the pharmaceutical industry facts, fiction, policy and ethics martin donohoe
DESCRIPTION
The Pharmaceutical Industry Facts, Fiction, Policy and Ethics Martin Donohoe. Outline. Economics Influences on Physician Prescribing Academia-Industry Connection Ethical and Policy Issues. Prescription Drugs. 10,000 FDA-approved drugs 70% of all office visits lead to prescriptions - PowerPoint PPT PresentationTRANSCRIPT
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ThePharmaceutical
IndustryFacts, Fiction, Policy and Ethics
Martin Donohoe
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Outline
• Economics
• Influences on Physician Prescribing
• Academia-Industry Connection
• Ethical and Policy Issues
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Prescription Drugs
• 10,000 FDA-approved drugs
• 70% of all office visits lead to prescriptions
• 1.5 - 2.0 billion prescriptions/year
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Prescription Drugs and Health Care Costs
• >10% of U.S. medical costs>10% of U.S. medical costs
• The fastest growing component of the $1.3 trillion US health care bill
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Economics of the Pharmaceutical Industry
• Sales revenues tripled over last decade
• Prices increased 150% (versus 50% CPI)
• Spending up 17% from 2000 to 2001
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Economics of the Pharmaceutical Industry
• Worldwide sales > $145 billion/year
• US = Largest market
»40 % of worldwide sales
• Average CEO compensation = $20 million (1998)
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Economics
• 16.4% profit margin in 2000 ($24 billion)
-Largest of any industry
-4 times greater than average return of all fortune 500 companies
-8 out of 25 most profitable U.S. companies are pharmaceutical companies
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Economics of the Pharmaceutical Industry
• Greater than 5000 companies worldwide
• Less than 100 companies account for over 90% of worldwide market
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Mergers and Acquisitions
• Drug company mergers
- Pfizer-Warner-Lambert
- Upjohn-Pharmacia
→Pfizer acquired Pharmacia in 2002 for $60 billion to become the world’s most powerful drug conglomerate
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Drug Industry Lobbying
• Pharmaceutical Research and Manufacturers’ Association powerful lobby
• 623 lobbyists for 535 members of Congress
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Drug Industry Lobbying
• $38 million donated to Congressional campaigns in the 1990s
• $84 million in 2000 election (2/3 to Republicans)»Orrin Hatch (R-Utah) - $169,000 in 2000 - #1
» John Ashcroft (Atty. Gen’l) - $50,000 in losing 2000 Senate bid
• GW Bush received $456,000 during his 2000 election campaign
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Drug Costs
• U.S. highest in the world 55% > Europe 35% to 80% > Canada (drug companies still among the most profitable in Canada)
• Cross border pharmacy visits increasingly common
»Canada vs. Mexico
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Drug Costs
• U.S. only large industrialized country which does not regulate drug prices
• Single payer system would dramatically decrease drug costs
»Single purchaser able to negotiate deep discounts
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Drugs: Who Pays?
• 55% out-of-pocket
• 25% private insurance
• 17% medicaid
• 3% Other (VA, Workman’s Comp, IHS, etc..)
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Where Prescription Dollars Go
• Research and development - 12%-preclinical testing - 6%-clinical testing - 6%
• Manufacturing and distribution - 24%
• Sales and marketing - 26%
• Administrative / miscellaneous expenses - 12%
• Taxes - 9%
• Net profit - 17%
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The Elderly and Prescription Drug Coverage
• Elderly represent 12% of U.S. population, yet account for 33% of drug expenditures
• Almost 2/3 of elderly Medicare enrollees have no coverage for outpatient drugs
»sicker and poorer then their counterparts with supplemental insurance.
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The Elderly and Prescription Drug Coverage
• Drug expenditures increasing up to 10 times as fast as SS and SSI benefits
• 1 out of 6 elderly Medicare patients are poor or near poor (incomes less than $7,309 or $9,316 respectively)
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Consequences of No Prescription Drug Coverage for the Elderly
Noncompliance, partial compliance
Increased ER visits and preventable hospitalizations, higher rates of disability, and greater overall costs
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Consequences of No Prescription Drug Coverage for the Elderly
Elderly, chronically ill individuals
without coverage are twice as
likely to enter nursing homes
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The Elderly and Prescription Drug Coverage
• Universal outpatient drug coverage cost-saving
-pharmaceutical industry strongly opposed
-Citizens for Better Medicare (pharmaceutical industry front group) $65 million ad campaign to defeat a Medicare prescription drug plan in 2000
• Bush/Congressional prescription drug benefit proposals woefully inadequate
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Generics
• Increased market share-1983 = 15%-1993 = 40%-2000 = 42%
• Average cost 1/3 of comparable name-brand drug
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Generics
• Brand name manufacturers acquiring generic producers
»E.g., Merck-Medco
• Prices rose almost twice as rapidly as those of brand-name drugs in 2002
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Delaying Generic Competition
• Nuisance lawsuits against generic manufacturers
• Lobbying for Congressional Bills Extending Patent Protection
»Schering Plough / Claritin - $20 million lobbying campaign
»Big-name lobbyists (Howard Baker, C Everett Koop, Dennis Deconcini, Linda Daschle)
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Influences on Physician Prescribing Habits
• Texts
• Journals
• Colleagues
• Formularies
• Samples
• Patient requests
• Personal experience
• Cost
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Influences on Physician Prescribing Habits
• Gifts
• Drug advertisements
• Pharmaceutical representatives
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Gifts from Pharmaceutical Companies
• Pens, toys and puzzles
• Household gadgets
• Food
• Books
• Event tickets
• Travel and meeting expenses
• Cash
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Patients’ Attitudes Toward Pharmaceutical Company Gifts
(Gibbons et al.)
