally regarded as his political philosophy, suggesting that the interests of his paying clients overrode his political views.[again, see this post]

Note that we have discussed the managerial, ethical and sometimes criminal misadventures of many of the companies listed above (see the links above for specific firms).  

Rudolph Giuliani

Mr Giuliani, like Mr Gingrich, early on became a close Trump adviser. Per the New York Times, November 15, 2016, Mr Giuliani's consulting firm's clients included Purdue Pharma,

Under contract with Purdue Pharma, the maker of the often-abused painkiller OxyContin, Mr. Giuliani used his clout with the Justice Department to press the federal authorities to offer a less onerous punishment to the company after allegations that security problems at its warehouses might have contributed to black market sales.

We have discussed, and others have discussed more extensively, the saga of Purdue Pharma, which aggressively and deceptively marketed the narcotic OxyContin, doubtless contributing to the deadly epidemic of prescription opioid abuse.


J Steven Hart

Hart, an attorney and accountant who perennially appears on lists of top D.C. lobbyists, is chairman of the law and lobbying firm Williams & Jensen [per the National Law Journal, November 10, 2016]

Hart joined Williams & Jensen in 1984 and became chairman in 1999. At the firm, he has lobbied for many Fortune 500 companies. In 2016 alone, according to filings from the U.S. Senate Lobbying Disclosure Act database, Hart’s clients have included General Electric Co., Coca-Cola Co., Pfizer Inc. and Visa Inc.

More clients of his firm include giant health insurance/ managed care company Anthem, and PhRMA, the association of pharmaceutical manufacturers, per Politico, November 11, 2016


Cindy Hayden

Trump's Homeland Security team ... is being led by Cindy Hayden, a director at the US tobacco giant Altria [per the Business Insider, November 11, 2016]

Given the well known health risks of smoking, Altria could just as well be called an anti-health care company.  As a member of its board of directors, Ms Hayden has a fiduciary responsibility to increase the company's revenue. 

Howard Lorber

Back in August, per the Washington Post, Mr Trump announced a list of core economic advisers that included Mr Lorber, "chief executive of the Vector Group." Per the company website, the Vector Group Ltd is a holding company that holds primarily tobacco companies:

Through our subsidiaries, Liggett Group LLC and Vector Tobacco Inc., we manufacture and market high quality cigarette products to adult smokers in the United States. Vector Group also owns New Valley LLC.

Vector Group’s tobacco subsidiaries have a proud history of charting an independent course in the tobacco industry, dating from Liggett’s founding in 1873.

Also,

We have also developed our e-cigarette brand, Zoom, which we believe is a superior disposable e-cigarette product.

As noted above, tobacco companies could easily be called anti-health care companies.  The more use of tobacco, the more the public health risk.  Yet Mr Lorber's job is to increase the company's revenue, and hence, presumably the use of tobacco. 


Betsy McCaughey

As reported by NPR in August, Mr Trump added a group of women to his economic advisory team. They included,

New York Lt. Gov. Betsy McCaughey, who wrote several influential but highly controversial articles criticizing Hillary Clinton's health care proposals in the 1990s, is also on the list. More recently, she has written books taking on the Affordable Care Act.

As we noted in a post in 2009, in an op-ed column for Bloomberg News that got wide attention, Betsy McCaughey, who is described as, "former lieutenant governor of New York and is an adjunct senior fellow at the Hudson Institute," attacked as "dangerous" provisions in the new Affordable Care Act (ACA, "Obamacare") which supported comparative effectiveness research.  However, not noted in Betsy McCaughey's op-ed article was that she ... [was] on the board of directors of Cantel Medical, a device company, and formerly on the board of Genta, a biotechnology company.

Furthermore, per an August article in the Huffington Post,

Betsy McCaughey built a career out of saying bombastic, completely false things about health care reform. She is reviled by actual health care policy analysts from the left, right and center for spreading frightening, but demonstrably false, misinformation while adopting the tone and posture of a serious expert.

In 1994, she claimed that Hillary Clinton’s health care reform plan would bar people from purchasing care outside the new Clinton system, which would cruelly ration treatments to curb costs. It wasn’t true. The magazine that published the article would later disavow it.

