Source: Forbes
Date: 8 May 2006

Pill Pushers

Robert Langreth and Matthew Herper

How the drug industry abandoned science for salesmanship.

Novartis employs some of the best medical researchers in the world, and they have created such lifesavers as Gleevec, which treats a deadly form of leukemia. But what is the fourth-biggest seller in the Novartis medicine cabinet? No lifesaver. It's Lamisil, a pill for--horrors!--toenail fungus. The main effect of the fungus is that it turns the toenail yellow; it can hurt, but no one has died of this inconvenience. But a few people may have died taking Lamisil. Federal regulators have linked the drug to 16 cases of liver failure, including 11 deaths. Novartis says most of the patients had preexisting illnesses or were also on other drugs.

Yet 10 million Americans have taken Lamisil, which costs $850 for a three-month treatment. They have been lured by a grotesque cartoon creature called Digger the Dermatophyte, a squat, yellow fellow with a dumb-guy New York accent. In TV ads he lifts a toenail as if it were the hood of a car, then creeps beneath it to declare, "I'm not leavin'!"

TNS Media Intelligence calculates that Novartis has spent $236 million on Lamisil ads in three years (Novartis says it has spent only $100 million). The first run, which featured Digger being crushed by a giant Lamisil tablet, so overstated the drug's benefit that regulators objected and the company had to pull the spots; the drug fully cures the problem in only 38% of patients. But the ad blitz undeniably was effective: Lamisil sales jumped 19% to $1.2 billion worldwide in 2004 and held steady last year.

Lamisil's rise points up what is wrong with the drug industry today: the triumph of salesmanship over science. The industry spends a fortune to create and sell a raft of me-too remedies aimed at quelling sometimes trivial maladies, even as research pipelines run dry, patents on old drugs expire and critical areas of medicine go underserved. Sometimes the marketing improves health; Americans would probably be better off if more of them were hounded into taking pills to lower cholesterol and blood pressure. Sometimes the result is the reverse, as when side effects from an overhyped and overprescribed medicine are fatal.

"The dominance of marketing over research has done real damage to company pipelines," says Jurgen Drews, former research chief for Roche. A decade ago he predicted a research slump; it has arrived. A total of 87 major drugs with $31 billion in combined annual sales have lost patent protection since 2002, but new drugs aren't arriving fast enough to replace them. Only 20 were cleared by the Food & Drug Administration last year, down from 53 a decade ago.

Drugmakers, says Maryland psychiatrist Jack E. Rosenblatt, editor of Currents in Affective Illness, "don't seem to realize that this is not toothpaste or shampoo, that they are dealing with something that can really hurt people."

The industry's malaise is certainly visible on Wall Street. The ten largest drugmakers have lost $130 billion in combined market value in two years, a 12% decline at a time when the S&P 500 Index is up 12%. They have endured scandal after scandal over drug safety and dubious sales practices. A total of 17 drugs have been recalled in the past decade. Wyeth's withdrawal of diet drug Redux in 1997 led to $22 billion in damages and counting (FORBES, Apr. 10).

Vioxx could yet eclipse that. Merck's new-generation painkiller--touted to consumers at a cost of $550 million over five years--was recalled in September 2004 when a study showed that patients on it for 18 months had double the risk of heart attacks. In the ensuing legal onslaught 10,000 suits have been filed, seeking billions in damages and accusing the company of misleading doctors and the feds. Last month Merck lost a $13.5 million verdict to one heart attack survivor, its second defeat in five cases tried. There are more potential lawsuits lurking where these came from.

The drug industry, of course, rejects the criticisms. Novartis says its Lamisil spending "absolutely" "in no way" has taken away resources from research into more serious diseases and that it spends far more on its cancer drugs. "Absolutely, marketing doesn't trump science--this is a science-driven industry," says Scott Lassman, a lawyer for Phrma, the industry trade group. He says makers have taken steps to curb any excesses and give ads a "more sober tone." Pfizer research chief Martin Mackay says, "We are thought of as monsters, but I don't know of a single case where we have been driven to take risks on a compound because of a marketing push. I would not let it happen."