• 200 patients, 270 physicians
• 1/2 of patients aware that doctors receive gifts
• 1/4 believe their doctor(s) accepted gifts
• 1/3 felt costs passed along to patients
• Patients felt gifts less appropriate then did physicians
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AMA Guidelines Re Gifts to Physicians from Industry
• Gifts of modest value which benefit patients O.K.
»Pens, notepads, modest meals, textbooks acceptable
»Film, videos, CDs; “Dinner to Go” (Merck); “Look for a Book” GlaxoSmithKline PLC); Palm Pilots (Dupont) – may be acceptable
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AMA Guidelines Re Gifts to Physicians from Industry
• No cash gifts
• No gifts with strings attached
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AMA Guidelines Re Gifts to Physicians from Industry
• CME sponsorship money to conference sponsor, not participating physicians
• Meeting expenses for trainees funneled through institution
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Pharmaceutical Company Advertising
• $15 billion in 2000
»up to $15,000/U.S. physician
»over $6 billion - advertising and marketing
»over $7 billion - sales reps’ salaries
»50,000 salespersons: 1/10 prescribing physicians
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Pharmaceutical Company Advertising – Drug Samples
• $8 billion/year in samples $8 billion/year in samples
• Dispensed at 10% - 20% of Dispensed at 10% - 20% of visitsvisits
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Drug Samples
• Only ½ of samples go to patientsOnly ½ of samples go to patients
»60% of pharm reps self-medicate60% of pharm reps self-medicate
»50% of residents self-medicate, often using samples
»early 1990s - benzos
»2000 - SSRIS for depression, antihistamines for sleep
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Truthfulness in Drug AdsWilkes et al.
Ann Int Med 1992:116:912-9
• 10 leading medical journals
• 109 ads and all available references (82%)
• 3 independent reviewers
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Truthfulness in Drug Ads: FDA Requirements
• True statements-effectiveness-contradictions-side effects
• Balance
• Instructions for use
• Approved uses only
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Truthfulness in Drug Ads: Data
• 57% little or no educational value
• 40% not balanced
• 33% misleading headline
• 30% incorrectly called drug the “agent of choice”
• 44% could lead to improper prescribing
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Truthfulness in Drug Ads
• Higher percentage of ads misleading in Third World
»Many agents available OTC
• Increased FDA oversight and enforcement needed
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Doctors are Influenced by Pharmaceutical Advertising and
Marketing
• Prescribing patterns
»e.g., Calcium channel blockers
• 1998: Trovan most promoted drug in US; sales most ever for an antibiotic in one year; use since limited by FDA due to liver toxicity
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Doctors are Influenced:Formulary Requests
by P and T Committee Members(JAMA 1994;271:684-9)
• Met with drug rep – 3.4X more likely to request company’s drug
• Accepted money to speak at symposia – 3.9X
• Accepted money to attend symposia – 7.9X
• Accepted money to perform company-sponsored research – 9.5X
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Pharmaceuticals Sales Reps’ Techniques
• Appeal to authority
• Appeal to popularity
• The “red herring”
• Appeal to pity» Dryden - “Pity melts the mind”
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Pharmaceuticals Sales Reps’ Techniques
• Appeal to curiosity
• Free food/gifts
• TestimonialsTestimonials
• Relationship building/face timeRelationship building/face time
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Pharmaceutical Sales Reps’ Techniques
• Active learning – reinforcement / change
• Favorable but inaccurate statements• Negative comments re competitors’
products• Reprints not conforming to FDA
regulations
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Relating to Pharmaceutical Reps
• Awareness of sales tactics
• Learn about new agents/formulations being developed and tested
• Question them, ask for references
»Evaluate quality of references
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Sources of Accurate and Reliable Drug Information
• The Medical Letter
• Peer-reviewed studies and reviews
• Micromedex
• Prescribers’ Letter
• Large databases-The Cochrane Collaboration
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Sources of Accurate and Reliable Drug Information
• Textbooks
• Facts and Comparisons
• AHFS Drug Evaluations
• AMA Drug Evaluations
• Conn’s Current Therapy
• The FDA (sometimes)
• Not PDR
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Direct to Consumer Advertising
• Began in 1980, briefly banned 1983-85
• Expenditures:
$155 million—1985
$356 million--1995
$1 billion--1998
$2.8 billion--2000
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Direct to Consumer Advertising
• US and New Zealand only countries to allow prime time TV advertising
• 1989 - one drug achieved >10% public recognition
• 1995 - 13 of the 17 most-heavily marketed• 2000 – Schering-Plough spent more to
market Claritin than Coca-Cola Enterprises and Anheuser Busch spent to market their products
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Direct to Consumer Advertising:Use of Celebrities
• Micky Mantle – Voltaren
