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June 19, 2006
Volume 84, Number 25
pp. 80-99

Regulatory Trends

Strong action on drug safety and pricing is more likely to come from states than from Congress or FDA

Bette Hileman

Broad segments of U.S. society are now deeply concerned about certain trends in the pharmaceutical industry. At the same time, public trust in the Food & Drug Administration has been declining, as blockbuster medicines, such as the arthritis drug Vioxx, have been withdrawn from the market, and some heavily prescribed antidepressants have been found dangerous for adolescents. There is little indication that Congress or FDA will take strong action in the near term to address the concerns, but some states are taking matters into their own hands.


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Coverage For All The Massachusetts legislature has passed a bill requiring virtually all residents to be covered by health insurance. Shown here is the Massachusetts Capitol Building.

Critics complain about a wide range of issues, from high pharmaceutical prices to ethical conduct of clinical trials. They contend that generic drugs should be approved more quickly to expand the supply of affordable medicines. They argue that the vast sums spent on direct-to-consumer advertising and on marketing of drugs to physicians contribute to high prices and overuse of expensive medications.

Critics claim that brand-name companies often extend the effective patent life of their drugs by filing frivolous patents shortly before the originals expire. They note that pharmaceutical firms fail to conduct two-thirds of the postmarketing studies FDA requests. And they say that clinical trials conducted in developing nations often exploit vulnerable trial participants.

Under strong pressure from the drug industry, critics say, the U.S. was the only country to vote in 2003 against a United Nations resolution that would allow inexpensive generic versions of patented drugs to be produced for global health emergencies, such as AIDS and tuberculosis.

On the other hand, representatives for large brand-name pharmaceutical companies and others who defend them are sanguine about the criticisms. They say prices need to be high to support the accelerating cost of R&D. They defend the huge expansion in direct-to-consumer advertising, claiming it plays primarily an educational role. They say the new Medicare drug benefit program, when fully implemented, will provide low-cost pharmaceuticals to most of the nation's elderly. They claim the backlog in generic drug approvals could be overcome if manufacturers paid user fees to FDA, just as the brand-name firms do. And they argue that companies need to protect their patents around the world or the entire system of intellectual property will collapse and there will be little incentive to develop new drugs or invest in the industry.

One of the most persistent and widespread criticisms concerns prices of prescription drugs in the U.S., which are up to two times higher than in Europe. Many factors contribute to high prices, including inflation and the cost of R&D (see page 30). But according to the Kaiser Family Foundation, one of the most important factors has been accelerated spending for marketing and promotion.

In 1996, the foundation calculates, drugmakers spent $9.2 billion to market, promote, and advertise their products. By 2004, that amount had tripled to $28 billion. Large increases occurred in outlays for direct-to-consumer advertising and free drug samples and in salaries for drug sales representatives, who are known in the business as drug reps or detailers. According to many press reports, for every nine physicians in the U.S., there is one drug rep−often strikingly good-looking and paid a six-figure salary−waiting in offices and hospital corridors to explicate the advantages and uses of a company's new pharmaceuticals and hand out free samples, outings, and other gifts.

In 2004, however, members of the Pharmaceutical Research & Manufacturers of America (PhRMA) devoted only $37 billion to R&D, and members of the Biotechnology Industry Organization, about $15 billion. So what industry spent on promotion in that year is more than half of what it spent on R&D.

Even though drug prices have escalated rapidly, several factors could exert downward pressure on prices in the long term, says the Tufts Center for the Study of Drug Development (CSDD). First, more and more health plans are promoting cost-effective prescribing through tiered formularies. These consist of either two or three lists of drugs covered under the plan. One list may require a higher copayment than the others. In 1998, only 10−15% of plans had tiered formularies, but by 2005, about 70% of plans had them, says Joshua Cohen, an economist at CSDD. With formularies, consumers are responsible for a smaller copay for generic drugs than for brand-name medications. Pharmaceutical firms are increasingly being asked to show that a new drug is cost-effective as a condition for inclusion in the formulary.