Here’s what she said about Obamacare in 2009:

'One of the most shocking things I found in this bill, and there were many, is on page 425, where the Congress would make it mandatory ― absolutely require ― that every five years, people in Medicare have a required counseling session that will tell them how to end their life sooner ... all to do what’s in society’s best interest or your family’s best interest and cut your life short. These are such sacred issues of life and death. Government should have nothing to do with this.'

Pretty scary! And totally untrue. Completely, 100 percent false. Zero correspondence with reality. But McCaughey’s nonsense took off. She made the same claim in op-eds for The Wall Street Journal and the New York Post. When Sarah Palin picked up the idea, the mandatory meetings morphed into “Obama’s death panel.” Conservative media and Republican politicians went wild.

Paula Stannard

According to Stat News, November 15, 2016, Ms Stannard served

in the last Republican administration as deputy general counsel to the Department of Health and Human Services.

She was responsible for food and drug issues and other matters, including federal health insurance and public health preparedness. On the Trump transition, she will be working under Bremberg.

However, her firm

has earned more than $4.4 million lobbying so far this year for health care companies and trade groups including Novartis AG, Verax Biomedical, the American Hospital Association, St. Jude Children’s Research Hospital, and Aetna — plus an untold amount doing legal and regulatory work, which does not have to be reported. 

Re her position in the transition team, Stat News quoted Dr Michael Carome, who runs the Health Research Group for Public Citizen,

I think this reflects the fact that Trump’s pledge to drain the swamp is not going to take place. Individuals who have close ties to regulated industries such as pharmaceuticals is worrisome, because such individuals are likely to pursue an agenda that is very industry friendly and not consumer and patient friendly.... 

Tommy Thompson

Also according to Stat News, November 15, 2016, Mr Thompson, a former Secretary of Health and Human Services under President George W Bush, served

as a founding member of the Bush Alumni Coalition Supporting Trump, which launched in late September. (Very late.)

Thompson, who ran the group, served as governor of Wisconsin from 1987 to 2001. He was also a partner at Akin Gump Strauss Hauer & Feld, which lobbies for the American Medical Association, PharmAthene, and the Alliance for a Stronger FDA, among other health care concerns.

Thompson’s participation could also be good news for the health care companies whose boards he serves on: Centene, United Therapeutics, and TherapeuticsMD. He is a former director of Cytori Therapeutics.

Note again that we have previously discussed managerial, ethical, and sometimes criminal misadventures of some of the companies with which Mr Hart, Ms McCaughey, Ms Stannard, and Mr Thompson were affiliated (see the links to the companies noted in the discussions above.)

Summary

Donald Trump's candidacy seemingly was welcomed by many people who really thought he would be an economic reformer.  They thought he would address the plight of poor, working and middle class people, who saw their incomes stagnant or falling, had trouble finding decently paying jobs, may have lost their jobs and/or their housing, saw their communities hollowed out, and generally felt the system was rigged against them. Even some health care professionals saw Mr Trump as a reformer of a rigged health system. For example, in July, 2016, Stat News published an editorial by Dr Charles D Rosen:

As a physician, I believe that Trump is absolutely right about allowing cheaper pharmaceutical drugs manufactured abroad to be sold in the United States. He is right that the pharmaceutical companies essentially sell their products to the federal government via Medicare and Medicaid without competitive bidding. In other areas of the budget, such as defense, federal laws require competitive bidding. It is outrageous this doesn’t occur with drugs and devices, especially since the health care budget is right behind defense in terms of expense.

Trump is right when he says that drug companies control the landscape. He appears to be willing to call it as it is and not worry about repercussions from the powerful drug interests, and has moved in the right direction in saying he would let Medicare negotiate with pharmaceutical companies if he becomes president.

However, by November 15, 2016, as reported by the Los Angeles Times,

the president-elect appears to have downgraded plans to act aggressively to control rising drug prices, handing the pharmaceutical industry an early victory and providing another illustration of the influence of lobbyists on the new Trump administration, despite Trump’s promise to 'drain the swamp' of special interests in Washington.

Trump, who once made the cost of pharmaceuticals a central part of his campaign healthcare pitch and included the issue on his campaign website, hasn’t mentioned the subject since the election, even though the issue is consistently cited as the top healthcare problem Americans want to see fixed.

And Trump’s transition healthcare agenda makes no mention of drug prices, though it lists six other healthcare priorities, including restricting abortion, speeding federal approval of new drugs and restructuring Medicare and Medicaid.

So like Dr Phil used to say, how is it working for you now, Dr Rosen?

