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based on 2010 revenues, in millions 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Pfizer Novartis Merck & Co. Sanofi GlaxoSmithKline AstraZeneca Johnson & Johnson Eli Lilly & Co. Abbott Laboratories Bristol-Myers Squibb Teva Takeda Pharma Bayer Schering Boehringer-Ingelheim Astellas Daiichi-Sankyo EISAI Otsuka Pharmaceutical Gilead Sciences Mylan $58,523 $44,420 $39,811 $37,403 $36,156 $32,515 $22,396 $21,685 $19,894 $19,484 $16,121 $14,829 $14,485 $12,883 $11,161 $10,794 $8,542 $8,440 $7,390 $5,404
Regulated to unregulated refers to the spectrum of control a govt institutes in the pharmaceutical industry, from requiring papers of R&D depts, reviewing results ofclinical drug trials, and controlling the environment in which a drug is manufactured through tough licensing laws. Some countries make you jump through hoops, others could care less, or they have laws in writing which are not diligently enforced. The changing dynamics of the global pharmaceutical industry especially that of the regulated markets like USA and Europe have presented a number of opportunities forIndian Pharmaceutical Industry to capitalize on. Japan, the world's third largest and one of the most regulated pharmaceutical marketsglobally, is emerging as the new attractive destination for Indian drug majors. The Latin American (Latam) pharmaceutical market is a semi-regulated market. Brazil is the largest pharmaceutical market in South America and ranks eleventh globally. “It is an attractive semi-regulated market, offering immense opportunities for speciality pharmaceutical companies,” Glenmark said. The Government of Lebanon continuously tries to control and limit medication costs. The market for medications, which accounts for 35-40 percent of health care expenditures, is largely unregulated Market Failure and the Pharmaceutical Industry: A Proposal for Reform By Sean Gabb www.seangabb.co.uk September 30, 2005
The award last month of £141m ($250m) against Merck for the alleged deficiencies of its painkilling drug Vioxx has brought the whole pharmaceutical industry into public discussion. We can, of course, deplore the vagaries of the American legal system. It is unlikely that the plaintiff in this particular case will ever see much of her compensation. The award will be contested in appeal after appeal. These will drag on for years to the ultimate enrichment only of the lawyers concerned. The case does, nevertheless, raise general issues of how the pharmaceutical industry conducts itself. There can be no doubt that the pharmaceutical industry as a whole has achieved and is achieving what would once have been regarded as miracles. It has created new products that cure or alleviate sickness and that have extended both the length and quality of life. This much has been achieved so far. There is every reason to believe that the future will bring still greater progress. Even so, the pharmaceutical companies have never been popular in the way that companies like Compaq and Apple Mackintosh have managed to become. They are distrusted where not actively disliked. The present case against Merck is just one instance of a growing prejudice. Since the 9th September 2004, the Health Select Committee of the House of Commons has been examining the influence in Britain of the pharmaceutical industry. The Committee is looking at how the industry affects government, regulators, healthcare professionals and consumers, and at the effects of this influence on public health. It has examined witnesses and considered written submissions by interested persons and organisations. The hearings began as a result of the obvious disquiet over the behaviour of the pharmaceutical companies. To be fair, there is some reason for disquiet. The pharmaceutical companies are limited companies, and their first duty is to maximise the return on their investments for dividing among their shareholders. As said, they have done and are doing often
which set up websites and bought advertising space in newspapers to recommend their products to the public. In February 2005. some senior medical consultants receive consultancy fees of more than £20.000 Britons at the time. The Case against the Pharmaceutical Companies Underhand Promotion Marketing Ineffective or Dangerous Products In 1998. Some of these tests are secret. where they are given lavish hospitality and are loaded with presents. in the case of quetiapine. other patients are denied medications they need. Schering Healthcare and Biogen Ltd were investigated by the Commons Select Health Committee for funding apparently independent campaigning groups. But a trial in Newcastle has suggested that the drugs are ineffective and. the pharmaceutical companies regularly arrange for endorsements of their products to be published in the medial press. a new anti-depressant produced by GlaxoSmithKline. He told the Commons Health Select Committee in October 2004 that as many as half the articles published in journals such as The British Medical Journal and The Lancetwere ghost written for the pharmaceutical companies. Dr Robert Adams tested Paroxetine. most though not all of it revealed to the Committee. speaking before the Commons Health Select Committee. Vioxx had been