Pharmaceutical industry conduct and the Trans‐Pacific Partnership Agreement

Dr Erik MonasterioPsychiatrist, Canterbury

TPPA AND THE PHARMACEUTICAL INDUSTRY

• TPPA will in particular include obligations to;

1. protection of IP rights;

2. protection of foreign investment;

3. the coherence of internal regulations and the processes of

developing them;

4. Government transparency

‘behind the border’ regulation

• These mandatory regulatory practices will favour corporate interests

ahead of national sovereignty for sensible health policy development

RENT SEEKING & INEQUALITY

“RENT”- Returns to land

“MONOPOLY RENTS” - Income from control of a monopoly

“RENT SEEKING”- Great wealth amassed by rules that allow the wealthy to collect “rents” from the rest of society through monopoly power

RENT SEEKING AND MEDICARE

• Medicare Prescription Drug, Improvement and Modernization Act in

2003 prohibited the government bargaining in medication purchase

• Extra medication cost of $50billion/yr

• > 3100 health lobbyists or 6: congressperson

PHARMAC

• Legal obligation to secure “the best health outcomes that are reasonably achievable from pharmaceutical Rx and from within the amount of funding provided”

• Capped annual budget ($786million)

• Market competition model:

In 2009 NZ per capita expense $237 USD PPP, Australia $370 and $850 (0.9%GDP, OECD average was 1.5% and USA >2%)

>NZ $5 billion saved since 2000

PHARMAC vs. PHARMA

The 2012 special 301 watch report of the US Trade of Representatives cites US industry concern over “the lack

of transparency, fairness, and predictability of the PHARMAC pricing and reimbursement regime, as well as the negative access of the overall climate for innovative medicines in NZ”

US Negotiating objectives listed in the “fast track” (Trade Priorities Act) bill introduced into Congress in Jan 2014 include “the elimination of government measures such as

price controls and reference pricing which deny full access for US products”

TPPA WILL PROVIDE PHARMACEUTICAL INDUSTRY EXTRA PRIVILEGES

1. Intellectual Property (IP) CHAPTER

2. Transparency and Regulatory CHAPTER- Procedural changes to

pharmaceutical coverage programs (PHARMAC)

3. Investor State Dispute Settlement (ISDS) mechanisms

IP CHAPTER

• Lowering the bar to patentability

• Data exclusivity

• Patent term extensions

• Patenting of medical methods

US TRANSPARENCY CHAPTER ANNEX

Some, but not all concerns:

• Removal of therapeutic reference pricing (“me too drugs”)

• Appeals process (can challenge decision in court)

• Institutionalisation of direct-to-consumer-advertising (DTCA)

INVESTOR-STATE DISPUTE SETTLEMENT(ISDS)

• Foreign corporations can sue governments in international tribunals, without first having to seek damages in domestic courts

• Lawyers appointed and paid at the behest of the parties and do not have to take into account domestic public health and environmental protection

• Inhibit the capacity of domestic governments to pass legislation (the "policy space") addressing perfectly legitimate public concerns, such as health and environmental protection, labor rights or human rights

• Allows the rise of the corporation as an equal to the nation state

WHAT HAVE WE LEARNT?

PHARMACEUTICAL INDUSTRY STRATEGY

1. Promotion of off-label prescribing

2. Reporting bias with unpublished negative findings and misreported

studies

3. Medical ghost-writing

4. Increased expenditure in promotion

5. “Evergreening Strategies”

6. Legal action against licensing authorities to delay market entry of

generics

OFF-LABEL MEDICATION USE

• Radley et al found that 73% of the off-label use of 160 commonly prescribed drugs

lacked evidence of clinical efficacy, and only 27% was supported by strong scientific

evidence.

Radley DC, Finkelstein SN, Stafford RS. Off-label prescribing among office-based physicians. Archives of Internal Medicine 2006;166(9):1021.

• Worldwide dramatic increase in AAP off-label use 2010- US$25.2 billion

• Seroquel (quetiapine), Zyprexa (Olanzapine) and Abilify (aripiprazole) 5th, 10th and 13th biggest selling pharmaceuticals with sales of US$6.8, US$5.7 and US$5.4

MISLEADING REPORTINGStudy 329 (93-96) largest trial on SSRI (Paxil) Rx in paediatric population;

1. Established 2 end points- “no better than placebo”

2. GSK contracted Scientific Therapeutics Information (STI); inserted 8 new

“efficacy measures” - Paxil superior in 4 of these

3. Abstract “generally well tolerated and effective for major depression in adolescents”

4. FDA reviewed the raw data and found 10/93 on Paxil had suicidal concerns

EVERGREENING

• 8 commonly prescribed drugs subject to evergreening strategies in the public

hospital system of the canton of Geneva, estimated an additional cost of 30 million

euros between 2000 and 2008, without any proven clinical advantage.

Vernaz, N., Haller, G., Girardin, F., Huttner, B., Combescure, C., Dayer, P., ... & Bonnabry, P. (2013). Patented drug extension strategies on healthcare

spending: a cost-evaluation analysis. PLoS medicine, 10(6), e1001460.

• Pfizer fined US$2.3 billion for the off label marketing of pregabalin,

valdecoxib, linezolid and the atypical antipsychotic ziprasidone in 2010

• Eli Lilly was fined US$1.4 billion for promoting olanzapine off label in

2009

• Johnson & Johnson fined US$1.1billion in 2012 for misleading

promotion of risperidone (judgment recently reversed by the Arkansas

Supreme Court)

THE RECORD FINE

2012 GSK agreed to plead guilty and pay a record US$3bn in penalties

for unlawful promotion of prescription drugs, failure to report safety

data, and false price reporting. It also signed a 123 page corporate

integrity agreement with the US Department of Justice that regulates its

activity for the next five years.

“…..I AM SORRY”

SYSTEMATIC STUDY OF PHARMACORRUPTION

US ATTORNEY GENERAL

“…can put the public health

at risk, corrupt medical

decisions by health care

providers, and take billions of

dollars directly out of

taxpayers’ pockets.”

RISK ASSESSMENT

HISTORICAL

1. Past offending behaviour

2. Frequency of offending behaviour

3. Versatility of offending behaviour

DYNAMIC1. Attitude

2. Sincere or insincere attitude

3. Compliance with remediation

attempts

ACCESS TO TPPA DETAILS

NO TPPA

NO TPPA

"One particularly disturbing trend is the use of foreign investment agreements to

handcuff governments and restrict their policy space... In my view, something is

fundamentally wrong in this world when a corporation can challenge government

policies introduced to protect the public from a product that kills." (WHO)

“There is a real risk that it (the TPP) will benefit the wealthiest sliver of the American

and global elite at the expense of everyone else” (J Stiglitz)

“the economic case (for the TPP) is weak at best…” (P Krugman)

“the TPP agreement is on track to become the most harmful trade pact ever for access

to medicines in developing countries” (MSF)