Says Bristol-Myers Squibb Chief Executive Peter Dolan: "The biggest disconnect for me is between how the industry is portrayed and how people in it actually feel about what they do."

Yet Big Pharma's focus on marketing is undeniable, and it spends hugely on it. The top ten drug firms invest $42 billion a year on research, 14% of sales--yet they plow more than twice that much into marketing and administration. In a decade drug firms have almost tripled the ranks of salespeople calling on physicians, to 100,000, according to Verispan. That's one seller for every 9 docs; in 1996 it was one for 18. Often they encourage unauthorized off-label uses or sponsor "continuing medical education" sessions to stoke more prescriptions and broaden a drug's patient base.

Even the research lab is more marketing-driven than ever. More than $9 billion a year in research spending goes to clinical trials of drugs that are already approved or may soon be--often to snare new ad slogans. That is up 90% in four years, says Goldman Sachs. Some of these ad-driven trials are skewed to pit the sponsor's full-strength product against a weaker dose of a rival pill. Yet drugmakers have failed to begin two-thirds of the 1,200 post-marketing trials required by the FDA.

The slogan-geared trials provide fodder for an explosion in consumer advertising of drugs, which had been highly restricted for decades before rules were eased in the 1990s. Ad spending in the U.S. has soared eightfold in nine years to $4.8 billion, says Nielsen Monitor-Plus, TV spots ply supposed low-risk, quick fixes to millions of people: Try Zoloft to get happy; gobble a state-of-the-art pain pill when aspirin would work fine. Drugs designed for narrow sets of patients end up in the hands of a far broader audience.

"It creates demand where there's not even disease there," complains internist Robert Centor of the University of Alabama. Drug giants "do it in a devious way," he says. "I wish they didn't spend all that money on marketing."

Merck's marketing of the painkiller Vioxx was, in retrospect, all too successful, contributing to the multibillion-dollar liability now looming over the company. Vioxx, part of a new class of drugs known as COX-2 inhibitors, had been intended for only the small slice of patients who can't stomach aspirin. But it ended up in the hands of 20 million people, driven by ad spending of $550 million in five years, says ad tracker TNS. Some spots had 1970s Olympic figure skater Dorothy Hamill twirling on the ice.

Vioxx's chief rival, Celebrex from Pfizer, also reached a far broader market because of splashy ads. About 60% of patients on the drugs had low ulcer risk and might have fared just as well on older generics, say researchers at the University of Chicago and Stanford. Pfizer says most gastrointestinal complications occur in patients who are not at high risk.

"People would come in asking for--demanding [a COX-2 inhibitor]--and sometimes threaten to find a new doctor if I didn't prescribe it," says physician John Abramson, a clinical instructor at Harvard Medical School who has consulted for plaintiff lawyers. "Vioxx wasn't a bad drug for everyone, it was a bad drug for certain patients," says Chris D. Robbins of Arxcel, which consults to pharmacy benefit managers. "Unfortunately, people saw the ads and started demanding the drugs from their doctors."

TV ads for prescription drugs were rare until Aug. 12, 1997, when the FDA lifted restrictions to let spots run without lengthy disclaimers of nasty side effects. Three days later Schering-Plough began a prime-time campaign for its antihistamine Claritin, featuring smiling folks frolicking in hay fields to the tune of Irving Berlin's "Blue Skies." Schering upped the ante in 1998 with one of the first celebrity pitches, by TV personality Joan Lunden. Claritin sales climbed 50% in 1997 and 30% more in 1998, hitting $2.3 billion. Schering's stock-market value approached $90 billion by mid-1999. Claritin lost patent protection in 2002. No problem: Schering was ready with Clarinex, a look-alike successor that still brings in $646 million in annual sales, even though its predecessor is sold over-the-counter at one-tenth of the price. The shift didn't help enough: Schering had a mediocre pipeline, and today its market cap is down by two-thirds to $27 billion.

Other companies followed with ads for antidepressants, heartburn drugs, painkillers and impotence pills. Pfizer found its erectile dysfunction pitchman in Senator Bob Dole, then age 75. Wall Street cheered the changes. "We had the whole financial community focused on blockbusters and maximizing the revenues and aggressive marketing," says Daniel Vasella, chief executive of Novartis, which TNS Media Intelligence says has spent $235 million in three years advertising Zelnorm. (Novartis disputes the amount.) The drug, which treats irritable bowel syndrome, costs $200 a month.