Mr Trump seemed to promise economic reform, and to "drain the swamp" or Washington crony capitalism, insider dealing, conflicts of interest, and corruption.  But at least in the health care sphere, many of his cronies on his advisory and transition teams seem to be rotators through the revolving door, having gone from being corporate insiders to being political advisers.  

And as we noted previously, the revolving door is a species of conflict of interest. Worse, some experts have suggested that the revolving door is in fact corruption.  As we noted here, the experts from the distinguished European anti-corruption group U4 wrote,

The literature makes clear that the revolving door process is a source of valuable political connections for private firms. But it generates corruption risks and has strong distortionary effects on the economy, especially when this power is concentrated within a few firms.

The case of the Trump transition once again suggests how the revolving door may enable certain of those with private vested interests to have excess influence, way beyond that of ordinary citizens, on how the government works, and that the country is still increasingly being run by a cozy group of insiders with ties to both government and industry.

So, as we have said before.... The continuing egregiousness of the revolving door in health care shows how health care leadership can play mutually beneficial games, regardless of the their effects on patients' and the public's health.  Once again, true health care reform would cut the ties between government and corporate leaders and their cronies that have lead to government of, for and by corporate executives rather than the people at large.

But did we really think the self-proclaimed billionaire and former star of The Apprentice was going to be a reformer?  After all, its theme song was "For the Love of Money"

With 10 Health Care Executives on it Board, US Chamber of Commerce Defends Big Tobacco Abroad

Tobacco, especially smoked in cigarettes, is generally recognized by health care professionals as having health hazards that greatly outweigh its benefits to society.  Therefore, most health care organizations discourage tobacco use, and many have developed tobacco free policies.

However, the tobacco industry has its powerful supporters.  A recent NY Times investigative report, and a report entitled "Blowing Smoke for Big Tobacco," documented how the US Chamber of Commerce has defended the interests of tobacco companies overseas.  The apparent paradox here is that the leadership of the US Chamber of Commerce includes leaders of large health care organizations.  So far this paradox has not been explained by the parties involved.

How the US Chamber of Commerce Promotes Tobacco Interests Abroad

The NY Times Articles

On June 30, 2015, the NY Times published a wide ranging report on the pro-tobacco activities of the US Chamber of Commerce,

From Ukraine to Uruguay, Moldova to the Philippines, the U.S. Chamber of Commerce and its foreign affiliates have become the hammer for the tobacco industry, engaging in a worldwide effort to fight antismoking laws of all kinds, according to interviews with government ministers, lobbyists, lawmakers and public health groups in Asia, Europe, Latin America and the United States.

The U.S. Chamber’s work in support of the tobacco industry in recent years has emerged as a priority at the same time the industry has faced one of the most serious threats in its history. A global treaty, negotiated through the World Health Organization, mandates anti-smoking measures and also seeks to curb the influence of the tobacco industry in policy making. The treaty, which took effect in 2005, has been ratified by 179 countries; holdouts include Cuba, Haiti and the United States.

Facing a wave of new legislation around the world, the tobacco lobby has turned for help to the U.S. Chamber of Commerce, with the weight of American business behind it. While the chamber’s global tobacco lobbying has been largely hidden from public view, its influence has been widely felt.

Letters, emails and other documents from foreign governments, the chamber’s affiliates and antismoking groups, which were reviewed by The New York Times, show how the chamber has embraced the challenge, undertaking a three-pronged strategy in its global campaign to advance the interests of the tobacco industry.

In the capitals of far-flung nations, the chamber lobbies alongside its foreign affiliates to beat back antismoking laws.

In trade forums, the chamber pits countries against one another. The Ukrainian prime minister, Arseniy Yatsenyuk, recently revealed that his country’s case against Australia was prompted by a complaint from the U.S. Chamber.

And in Washington, Thomas J. Donohue, the chief executive of the chamber, has personally taken part in lobbying to defend the ability of the tobacco industry to sue under future international treaties, notably the Trans-Pacific Partnership, a trade agreement being negotiated between the United States and several Pacific Rim nations.

'They represent the interests of the tobacco industry,' said Dr. Vera Luiza da Costa e Silva, the head of the Secretariat that oversees the W.H.O treaty,...