Similar developments have occurred in Europe. In the U.K., the National Institute for Health & Clinical Excellence (NICE) has been set up as a parallel structure to the national health system. NICE has created a quantitative matrix that relates drug cost to efficacy and uses it to decide which pharmaceuticals the government will pay for. An analogous organization in Germany performs a similar function. These agencies act as a market barrier because they veto high-cost drugs with, at best, the same efficacy as less expensive products. The U.S. government could eventually adopt a similar system, says Arthur Daemmrich, director of the Center for Contemporary History & Policy at the Chemical Heritage Foundation.

The reaction from states

A second trend that may depress drug prices comes from several states that "are setting up systems to provide health coverage for young people or for all their citizens," Daemmrich says. For example, last December, Illinois Gov. Rod R. Blagojevich signed legislation that will provide health insurance to all children in the state. Maine has passed legislation to ensure that all residents have access to affordable health care by 2009. And the Massachusetts legislature has passed a bipartisan bill that requires virtually all residents to be covered by health insurance. Undoubtedly, these states already have established or soon will establish formularies that will apply to residents covered by state health insurance.

"In the U.S., there is no single-government-payer health insurance, yet the trend is toward something like it, although for political reasons, we are afraid to call it that," Daemmrich says. In the new Massachusetts health insurance system, for example, there will be many payers. But a single state entity, the health insurance connector, will coordinate the provision of insurance to individuals and small businesses that cannot get it through normal channels.

A third factor that may lower drug prices is pressure in the form of laws, regulations, and lawsuits from the states. Many states are deeply concerned and angry about the high cost of prescription drugs. All pay a portion of the drug expenses for Medicaid patients, and many subsidize or purchase medicines for current and retired state employees. These expenses are the fastest growing parts of their budgets. To curb that growth, the attorneys general of nine states have sued pharmaceutical companies, demanding that they reveal what portions of drug revenues are going into marketing. They are concerned that the number of drug reps more than doubled between 1996 and 2004.

"The states are in a different situation than the federal government. A lot have large pharmaceutical bills because of Medicaid payments and drugs for state workers," says Kenneth I. Kaitin, CSDD director. Unlike the federal government, states must balance their budgets each year. "Often a state must weigh the need to provide pharmaceutical benefits against the need to repair roads and maintain safe airports," he says.

State legislators have also set up the National Legislative Association on Prescription Drug Prices. Members include the District of Columbia, Hawaii, the New England states, New York, Pennsylvania, and West Virginia. In addition, legislators from nine other states have joined as individuals. Members and legislators work across state lines to negotiate drug prices and make consumer drug plans accessible and affordable.

Several of the member states, as well as others, have enacted legislation addressing pharmaceutical pricing and marketing and disclosure of clinical trial results. According to the National Conference of State Legislatures, state lawmakers across the U.S. considered 600 proposals involving pharmaceuticals last year, and 43 states passed such bills. Some proposals were aimed at protecting companies from product liability claims. But most were attempts to control drug prices and advertising and to force pharmaceutical firms to disclose clinical trial results and details of marketing activities.

In 2000, Maine was the first state to attempt to set price ceilings for prescription drugs and to force drugmakers to finance discounts for the uninsured. It has also passed a measure requiring each manufacturer that sells drugs in Maine to submit an annual report on the money spent on marketing products within the state.

Similarly, in 2005, Vermont enacted the Pharmaceutical Marketer Price Disclosure Law, which requires drug marketers to provide physicians and other prescribers with comparative price information for all drugs within each therapeutic class. In the same year, it also passed legislation requiring pharmaceutical firms to submit annual reports of all free trips, gifts, and subsidies given to physicians or other entities for purposes of marketing products in the state.