prescribed to 400. was withdrawn by the pharmaceutical company Merck in September 2004 after a study of cancer patients showed a similar increased risk. involved 93 people with Alzheimer’s living in care homes in Newcastle. in which. and in the management of acute pain – were officially advised to stop their treatment immediately if they suffered from heart disease or stroke The European Medicines Agency said that patients on Cox-2 inhibitors.000 for a few hours’ work. Quetiapine (sold as Seroquel) and rivastigmine (Exelon) are prescribed to nearly half the patients with dementia in residential homes in Britain. Large amounts of money are spent on marketing products which do not work. two drugs.marvellous things. often for long periods.000 an hour for extolling the virtues of new drugs to other doctors. rivastigmine or a placebo pill. normal variations in people’s health are now arbitrarily being classified as diseases and that companies are more interested in selling preventative drugs to the healthy than in healing the sick. The present award of £141m may be followed by claims of ten or twenty times this amount by British litigants alone. Worse than this. giving evidence in August 2004 to the Commons Health Select Committee. This is a powerful antidepressant. GlaxoSmithKline published an internal memorandum. another bestselling painkiller. Doctors were instructed to exercise caution in prescribing to any patients who might be at increased risk of heart disease – such as smokers. anti-inflammatory drugs used by more than a million Britons. according to Dr Iona Heath. and that respected clinicians were then paid to have their names put at the top of the articles. Vioxx. An investigation by the General Medical Council found that Dr Adams had received more than Unethical Behaviour . She suffered severe side effects. and it was suggested that sales might be increased by persuading people to take it who were not seriously depressed. It calls this practice “disease mongering”. of the Institute of Psychiatry at King’s College London. Apparently. for example. may not only be ineffective but one may even accelerate mental decline. In some cases. Bextra and Arcoxia. According to Professor David Healy of the University of Wales. should observe urgent safety restrictions after a comprehensive review. so they can be used to measure the effectiveness of the tests. patients taking any Cox-2 inhibitors – which include Celebrex. for example. often prescribed for dementia. Pharmaceutical companies have been accused of setting up front groups to urge sale of their products. It was led by Clive Ballard. But it now emerges that they have little impact on halting the progression of the disease or allowing people a better quality of life. these being used to treat pain and inflammation in osteoarthritis and rheumatoid arthritis. even though they had not seen the raw data on which they were based. from the Department of General Psychiatry at the University of Vienna. and thereby increase pressure on general practitioners to prescribe those medications. Let us consider some of this conduct. which are disturbing to them and make them more difficult to look after. The patients were treated with quetiapine. Pharmaceutical companies pay general practitioners to test their new products on patients. Those given quetiapine showed a much more rapid decline in mental capacities. on a patient without her knowledge and consent. In 2002. In April 2000. He gave the example of an article he had refused to father that later appeared bearing the name of Siegfried Kasper. Patients are given the drugs to control behavioural changes such as agitation. diabetics and sufferers of hypertension and high cholesterol. Pharmaceutical companies seek to influence general practitioners to prescribe their new products by inviting them to conferences in expensive locations. She calls this a policy of deliberate “disease creep”. they deliberately frighten patients about conditions that are not serious enough to require special medication. This action came after growing concerns about evidence suggesting a raised risk of heart attacks or strokes linked to the class of drugs. The trial. Towards the Second Billion – a reference to sales of $1 billion already – in which it discussed marketing strategies by which sales of Seroxat could be increased. Experts can also earn more than £4. Doctors are paid large fees for giving apparently spontaneous endorsements of pharmaceutical products to other doctors. accelerate the progress of the disease. patients are given medications they do not need. But they have also been caught many times engaged in questionable or even immoral conduct. funded by the Alzheimer’s Research Trust. At the same time. many of whom were then given Celebrex and Arcoxia instead. Neither of the groups given the active drugs showed any benefit in their agitation symptoms over six months. Pharmaceutical companies run “disease awareness campaigns”. The medications presently used to treat Alzheimer’s disease have been said by the companies producing them to have impressive results. A report published in The British Medical Journal says that it should not be used to treat such patients. According to the Royal College of General Practitioners.
