NOT LONG AGO, WHILE VACATIONING IN THE SUN-BLEACHED Mexican port town of Manzanillo, I encountered the future of the American medical system. It wasn’t a hospital or an HMO. It wasn’t even one of those hard-scrabble clinicas that have become so familiar in parts of Los Angeles or New York or Houston these days. It was a farmacia, its owner fanning himself in the midday heat.
“Prozac?” I inquired, using my best gringoese. “Do you carry Prozac?”
“Si, senor” replied the druggist. “Cuanto?”
How many? Mexican pharmacists have rolled out that beautiful question to curious norteameri-canos for decades now; what was traditionally preceded by a lengthy doctor’s visit and costly prescription in the United States could almost always be secured mas directamente in Mexico. No questions asked, either. But the difference is fading when it comes to the availability of drugs, we’re starting to look like Mexico. This strange epiphany came to me while I was still in Manzanillo, when I happened across some American magazines and, flipping through them, was struck by the myriad “Ask Your Physician About . . .” advertisements exhorting readers to try new medications for high blood pressure, prostate enlargement, ulcers, and other ailments. “Without a prescription!” advised one. After returning to the United States, I seemed to see proof of the change everywhere. As they say in Hollywood, I’m talking structure here a health-care system that each day is devoted less to the art of medicine and more to the delivery of pills. Consider:
In March 1995, Jan Leschly, the chief executive officer of SmithKline Beecham (1995 sales: $11 billion), who is also known in the trade as “the Mike Ovitz of the pharmaceuticals industry,” closed his fortieth deal in eighteen months that’s one every two weeks by acquiring Coastal Healthcare Group, Inc., the largest physician-management group in the country. The result is that SmithKline Beecham, one of the world’s largest drug companies, now “covers” 6,000 doctors and 600,000 patients.
In May 1995, Schein Pharmaceutical and Solvay Pharmaceuticals, makers of several psychopharmacological concoctions, joined forces to form a “mental health group alliance.” Their stated goal was “to provide our customers with a more comprehensive line of psychotherapeutic agents at reasonable costs.”
Last October, asked about why his company, the pharmaceutical giant Pfizer Inc., hadn’t yet purchased its own managed-care company, chairman William Steere replied: “[B]ecause we deal with the pharmacy benefit managers. And we have relationships with drugstores. We get wonderful information from drugstores. … We can drill down to the patient from any of these centers.”
1? Last November, the General Accounting Office released a study of the pharmacy benefit managers Steere referred to. PBMs, which administer the prescription-drug part of health-insurance plans for self-insured employers, insurance companies, and HMOs, provide services to about 50 percent of the population. Because PBMs control the lists of prescription drugs, or formularies, that health plans will pay for, they are attractive to pharmaceutical companies. Indeed, the GAO noted that the five largest PBMs (Medco, Diversified, PCS, Value Rx, and the Prescription Service), which cover 80 million people, were in turn owned by three large pharmaceutical companies (respectively, Merck, SmithKline Beecham, Eli Lilly) or by companies “in alliance” with one (Pfizer). Under these arrangements, the GAO said, some PBMs had dropped from their formularies medications that competed with drugs manufactured by their parent company or an allied company.
As startling as these developments are, few mainstream news organizations took note; there was no national debate about the possible conflicts of interest that could occur when a company that makes pills might own the companies that oversee the payment and use of them. (In fact, if there was any attention at all paid to the strange new confluences, it was on Wall Street, where the Dow Jones Drug Company Index rose 59 percent last year.) No longer content merely to manufacture and sell drugs, pharmaceutical companies (1995 worldwide sales: $700 billion) are drawing ever closer to the end consumer. As a recent issue of Med Ad News, the industry’s bible, put it, drug companies aren’t competing with one another anymore; instead, “they will grow by taking share away from other health care services.”
I find this assertion worrisome. Does “taking away” mean from me? From doctors? From hospitals? From the medical institutions Americans used to look to for protection from “market forces”? What, exactly, does SmithKline Beecham CEO Jan Leschly want from me? Not to put too fine a point on it, but should I be rereading Aldous Huxley’s Brave New World’/
TO EXPLAIN HOW I STARTED asking such about the pharmaceutical industry, I should first describe the nature of my particular ailment, depression, and note that it places me as a consumer in one of the drug industry’s fastest-growing markets and thus provides as good a way as any to observe broader forces at work. My ten-year pilgrim’s progress through the American health-care system has, on one level, been no progress at all; rather, my treatment has simply changed with the industry itself.
As best I can tell, and this after thousands of dollars spent on the proverbial couch, my own depression began somewhere around the age of eight. I’ll spare the details it’s mundane dysfunctional stuff, no coat hangers or Satan worshiping.