Meanwhile, West Virginia set up a state Pharmaceutical Cost Management Council in 2004 that aims to lower drug costs. And in 2005, it proposed a regulation that would force pharmaceutical firms to reveal all their marketing expenses in the state, including advertising costs, number and salaries of salespeople, and the gifts they give to physicians.

"The existing system does not provide information to help physicians understand what the best therapy is to use in an open marketplace where there are many potential approaches."

States are also taking action to regulate the access of drug reps to computerized dossiers showing prescribing practices of individual physicians. They use these records to target certain doctors and convince them to write more prescriptions for brand-name drugs, according to the National Conference of State Legislatures. Arizona, Hawaii, New Hampshire, and West Virginia have proposed legislation that would ban the disclosure of prescribing data to drug sales representatives. "These are areas where states think the federal government is not doing its job and they are filling the void," says Christopher Milne, assistant director of CSDD. "Some of the areas that are not being covered by the federal government are, in fact, state issues. It is appropriate for states to become involved in consumer issues."

But according to PhRMA spokesman Jeff Trewhitt, laws that order drug firms to disclose marketing costs are misguided. Sales representatives do not just promote products; they perform a valuable educational function, he says. "Just like in other industries, it is important to convey information about our products. Sales representatives are well-trained technically. They are in a position to answer sometimes pointed technical questions from doctors concerning side effects and how to use the medicines."

Last year, PhRMA set up four more regional offices, to make a total of six, to follow and react to what is going on in the states. PhRMA's lobbyists fought many of the state proposals, especially those aimed at controlling prices.

States have also filed lawsuits against various companies over drug safety. "It is an untold story in American politics that many states are moving to regulate not just drug costs but drug safety as well," says Daniel Carpenter, a professor of government who leads a project on drug regulation at Harvard University.

FDA has intervened in state lawsuits over safety by filing amicus briefs on the side of pharmaceutical firms. And it has inserted language in a drug-labeling regulation that says FDA's jurisdiction over prescription drugs bars state lawsuits over safety. Reps. Henry A. Waxman (D-Calif.), John Dingell (D-Mich.), and Sherrod Brown (D-Ohio) have sent a letter to the Department of Health & Human Services objecting to this language. States have a constitutional right to control the safety of drugs sold within their borders, the letter says.

A number of states are considering proposals to ban direct-to-consumer advertising. The ads began proliferating in 1997, when FDA issued a draft guidance loosening the restrictions for TV ads. The agency allowed the ads to list many fewer side effects than had been required in the past.

Advocates of banning direct-to-consumer advertising say it often leads people to ask their doctors for drugs that are unnecessary or more expensive than equally effective medications. They cite, for example, a recent study in the Journal of the American Medical Association (2005, 293, 1995) that concludes, "Patient requests have a profound effect on physician prescribing."

Furthermore, according to a 2002 report by the Government Accountability Office (GAO), many advertisements are misleading or erroneous and are therefore illegal under the Federal Food, Drug & Cosmetic Act.

Meanwhile, FDA's drug marketing enforcement office has only 40 employees to review 30,000 pieces of promotional material each year. Perhaps as a result of an overworked staff, enforcement action has declined sharply in recent years. According to a report by the Democratic staff of the House Committee on Government Reform, FDA sent more than 250 notices of violation or warning letters to manufacturers regarding false or misleading advertisements between January 1999 and December 2001. Only 72 such letters were sent in the following three years, ending in December 2004.

Merrill Goozner, director of the Integrity in Science project at the Center for Science in the Public Interest, says: "Direct-to-consumer advertising should be eliminated, just as it is banned in other industrialized countries. But it will continue as long as the political power relationships remain as they are today."

Carpenter is more optimistic. FDA may decide to regulate direct-to-consumer advertising more stringently sometime in the next few years, he says, because there is a great deal of support for such a change now in Congress. Senate Majority Leader Bill Frist (R-Tenn.), for example, favors stricter regulation.