In the rush to find big sellers, many companies fell into a herd mentality and focused on the same few common ailments, says Genentech Chief Arthur Levinson. "Everyone was doing the same thing, so the chances of success got smaller and smaller." Big Pharma "said we were nuts" to test a cancer drug that targeted only 25% of breast cancer patients, Levinson recalls. Now the drug, Herceptin, is near $1 billion in annual sales. "If you are developing novel drugs, you don't need sales forces of tens of thousands."

Some drug firms stopped researching in critical areas even as they focused on pop pills. Eli Lilly & Co. had dominated the antibiotic field for decades, and new remedies are badly needed to kill drug-resistant superbugs. Yet in the 1990s the company sold off three promising antibiotics and antifungals, two of which went on to win approval. Lilly exited antibiotic research entirely in 2002, believing the chances of success were higher with antivirals. The next year Lilly and partner Icos spent $243 million launching their me-too pill for erectile dysfunction, Cialis. Barry Eisenstein, who headed Lilly's antibiotic program from 1992 to 1996, says drugs for chronic conditions, like Prozac, are seen as "a much better and easier business proposition." Lilly says that any contention that it didn't pursue antibiotics to chase mass-market blockbusters is simply not valid.

The "easiest profits" come from me-too drugs, says John Santa, medical director at Oregon Health & Science University. Genuine discovery is a risky business, "more like drilling for oil." Instead of prospecting for real cures, some companies repackage old drugs with the minimal tweaks needed to get a new patent. Then they stage exhaustive trials aimed at unearthing some slender advantage that can be cited in advertising.

One throwback, the Lunesta sleeping pill from Sepracor that came out early last year, is based on a remedy first approved in Europe two decades ago. It is very similar to Ambien, which is made by Sanofi-Aventis and racks up U.S. sales of $1.6 billion annually (on an ad budget of $130 million). Lunesta garnered $330 million in sales in its first nine months on the market thanks to TV spots featuring a diaphanous cartoon butterfly flitting in and out of moonlit bedrooms. Tagline: "Leave the rest to Lunesta." Sepracor spent $215 million last year advertising Lunesta, says TNS.

To differentiate Lunesta from Ambien, Sepracor tested its drug versus a placebo in 1,600 patients for six months, something Ambien's maker hadn't bothered to do. The trials let Sepracor claim in print ads that Lunesta "is the first and only hypnotic approved for long-term use."

Prescriptions for sleeping pills are up 48% in five years to 43 million prescriptions annually, driven by the huge ad spending for Ambien and Lunesta. Sales are up 140% in the same period to $2.76 billion. Yet the newer drugs "are no better than older ones costing about one-tenth as much," says John Abramson of Harvard. "Has insomnia become an epidemic in the past five years? Or are the makers skillfully leading Americans [to] an expensive drug?" he asks. Sepracor points to an Institute of Medicine report highlighting insomnia as a serious problem.

Astrazeneca, faced with patent expiration on its blockbuster for acid reflux, Prilosec--touted as "the purple pill"--tweaked it a bit to create "the new purple pill," Nexium. AstraZeneca studied high doses of Nexium in five trials totaling 12,000 patients. All this to show the drug helped the esophagus heal in an extra one in 20 patients, compared with Prilosec or competitor Prevacid.

The payoff: Nexium now is touted as "the healing purple pill," hawked in ubiquitous TV spots. In one, a sterling-haired man in black cites the "exciting news" from one of the studies and concludes, "Better is better." Nexium is the third-best-selling drug in the world, according to IMS Health, with $5.7 billion in sales and an ad budget of $226 million last year. Never mind that some of the trials were stacked: In three of the big trials AstraZeneca pitted high doses of Nexium versus half the dose of Prilosec; it never bothered to test whether twice the Prilosec dose would be equally effective. AstraZeneca says there are "clear differences" between the two purple pills and notes that one equal-dose study showed a statistical advantage for Nexium in esophageal healing.