• Bob Dole – Viagra
• Joan Lunden – Claritin
• “Newman” - Relenza
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Effects of Direct to Consumer Advertising
• Better educated/informed (?misinformed?) Better educated/informed (?misinformed?) patientspatients
• Discovery of unrecognized illnesses: Discovery of unrecognized illnesses: diabetes, hypertension, hep C, EDdiabetes, hypertension, hep C, ED
• More proactive patientsMore proactive patients
• Diversion from important health issues; Diversion from important health issues; wasted timewasted time
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Pet Pharmaceutical Industry
• $3 billion market
• Examples:
»Clonicalm (clomipramine) for separation anxiety in dogs
»Anipryl (seligeline) for canine Cognitive Dysfunction Syndrome
» “Sea pet” shark cartilage treats for doggie arthritis
• Pet superstores and websites sell multiple antibiotics
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Pharmaceuticals on the Farm:Agricultural Antibiotic Use
• Agriculture accounts for 70% of U.S. antibiotic use
»Use up 50% over the last 15 years
»Due to explosion in factory farming
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Consequences of Agricultural Antibiotic Use
• CDC: “Antibiotic use in food animals is the dominant source of antibiotic resistance among food-borne pathogens.”»Campylobacter fluoroquinolone
resistance»VREF (poss. due to avoparcin use
in chickens)
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The FDA: Current Issues
• Nicotine/Cigarette regulation• Policies re transgenic foods (GMOs,
Frankenfoods)»Biopharming
• Pharmaceutical industry involvement in research and production of chemical and biological warfare agents and drugs used to facilitate executions
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Policy Issues Related to Women’s Health Care Drugs
• OCPs available OTC
• Pharmacist-prescribed emergency Pharmacist-prescribed emergency contraceptioncontraception
» reduce number of unintended reduce number of unintended pregnanciespregnancies
»cost saving to patients and health care cost saving to patients and health care systemsystem
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Concerns Re Research in the U.S.
• 22% of new drugs developed over the last 2 decades new molecular entities
»Most are “me too” drugs
»Examples
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Concerns Re Research in the U.S.
• Insurance coverage of clinical trials decreasing
»Low enrollment causing delays in evaluating cancer medications
• Clinical trials a stop-gap source of care / meds for poor and uninsured
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Unethical placebo-controlled trials
anti-depressants
anti-psychotics
anti-emetics
anti-hypertensives
anti-inflammatories
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Pharmaceutical Company Research
• 90% of health research dollars are spent on the health problems of 10% of the world’s population
»research on major diseases of the developing world under-funded, not profitable
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Pharmaceutical Company Experimentation
• Third World experimentation with inappropriate placebo-controls: AIDS drugs/Africa; Sulfazyme/Brazil
»Results more beneficial to First World patients
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Anti-AIDS Drug Availability in Africa
• 36 million infected with HIV; 2/3 in sub-Saharan Africa (1.3% of global pharmaceutical market)
»Only 1/1000 S. African AIDS patients getting anti-HIV drugs
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Anti-AIDS Drug Availability in Africa
• PHRMA lawsuit vs South Africa (supported by US govt)
»parallel importing
»compulsory licensing
»dropped after activist campaign
• PHRMA continues to lobby against parallel importing and compulsory licensing through governments and the WTO
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Third World “Donations” (Dumping) of Pharmaceuticals
• Genuine gifts
• Dubious “gifts”
»clear out stocks of nearly-expired drugs/poor sellers
»tax write-offs (up to 2x production costs)
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Third World “Donations” (Dumping) of Pharmaceuticals
• Egregious Examples:-Expired Ceclor to Central Africa-Garlic pills and TUMS to Rwanda
-50% of donations to Bosnia expired or medically worthless
• Donation recommendations from WHO:-WHO list of essential drugs-Expiration date at least 1 year away
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Academia/Pharmaceutical Industry Links Strong/Growing
• Industry funds 8-40% of university research (a 7-fold increase since 1970)
• ¼ of scientific investigators have industry affiliations
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Academia/Pharmaceutical Industry Links Strong/Growing
• 2/3 of academic institutions hold equity in start-ups that sponsor research at the same institutions
• Up to 80% of science and engineering faculty perform outside consultations
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Exclusive university - corporate agreements
»MIT – 5 yr, $15 million deal with Merck and Co. for patent rights to joint discoveries
»DFCI – Novartis
»UC Berkeley – Novartis
»Wash U. in St Louis - Pharmacia
»Univ. of CO – Ribazyme
»BIH - Pfizer
»MGH - Shiseido
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Guidelines
• Majority of authors of Clinical Practice Guidelines published in major journals have industry ties