FDA, however, may not have the constitutional right to ban direct-to-consumer advertising. "It's unclear, depending on what scholar you talk to, whether we can ever ban direct-to-consumer advertising under our Constitution," says Janet Woodcock, FDA's deputy commissioner for operations.

Bolstering generics

As Woodcock puts it, FDA's "mission is not aimed at drug cost." Yet several steps FDA or Congress could take would tend to lower prices.

One step would be to speed up the approval of generic drugs. FDA's Office of Generic Drugs approved about 360 products last year, but about 800 drugs are still awaiting approval. Despite the backlog, FDA did not request a budget increase for the office for fiscal 2007. "There is a large backlog because so many drugs were approved in the 1990s," Woodcock says. "Each time a patent expires, we get about 10 applications."

Compounding the backlog in generics approvals are the strategies brand-name companies use to stall the introduction of generics competition. At the beginning of a product's life, brand-name firms develop what is called a "life-cycle management plan," which consists of patent strategies and other tactics aimed at generics, says Greg Perry, director general of the European Generic Medicines Association.

One such strategy is "evergreening." This refers to the filing of additional patents or other legal maneuvers, often undertaken shortly before the original patent expires.

Evergreening is possible, Milne says, partly because no one is paying careful attention to the patents listed in FDA's Orange Book, which is an electronic listing of all approved drugs and certain patents on those drugs.

If a generic drug manufacturer does not infringe any of the patents listed in the Orange Book, and it can show that its product is bioequivalent to the branded product, it can obtain approval from FDA. To be listed in the Orange Book, the patent is supposed to relate to formulation and composition, the active ingredient, or method of use. Not all patents granted by the Patent & Trademark Office satisfy the criteria.

"The problem of evergreening arose because FDA considered its role in listing patents in the Orange Book to be purely ministerial; that is, merely accepting whatever patents companies said they had without any due diligence as to their validity," Milne says. "Some of these patents, when challenged in court, were, in fact, found to be invalid."

Brand-name companies often submit to FDA a new patent involving something that does not meet the Orange Book criteria shortly before the original patent is about to expire, says Gordon Johnston, vice president of regulatory affairs at the Generic Pharmaceutical Association (GPhA). Even if the patent does not meet Orange Book criteria, it is usually listed, he explains.

Another tactic brand-name firms use is to file a "citizen's petition," which raises a question about the safety of a generic drug while it is undergoing approval, Johnston says. The petition, which can be filed by a citizen or a brand-name firm, can delay the introduction of a generic for an average of nine months while FDA evaluates it. The agency has publicly acknowledged that the citizen-petition process instigated by brand-name companies is a serious problem.

"Despite continued efforts to close unintended loopholes that delay generics competition, unnecessary barriers to market entry remain," says GPhA President Kathleen Jaeger.

Some members of Congress are trying to remove the barriers to generics approval. Earlier this year, on Feb. 16, Sens. Debbie Stabenow (D-Mich.) and Trent Lott (R-Miss.) introduced the Lower Priced Drugs Act (S. 2300), which would make it more difficult to erect legal hurdles to generic drug approval. The bill has the support of AARP (an association representing senior citizens), Families USA, and General Motors, but seems unlikely to pass this year.

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One of the largest barriers to the introduction of generic drugs is that FDA has not yet figured out a way to approve generic biological medicines, says Stephen Roylance, a patent attorney with Greenblum & Bernstein, in Reston, Va. In general, biological medicines are the most expensive drugs, and figuring out a way to approve generic versions of these medicines would lower drug costs. Biologics, which now comprise 12% of the market, are generally large protein molecules, such as human growth hormone, derived from living cells. "The question is: 'What kind of regulatory pathway are we going to arrive at for the large molecules?' " Roylance asks.

FDA faces several problems in working out a way to approve generic biologics, also called generic biopharmaceuticals. So far, the agency has approved only one generic biologic, the human growth hormone Omnitrope made by Sandoz. This is the first time the agency has approved a copycat version of a biotech drug grown in living cell lines.