iron). assisting countries to increase consumer information.” So long as the Codex was purely a creature of the United Nations. silicon. People are influenced by opinion leaders who are paid consultants to the company. Wales and Northern Ireland.” The War against Vitamins For many years now. But they are at best useless in wealthy countries like Britain and America. the pharmaceutical companies have been accused of working to limit access to vitamins and other dietary supplements. which will help consumers use them in a safe and effective way. Its purpose is to harmonise regulations across the world on a range of issues related to food. they can be dangerous. is alleged to have withheld information that Seroxat increased the risk of suicide in children. for example. One of the provisions of this directive is for lists of nutrients and their sources that can be included in food supplements. which can be seen on every label. for example. beriberi and pellagra. One is to regard them as useful simply to prevent illnesses caused by deficiencies. and that many of the tests had also been run without the consent of his patients. Separate. The directive and these regulations apply from 1 August 2005. nickel. Suppression of Unwelcome Information £100. for example – who developed the polio vaccine – believed that taking very large doses of vitamin C could prevent and in some cases even cure cancer.. A pharmaceutical company was accused before the Commons Health Select Committee in November 2004 of having offered Peter Wilmshurst. The semi-official “recommended daily allowances”.000 during the previous five years from various companies. Only in cases where food does not provide sufficient vitamins and minerals should supplements be used. and vanadium) that are currently used in food supplements on sale in the UK. According to an investigation by The Observer newspaper. Since the early 1990s. and most governments generally ignored them. It also requires limitations on dosages that can be sold without a medical prescription. On the 1st August this year. GlaxoSmithKline. If ever carried fully into effect. The European Union has already imposed its own regulations. On the 4th July this year. All member states are now obliged by treaty to incorporate the provisions of the Codex into their domestic law. The other position is to regard dietary supplements as active contributors to health and longevity. it is widely believed that the pharmaceutical companies have decided that their interests are best served by having the first position imposed by law. the dispute might long since have been settled by experience. dietary supplements have their use at times and in places where people cannot eat a full and balanced diet. Now. bringing general practitioners around £1. On this reasoning. boron. came into force. Linus Pauling. It instead lays down rules on testing that will for reasons of cost prevent most supplements from remaining on the market. consultant cardiologist at the Royal Shrewsbury Hospital “two years salary” to suppress results of a trial that showed its products were both deadly and ineffective. Seroxat has been banned from prescription to persons under the age of 18. Since the information was published. there are two positions on dietary supplements. calcium. regular intake of certain dietary supplements can prevent or alleviate or cure many other illnesses. this will take as many as 5. cobalt. In some cases. is accused of setting maximum order sizes on wholesalers in cheaper countries. whereby products are imported into this country from other countries where the products are sold at lower prices.. The full potential of these supplements can only be realised at far higher doses. He explained to the Committee: “I know the pharmaceutical industry influences the research that is published. The guidelines say that people should be encouraged to select a balanced diet to get the sufficient amount of vitamins and minerals.000 such trials every year. it recommended laws in every country to require “labelling that contains information on maximum consumption levels of vitamins and mineral food supplements.. the Codex has been recognised by the World Trade Organisation. there are around 45. The meaning of this Directive is explained in a British Government news release: The Food Supplements Directive 2002/46/EC came into force in July 2002 and was implemented in England by the Food Supplements (England) Regulations 2003. it has been working in conjunction with the main pharmaceutical companies to destroy the growing market in dietary supplements. The Directive does not explicitly require bans on any products. Given the right environment of diversity. and can often achieve better results than the patented medications of the pharmaceutical industry. the Food Supplements Directive. The second list covers the chemical forms (sources) of those vitamins and minerals that may be used.000 products off the European market. They could be adopted or ignored as member states pleased. Pharmaceutical companies only publish trial reports favourable to their products. The main vehicle for this limitation is the Codex Alimentarius. These lists can be added to following a favourable opinion on individual nutrients or nutrient sources from the European Food Safety Authority (EFSA) after consideration of a dossier containing safety data. The first list covers the vitamins and minerals that may be used in food supplements (such as vitamin C. He refused the bribe and the drug was subsequently banned after his results were published. The “recommended daily allowances” are regarded as minimum doses. For the past decade or so. its recommendations were of little importance. Failure to do this may lead to international sanctions and even expulsion from the World Trade Organisation. The problem is that. equivalent legislation has been made in Scotland. It excludes six minerals (tin. I think it is very common. GlaxoSmithKline. based on 1998 German regulations that emphasize “maximum upper limits”. This is an organisation set up in 1962 and affiliated to the United Nations. while no compelling evidence has been presented against them. are based crudely on the estimated dosage needed to prevent deficiency. These are both arguable positions. I suspect this is as common now as ever. Some pharmaceutical companies are seeking to end the practice of parallel imports. like scurvy. and if the companies sponsoring them are not implicated in these trials. where just about everyone can have all the food he wants to eat. the effect of which is to force up demand for the products in this country from the manufacturers. . however. There is a huge literature or varying quality which suggests that the high.000 per patient – even if only about one per cent of these trials are run without consent.
