by Ron Powers
Clozapine’s side effects, often virulent, were detected early by the corporate scientists who discovered it. These included seizures, constipation, weight gain, and, rarely, sudden death. None of those scientists or their employers said a word about these hazards. After all, the percentage of mental patients who experienced these ailments was low. And profits were high (though not as high as they soon would be). Not until researchers began linking it to a dangerous and sometimes fatal white blood cell depletion called agranulocytosis did Sandoz squeeze its corporate eyes shut and pluck it off the market.
Clozapine did not regain a place in the market until 1972, when it was sold in several European countries as Clozaril. Now—finally—it was carefully marketed as a medication to be administered only when patients’ symptoms showed resistance to other antipsychotics, or when the patients began to talk seriously about suicide. It remained, and remains, a dangerous potion for many people. This problem was addressed not via adjusting its components, but via advertising—beneficial advertising, for a change: when it finally appeared in America in 1993 (as clozapine), its packaging carried five serious, or “box,” warnings, including warnings for agranulocytosis.7 The FDA pledged that its use would be carefully monitored.
Clozapine in ways good and bad was the narcoleptic drug of the future. It was the first of the “atypical” or “second-generation” antipsychotics that began to appear on psychiatrists’ prescription lists in the 1970s. Drugmakers claimed that the new drugs were more versatile and bore less harmful side effects. This latter was contrary, of course, to the evidence of clozapine itself. But as we shall shortly see, exaggerated and outright false claims were already fast becoming the lingua franca of the brave new drug-world. The really ugly days lay ahead.
To open the dossier on the behavior of American and European pharmaceutical giants over the past quarter-century is to confront a fortified casino of riches and debauchery. Accounts of documented piratical atrocities gather, thicken, and expand like locusts blotting out the sun: corruption, criminality, contempt for public safety, buy-offs, payoffs, kickbacks, and the overarching pollution of medical integrity. All wrought by what seems a virulent new genetic strain of greed; a strain impervious to public disclosure, to staggering court fines, to continual calls to personal conscience and civic accountability. A sobering artifact of this scandal-beyond-scandal is the liberty that reformers feel to tar Big Pharma with analogies to the underworld, via use of such comparative terms as “organized crime” and “the Mafia.”
These accusers are part of a new generation of watchdogs. They have taken up the work of those who exposed the overcrowding and inhumanity of state psychiatric hospitals more than forty years earlier. They are medical journalists and unspecialized journalists; PhDs, psychiatrists, and doctors repulsed by the malfeasance they have witnessed firsthand; they are current and former psychiatric patients. They share outrage over the mockery of public trust as it has unfolded and enlarged in plain sight—their plain sight, at least.
Their published output keeps growing. From the beginning of the twenty-first century alone, books regularly hit the stores bearing such titles as Selling Sickness; Big Pharma (2006); Big Pharma (2015); The Big Pharma Conspiracy; Bad Pharma; Pharmageddon; Bad Science; The Truth About the Drug Companies; Overdiagnosed; Overdosed; Overdosed America; How We Do Harm; On the Take; Know Your Chances; Taking the Medicine; Death by Medicine; Our Daily Meds; Drugs, Power, and Politics; Pill Pushers; Poison Pills; and others.
The sheer tonnage of all this can leave one feeling that a vital membrane in the social fabric is tearing open under pressure; a membrane that already bears the weight of big banks and finance institutions; a membrane that has held us back from decadence.
The list of companies shamed yet undeterred by stupendous fines reads like an inventory of vial labels on the shelves behind the bathroom mirror: Johnson & Johnson, Pfizer, GlaxoSmithKline, Abbott Laboratories, and several others. Many of their product names are even more familiar: among them Risperdal, Bextra, Geodon, Zyvox, Lyrica, Abilify, Wellbutrin, Paxil, Advair, Zocor, Oxycontin. Their perfidies, less so: off-label promotion (marketing a drug for uses not approved by the Food and Drug Administration), kickbacks, failure to disclose safety data, Medicare fraud, making false and misleading claims, and bribery, among others.