FDA, however, still has not issued any guidance that would tell companies the procedures they need to follow to obtain approval of generic biologics. It says Congress must amend the drug law before it can approve almost any other generic biological drug.

It is difficult to develop guidance for biologics partly because approving the original drug is much more difficult than approving small-molecule drugs, says Charles L. Cooney, professor of chemical and biochemical engineering at Massachusetts Institute of Technology, who chairs the FDA Advisory Committee on Pharmaceutical Science. The complications arise from the size and complexity of the drug molecules. "The greater the complexity of the molecule, the more you have to worry about how the manufacturing process might affect the quality of the product," he says.

Traditional generic drugs are usually small molecules, and there are established, fairly simple, analytic techniques for showing equivalence, Cooney explains. But with biopharmaceuticals, there is a continuum of complexity. Some of them, such as insulin, are fairly simple. "You can show molecular similarity and have a high degree of certainty that insulin made by" one process is similar to the insulin made by another process, he says. Each insulin product now available on the market is a brand-name medicine because no generic has yet been approved.

Indeed, GPhA says FDA could now approve a vast array of generic biopharmaceuticals of low to moderate complexity with its current approval process for ordinary drugs.

But other biologics, such as erythropoietin, are molecularly complex and also have some inherent heterogeneity. For example, erythropoetin is a glycosylated product, consisting of a mixture of molecules.

If a generic version of one of these complicated biopharmaceuticals is to be approved, Cooney says, some degree of biological characterization would be required to compare the protein in the generic version with that in the brand-name product. "The question is: 'How much is enough?' " Even he predicts that it will take more than a few years for the problems to be worked out and for generic biopharmaceuticals to come into the marketplace on a large scale.

Meanwhile, the Federal Trade Commission (FTC) has recently moved to eliminate one practice that is keeping the prices of some drugs artificially high. It is trying to force brand-name companies not to enter into deals with generic drug firms in which the generic companies are paid to defer the marketing of particular drugs.

According to an FTC report released in April and a speech by Commissioner Jon Liebowitz, three such agreements were made in fiscal 2005, and seven have been completed so far in fiscal 2006.

The agreements involve the following scenario: A generic drug company sends an application to FDA, asking the agency to approve a generic product. In the application, the company says it does not infringe on any of the brand-name company's patents or that one of the patents is invalid. The brand-name firm may then file a suit against the generic firm, claiming patent infringement. If the brand-name company fears it will lose the suit, it may decide to settle by paying the generic company to defer the marketing of its product for several years.

Before 2005, FTC had successfully challenged such agreements on the grounds that they are anticompetitive. But last year, two FTC challenges were rejected in federal appeals court rulings, saying that the agreements were acceptable business arrangements. FTC has now appealed one of these rulings to the Supreme Court. "If the Supreme Court or Congress doesn't reverse this trend, the result could be a substantial increase in drug costs and substantial harm to the consumers who pay for these drugs," according to Leibowitz.

Ensuring safety

Even though FDA, Congress, and the courts could take steps that would allay some public concerns over prices, these steps would not ameliorate concerns over safety. As a condition of accelerated approval, especially of drugs for life-threatening diseases, FDA often asks manufacturers to do further clinical trials. But according to a GAO report on drug safety released March 31, industry conducts only about one-third of the postmarketing studies FDA requests. Some observers say that if Merck had done the requested studies of Vioxx, the risks posed by the drug would have been uncovered much sooner.

The report notes that some postmarketing studies were never done because they were unreasonable. But firms failed to do most of the requested trials because they did not seem urgent.

Except for its power to pull drugs from the market, FDA's Woodcock says, the agency has no way to force a pharmaceutical firm to conduct a trial after a drug is released to the market. Congress should give the agency more power to persuade companies to conduct these studies, she says.