for example. The private companies in the free world at least do create new and useful products. It makes economic sense. Prices in poor countries are set to make a small contribution to research and development overheads. whether or not successful.000 chemical formulations do not make it: either they do not work as expected or they are outperformed or simply beaten to market by a rival product. and even above its own development cost. believes that the answer to the problems raised above is more and better regulation. The parallel trade threatens to destroy this subsidy to the poor. Companies distinguish between overheads and marginal costs. It is enough to say that there is a general assumption among those who matter that everything that is done by the people must be known to the authorities and controlled by them. they should maintain a clear focus on protecting public health and delivering public benefit. and that the authorities had better do something about the fact. rock climbing. though the result is prices are largely determined by ability to pay. 5. and anything to do with the Internet . it costs about $800 million to bring a new pharmaceutical product to market. secretive and indifferent to the wishes or even needs of patients. where people are too poor to pay the full cost price of pharmaceutical products.Controls on dietary supplements mean a bigger market for patented medicines than would otherwise exist. it is entirely reasonable that the pharmaceutical companies should try to make a profit on those products that do come to market. But the longer term consequences will be a shortage of investment funds for research and development of new products. If people can buy pharmaceutical products at lower cost abroad. those representing the interests of patients. there is enough truth in the attack for the pharmaceutical industry to have fallen at least partially into disrepute in recent years. The pharmaceutical companies adopt a strategy of contributive skim pricing. the pharmaceutical companies set prices to cover marginal cost of production plus whatever contribution to overheads can be charged. the price of a new product is set far above immediate costs of production. and a larger contribution is taken in rich countries. It is also often seen as unable to create products that work effectively and safely. is there to suppose that regulation really is the solution to any of these problems? Undoubtedly. funeral directors. In its own submission of August 2004 to the Commons Health Select Committee. The Consumers’ Association. In other words.including all forms of covert promotion .as far as possible at the outset. Price must always cover the latter. we live in an age where regulation is seen as the solution to every problem. How Can the Pharmaceutical Market be Improved? But while there are defences to some of the charges. A recent study of 100 pharmaceutical products showed that the profits earned on most of them did not cover investment costs. Not all. though. salons and tanning shops. but not too poor to buy at any price. And the evident truth of these charges is being used as an argument for tighter regulation of how the pharmaceutical companies operate. it argued “The Medicines and Healthcare products Regulatory Agency (MHRA) needs to ensure that all its work is undertaken in the interests of public health protection. As in the rest of the English-speaking world. What reason.that these are all “almost completely unregulated” or just “completely unregulated”.” It further argues: Responsibility for monitoring all forms of pharmaceutical industry advertising and other promotion should be transferred to a new. In Partial Defence of the Pharmaceutical Companies These are serious charges. the phrase is part of a condemnation of some activity. Britain is subject to a heavy and growing weight of regulation. This regulator should adopt and proactively implement robust and transparent procedures to prevent misleading promotional campaigns . however. they have only a few years of profitability – before the patent protection expires. Regulation: Solution or Problem? . But what other model is there for the development of pharmaceutical products that work? The Soviet and Chinese state pharmaceutical industries never amounted to much in terms of research and development of products that were useful to ordinary people or even useful for their stated purpose. in particular. And all this research and development costs money. Therefore. Some part of the resulting surplus may represent profit in the economic sense. This is not the place to discuss whether any specific regulation is justified. however. Therefore. this is far most complex than the usual story of greedy pharmaceutical companies and heroic small firms undercutting them. there is a short term fall in price. unless used satirically. if steps are taken to limit the re-importation of products. In these countries. residential lettings agents. Taking into account research and development and regulatory compliance. We are told that the advertising of food to children. contracts for extended warranties on home appliances. These procedures should be drawn up in consultation with all relevant parties. and re-import them. The