The TPPA and Big Pharmaceuticals

The TPPA and Big Pharmaceuticals

by Len Parker

It is secret and we won't know for four years what the government has signed us up to under the Trans Pacific Partnership Agreement (TPPA) - a potential trade agreement between New Zealand, Singapore, Brunei and Chile which, by extension, the US could soon be a party to.

But we can get an idea!

In May this year, 28 US senators lobbied President Obama with their concerns about the perceived threat to the powerful US pharmaceutical industry's “intellectual property” interests - and no doubt the senators' own future campaign funds. Their gripe was that drug company interests were not being sufficiently protected by the TPPA.

The US pharmaceutical industry has the largest lobby in Washington. According to Marcia Angell in The Truth About the Drug Companies, in 2002 it employed 675 lobbyists (more than one for each member of Congress) at a cost of $91 million. Their job is to prowl the corridors of power in Washington to promote drug company interests.

The senators' (read: drug companies') concern was with New Zealand's publicly funded drug purchaser Pharmac. Pharmac's role is to shop around as a public purchaser of medicines, and to get the best value for money it can for the taxpayer. The safety and efficacy oversight review is handled by the NZ Medsafe division, composed of chemists, pharmacists and other medical professionals.

Prime Minister John Key, under pressure of public questioning, said he would take “a fair bit of convincing” before concessions would be made regarding Pharmac. Now we hear that some concession may have been made, but we the people will not know about it for four years.

Were concessions made for changes to Pharmac and what were they? To our public hospital system? To medical insurance? Protection from liability for private insurance companies? An attack on ACC? We won't know!

Where are the legitimacy, transparency, accountability and democracy in such agreements? The giant US pharmaceutical corporations insist on transparency and openness with Pharmac, but hide their own business interests behind a veil of commercial secrecy, intellectual property, patents and expensive "me too" drugs.

In the battle for healthcare reform in the US under President Obama, health insurers, the pharmaceutical industry and other special interest groups “opened their pocket-books to frustrate reform legislation and protect their huge profit streams," says Angell. "Members of Congress were showered with political contributions – and overwhelmed with thousands of lobbyists.”

For us in New Zealand, this agreement could be a disaster waiting to happen. Even in the midst of the global financial meltdown, private capital has been flowing into the giant private US hospital business. Share prices in Universal Health Services Inc. (UHS), one of the largest US health and management companies, have rocketed. Income flow increased in the September 2011 quarter by 40% compared to the previous year, and for the the previous nine months to $5.66 billion. In addition to the United States, UHS has operations in Puerto Rico and the US Virgin Islands, which suggests tax havens and transfer pricing.

In the US, medicine is quite simply big business. Conglomerates like Tenant Health Care own and operate 64 acute care hospitals in 12 states. Hospital Corporation of America (HCA, Inc) includes approximately 191 hospitals and 82 outpatient surgery centres in 23 states. This is a "Managed Care” for-profit system, and the Wall Street shareholders' sole concern is for their dividends and maximum returns on speculative investment.

Private medical insurance premiums are so expensive - sometimes greater than a home owner's mortgage - that industry providers have been dropping out, leaving many people without any cover. One schoolteacher, who had a school based policy, dropped her family from her policy. The cheapest family plan the school offered was $858 monthly and an $11,000 deductible (excess), which meant that nothing was covered until their claims exceeded that amount. Some excesses can reach $30,000 per annum.

Many insurers in the US will not re-insure policy holders after they have had major surgery, even if they develop chronic conditions. Some will even deny family cover if one member develops a condition such as asthma.

Medical insurance premiums here in New Zealand have been rising dramatically also, so any agreement to further privatize hospitals and promote for-profit health care should have been strenuously resisted in any TPPA agreement. But we do not know what our capitalist, market orientated, government has signed us up to with this TPPA agreement.

Why would we want to follow US corporate feudalism, and why would we believe the free market healthcare system is more "efficient"? We don't, really - it is simply the commodification of healthcare for profit.

The 8,000 members of the US “Physicians for a National Health Project” support a single-payer national health insurance scheme, and envy countries such as New Zealand. They say: 

The US spends twice as much as other industrialized nations on health care per capita ($8,160). yet performs poorly in comparison and still leaves 50 million without health coverage and millions more inadequately covered... This is because private insurance bureaucracy and paperwork consume one third (31 percent) of every health care dollar. Streamlining payment through a single non-profit payer would save more than $400 million per year, enough to provide comprehensive, high quality coverage for all of America.

This will be little altered by the compromised Obama health reforms.

There has been a great deal of mythology spun around the pharmaceutical companies' investment in research and development, when most of the successful research has been done in the universities at taxpayers' expense, as Marcia Angell points out.