Harvard's Carpenter proposed in October 2005 that user fees be increased to finance postmarketing safety studies. In his proposal, "FDA would direct the incremental funds to a combination of randomized, controlled trials; epidemiological studies; and postmarketing surveillance" (Health Affairs, published online Oct. 18, 2005, www.healthaffairs.org).

Raymond L. Woosley, director of the Center for Education & Research on Therapeutics at the University of Arizona, and Glenn Rice, president of Bridge Pharmaceuticals, suggest a basic change in the clinical trial system to avoid problems that appear after a drug is marketed to millions of people (Issues Sci. Technol., Winter 2005, www.issues.org). Currently, drugs move from Phase III clinical trials, where they are tested on only 1,000 to 3,000 people, directly to the nationwide market. In an era of heavy marketing, that means new drugs frequently are taken by millions of people within just a few months after launch and in ways not anticipated during development, Woosley and Rice write. Serious but rare side effects then may appear that could not possibly be seen in just a few thousand patients.

In Woosley and Rice's approach, Phase I trials would be conducted as they are today. Phase II trials would be expanded to include "more complete characterization of the drug's dose-response relationship in the intended population" and "more thorough drug-interaction studies." Biomarkers and modern computing techniques would be used, and the Phase II trials would last about four years. Then, they write, "the drug would be approved for marketing to a carefully defined population of patients," and the outcome for every patient would be tracked electronically. If no serious problems are encountered, the drug could then be prescribed with few restrictions.

In the days before direct-to-consumer advertising, "drugs took five to eight years to penetrate all the markets," Kaitin explains, but now they reach millions of people in just a few months. An approval system that includes a provisional approval "makes sense to some degree," he says.

Many other aspects of clinical trials need to be addressed.

For example, Marcia Angell, senior lecturer in the department of social medicine at Harvard Medical School and former editor-in-chief of the New England Journal of Medicine, says the basic structure of the clinical trial system does not allow valid comparisons between the effectiveness of candidate drugs and those already on the market for treating the same condition. Unless a drug is designed to treat a life-threatening illness, most Phase III trials compare the new medication against a placebo. If trials show that the new drug is significantly more effective than the placebo, it is generally approved, even though it may be less effective than available medicines for the same indication.

Angell also believes that when a pharmaceutical company sponsors a trial, the results are often biased toward the firm's product. Consequently, she recommends that "drug companies should no longer be permitted to control the clinical testing of their own drugs." She proposes that an institute for prescription drug trials be set up within the National Institutes of Health. The institute would contract with researchers at academic medical centers to conduct trials. Comparisons of existing drugs within therapeutic classes would be done at existing NIH institutes, she says. In her view, this system would allow few drugs of dubious value to come to market and would produce valid comparisons of existing drugs.

Many journal articles lend support to Angell's arguments. For example, in a recent review of antipsychotic drug trials, the medications produced by firms that funded the trials were found superior 90% of the time (Am. J. Psychiatry 2006, 163, 185).

"The existing system is derelict in its ability to provide information that is most needed for patients and doctors," says Goozner, of the Center for Science in the Public Interest. "It does not provide information to help physicians understand what the best therapy is to use in an open marketplace where there are many potential approaches."

Another safety concern is that some drug trials showing adverse effects or no benefit are never released to the public. When a firm submits an application for approval of a new pharmaceutical, it is required to submit all of its trial data to FDA. "However, we don't know if all the trials are submitted," Milne says. "An even bigger problem is that not all clinical trials are published," he explains, and for some clinical trials that are published, only selected data, rather than all data, are included in the article.

To avoid the problem of selective publication, the International Committee of Medical Journal Editors announced in 2004 that its 11 member journals will require, as a condition for publication, the listing of clinical trials in a registry before the trial starts. And when the results of the trials are known, they too must be included in the registry. The policy applies to trials that started enrolling patients after July 1, 2005.

Milne says this policy is likely to be adopted by all journals-which means hundreds of publications-eventually. "The journals that do not have these requirements are likely to be at a competitive disadvantage," he says.