pharmaceutical industry is seen as greedy. alleged communication with the dead. independent advertising and information regulator. During the ten years to the 21st February 2005. In the richer countries of the developed world. and patients in poor countries receive a large indirect subsidy from patients in rich countries. are justly laid. consumers and public health. but are not in themselves immoral business conduct. Much criticism of the pharmaceutical industry seems to proceed from a general hostility to private business. or before an improved product is released by another company. They also provide regulatory hurdles that restrict the market to those big pharmaceutical companies able and willing to pay for the necessary certification. those products that do succeed are priced to cover the costs of developing all products. This allows pharmaceutical companies to charge lower prices in other countries. Once on the market. Most importantly. Parallel Imports Turning to the issue of parallel imports. For every one new product put on the market. and to take swift and effective action when these do occur. In all cases. And it seems to be taken for granted that profit is at least an indecent companion to the search for cures and palliatives for human illness. these may be open to criticism in their specifics. it will be taken as a contribution to the general development costs of the company. Many of these costs are incurred whether or not the product is actually put onto the market. In many cases. the phrase “completely unregulated” occurs 153 times in the British newspaper press. but may include a variable contribution to the former.
The second means that production satisfies the known wants of consumers in the fullest way currently possible. 1900-1916. Since 1989. In October 2004. there is a case for the public not to be allowed to find out information for itself. the MHRA has been wholly funded by the pharmaceutical companies. Kolko examined the growth of American federal regulation in the early 20th century. who is mainly known for his books on drug regulation. The functions of this body are to ask the appropriate questions. that there is perfect knowledge among all players in the market regarding prices and production methods. who reworked his doctoral thesis into the The Triumph of Conservatism: A Reinterpretation of American History. business interests took control of the actual regulatory process early on and made it work for them. To speak formally. The industry has been pushing for higher level representation at the MHRA against ministers’ wishes. there is no need for the public to ask its own questions. published in 1963 and followed it up with a more detailed study of a single industry in Railroads and Regulation in 1965. and only to allow products to be sold if the answers are satisfactory. This first means that goods and services are produced at the lowest currently known cost. the overwhelming consensus of opinion is that some regulatory body is needed to stand between the pharmaceutical companies and the consuming public. there is not perfect knowledge. the problems uncovered. Therefore. As the phrase "triumph of conservativism" suggests. They may thereby ensure pressure on regulatory bodies to take a more liberal approach to licensing of products. We can best see this argument in the analysis of firms under perfect competition. There is instead what is called the problem of asymmetric information. nor are goods of the same quality – instead. and is not thought able to learn what needs to be known. This being so. Given these assumptions. is not incidental by systemic. but many agency officials used to work for pharmaceutical companies. The Economics of Regulatory Capture The main problem with this approach. there is a group of very large companies with virtual monopolies in certain products. Above all. Not only does it now not have any teeth. The public may be too ill-informed about the nature of what is being discussed to understand the nature and quality of the information provided – especially as much information will come from sources that are themselves ill-informed. Any intervention by the authorities in such a state of affairs will produce a loss of welfare. the best use of intellectual effort must now be in devising a better scheme for the future. who is now the MHRA’s head of licensing. Now. it tends to bring about both productive and allocative efficiency. The Guardian newspaper obtained documents that showed the nature of the relationship. that all the goods produced in this market are of the same quality. As we have seen. Not only does it take fees from the pharmaceutical industry. a Marxist historian. But what went wrong with the regulations already in place? The answer is that the present regulatory body for the pharmaceutical industry – the Medicines and Healthcare Products Regulatory Agency (MHRA) – seems to have been too close to the industry for effective regulation to have taken place. and whatever the public may have believed. in this country. It is what pubic choice economists call “regulatory capture”. Indeed. such as the former head of worldwide drug safety at GlaxoSmithKline. He found no important exception to its emerging. They will set up