My attempt to deal with this syndrome began with talk therapy. In eight years of talk therapy, however, I can’t escape major depression. I am referred to R., my psychiatrist, by my counselor, who decides that my problem “may be chemical” in other words, beyond her ken.
How did talk therapy disappear beneath the onslaught of today’s designer drugs? The answer can be found in the busily enterprising milieu of the mid-Eighties, when three trends converged, creating the new age of pharmo-capi-talism. The first had to do with technology. For decades medical science had suspected that one cause of de-
pression involved low levels of the brain chemical serotonin. To only slightly oversimplify, serotonin was thought to act as a connector between neural transmitters and receivers. The problem, researchers postulated, was that, in some people, one part of the brain cell known as the “reuptake pump” was overactive; it automatically hoovered up too many serotonin particles, leaving the receptors understimulated depressed. In July of 1974, Eli Lilly reported that an experimental chemical known only as #82816 selectively blocked the reuptake of neural serotonin. Moreover, the compound appeared to be pharmaceutically “clean” it affected few other neural systems, so side effects would be minimal. A note: #82816 was labeled fluoxetine. This is what we now call Prozac.
WHAT KEPT PROZAC FROM BE-coming just another grudgingly used drug in the psychiatrist’s dusty apothecary? On September 14, 1984, liberal Representative Henry Waxman of Los Angeles, and the very conservative Senator Orrin Hatch of Utah shepherded through both houses a piece of legislation that would forever change the character of the pharmaceutical industry. In a thrilling display of political euphemism, they called this the Drug Price Competition and Patent Term Restoration Act of 1984. It was actually a spectacular piece of back-scratching. The act expanded the number of drugs suitable for so-called Abbreviated New Drug Applications, or ANDAs, which were intended to make it easier for cheap generics to reach the market. More importantly, the act gave pharmaceutical companies up to five extra years of patent protection in effect, a new license to print money.
Pharmaceutical-industry executives envisioned a new strategy. Capitalizing on the Reagan era’s laissez-faire policies, they switched from a strategy of introducing a few new drug applications a year to introducing dozens. They lobbied for, and obtained, permission to use European studies of new drugs to accelerate the process. By 1995, the [FDA’s] review time had shrunk from thirty-three months to nineteen.
Marketing executives had to find a way to get more out of their companies’ window of opportunity. In the case of antidepressants, which were traditionally dispensed by the nation’s small corps of psychiatrists, the industry desperately needed to broaden its base of distributors. To do that, Lilly, Pfizer, and a number of other manufacturers targeted health-management groups and HMOs, which, as we all now know, are charged with the dual responsibilities of providing therapy and cutting costs. For them, Prozac was a panacea. Almost immediately, the average number of insurer-paid visits to talk therapists fell dramatically while drug-therapy numbers soared. By the late Eighties, of nearly 16 million patients who visited doctors for depression, 70 percent ended up in drug therapy. And slowly but surely, nonpsy-chiatric physicians were brought into the prescribing fold. Lilly and other manufacturers underwrote “mental health days” for area medical groups. The events were marketed as “educational” forums; they functioned as subsidized marketing for the company and for the physicians.
But the ultimate goal of the new pharmo-capitalism involves the consumer, once known as “the patient.” Today, the American patient is inexorably being transformed into his own pharmacist. The trend is most apparent in the pages of magazines, with their weirdly text-heavy ads. Less obvious are the marketing fests taking place in the nation’s doctors’ offices and emergency rooms. There one inevitably hears the cheery, insistent voices of the local “health care” cable station prattling on about how you can have “a better, fuller life” if you just fill out the self-diagnostic chart about depression that’s sitting right there by your chair. (I once saw a plainly undepressed young Latino couple filling these out in triplicate, as if they were participating in some kind of medical lotto.)
ACCORDING TO THE FDA, THE pharmaceutical industry spends more than $10 billion on promotion every year. Our media and medical establishment are drunk on it from the editorial pages of the New York Times, which regularly rents out space to Lilly et al., to the American Medical Association and the American Psychiatric Association, whose members suck up free promo money and research funds. Ten billion dollars, to state the obvious, buys a lot of understanding. This is why, in the marketing departments of Time andNewsweek, “up pill covers are some of our biggest sellers!” as a friend of mine who worked in one of those departments told me recently. A look at the last five years of newsweekly covers reveals few bummer pill stories,
yet the flies of the FDA’s Division of Drug Marketing, Advertising, and Communications (DDMAC) are full of horror stories. This division, empowered to review all promotional materials, has a small handicap: because of the First Amendment, it can require submission for review only after the company has begun to use the ads. The unregulated window of opportunity has produced a new opportunist the rogue pharmo-capitalist.