The NYT asked the Chamber of Commerce for a response, and got only

The U.S. Chamber issued brief statements in response to inquiries. 'The Chamber regularly reaches out to governments around the world to urge them to avoid measures that discriminate against particular companies or industries, undermine their trademarks or brands, or destroy their intellectual property,' the statement said, adding, 'we’ve worked with a broad array of business organizations at home and abroad to defend these principles.'

The chamber declined to say if it supported any measures to curb smoking.

"Blowing Smoke for Big Tobacco"

Two weeks after the first NY Times article, a group of nine organizations including Campaign for Tobacco Free Kids, Corporate Accountability International, and Public Citizen released a report on the US Chamber of Commerce pro-tobacco actions. A summary article in the Huffington Post written by representatives of the latter two organizations included,

Our report and a two-part New York Times investigation shows that, while the Chamber throws its weight around in many Global South countries to protect its corporate members' interests, Big Tobacco has also pushed it to adopt particularly aggressive and radical positions in order to undermine the cascade of public health laws being passed as a result of the success of the global tobacco treaty.

In particular,

For tobacco control advocates familiar with this deadly industry's tactics, the Chamber's work in this space comes as no surprise. Internal documents tell us that as the tobacco industry lost its public credibility, it began to use third parties to advocate on its behalf.

Case studies in our report, from Africa to Latin America, make it clear that Big Tobacco is doggedly pursuing this strategy with the U.S. Chamber and its affiliates in Global South countries. In countries the tobacco industry has targeted around the world, the Chamber is delivering threatening letters that cast doubt on the science behind tobacco control, exaggerating exaggerate the economic impacts repercussions of proven measures like tobacco taxation and crying wolf about explosions in illicit trade. In pursuing these actions, the Chamber and its AmCham affiliates are exporting well-documented tobacco industry tactics to block health laws around the globe.

And as the New York Times points out in its investigation, (and then advocates that countries resist in their recent editorial: Tarred by Tobacco), these tactics are in some cases drafted by Big Tobacco executives themselves.

Who Runs the US Chamber of Commerce?

A 2010 MotherJones article noted that the US Chamber of Commerce as having a "name that evokes Main Street and Little League teams," and its history of "taking a moderate, nonpartisan approach."  So who is responsible for the US Chamber of Commerce becoming a tobacco advocate, at least outside of the US?

First, the Chamber has become more the creature of the biggest corporations than small businesses.  The MotherJones article noted that recently

The Chamber's politics became synonymous with its biggest corporate donors.  [Chamber President Tom] Donohue established special accounts for companies that feared taking controversial public stands, allowing them to anonymously funnel money to the Chamber, which advocated on their behalf.

Furthermore,

The Chamber claims that 96 percent of its members are small businesses, yet its self-seleted board includes just 6 representatives from small businesses, 1 from a local chamber, and 111 from large corporations.

Among these large corporations, tobacco corporations seem to be particularly influential.  The NY Times article noted,

The increasing global advocacy highlights the chamber’s enduring ties to the tobacco industry, which in years past centered on American regulation of cigarettes. A top executive at the tobacco giant Altria Group serves on the chamber’s board. Philip Morris International plays a leading role in the global campaign; one executive drafted a position paper used by a chamber affiliate in Brussels, while another accompanied a chamber executive to a meeting with the Philippine ambassador in Washington to lobby against a cigarette-tax increase. The cigarette makers’ payments to the chamber are not disclosed.

Yet the Chamber's governance also ostensibly includes health care viewpoints.  Its current board includes 10 member who are executives of large health care organizations:

- Richard Bagger Senior Vice President, Corporate Affairs & Strategic Market Access, Celgene Corporation, [biopharmaceutical company] Summit, NJ
- John Cannon Executive Vice President & Chief Administrative Officer, Health Care Service Corporation, [health insurance company] Chicago, IL
- Ken W. Cole Senior Vice President, Government Relations, Pfizer, Inc., [pharmaceutical company] Washington, DC
- Wayne S. DeVeydt Executive Vice President and Chief Financial Officer, Anthem, Inc., [health insurance company, formerly Wellpoint] Indianapolis, IN
- Ralph de la Torre, MD Chairman and CEO, Steward Health Care System LLC, [for-profit hospital system, owned by Cerberus Capital Management] Boston, MA
- Fuad El-Hibri Executive Chairman, Emergent BioSolutions Inc. [biopharmaceutical company] Gaithersburg, MD
- Daniel F. Evans, Jr. President & Chief Executive Officer, Indiana University Health, [non-profit hospital system] Indianapolis, IN
- Gregory Irace President and Chief Executive Officer, Sanofi US Services Inc., [US subsidiary of French pharmaceutical company] Bridgewater, NJ
- Paul J. Klaassen Founder, Sunrise Senior Living, Inc., [for-profit provider of nursing care, hospice care, etc] Arlington, VA
- Elaine R. Leavenworth Senior Vice President, Chief Marketing and External Affairs Officer, Abbott Laboratories, [pharmaceutical and device company] Abbott Park, IL