front organisations to campaign for certain products to be made available. Let it be granted: that there are many buyers and sellers in a market. the pharmaceutical companies will seek ways around any controls. however. but in fact the norm. There are obvious barriers to entry and exit. The mainstream defence of the free market rests on the claim that it allocates resources more efficiently than any other system. It was known before Kolko’s work. The phrase comes from Gabriel Kolko. The Case for Regulatory Bodies: Asymmetric Information as Market Failure The justification for a regulatory body where pharmaceutical products are concerned is what economists call “market failure”. However. Therefore also bans on the advertising of pharmaceutical products. Margaret Thatcher. and a very tight control over what information can be released to the public. such an equilibrium never comes about in the real world. an equilibrium between demand and supply will come about that maximises social welfare. but regarded as an aberration. The industry privately drew up its own detailed blueprint of how the MHRA should be run. It is no more than the illustration of a general tendency. Given sufficient zeal by or trust in the regulatory body. facing a virtually monopsonistic buyer in each national market: in Britain. John Abraham. It was with these facts in mind that the Consumers’ Association has called for a new regulatory body. the Medicines and Healthcare Products Regulatory Agency. took drug regulation out of the hands of the Department of Health. He further claims that there is too much of the “revolving door” syndrome at the MHRA. The problems with this restrictive approach is that it does not work. Since then: The regulator and the industry have been engaged in a joint lobbying campaign in Europe. in the history of a regulatory agency. but it is not motivated to bite. and usually emerging very early. what appears to have happened with pharmaceutical regulation is not some aberration that can be improved with a new legal framework. The pharmaceutical companies know all that can be humanly known about their products: the consuming public knows almost nothing.Yet is regulation the solution in this case? The assumption behind much of what was presented to or discussed in the Select Committee hearings appears to have been that whatever wrong or merely questionable was done by the pharmaceutical companies could have been avoided by a better scheme of regulation. He applied the phrase to a specific phenomenon: when regulators serve the interests of those they are allegedly regulating in the general public interest. and that. There are not large numbers of buyers and sellers. professor of sociology at Sussex University. He says: The criticism of the old Department of Health medicines department in the 70s was that it didn’t have any teeth. when the then prime minister. that there are no barriers to entry or exit for any player in the market. It certainly never comes about in the pharmaceutical product market. says that the MHRA has come to believe the interests of public health are coherent with the promotion of the industry. They will also place what appear to be academic papers in the medical press that are in effect disguised advertisements. . and argued that regulatory capture was not just common. Kolko argued that whatever liberal reformers might have intended. and will heavily promote products directly to general practitioners. this is the National Health Service.
who provide information and make a show of cooperation. The central questions are of information and trust. could affect public health. Second. Regulated firms end up supplying not just data to regulators. Regulators find that if they cooperate with their subjects in some areas. People give more attention to a particular law or agency if they feel that they have something at stake.The basic mechanics of regulatory capture are straightforward. and they never know the full consequences of their actions. and will correspondingly make sure to be fully informed. typically for lack of informed consent. Anyone who expects new pharmaceutical products to be completely effective and completely safe and the pharmaceutical companies to love their customers more than their balance sheets. Between these extremes. regulators may at first feel hostile to their subjects. They will make sure to know about laws and policies that affect their own interests. Over time. they will get cooperation back on others. the net effect of such shifts in the course of regulation is to draw the regulatory agency in directions that the public is likely neither to understand nor to feel represents the original intent of the legislation that created the agency. there are the completely unregulated and frequently unlikely claims that circulate on the Internet – some websites. Safety in Diversity? Regulation. even of non-prescription medicinal products. Therefore. information about any specific product is of two kinds. Sometimes. may not be the solution. many national jurisdictions had adopted into their product liability laws some variant of the American “learned intermediary rule”. and to ensure that regulation works in what objective third parties might regard as