The rogue pharmo-capitalist also known as the drug company sales representative differs from his industry antecedents, who went by the folksier monikers of “detail men” or “product reps.” Whereas the previous generation relied on a few free samples and an occasional lunch for the buyer, the new generation, emboldened by the media’s lack of scrutiny, is, like the witches in Macbeth, routinely making up new uses and indications for its potions out of thin air.
Such was the case on September 6, 1994, when the FDA caught representatives of SmithKline Beecham, maker of the antidepressant Paxil, handing out un-approved, homemade promotional materials containing, the FDA said, “numerous false and/or misleading claims.” One of the items was a cheery handwritten note, on Paxil stationery, left with physicians. “Dr. [X]. Hello!” it said. “Why should you use Paxil instead of Prozac?” and then went on with such “egregious violations” (the FDA’s words) as suggesting that Paxil is safer than Prozac (it is not), that it costs less (only to wholesalers), and that it is easier on the elderly (a claim the FDA found to be, simply, “false”).
Such was the case as well on August 12, 1994, when the DDMAC caught Pfizer Inc. hyping Zoloft beyond the limits of any known research. The DDMAC mandated that Pfizer discontinue a whole raft of promotional materials because, among other things, the items minimized “adverse event data,” downplayed the risk of toxicity, made bloated claims of “broad spectrum efficacy,” and used bogus “placebo-adjusted” rates of side-effect reporting.
Then there is Eli Lilly, maker of Prozac. Lilly’s cadre of detail men are the proverbial aluminum-siding salesmen of the antidepressant industry. Their exploits are already legendary. One of the group’s more colorful buccaneering adventures was at a “National Depression Awareness Day” held at a suburban Maryland high school. As revealed last year by the Washington Post, the day was billed as an educational forum but actually turned into a Prozac referral day, in which Lilly sales representatives distributed promotional pens and brochures, addressed 1,300 students, and presumably went home feeling that their time was well spent.
So endemic is the practice of hyping product features the facts clearly don’t support that FDA deputy commissioner Mary K. Pendergast, speaking in October 1994 before the House Subcommittee on Regulation, Business Opportunities, and Technology, was moved to uncharacteristically straightforward language. “Promotion of unapproved uses by company sales representatives,” she stated, “is a major problem.” Yet rogue campaigns get called what they are only when the perpetrators are caught red-handed. The FDA knows that in the new age of do-it-yourself, on-the-run pharmo-capital-ism, the game is going to the innovator. And innovate the pharmo-capitalists have done.
So there are salesmen as label writers, studies as sales tools and pharmacists as arm-twisters. As if doctors weren’t getting enough of a hard sell, at least one leading pharmaceutical company, Upjohn, has been caught paying bribes to pharmacists to persuade doctors to switch to new drugs. This the FDA has dubbed a “switch campaign.” Another company, Miles, Inc., maker of a hypertension medication, paid pharmacists for identifying patients who were taking older forms of drugs and then sending these patients coupons to help them switch to a new drug.
Who knows where all this innovation will lead? Certainly not the FDA, which is too busy approving new drugs to properly patrol the trenches. Still, a few at the beleaguered agency do get the drift. As commissioner Pendergast told Congress last year, “When I get a prescription filled, I want a drug that will benefit me, not my drugstore and pharmacist.”
AND IF SOME TERRIFIC NEW PILL comes along, I will read about it everywhere, and if I want it cuanto?I will be able to have it, and in doing so I will be a very regular late-twentieth-century American in good graces with my health-care provider. Cocaine and Freud ushered in this century, but now the culture has no time for the second part of that equation. There is no time for talk. No insurance money for it either. Serotonin enhancement and PBMs will ring in the next century.
Meanwhile, the pharmo-capitalists busily plan their next beachhead. The global market for antidepressants is expected to reach more than $6 billion by 1998 having doubled in four years. Two new antidepressants are pending FDA approval, four are in the late stages of development, and six are right behind them in the pipeline. And so it is that Med Ad News’s “Executive Edition,” an insider’s report to pharmaceutical-company leaders, recently described the “winning traits” of the next century’s most profitable drug companies: “The winning pharmaceutical companies will have to gain direct access to these customers . . . the pharmaceutical company of the future will have to interface with the patient.”
The future, it appears, draws ever nearer.
Greg Critser, former deputy editor of Buzz magazine, is a Los Angeles resident. Copyright © 1996 by Harper’s Magazine. All rights reserved. Reproduced from the June issue by special permission.