• Authors of NEJM reviews and editorials can accept up to $10,000/year in speaking and consulting fees from each company about whose products they are writing
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Problems Consequent to Increased Academia-Industry Partnerships
• Impaired sharing of knowledge, materials
»Difficulties in repeating/verifying important research
• Impaired collaboration
»Driven by usual academic competitive jealousies, fears of contract violations and subsequent litigation, and desire to protect financial interests and keep stock prices high
• Patents used to inhibit other investigators’ research
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Educational Concerns Regarding Industry-Funded Research
• Diversion of faculty away from teaching, towards more remunerative consultations
• Faculty change research direction
• Fellows/post-docs diverted to industry-related topics
• Patent- and profit motive-related-publication delays affect trainee and junior faculty career development
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Withholding of Data / Publication Delays / Harassment of Researchers
• JAMA Celebrex (Pharmacia) study: fewer ulcers than ibuprofen at 6 months, but no difference at one year (only 6 month data submitted and published
• Synthroid study: Betty Dong, UCSF, Boots/Knoll Pharmaceuticals
• Deferipone: Nancy Oliveri, University of Toronto, Apotex
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Issues in Drug Company Research
60% of industry-sponsored trials are contracted out to for-profit research firms, which in turn may contract with for-profit NIRBs for ethical review
*Conflict of interest
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Proliferation of Physician “Researchers”
• 3-fold increase in the number of physicians conducting “research” in the last decade
• “Investigators” can make from $500 to $6000 per enrolled subject
»Active recruiters can make from $500,000 to $1 million per year
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Seeding Trials
• Sponsored by sales and marketing dept., rather than research division
• “Investigators” chosen not for their expertise, but because they prescribe competitor’s drug
• Up to 25% of patients enrolled in clinical trials
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Seeding Trials
• Study design poor
• Results rarely published
• Disproportionate amount paid for “investigator’s” work (writing a prescription)
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Recommendations for Industry-Sponsored Research
• Written agreements with university, not researcher
• Alternatives therapies selected based on clinical relevance
• Stepwise project results not provided to sponsor until study is funded and open publication guaranteed
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Recommendations for Industry-Sponsored Research
• Full disclosure of conflicts of interest
• No gag clauses regarding publication
• Investigator not to act as consultant during study
• National/international database of clinical trials
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The Pharmaceutical Industry and Medical Ethics
• Funding of conferences, Centers of Ethics, individual investigators
»E.g., $1 million gift from SmithKline Beecham to Stanford University Center for Biomedical Ethics
• Rapid growth of for-profit non-institutional review boards (NIRBs)»Ethicists for hire
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The Pharmaceutical Industry and Medical Ethics
• Ethics consultants serving on corporate boards
»E.g., Harold Shapiro continued to draw annual director’s salary from Dow Chemical while serving as Chair of NBAC
• Loss of appearance of independence; damage to credibility
• Most bioethics journals do not require conflict of interest disclosures
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Increasing Involvement of Industry in Provision of Continuing Medical
Education
• 1/2 of the $1.1 billion spent on CME in 1999 from industry
• Medical Education and Communication Companies
»Sponsored/paid mainly by drug companies
»Provide “educational” materials gratis
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Guidelines for Speakers at Industry-Sponsored Events
• Educational, not promotional
• Content based on scientific data and clinical experience
• Full disclosure of relationship with company and honoraria
• Travel expenses not lavish
• *Few mechanisms for surveillance/guideline enforcement *
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Enhancing Cooperation Between Physicians and the Pharmaceutical
Industry
• Improve compliance
• Decrease adverse events
• Promote and fund of open, freely-shared basic science and clinical research, with appropriate but not excessive compensation to the sponsoring investigator, institution and company
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Conclusion
• Pharmaceuticals and Biotechnology Industries-Tremendous contributions to health-Motivation = “alleviate suffering”-Primary responsibility = “make money for shareholders”
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Suggestions
• Be aware of worrisome trends in the business of drugs, research and health care
• Thoughtfully consider your relationship with pharmaceutical companies
• Advocate locally and nationally for solutions
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Contact Information
Public Health and Social Justice Website
http://www.phsj.org