States also are legislating in this area. Maine enacted a law last year requiring drug firms to disclose all clinical trials dating back to October 2002. A similar bill was introduced in Minnesota in March.

On another front, critics say contract research organizations (CROs) that drug companies hire to assist with clinical trials also pose safety concerns. CROs are involved in some way in about two-thirds of clinical trials. They may sign up volunteers, analyze data, oversee the conduct of the trials, and perform many other functions. They often promise to recruit subjects and get a trial up and running in four weeks, in contrast to the usual three months that a university or pharmaceutical firm might take. "Some people are beginning to question this practice," says Karen Maschke, editor of IRB: Ethics & Human Research at the Hastings Center, an independent nonprofit bioethics research center in Garrison, N.Y. "They are wondering if speed reflects a better organizational system, or if it reflects less attention to protocols, informed consent, and other aspects of an ethical process."

There is anecdotal evidence that CROs sometimes pay physicians so-called bounties for recruiting the last few patients in a clinical trial, Maschke says. As a matter of standard practice, doctors are always given a modest amount of money to cover time and expenses for recruiting patients and taking part in a trial. But bounties of $10,000 to $20,000 have been reportedly given to doctors for recruiting one or two patients, she explains. In the academic publishing world, however, there have been no empirical studies documenting the payment of such bounties, she says, so it is hard to tell how prevalent the practice is.

PhRMA Associate Vice President of Regulatory Affairs Alan Goldhammer sees no special problems associated with CROs' conduct of clinical trials. "The same regulations apply to them, and their trials are subject to auditing just as the pharmaceutical companies' trials are," he says.

Clinical trials overseas

Yet another source of concern is the increasing tendency to carry out clinical trials overseas.

An estimated 2.6 million patients are needed each year for clinical trials conducted by U.S. firms, and it is getting more and more difficult to persuade Americans to join them. Pharmaceutical companies are fanning out across India, Africa, and Eastern Europe in search of volunteers. Often, clinical trial participants in developing countries are illiterate and can't understand the consent forms, according to Glenn McGee, director of the Alden March Bioethics Institute at Albany Medical College (The Scientist, April 2006, www.the-scientist.com/2006/4). Often, they cannot understand the difference between a trial that could benefit them personally and one that cannot. And in India, participants are often given irresistibly large inducements to join clinical trials, as much as the equivalent of three months' salary, he tells C&EN. "Huge populations of poorly educated and poor Indians are involved. The excessive payments amount to a form of coercion."

The Indian government, fearing exploitation of patients, passed a law in 2004 prohibiting clinical trials of drugs in India unless the drugs are first proven safe in the country of origin. But the law was revoked in 2005.

Goldhammer says the International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH) prevents abusive clinical trials.

ICH is a project that convenes regulatory authorities of the U.S., Europe, and Japan, as well as experts from the pharmaceutical industry, in periodic conferences. The conferences have resulted in guidelines laying out a uniform approach to clinical trial standards that the regulatory agencies in the three regions accept. Their main purpose is to harmonize how to collect the data, how to manage it, and what is required in preclinical testing. With standardized scientific and technical requirements, duplicate testing is reduced or eliminated.

The guidelines contain some standards for selection and protection of trial participants, but, as Maschke points out, they are not primarily ethical documents.

Problems occur in the implementation of these guidelines, Maschke says. In developing countries, local governments often fail to police trials, FDA does not monitor trials, and the local institutional review boards, which are set up to oversee trial protocols, often do not have the education and background to ensure that trials are conducted ethically, she explains.

Despite some well-publicized investigations of abuses in the past, poorly designed, abusive trials are still taking place in developing countries, McGee says. "Many of the trials are not of any great value, and certainly not to the subjects themselves, whether in the long or short term," he explains. For example, "in one Indian trial, 435 women were given an anticancer drug to treat infertility," but they did not know that the drug had never been tested for this use, he explains. "Some trials have been conducted on humans without prior animal studies having been performed," he says. "These events make the British oppression that Gandhi fought against seem like nothing in comparison. If he were alive today, he would be marching on pharmaceutical research companies in Mumbai and elsewhere."