No category of medication, or medication user, has escaped the consequences of this collapse of medical and professional ethics. Certainly not the suffering and misinformed consumers of these products, the sick, the depressed, and the “worried well.” These are the ones who have paid the price, or the ransom: paid in dollars and often in the well-being of their minds and bodies. In some cases, they paid with their lives. The most defenseless category of all the victims, as usual, has been the mentally ill.
How did it happen? How could an industry with roots so deep in the venerated healing arts have turned so feckless, so grotesque? Where have you gone, Anne-Marie Staub?
It happened via a chain of causality. The most volatile element in this chain was a December 1980 bipartisan vote in Congress. The vote went virtually unremarked in the punditry unleashed by the election of Ronald Reagan to the presidency. The vote was an amendment to the patent law.
Patents are rarely brought up in topical conversation, yet industries and state economies can rise and fall on them. The 1790 Patent Act was designed to financially protect the inventor of “any useful art” from profiteering by imitators. In 1967, the concept of “intellectual property”—roughly, the ideas of inventors that lead to new products—was given legal force by the World Intellectual Property Organization, an agency of the United Nations.* This and later patent-law refinements have led to a rapid product expansion of high technology and biomedicine, and have underscored the point of view that patent protection drives the US economy.
This particular patent act amendment was sponsored by the Democratic senator Birch Bayh and the Republican Bob Dole of Kansas. President Jimmy Carter, freshly unseated by Ronald Reagan, signed the new measure into law. Its intention, in simplest terms, was to stanch the US industrial drain to the Third World by creating new domestic industries almost from scratch. Among the most important of these would be the industries related to biotechnology.
To that end, the Bayh-Dole Act reversed decades of policy regarding ownership of inventions financed by federal funding. In a word, it privatized them. Previously, inventors (typically salaried research scientists from universities and nonprofit institutions) were required to turn over the rights to whatever they produced to the federal government. Now, these innovators, along with those from small businesses, could patent their own discoveries and take them to the marketplace: to the pharmaceutical companies, as a prime example. In 1979, universities secured 264 patents for research discoveries. By 2002, that number had increased to 3,291. In 2014, it stood at 42,584 in the biotechnology industry alone—an increase of almost three thousand from the previous year. In 2012, American universities earned $2.6 billion from patent royalties, according to the Association of University Technology Managers.
But holding a patent and realizing a profit from it are two different things. In recent years, this fact has begun to threaten the momentum and even the viability of the bonanza created on the good intentions of Bayh-Dole—not to mention the companies’ widely known competitive “rush to the market” to be first with a new patent. Litigation costs surrounding patent deals inevitably have skyrocketed, as have so-called “transaction costs”—the various obligations one incurs in putting any patent (or product) into play. High-stakes lawsuits have challenged the legality of so-called “me-too” drugs: copies of established brands, the molecular structures of which are altered just enough to justify a new patent and new riches. As a result, patent-holders began cautiously withholding their products from licensure. The useful scientific knowledge that some of these patents hold is withheld from society—wasted. The unrealized economic value of this waste to the American economy has been estimated at $1 tr
illion annually, or a 5 percent reduction in potential GDP.8*
This commodification of research had other consequences. It thrust universities and nonprofits into the hard-eyed venture-capital world. No longer would “serendipity” be permitted to work its happenstance magic, as it did with penicillin. No longer would time stand still for “pure” research—unpurposed, intuitive, trial-and-error experimentation that sometimes consumed decades of a scientist’s life. From now on, applied science (in which the result was expected or intended at the outset) would rule.
And in the bargain, the American public would now be required to pay commercial prices for the results of this public-funded research—antipsychotic and antidepressant drugs included—having already paid, through taxes, the costs accrued by public universities and nonprofits in developing them. In vernacular, this is known as paying twice.
