GlaxoSmithKline is to pay a 3B$ fine, the largest ever for healthcare fraud in the US. In the past, numerous big pharma companies including Abbott, Pfizer have been fined and this is something the industry seems accustomed to. It’s important to understand why pharma marketing becomes unethical, if the unethical sales practices are to stop while innovation continues. Here is how the pharma NPD (New Product Development) process plays out:
- Drug discovery and patent – no sooner than an invention occurs patent applications are submitted. The patent is good for 20 years when competitors cannot produce the same drug.
- Drug development, testing and FDA approval can take upto 10-12 years involving several phases including testing with animals,healthy subjects, patients etc.
- Euphoria with FDA approval:The pharmaceutical drug development is so difficult,expensive and uncertain that it is common to find scientists who have worked 20 years and yet not seen a single product make it to market. Naturally when FDA approves a drug there is euphoria amiong shareholders and the stock market, expectation and hope among patients and their doctors. But by now only 8-10 years remain on the patent, by which time the pharma company must earn what it can.
- Prescription drugs paid by insurance: Once prescribed insurance companies including Government programs like Medicare and Medicaid pay for the medicine. Generally over the counter (OTC) drugs are not covered. Between a generic and a branded, under patent drug- patients,doctors and insurance companies prefer the less expensive generic.
- Off Label use– expanding the use of a drug involves using it for applications other than what it is approved for. Think of the many uses of baking soda beyond baking. Not a huge problem in medicine if you think about using a body pain medicine for a headache and doctors do keep trying out drugs for different ailments. But this can be a big problem when a psychiatric drug for adults is used on children without FDA approval as in the GSK case. Apparently the pressure to sell on the sales force is very high.
Beyond off label use there were numerous instances of trying to influence doctors to prescribe particular drugs through inducements such as free holidays,golf, expensive gifts etc. The sales force behavior is consistent with the pressures of pharmaceutical marketing where the pharma sales force is chasing large sales quotas against rapidly expiring patents.
Ideally pharma NPD should involve much more focus at the early stages of the NPD process so that the FDA approvals are quicker and as off label applications become known, the FDA process to include off label use should be made easier. The balance between high speed innovation—–> safety and efficacy by FDA—–> earning money by the company within patent periods is a tough task. Doing so is essential if innovation is to continue for big pharma.