the public interest. Regulators hardly ever want to destroy what they regulate. How can it be generally known which pharmaceutical products work for patients? And how can we trust claims about what does work? Part of the answer at least lies in diversity of information. Indeed. enthusiasm. but personnel. and the like get favours. If those people are running a wealthy business. were it to be excessive and ill-considered. See. whereby pharmaceutical suppliers were under a duty to warn only the physician intermediary. Ordinary people are not expected or fully allowed to learn for themselves about the value of any particular medication. then. "responsible. uninformed patients were expected to proceed against the doctor for negligence. for example. who find that endless crusade takes its toll in energy. The regulated. As said. We have an increasingly complex and dynamic pharmaceutical market in which it has been reasonable to see untrained members of the public as incompetent to make informed choices about products. Advertising of medicinal products to the general public. It is unrealistic to expect otherwise. we can hope to improve on the existing situation. Indeed. Whatever model of supervision we adopt for the pharmaceutical industry. Most often. and efficiency. Over years and decades. Often they do not. The problem is that incremental small shifts can add up to big consequences. there is at best limited room made for informed debate about pharmaceutical products. This Directive prohibits the advertising of prescription only medicines to the general public. They still work together. just as in the case of education. Institutionalised Asymmetric Information . That is why there are presently advertising controls in many European countries. medications with unacceptable side effects. But the overwhelming evidence is that it is impossible to ensure that the regulators and regulated in any scheme of regulation will not eventually come to regard each other in at least many important respects as allies. it goes further in suggesting that rules are needed for all pharmaceutical products. there will inevitably be failures – medications that do not work. The Guardian report cited above. however. After all. The result is a regulatory agency staffed by former or perhaps future colleagues of those in the regulated firms. earn the appreciation of regulators. they see their job as simply a matter of imposing the public interest on otherwise irresponsible organisations. ought therefore to satisfy certain essential criteria which ought to be defined. there may be no overall solution. the gentleman in Whitehall really does know better what is good for the people than the people know themselves. And the regulated usually regard the regulators as facts of life to deal with. recommend Prozac as an appetite suppressant. Directive 2001/83/EC on the Community code relates to medicinal products for human use. is asking for a perfection that cannot be on offer. they will have a lot at stake. Injured. for example. In addition. First. cooperative enterprises". for example. with or without any real sense of cooperation. Nevertheless. We are talking about human beings. regulators and the regulated get to know each other and to work together. These have their own interests to consult. who understands the field better than folks who are retiring or resigning from the field's major participants? Few people want regulations made in outright ignorance. Every so often. Now. incidental details of this process will come to light. New pharmaceutical products are usually based on radical new departures in scientific understanding. the details will verge on the scandalous – see. and we have a medical profession and set of regulatory agencies expected and empowered by law to make their choices for the public. and better cooperated with than resisted outright. There is no need for regulators and regulated to like each other. These are now codified in the commercial law common throughout the European Union. Even before this blanket prohibition came into force within the European Union. not the patient. we live in a world of centralised information about pharmaceutical products. Such rules essentially immunised the pharmaceutical manufacturer in most failure-to-warn cases. where it is permitted. Controlled Release of Information Much has happened since the high age of confidence in government. medications that are a deadly menace to those who take them. But what Douglas Jay – a Minister in the Labour Government of the day – still largely holds: [I]n the case of nutrition and health. the revelations of the late 1990s about the body set up to regulate the British National Lottery. Testing on animals and on a small number of human volunteers can never give the same knowledge of effects that comes from having a product on the market for several years. and it can never be known in advance what will the full effects will be. those of the regulated who gain the sympathy of regulators as "team players". there are the impenetrable and often secretive conversations that take place between the pharmaceutical companies and the regulators of the medical profession or both. whether or not prescribed: Advertising to the general public.