These organizations ostensibly are all about promoting or sustaining individual or population health.  Executives of these organizations serving on the board of the US Chamber of Commerce are responsible for the governance and stewardship of the Chamber.  How could they square the missions of the organizations which the lead, and their responsibility for the Chamber's pro-tobacco stance?

The Health Care Organizations Dodge the Question

The answer to that question is elusive.

The NY Times article stated,

It is not clear how the chamber’s campaign reflects the interests of its broader membership, which includes technology companies like Google, pharmaceutical giants like Pfizer and health insurers like Anthem.

An accompanying NY Times editorial added,

Health insurance and hospital companies that are members of the U.S. Chamber of Commerce find themselves in an uncomfortable situation. Publicly, these companies support policies designed to reduce smoking, but the chamber, as Danny Hakim recently reported, has opposed anti-smoking measures around the world.

The controversy appears to have surprised health-related businesses like Anthem, one of the nation’s biggest health insurers, and Steward Health Care Systems of Boston, which have executives on the board of the chamber. 'If the chamber is in fact advocating for increased smoking, we do not agree with them on this public health issue,' a spokeswoman for Steward said in a statement to The Times.

In an article in the Indianapolis Business Journal, J K Wall recounted how he tried to get a substantive response to the NY Times article from Indiana University Health, whose President is on the Chamber board,

Indiana University Health CEO Dan Evans is one of the most anti-smoking health care executives I know.

Just a few months after I started covering health care for IBJ in 2007, Evans told me in an interview that Indiana employees 'should snatch the cigarettes out of their co-workers mouths and say, ‘Hey, you’re costing me money!’'

However, Evans was not available, and the only response was this statement from a spokesperson

We are proud of the many programs we have in place for smoking prevention and cessation, as well as health promotion and screenings for our team members, patients and members of the community. IU Health has been and will continue to be a leader in Indiana to prevent and curtail the use of tobacco products.

IU Health is a member of many diverse state and national organizations to support our public policy goals including the U.S. Chamber of Commerce and the Indiana State Chamber of Commerce. We are talking with U.S. Chamber leadership about the facts surrounding recent stories in the NY Times and will strongly encourage the U.S. Chamber to review its international programs to ensure they are consistent with its own stated policy to oppose smoking and promote wellness.

Similarly, a follow up story in the New York Times documented this response from Anthem, (formerly Wellpoint), whose Executive Vice President and CFO is on the Chamber board,

Anthem said it was 'dedicated to helping people quit smoking and has led the charge to end tobacco use.'

'Anthem has shared its strong, longstanding position with the chamber and will continue to address our concerns with the chamber directly,' the statement said.

Likewise, the Times noted this response from

Greg Thompson, a spokesman for the Health Care Service Corporation, said in a statement last week: 'We are convinced that ending smoking may help people live longer, enjoy a better quality of life and reduce costs in our health care system.'

'This is a point of view we have advocated for decades and made clear to organizations that we support.'

Those seem to be the only public responses from companies whose leadership is represented on the Chamber of Commerce board. They all ignored the main issue.  None of them seemed informed by the role their companies' executives on the Chamber of Commerce board play.  None of the executives or the companies for whom they worked acknowledged any accountability for the Board's vigorous foreign campaign of pro-tobacco activities.

The Times did note that Chamber of Commerce member CVS, which is not specifically represented on the Chamber board, and which recently stopped selling tobacco products, withdrew from Chamber membership. But as a simply a member of the Chamber, it had little direct responsibility for the Chamber's actions.

Discussion

US health care is increasingly dominated by large organizations.  Most of these organizations like to portray themselves as warm and fuzzy supporters of individual and population health.  For example, Pfizer has a statement of responsibility which begins

As a member of today’s rapidly changing global community, we are striving to adapt to the evolving needs of society and contribute to the overall health and wellness of our world.