Bayh-Dole was just the second of two little-noticed landmark procedures in 1980 that cleared the way for legal entrée into the human brain. The previous June, the Supreme Court had ruled (by only a 5-to-4 majority) that a living microorganism, modified by man into a useful substance, is eligible for patent. That ruling marked the legal foundation for the transformational biotech industry.*
None of this is to imply that the University and Small Business Patent Procedures Act was intentionally insidious. Its sponsors saw it as a job-creator, a conduit for creative cooperation between industry and academia that would lead to proliferating new products, and that was in many other ways an unshackling of Yankee know-how for the betterment of society. And to varying degrees, it worked. But like a narcoleptic drug rushed to market without enough testing, it carried destructive side effects.
It worked for a circumscribed sector of the American economy: the once prim-and-dutiful pharmaceutical industry that now cavorted on a permanent gusher of cash; for the university research bio-and neurochemists who suddenly discovered that they could do well by doing good, and do sensationally by doing even a little bit more good; for the tech PhDs on campus who used public funding to conceive and sell increasingly miraculous computer-enabled machines and processes: brain-computer interfaces, high-resolution microscopes, neuron-controlling optogenetics; the CRISPR gene-editor; even DNA versions of their filament-and-molded-plastic selves. It worked for the insane and disease-ridden patients who found relief in a scattering of genuinely “breakout” medications. For others, it didn’t work so well. Especially those consumers of needed medications for ailments mental and physical. They, too, paid twice.
It took a few years, given the public’s obliviousness to Bayh-Dole, for consumers to notice that they were paying twice (and then twicer and twicer and twicer). The consumers didn’t like this. But they paid. And paid. And paid, even as prices for drugs rose and many of the elderly recipients responded by cutting down on or doing without some of the prescribed meds in their regimens. Or all of the prescribed meds in their regimens.
The consumers paid and paid, even as Big Pharma’s rationale for constantly raising its prices—the “cost of research” involved in making the drugs—grew ever more hollow, given that the companies now were harvesting research from academia, or farming it out to other public entities for negotiable prices. (Their own, in-house research, as mentioned, tended increasingly toward the “me-too” micro-altering of patented compounds already on the market.)
And the consumers paid and paid, even as their anger at last rose. Some tried to develop grassroots strategies to combat the rising prices. Americans who lived a reasonable driving distance from the Canadian border, for instance, would cross that border to shop at pharmacies where they could buy their medications at a tenth of the US prices. Often they would make the trip in chartered buses. When the people on the buses were well along in years, as they usually were, a member of their state’s congressional delegation would sometimes ride along as an escort. (Vermont senator Bernie Sanders pioneered this practice in 1999.)
Here is a brief index to how much they paid, and how much the government paid: In the act’s first year, 1980, the government spent $55.5 billion (in 2000 dollars) for research and development. Sales of prescription drugs in that year stood at $11.8 billion.9 In 1997 the figure was $71.8 billion in pharmaceutical sales; federal funding totaled $137 billion, but a large proportion of that went to the Strategic Defense Initiative and other military programs. In 2014, consumer spending rose to $374 billion,10 with federal funding back down to $133.7 billion. That same year, the US Food and Drug Administration approved forty-one new pharmaceuticals, a record; and in 2015, the Wall Street Journal, citing research by the firm Evaluate Pharma, reported that global prescription drug sales are projected to grow by nearly 5 percent annually and reach $987 billion by 2020.11 The reason, in the insouciant words of the Journal reporter, is “largely attributed to a crop of new medicines for hard-to-treat illnesses such as cancer and fewer patents expiring on big-selling drugs” (emphasis added). In November 2015, Intercontinental Marketing Services Health projected the sales number at $1.4 trillion.12
That the rising flow of riches in the pharmaceutical industry might bring trouble in its wake—trouble in the form of litigation—apparently did not trouble the giddy pharma-entrepreneurs of the Reagan years and beyond. (And as the years went on and litigation spread and court settlements and fines seemed to add zero after zero to their totals, it grew clear that the entrepreneurs didn’t really care. Their sales figures were adding even more zeros.) The international catastrophe of thalidomide should have been recognized for the dreadful omen that it was, but for some reason this did not happen. The German-made drug, introduced in Europe in 1957 as a completely safe antidote to morning sickness and soon a global phenomenon, caused multiple thousands of birth defects in children of women who trustingly bought it—such as flipper-like arms and the absence of toes, legs, and ears. Roughly half the cases were fatal. Some of the litigation continues today. (Thalidomide was never approved for sale in the United States, yet the makers sent samples to American doctors, who passed them along to their unsuspecting patients, with the inevitable results.)