Take the case of Taxol (the brand name for paclitaxel), the bestselling cancer drug in history. ... All of the research on the drug was conducted at, or supported by, the National Cancer Institute over nearly thirty years, at a cost to taxpayers of $183 million. In 1991, Bristol-Myers Squibb signed a cooperative research and development agreement with NCI. … The company's part of the bargain was mainly to supply the NCL with seventeen kilograms of paclitaxel (which it obtained from a chemical company). No ingenuity there...

In 1992, after Taxol was approved by the FDA or treatment of cancer of the ovary, entirely on the basis of NIH-supported research, Bristol-Myers Squibb was given five years of exclusive marketing rights... The worldwide use of Taxol (for cancer of the ovary, breast and lung) generated between $1 and $2 billion a year for Bristol-Myers Squibb and only tens of millions in annual royalties for Florida State University, who did the work to synthesize paclitaxel. 

Pharmac sponsored Taxol here for $500 per patient year ($12.5 million over five years), compared to the costly in-patent breast cancer drug Herceptin, that cost about $60,000 a year for each patient. (NZ Herald 27.08.08)

There is nothing in Pharmac's role that offends against any principle of “free trade.” Pharmac does not decide what medicines may be traded in New Zealand, only which ones will be bought at public expense.

 

Are the in-patent brand drugs safer or more effective than generic drugs?

In August 2007 the New Zealand Government's medicines watchdog Medsafe warned “that short-term users of Prexige (a Cox 2 inhibitor) would be wise to stop taking it and take something else,” after two people in Australia died. It has also been linked to liver damage. The drug was used for short term dental, menstrual and post-surgical pain, and long term by a small number of people with osteoarthritis. While over 60,000 people in Australia took the medicine, only 2,000 New Zealanders used it - Prexige was not a subsidised medicine here.

Vioxx, also a Cox 2 inhibitor, was voluntarily recalled worldwide by its manufacturer Merck in 2004 because of adverse effects on patients. Bextra, from the same class, was withdrawn a few months later because of concerns about an increased risk of serious skin reactions. (NZ Herald 13.08.07)

In a speech to the 25^th annual scientific conference of the Australasian College for Emergency Medicine in Wellington in November 2010, George Jelinek, Professor of Emergency Medicine at Perth's Sir Charles Gairdner Hospital, Australia, said:

Marketing of drugs was often disguised as education, and doctors attending pharmaceutical sponsored events were more likely to use the product, even without scientific evidence.

Widespread conflict of interest results in over-prescribing many medicines of dubious benefit, and that conflict of interest leads us to neglect health in favour of pharmaceuticals.

Some large, heavily promoted drugs have subsequently caused great damage to an unsuspecting public.

The pharmaceutical industry was awash with profits... In fact, the combined profits of the top 10 drug companies in Fortune 500 has been greater than the other 490 companies' profits combined.

Dr John Read, of the psychology department at the University of Auckland, wrote in the NZ Herald on 4.4.2008, congratulating the Australian Government for being the first in the world to force drug companies to disclose how much they spent wining and dining doctors. The first report revealed a staggering $31 million was spent in this way in just six months.

He goes on to say: 

Will the New Zealand …Research Medicines Association be lobbying our Government to introduce similar legislation?... It was only after other legislation leading to forced disclosure of previously secret drug company studies that we now know that anti-depressants are no more effective than placebos.

One of the largest trials in medical history was with antihypertensive drugs involving forty thousand older Americans. Generic diuretics which cost less than ten cents a day proved slightly more effective than the still-on-patent calcium channel blockers and ACE inhibitors, which cost between $0.75-1.75 per day. A fourth in-patent drug was dropped from the trial when it did substantially worse than the rest. Goozner writes: “The elderly and near-elderly people who took the diuretics suffered slightly fewer heart attacks and strokes than comparable groups on the costly medication.”

A smaller Australian trial showed that the ACE inhibiters were slightly better than the diuretics. However, the Australian trial involved almost all white Australians, while the American trial included many black Americans (35%), and mirrored the US population. The Australian trial contained fewer smokers or patients with diabetes or coronary heart disease, conditions that made it more likely high blood pressure would lead to heart attacks and stroke.

References

Angell, Marcia. The Truth About the Drug Companies. (Angell is a former editor in chief of The New England Journal of Medicine and now a member of Harvard Medical School's Department of Social Medicine.)

Barlow, Maude. Profit is Not the Cure. Maude Barlow. (Barlow is National Chairperson of The Council of Canadians, and strong in opposition to the privatisation of water.)

Goozner, Merrill. The $800 Million Pill – The Truth Behind the Cost of New Drugs. Goozner is former chief economics correspondent at the Chicago Tribune and winner of six Peter Lisagor Awards.

Kelsey, Jane (ed.) No Ordinary Deal - Unmasking the Trans-Pacific Partnership Free Trade Agreement. Although it is rather academic, it is a must have for anyone concerned about the dangers to Pharmac.

Potter, Wendell. Deadly Spin: An insurance company insider speaks out on how corporate PR is killing health care and deceiving Americans.