Anthem's statement includes

Anthem is dedicated to delivering better care to our members, providing greater value to our customers and helping improve the health of our communities.

Yet on Health Care Renewal, we have documented actions by leaders of health care organizations that directly contradict their lofty mission statements, and may have threatened patients' or the public's health.

In its aggressive international promotion of tobacco interests, the US Chamber of Commerce appears to be promoting the use of products that directly threaten individual's and the public's health.  Even though the Chamber protested that it was merely reaching out

to governments around the world to urge them to avoid measures that discriminate against particular companies or industries, undermine their trademarks or brands...

their protestation ignored how tobacco is a different product than that of nearly all industries.  It seems inherently dangerous to patient's the and public's health even when used as intended, and has no known health or societal benefits that even partially compensate for its risks.  Therefore, what is the argument not to discriminate those who make and promote such an inherently dangerous product from those who make products that do not threaten health, or provide obvious benefits that may compensate for their risks?

It is obvious why tobacco companies might want the Chamber's support.  What, however, could be the rationale for executives of corporations pledge to promote health to preside over the international promotion of tobacco?

The executives on the Chamber board, and their companies have not as yet even tried to provide an answer.

Thus, in the absence of better responses, in my humble opinion the presence of health care executives on the US Chamber of Commerce board is another example - an important one - of mission-hostile actions by top leaders of US health care organizations.

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.

Oh, the Prices We Pay, Reloaded - Celgene Balks at Explaining High Price of Thalidomide

A brief article on Bloomberg.com implied that Celgene has been fighting efforts by the Canadian Patented Medicine Prices Review Board to get pricing data about the drug Thalidomid (thalidomide):

Celgene Corp., the biotechnology company specializing in blood-cancer medicines, will get a hearing before Canada’s highest court over the country’s demands to provide pricing information for the drug Thalomid.

The Supreme Court of Canada today agreed to hear Celgene’s appeal of a Federal Court of Appeal ruling that said Canada’s Patented Medicine Prices Review Board was entitled to information about the pricing of the drug. The high court gave no reason for its decision.

Celgene’s two top-selling drugs are Revlimid and Thalomid, for a form of blood-cancer called multiple myeloma. They brought in more than 80 percent of the company’s total $2.25 billion in 2008 revenue.

It should be no surprise that Celgene may be sensitive about the price of Thalidomid. We posted back in 2005 about the stratospheric prices of new drugs that seemed disproportionate to manufacturing and development costs on one hand, and the value of the drugs for patients on the other. We noted that thalidomide, a very old drug that notoriously was found to cause birth defects when it was given to pregnant women, but that then showed promise as an anti-cancer drug, was being marketed in the US for $29 per capsule (approximately $25,000 a year), while a generic form sold in Brazil for $0.07 per capsule.
 
The amount Celgene manages to make from this very old (and demonstrably cheap to produce) molecule is vivid, albeit anecdotal evidence about what has gone wrong with health care prices in the US.  Despite health care insurance companies' protestations that their goal is to provide reasonably priced health care, they seem utterly incapable of negotiating down the prices of even the most obviously over-priced drugs.  And the US government Medicare program so far is prohibited by law from negotiating prices.  How our supposed free market health care system has tilted so far in favor of pharmaceuticals is a reason to wonder, but ought to be reason to investigate. 
 
Meanwhile, Celgene's 2010 annual report shows that the company has sold more than $400 million worth of Thalidomid yearly since 2007. The company's total sales in 2009 were $2.567 billion, while it spent $795 million on research and development, and $754 million on general, sales, and administrative expenses. According to the company's 2009 proxy statement, in 2008 its CEO received over $8.5 million, its COO over $5.1 million, its CFO over $2.1 million in compensation, and a senior vice president over $3.0 million. The total compensation of its five highest-paid hired managers (compare to a total of 2813 full-time employees in 2009), approximately $20.5 million 2008, was was approximately 2.6% of the company's net income in 2009, and just under 1% of its total sales.
 
As we have said previously, so the health care bubble continues to inflate.  One cause is"compensation madness," including "insiders hijacking established institutions for their personal benefit."  Another is the amazing acquiescence of those who pay bills at all levels, from the individuals who ultimately fund health care through salary dollars not earned, health insurance premiums, co-pays and the like, and tax payments, through the health care insurers and government agencies who did not balk at paying $25,000 a year for thalidomide in 2005.  If we really want to provide accessible health care of good quality and a reasonable cost, we will need to develop mechanisms to pay more reasonable amounts for health care goods and services. This will require some courage facing down the corporate and organizational insiders who have made themselves very rich from the current craziness.