The first serious American-made hint of bad consequences arrived with clozapine, whose makers flirted with legal reprisal before voluntarily withdrawing their new atypical drug. But it was the debut of another “atypical” drug, Risperdal (risperidone), that introduced Big Pharma to Big Lawsuit.
Risperdal went on the market in 1994, a product of Janssen, itself a subsidiary of the pharma giant Johnson & Johnson, the largest marketer of medications in the world. The drug was sold as a treatment for bipolar disorder and schizophrenia. Its makers assured the public of its safety based on three internal trials before submitting it to the FDA for review. Somehow, the trials failed to demonstrate that the drug could result in fever, muscle stiffening, irregular heartbeat, trembling, fainting—and the dangerous disorder tardive dyskinesia.
These complaints caught the attention of consumer protection agencies in thirty-six states between 1993 and 2004.13 The state’s full catalog of complaints would have made a Gilded Age railroad baron recommend prayer and penitence. They included allegations that J&J paid kickbacks to the charmingly named Omnicare Inc., the largest nursing home pharmacy in America, to prescribe Risperdal to the generally clueless seniors—many of them suffering from dementia. (Risperdal’s packaging includes a “black box” warning with this language: “Elderly patients with dementia-related psychosis treated with antipsychotic drugs are at an increased risk of death.” Risperdal of course is an antipsychotic. Caveat emptor.) The kickbacks included money, offers of paid vacations for doctors’ trips, and “lucrative consulting agreements” to prescribe Risperdal to more patients.14 Johnson & Johnson decided to contest these charges and lost. Omnicare, for its part, agreed to pay $98 million to resolve claims that it accepted this booty and thus violated the False Claims Act.15
J&J later reached separate settlements with Texas in 2012 and Montana in 2014 for $158 million and $5.9 million, respectively. Settlements with other
states added up to $181 million.
The dollar amounts of these state trial costs and settlements might lead a reasonable observer to conclude that they taught Big Pharma a lesson it would not soon forget. The reasonable observer is invited to read on, preferably while seated or holding on to a firm object. Not long after the turn of this century, settlements and verdicts against drug companies began to roll out from federal court trials on a monetary scale that obliterated the state-level penalties and threatened to obliterate the very notion of “scale” itself.
The first and largest of these decisions did not directly involve an antipsychotic drug, though the company in question had one of those (Saphris*) on the market. It is of interest because it highlights the entry of the Department of Justice into the arena, and because it opens a view into the realm of Big Pharma as it balances its growing flood tide of revenue against its ethical responsibility to public safety.
In 2007, the global health-care company Merck, with headquarters in New Jersey, agreed to pay $4.85 billion to settle lawsuits filed in relation to its medication Vioxx. The substance had been introduced in 1999 as an antidote to pain brought on by rheumatoid arthritis, then pulled off the market in 2004. The lawsuits numbered about twenty-seven thousand and covered forty-seven thousand sets of plaintiffs.16 They had been filed by Vioxx users or their relatives who claimed that the medication had resulted in heart attacks, many of them fatal. The Justice Department’s investigations turned up documents that Merck researchers had been aware of these risks, but that the company did not report them. In 2011, Merck agreed to pay an additional $426 million to the federal government, $202 million to state Medicaid agencies, and $321 million in criminal charges, to round out the litigation.