is not allowed to publish a word about the correct uses of Prozac. our data suggest that available technical quality criteria fail to identify potentially harmful information online. This is potentially dangerous because consumers have easy access to CAM products online and act upon what they see on the Internet. consumers will on the whole make very informed decisions. those front organisation web sites set up Schering Healthcare and Biogen Ltd. The pharmaceutical companies are often prevented by law from replying in detail to these claims. and whether it is being offered in the way that they want. the manufacturer of the product. and in which ordinary people can tell the companies and each other about the medicines they want. Doubtless. They cannot be reformed. After all. and on the serious attention these magazines receive from people of apparently limited education. It may be said that people really are not able to know what they want. The researchers found that: We found that most CAM Web sites were potentially harmful either by displaying statements which could cause harm. Whether this is a patronising assumption of superiority is beside the point. most people would continue to consult their doctors . What does matter is that it is probably a false belief. Again. These are facts that cannot be known to any outside agency.that large numbers of people would buy recreational drugs and thereby wreck their lives . Because the pharmaceutical companies are prohibited by law from communicating directly with the public. the pharmaceutical companies cannot reach out directly. or the wild claims of Internet salesmen based in the British Virgin Islands. contraindications. but they are surely able to decide whether it is right for them. or presented information on products that may cause interactions with conventional medications. however. We found that one quarter of CAM Web sites present information that may cause physical harm if acted upon. as at present. And yet the average child of ten can explain what he wants from a mobile telephone. This means no regulatory framework other than that provided by the common law of tort and contract.google. where matters of health or even life itself are concerned. Whatever the case. for example. However. faith healing. As said. drug interactions. or by omitting vital information. Let the Public Speak and Decide We need a regulatory framework within which the pharmaceutical companies can speak directly with ordinary people. it is frequently hard to tell the difference between commercial and ordinary speech – see. the Internet is already full of charlatans. Almost all (97%) CAM Web sites omitted vital warnings. Anyone can set up a website to claim that Viagra can cure lung cancer. Look again at the Internet claims about Prozac as an appetite suppressant. can imagine what would happen were the pharmaceutical market opened to the same public scrutiny and dialogue as any other market. It is wrong to assume that an informed decision must rest on full information. They still somehow work out what capacity. Every consumer market in the world is filled with informed consumers who have nothing approaching full information. presented information on products that may be directly toxic. They require information relevant to the decision. These sites encouraged consumers to avoid conventional therapy.co. Their effect is to prevent informed discussion of pharmaceutical issues of a kind that ordinary people can understand. and prescriptions would be purely reminders of that advice. Nor is there legal room for any other organisation independent of Pfizer or the regulators to speak authoritatively to the public. It is better to scrap them and return to the practice of the past. At the same time. The modes of regulation presently in place have failed. Further. The normal objection to liberalising the market in pharmaceutical products . These products include psychic surgery. Anyone who thinks it can help with dieting may be misinformed. Ordinary people may not be able to understand all the scientific details of a new pharmaceutical product. A system of regulation devised to solve the problem of asymmetric information has set this asymmetricity in legal concrete. the pharmaceutical companies would have to direct their advertising not at small groups of professionals. and which brand and network come closest to giving that. and much else. http://books. In such a market. Eli Lilly. there are websites that denounce the products of the pharmaceutical companies and instead recommend products that may be useless or actually harmful. It is not worth discussing because everyone knows that recreational drugs are already freely available to anyone inclined to break a few barrely-enforced laws. or to understand the nature of what is offered to them. Even fewer people know how a mobile telephone works.. In 2004. and about what they hope from the medicines that are available. that. and cannot be known in advance.but the advice given would be purely advice. Adults should be able to wander into a pharmacist and buy whatever they please. laetrile. This is concerning because many consumers perceive "natural" products as safe. but at the final users of their products.in/books?id=hlQ56RuhSuAC&pg=PA254&dq=pharma+management+biren+shah +export&hl=en&sa=X&ei=5YKeT6DQBorJrAeCvqBh&ved=0CEEQ6AEwAA#v=onepage&q&f=false . Pfizer. And these are in markets where no controls exist on what information may be given or exchanged. the public must trust either what information is transmitted via the medical profession. Anyone who looks at the range of magazines available on consumer electronic products. many herbs that may be safe when used alone interact with conventional medications. the Journal of Medical Internet Research published a survey of websites providing information on complementary and alternative medicine. on the detailed answers within them to questions put by the readers. The purpose of liberalisation here is to enable the growth of a conversation between producers and consumers. is not allowed within the European Union to say on its own website how it should best be used. often do so without the knowledge or advice of clinicians. Hardly anyone in the world knows how a refrigerator works. size and shape and colour of refrigerator they want in their kitchens. or adverse reactions. There should be no control on the advertising and sale of any pharmaceutical product. they cannot truly know what their customers want. Informed decisions do not require full information. We can be sure. and from offering their own opinion about the effectiveness and best use of their own products.The effect of these regulations is not to protect the public from charlatans.is not worth discussing. What is relevant depends on what is wanted from a product and on the capacity of individual consumers. which developed the product.
google.co.in/books?id=hlQ56RuhSuAC&pg=PA254&dq=pharma+management+biren+shah +export&hl=en&sa=X&ei=5YKeT6DQBorJrAeCvqBh&ved=0CEEQ6AEwAA#v=onepage&q&f=false .http://books.
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