The Exorbitant Costs of Orphan Drugs

The Wall Street Journal ran an article this week on the unintended consequences of the Orphan Drug Act of 1983. (Now available free on the web here. )

The Orphan Drug Act was meant to facilitate production of drugs for rare diseases. A product granted orphan drug status by the US Food and Drug Administration (FDA) gets seven years of patent-like protection, without the need to go through the patent application process. Orphan drug status can be given to a product already on the market. Orphan drug status also gives companies tax credits for research and development, grant money for drug testing, and assistance in getting products approved. Furthermore, it is harder for generic drug companies to gain approval to market generic versions of former orphan drugs than of drugs that go off patent.

Although the law was envisioned as likely to apply to only a few products, there are now 260 orphan drugs on the US market, with 1400 in development. "Today, nearly half of all drugs produced by biotech companies are for orphan diseases."

The Wall Street Journal showed that the protections afforded by the Orphan Drug Act enabled pharmaceutical and biotechnology companies to make huge profits off orphan drugs, often by charging staggering prices for them.

• "Last year, Genzyme Corp. a Cambridge, Mass. biotech firm, posted sales of $840 million on its drug for Gaucher disease, which affects fewer than 10,000 people world-wide. Treating the average patient costs $200,000 annually, the company says. But the price of the drug, dosed by weight, can run as high as $600,000 a year for adults on the higher of the two recommended doses." The Journal documented how this drug was first developed at the US National Institutes of Health (NIH), and a contract to manufacture the drug was given to Genzyme. Genzyme first justified the drug's price because it was produced with difficulty, from human placentas, of which 22,000 were required to make one adult's yearly supply. However, an Office of Technology Assessment study estimated that Genzyme only spent $29.4 million on drug development, because most of the initial work was done by the NIH. Furthermore, in 1994, Genzyme began making the drug using genetically modified cells. The CEO of Genzyme, Henri Termeer "declines to say what the production cost is today." When asked why the price is not lower, he responded, "What's the difference between charging $200,000 or charging $175,000 to a patient? No one can afford it without insurance." The current director of the FDA Office of Orphan Products, Marlene Haffner, commented, "I just find it unconscionable that someone can charge that much."
• "Genentech received orphan-drug protection in 1985 for its first drug, human growth hormone, to treat children who weren't growing properly because of a hormone deficiency - a population of about 20,000 in the US. Revenue grew rapidly as the drug became more widely used. Last year, 19 years after the first version came to market, the drug yielded Genentech revenue of $354 million."
• "In 1999, BioMarin Pharmaceutical Inc., a California firm, raised $67 million in an initial public offering based mostly on the promise of a single orphan drug still in clinical trials - a potential treatment for a rare genetic disease called mucopolysaccaridosis I. Fewer than 4,000 people in the developed world are estimated to suffer from the disease...." "BioMarin, in a joint venture with Genzyme, Inc., brought the treatment to market in 2003 at an average cost of $175,000 per patient each year. The joint venture is expected to have sales of about $70 million this year."
• "Orphan-drug status can also be given to older medicines, if they are being used in new ways." "Calgene Corp. brought a thalidomide pill to market at the price of $6 a pill in 1998 and has since raised the price to about $53. Though thalidomide has been around for decades, it received orphan-drug status for its use in treating a side-effect of leprosy, then later for a certain kind of cancer [multiple myeloma]. The drug is so inexpensive to make that it is sold by other companies in Brazil for seven cents a pill." "The company's chief executive, John Jackson, raised the price - not because it cost more to make or market, but because, he says, many cancer drugs were priced much higher." "A new orphan drug, Velcade, came to market for the same cancer in 2003. Millennium Pharmaceuticals Inc., of Cambridge, Mass., which says it spent many years and millions of dollars developing Velcade, priced it at about $4,400 a month. Mr. Jackson saw the price of Velcade as an opportunity to raise the price of his company's drug further." (See our previous post on thalidomide here.)

