Big Pharma Maintains Illusion of Innovation

Eli Lilly (LLY) Chairman and CEO John Lechleiter’s op-ed piece on “Health-Care Reform and the ‘Innovation Test’” in yesterday’s Wall Street Journal is yet another anti-consumer big pharma industry rant. Mr. Lechleiter does not want Americans to have the ability to choose between a public or private option for health insurance. And he’s against the government conducting cost benefit comparisons of medications and medical treatments so consumers can save money by using the most effective treatment at the lowest price.

Lechleiter reiterates big pharma’s party line, threatening that any tampering by government to bring down the costs of pharmaceutical drugs in America means “innovation may be written out of the script.” “U.S.-based private industry is the heart and soul of this innovation drama, investing $58 billion in research and development for new medicines in 2007 alone.”

Yet turning to the front page of yesterday’s Journal (“A Celebrity Backing Turns Sour for Drug Firm”) describes a different “innovation drama” taking place at big pharma. And the only thing being pushed out of this “innovation script” is the $60 billion per year drug companies spend marketing their products. This is twice the amount big pharma spends on research and development, according to a study published by the Public Library of Science.

Bristol-Myers Squibb’s (BMY) innovation script for its “disease awareness” efforts marketing campaign is straight out of a Hollywood casting call. People who recovered from illness audition for a part in the campaign. If they pass the audition, they receive a callback where they’re given a script based on their talk during the audition. If selected, they’re paid to appear in TV commercials and give speeches at internal marketing events.

In early 2004, Bristol-Myers was seeking FDA approval to expand the use of its schizophrenia drug Abilify to treat bipolar disorder. According to the National Institutes of Health, bipolar disorder affects 5.7 million Americans. It is characterized by “mood episodes” that go from a depressive episode to a euphoric high called a "mania." Sometimes a person can exhibit a combination of both (a “mixed state”). Over half of all cases of bipolar disorder start before age 25.

A Bristol-Myers employee contacted Andy Behrman about promoting Abilify for bipolar after reading Behrman’s book, “Electroboy: A Memoir of Mania” chronicling his mood episodes and describing his drug use and electroshock therapy, his time as a stripper, and running an art forgery ring (which landed him in jail for five months).

Between February 2004 and December 2005, Bristol-Myers paid Behrman a total of $400,000 to appear in a promotional video and give speeches to Bristol-Myers sales reps at marketing events about his experiences using Abilify. In the video Behrman says: “Since I switched to Abilify, almost all the side effects have gone away. In fact, all of them have gone away.”

Behrman had been taking Abilify just four days before the video was shot, and within weeks of taking the drug he told the Journal he “developed stiffness and agitation in his legs” and that Abilify “clouded his thinking.”

Behrman was not contractually obligated to take Abilify, and stopped taking the drug in early 2005. He claims he privately complained to Bristol-Myers about its side effects. Bristol-Myers acknowledged to the Journal that “the appearance and onset of side effects depends on a number of variables,” but claims it has no record of Behrman’s complaint.

Behrman continued to speak at Bristol-Myers internal marketing events, where he praised Abilify as the only medication he took that didn’t have side effects. To prepare for these events, Behrman was regularly coached by a communications consultant and a PR firm employed by Bristol-Myers. Behrman said he was instructed to:

• Reiterate the drug has no side effects.
• Say that Abilify had “saved” him.
• Avoid mentioning (but if pressed respond truthfully) that he was being paid by Bristol-Myers.

Bristol-Myers even hired Andy Behrman’s psychiatrist, Mark Frye as a consultant, funding physician education videos featuring the two men.

The collaboration between Behrman and Bristol-Myers ended when Bristol-Myers offered to renew his contract for $150,000 a year for three years, but Behrman rejected the offer. (Behrman disputes Bristol-Myers’ assertion he asked for $7.5 million.)

Perhaps Behrman should have taken a cue from the Hollywood playbook he attempted to emulate and have asked for a low salary and a share of Abilify’s profits. (Abilify’s sales were $2.8 billion in 2008, making it Bristol-Myers’ second biggest selling drug.) Since his confidentiality agreement expired at the end of 2008, Behrman has been unsuccessful in acquiring a new speaking gig with another drug company.

From Abilify to stunt doubles to ghostwriters. These are just a few examples of lies and deceit hiding behind big pharma’s illusion of innovation.

No disclosures.

Comments

[redbaron:]

Well written, and I agree on the concept that Big Pharma is not to be trusted. They spend way too much on drug marketing, and not nearly enough on drug research and development. With this sort of approach (as described above) to ethics and honesty, why would anyone put any faith at all in their data, when it comes to drug approvals? The previous administration allowed these companies to stack the deck within the FDA and NIH, and now that this era is coming to an end, these companies are starting to panic. I say lets go back to a previous world where drug marketing is severly restricted, and spend the money saved on drug development instead of back to back to back to back drug ads on TV. Perhaps such measures would give us some new drugs, and address some of our most pressing health issues. IMHO

May 15 08:20 AM

[User 414457:]

The "pharma spending is a tradeoff between R&D and marketing" argument is a red herring. Marketing has one purpose and one purpose only, to bring in more revenue than is spent. Marketing spend is constantly indexed to return on investment, and if it's not generating sufficient ROI, it is cut. And what is said revenue used for? R&D, or rewards to shareholders for investing in the company.
Please, people, let's not just parrot leftie applause lines.

May 15 08:52 AM

[redbaron:]

And who decides on the tradeoff? And who decides who dies as the result of non-investment in new research? And where is management held accountable for those decisions? The poor results from these management decisions affects us all in the end. We can and should do better!