In May, a Nigerian government report made public by the Washington Post concludes that Pfizer violated international law by using an unapproved drug on 100 children and infants in 1996. The drug, an oral form of the antibiotic trovafloxacin, was given to Nigerian children with meningitis, even though Pfizer did not obtain authorization from the Nigerian government to conduct the experiment.

Five children died after receiving the experimental drug. The experiment violated Nigerian law, the International Declaration of Helsinki, and the UN Convention on the Rights of the Child, the report says.

Pfizer contends the trial was conducted with full knowledge of the Nigerian government and with verbal consent of the parents. The Nigerian government report claims, however, that an approval letter from a Nigerian ethics committee was backdated.

In 1999, FDA severely restricted the marketing of trovafloxacin because it causes liver damage, and the European Union banned it.

Pharmaceuticals for all

Even though FDA and Congress do not seem poised to make major near-term changes in U.S. laws and regulations to address high drug prices and safety issues, there are signs that the situation is changing internationally.

For years, the U.S. government and brand-name pharmaceutical companies opposed efforts in the UN, the World Health Organization, and the World Trade Organization (WTO) to allow the export of generic drugs to poor nations for global health emergencies, such as AIDS and tuberculosis.

As a consequence, the lifesaving AIDS drug cocktail, which costs about $15,000 per year in the U.S., remained out of reach for most patients in Africa and for most in the rest of the developing world. But after WTO negotiations in 2003, the situation changed somewhat.

After almost two years of debate, the 146 member nations of WTO agreed in August 2003 to relax patent restrictions to allow low-cost producers to export generic versions of brand-name medicines to impoverished nations.

Only poor countries that cannot manufacture the medicines themselves are allowed to import the generic drugs. The agreement stipulates that special packaging or differently colored tablets are to be used for the generics intended for poor countries so they won't be resold in rich nations (J. Clin. Invest. 2003, 112, 1269).

The WTO agreement may have come about partly because some developing countries had already begun to manufacture generic AIDS drugs for their own use. For example, in 1996, Brazil began making generic versions of some antiretroviral drugs and giving AIDS victims free drugs at a cost to the government of about $1,000 per year per patient.

Although access to cheap generic medicines has improved somewhat in developing countries because of steps taken by WTO and unilateral actions by countries such as Brazil, it will take a number of years before cost issues are solved in the U.S. However, given the widespread outrage in many sectors of society over prescription drug prices, the issue is likely to continue to receive a great deal of attention in the states and among members of Congress who believe the federal government has an obligation to deal with this problem. Corporations such as General Motors, which find that prescription drugs are an important factor in the rising costs of the health care they provide their workers and retirees, will also be advocating for change. The issue will become even more urgent as personalized medicines, which tend to be very expensive, begin to proliferate.

Furthermore, drug safety will probably receive a great deal of attention from FDA, the states, Congress, and medical journal editors. Because of recent high-profile drug withdrawals, public demand for access to the results of all clinical trials and for objective studies comparing the efficacy of drugs in the same therapeutic class will likely intensify.

C&EN SPECIAL ISSUE: Pharma's Road Ahead

Cover Page Thumbnail
Pharma's Road Ahead
Volume 84, Issue 25
June 19, 2006
Table Of Contents
Web Feature: The Human Face of Pharma

Seventeen individuals whose lives depend on, or whose livelihoods are affected by, the pharmaceutical industry offer unique perspectives on what pharma's future should be.

Regulatory Trends

Strong action on drug safety and pricing is more likely to come from states than from Congress or FDA

Prescription For Chaos

For Most Retirees, Medicare Program Fails To Lower Costs

Affordable Medicine

Citing Application Backlog, Makers Of Generic Drugs Seek To Boost FDA Funding