"All we wanted to do was make products available for patient who had these rare diseases," said Marion Finkel, former head of the FDA Office of New Drug Evaluation, who wrote to recommend incentives for orphan drugs in 1979. Representative Harvey Waxman, who supported the Orphan Drug Act, said "we did not expect to see thie high cost of orphan drugs."
The article noted that the cost of orphan drugs is now an important part of the huge and growing national cost of health care. For example, "annual spending on specialty pharmaceuticals - the term health-insurance providers use for biotech medicines that treat smaller patient populations, including orphan drugs - rose 23% per member from 2002 to 2003, according to a study funded by the Blue Cross and Blue Shield Foundation on Health Care."
"These companies try to bargain with biotech companies, as insurers do, to get discounts by buying in volume or buying several products. But because there isn't much competition and the markets aren't big, there's less room to negotiate discounts."
The high cost of orphan drugs can be devastating for small businesses who can see their total health insurance bills soar when a single employee starts requiring one of these drugs. A health insurance consultant "says he often hears from people who say they have been targeted for layoffs because of the high cost of their medicines. It's illegal to fire a person because of health costs, but ... it can be hard to prove that was the reason a worker was terminated."
The exorbitant prices of some orphan drugs seems to be an unintended consequence of the way the Orphan Drug Act was written. Although the current director of the FDA Office of Orphan Drug Products noted, "we live in a free country," the Orphan Drug Act clearly did not lead to anything resembling a free market in the products it protected. But it has taken over 20 years for the unintended consequences of this well-intentioned but badly designed law to be noticed. We'll see how long it takes for it to be changed.
This should be a cautionary tale for those who advocate more direct intervention by governments in health care markets.

Oh, The Prices We Pay: Thalidomide for Cancer

The New York Times recently reported on the high prices paid for drugs to treat cancer, notably the newer "targeted therapies." Some examples included:

• $54,000 per year for Avastatin, made by Genentech,
• $31,000 per year for Terceva, made by Genentech, and
• $25,000 for Thalidomid, made by Celgene.

The article shows how the prices of these drugs drastically ratcheted upwards in the 1990's, starting with Taxol, made by Bristol-Myers-Squibb, at $4,000 per year, starting in 1992, through Herceptin, made by Genentech, at $20,000 per year, in 1998, to Erbitux, at $100,000 per year, made by Bristol and ImClone Systems.
The article stated that these prices are unrelated to manufacturing costs, and simply based on what the market will bear. A biotechnology analyst, Geoffrey Porges, said, "it's sort of one of those things where everyone looks over their shoulder at everyone else, says, 'he started it, it wasn't me,' and it builds."
Of course, this raises the question of why those organizations whose goal is to control health care costs, particularly federal payers represented by the Commission for Medicare and Medicaid Services (CMS), and managed care organizations haven't been able to address this price inflation.
A notable example is Thalidomid, whose price is listed above. Thalidomid is thalidomide, a drug whose adverse effects in the 1960's lead to major reform of the US drug approval process. (For a background article on the history of thalidomide go here: Rouhi M. Thalidomide. Chemical and Engineering News, June 20, 2005. ) "Chemie Grünenthal introduced thalidomide--under the brand name Contergan--to the German market on Oct. 1, 1957, as a sedative to treat insomnia as well as to reduce nausea associated with pregnancy." Richardson-Merrell had applied to introduce thalidomide, under the trade name Kevadon, to the US in 1960, but the application was held up by a diligent officer of the US Food and Drug Administration, because of inadequate documentation of drug safety. The drug never made it to the US market, because by 1961, there were widespread reports in Europe of babies born with severe deformities to mothers who had taken thalidomide. (For more background on the history of thalidomide, see the materials from the NIH here, and from the March of Dimes here.) Later, discoveries that thalidomide had anti-inflammatory properties lead to studies of its use in several severe diseases, including multiple myeloma.
Now, what can the possible rationale for charging $25,000 per year for the nearly 50 year old drug thalidomide for multiple myeloma, other than it is considered a new "targeted therapy?" The drug is a relatively simple molecule first sold, again firs sold almost 50 years ago. Its manufacture does not involve high technology. Celgene raised the price of thalidomide from $6.00 to $29.00 per 50 mg capsule from 1998 to 2004. The price of a 100 mg capsule in Brazil is $0.07.
So thalidomide becomes another poster child, not only for the production of serious birth defects that lead to reform of the drug approval process 40 years ago, but also for how those organizations who claim to control health care costs are willing to pay amazingly high prices for "high tech" health care interventions, even if they are just re-named low-tech interventions from the last century.