On May 15 08:52 AM User 414457 wrote:

> The "pharma spending is a tradeoff between R&D and marketing"
> argument is a red herring. Marketing has one purpose and one purpose
> only, to bring in more revenue than is spent. Marketing spend is
> constantly indexed to return on investment, and if it's not generating
> sufficient ROI, it is cut. And what is said revenue used for? R&D,
> or rewards to shareholders for investing in the company.
> Please, people, let's not just parrot leftie applause lines.
>

May 15 10:47 AM

[Furd Turgeson:]

This isn't communist russia is it? What the hell do you care how much big pharma spends on marketing? They develop the products pal, and if you don't like em, don't take the meds. Simple. Now go cry some more in your sandbox you pinko baby. WAAAA!

May 15 12:01 PM

[ken johnson:]

From Ken Johnson, Senior Vice President, Communications, PhRMA.

Contrary to the myth cited above, America’s pharmaceutical research and biotechnology companies spend considerably more on research and development of medicines than on promotion. In 2007, they invested $63.2 billion on R&D. During that same year, they spent $11.5 billion on promotional activity directed to physicians, journal advertising and consumer advertising, according to IMS. And last year, despite unfolding economic challenges, a record $65.2 billion was invested in R&D.

Research is the backbone of America’s biopharmaceutical industry. The nonpartisan Congressional Budget Office recently noted that the “pharmaceutical industry is one of the most research-intensive industries in the United States. Pharmaceutical firms invest as much as five times more in research and development, relative to their sales, than the average U.S. manufacturing firm.” That’s not a guess, that’s a fact.

May 15 02:35 PM

[Jasper M:]

If misregulation had not encouraged over-consolidation in this sector, implicitly threatening breadth of consumer choice, we would not be having these issues.

If "pharma" was split up into 30-odd "Little Pharma", with less political clout (therefor less subsidy) and far more price competition, we could, and would trust them a lot more.

I think they should take a lesson from the US auto makers: oligopolies Look profitable, but ultimately, they are a way to temporarily get away with alienating your customers. And that is FATAL.

May 15 06:17 PM

[YoYoMama:]

Big pharma does spend a lot on research and development. They then market the drug worldwide and make huge profits. Where is the drug priced the highest? Right here in the good old USA.

Big pharma has the FDA in their pocket, and both should be very concerned about competition from India. India has their own patent laws which allow them to reverse engineer pharmaceuticals to come up with a standardized (by European standards) medication for their vast populace.

As consumers discover these excellent products, expect more rhetoric like this from Big pharma.

To the author of this article - your description of bipolar tells me you have never lived with the disease. My father, grandmother, three cousins and my own son suffer from this horrible disease, and it is not simply characterized by "highs" and "lows". It can be associated with angry and violent outburts, erratic (strange) behavior and and uncontrolled compulsions. Not all bipolars get depressed, nor do they all experience mania.

My son also takes Abilify, and whether or not Mr. Behrman was coached or not, I can tell you from first hand experience that this drug does all Mr. Behrman is saying. So give the guy a break. He probably was speaking honestly, coached or no.

May 16 09:01 AM

[dspg:]

A couple of points:
1.) You can believe the data from clinical trials. It is IRB (Institutional/Indepen... Review Boards) approved and CRO (Contract Research Organizations) monitored, not massaged by the company. It may not be published or promoted if it is "negative" (ie doesn't support the new medication/dose/schedule of treatment used), but publishing a negative trial is often made difficult by medical journal editorial policy as much as the lack of the pharma enthusiasm in trying to publish negative data.
2.) Of course the pharma companies are going to market themselves in a good light--why would they hire anyone to do the opposite. What's wrong with marketing?
3.) Drugs are more expensive here--well, wrong again; yes they seem insanely expensive, but in fact per unit of GDP or individual purchasing power they cost about the same here as in Romania or the Congo etc). In countries where they are subsidized (eg Canada) the cost is just hidden by income taxes.

Just an aside; it is very hard to do clinical research in the US, and hugely expensive as well.

May 16 12:21 PM

[Buckeye Jim:]

I've enjoyed reading all the posts. Both sides have passion, but I have to side with pharma, warts and all. Pharma needs to cut wasteful marketing, and they have already slashed sales forces. If you want to take away the profit motive, don't be upset with the lack of new medicines. Socialists fail to recognize that simple truth.

May 16 12:56 PM

[Jasper M:]

dspg,
"You can believe the data from clinical trials. It is IRB (Institutional/Indepen... Review Boards) approved and CRO (Contract Research Organizations) monitored"

Um.
Given the Pile of bad drugs that have gotten past the FDA process, it is hard accept that this process in trustworthy. And given that a disproportionate number of these seem to be from larger pharmaceutical companies, it is hard to believe this 'leakage' is accidental.
My point it not to rehash failures. It is that the process Lends itself to a certain kind of abuse.

May 17 12:29 AM

[cyndikus:]

Lilly has 24 oncology products in the pipeline. Included are the antibody to insulin like growth factor receptor and a antibody to VEGF receptor. Both of these seem to have activity in many cancers. Using molecular targets for cancer treatment is a science that is just coming to fruition. Not only can we determine molecules that contribute to unregulated cancer growth and target them, we can also do molecular analysis on the patient to determine if the drugs will work for that cancer, making the drugs much more cost effective. It is a very exciting time, with 25 years from bench to market these remarkable drugs are usually active in other diseases. Take for example the use of rituxun in autoimmune dieses and mtor inhibitors for renal poly-cystic diseases and possibly obesity. These growth pathways are common to every cell in the body and dysfunction or dis-regulation results in the diseases we see everyday. The cost to develop a drug is one billion dollars. That means Lilly is spending 24 billion for oncology alone. Those who think pharmaceutical is not innovative should refuse to use the drugs they develop.

Oct 11 11:53 AM