In another instance AstraZeneca staged trials that fizzled but used them for a new ad claim anyway. Before it won approval in August 2003, AstraZeneca studied its Lipitor look-alike, Crestor, for cholesterol reduction, in 24,000 patients, hoping to prove superiority. But the only dose of Crestor that clearly beat Lipitor turned out to cause kidney problems and never won fda approval. Nonetheless, after Crestor's debut AstraZeneca used ads featuring a voiceover by the stentorian actor Patrick Stewart of Star Trek: The Next Generation, in Seussian rhyme: "When Crestor performed in a head-to-head test, its lowering effect was clearly the best."

That claim brought a rebuke from the FDA in March 2005. The company halted the ads, but it now is testing Crestor in 30,000 more patients. AstraZeneca notes that Crestor is the only statin shown to clear plaque out of the arteries.

The drug industry has begun to restrain its own advertising. Last June Bristol-Myers Squibb took a first step, announcing that it would wait a year after drugs hit the market to begin running ads, leaving time for doctors to learn about a medicine and for side effects to crop up. Companies are now submitting ads to the FDA before they run and are more clearly stating big risks.

But myriad drugmakers have plenty of ways to game the system. In the market for new schizophrenia treatments Lilly and Johnson & Johnson and others have run 21 head-to-head trials--and 90% of the time the conclusions favor the sponsor's drug, according to research in the American Journal of Psychiatry. Nine studies compared Lilly's Zyprexa to Johnson & Johnson's Risperdal. All five Lilly-paid trials favored Zyprexa; three of four J&J studies favored Risperdal. Lilly stands by its high scientific standards and says the results highlight the need for more independent studies. Another analysis, in Archives of Internal Medicine, tallied 56 studies of painkillers; not once was the sponsor's drug deemed inferior.

"The comparative studies are a joke. They are comical. A lot of the scientific literature these days is worthless," says psychiatrist Jack E. Rosenblatt. "The whole process has been corrupted," says British bone researcher Aubrey Blumsohn. "It is getting worse as the financial stakes are rising."

Blumsohn contends procter & gamble for years refused to supply raw data for a 2003 study he led comparing its drug Actonel to Merck's competing drug, Fosamax, even after he became suspicious that Procter's analysis was skewed in favor of Actonel. "It was a process of intimidation," says Blumsohn, who was suspended from his job at the University of Sheffield after he complained to the British press. (He recently left after agreeing to an undisclosed settlement.) Procter & Gamble says it "always" provided Blumsohn with "unfiltered access to all of the data that was relevant." "This issue is about a relationship fraught with misunderstanding, and we regret that," a spokesman says. Procter is now providing Dr. Blumsohn with additional data.

Despite the profusion of dubious trials, drugmakers often don't conduct crucial studies to ensure new drugs are truly safe as they move out to a mass market. This year Trasylol, a Bayer drug used to prevent bleeding during heart surgery, has emerged as yet another problem medication. In December Bayer promised annual sales of the drug, then at $280 million, would surge to $600 million.

But a study of 4,000 surgery patients found that the drug, at $1,400 per dose, posed more than twice as much risk of kidney failure as cheaper generic alternatives, as well as more heart attacks and strokes. Replacing Trasylol with generics would prevent 10,000 cases of kidney failure each year, says clinical researcher Dennis Mangano, who led the study at the nonprofit Ischemia Research & Education Foundation in San Bruno, Calif.

Bayer says its own studies of 6,500 patients haven't found any link between the drug and kidney failure, heart attack or stroke, and that it is working with the FDA to evaluate the Mangano report and another study linking the drug to serious adverse events. "Bayer's highest priority and concern is patient safety," says a spokeswoman.

Mangano, who also did the first study to raise concerns about the cardiovascular risk of Pfizer's Bextra (pulled from the market in April 2005), spent $35 million of his foundation's endowment to painstakingly gather the Trasylol data over four years. Few independent researchers have the money to perform such definitive safety studies. His foundation used to do clinical trials for the industry, but drug companies don't call much anymore, he says. "There is no incentive for companies to find problems with safety once a drug is approved. It is just downside risk," he says. The result is worrisome: "We find out a drug is unsafe when the bodies accumulate."

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