Class 9 Pharmaceuticals

Gregory G. Billy, M.D.

Assistant Professor
Penn State Orthopaedics
Team Physician
Penn State University
Objectives
Basic understanding of the pharmaceutical
industry

Review the role of the FDA

Understand the past and current relationship of

the pharmaceutical industry with physicians
Participation Question
Who is this a picture of?

A Dont know
B Charlie Sheen
C Martin Shkreli
D Rapper wanna be
Turing Pharmaceuticals
The despised ex-hedge funder
who raised the price of a life-
saving drug for AIDS and
cancer patients from $13.50 to
$750 a tablet
CEO who acquired the rights
to 62 year old Daraprim in
August and raised the price by
5,000 % overnight
Daraprim is a common
treatment for the disease that
afflicts pregnant women and
cancer and AIDS patients
Daraprim can be produced for
pennies
Turing Pharmaceuticals
Martin Shkreli was escorted
from his New York apartment
by authorities, in a hoodie and
handcuffs along with his
attorney Evan Greebel. Both
are charged with fraud and are
being arraigned in a local
court in Brooklyn, New York.
The FBI arrested Shkreli and
Greebel on 7 counts of fraud,
in conjunction with other
companies he headed.
San Diego pharmaceutical
company is producing a
substitute medicine for a
dollar a day
Definition
The pharmaceutical industry develops, produces,
and markets drugs or pharmaceuticals for use as
medications
Pharmaceuticals
The global
pharmaceuticals
market is worth $300
billion a year, a figure
expected to rise to
$400 billion within
three years.

World Health Organization

Pharmaceuticals
The 10 largest drugs companies control over
one-third of this market, several with sales of
more than $10 billion a year and profit margins
of about 30%.
Six are based in the United States and four in
Europe. It is predicted that North and South
America, Europe and Japan will continue to
account for a full 85% of the global
pharmaceuticals market well into the 21st
century.

World Health Organization

Pharmaceuticals
Pharmaceuticals
Companies currently
spend one-third of all
sales revenue on
marketing their
products - roughly
twice what they
spend on research &
development

World Health Organization

Pharmaceuticals
As a result of this pressure to maintain
sales, there is now, in WHO's words, an
inherent conflict of interest between the
legitimate business goals of manufacturers
and the social, medical and economic
needs of providers and the public to select
and use drugs in the most rational way.
This is particularly true where drugs
companies are the main source of
information as to which products are most
effective.
Pharmaceuticals
In the United Kingdom,
where the medical
profession receives more
independent, publicly-
funded information than
in many other countries,
promotional spending by
pharmaceuticals
companies is 50 times
greater than spending on
public information on
health.
Pharmaceuticals
The industry expanded rapidly in the
sixties, benefiting from new
discoveries.
In the 1960s attempts were made to
increase regulation of pharmaceutical
industries and to limit financial links
between companies and prescribing
physicians.
Pharmaceuticals
More than 810,000 people
work in the
biopharmaceutical industry
in the United States as of
2012, and the industry
supports a total of nearly 3.4
million jobs across the U.S.
economy, including jobs
directly in
biopharmaceutical
companies, jobs with vendor
companies in the broad
biopharmaceutical supply
chain, and jobs created by
the economic activity of the
biopharmaceutical industry
workforce.
Pharmaceuticals

How does the industry work?

Ads

Sales reps
Pharmaceuticals
Drug Rep
Young
Energetic
Attractive
Get the message out
Perks
Trips
Lunch
Pens
Notepads
Pharmaceuticals
Drug Rep
Armed with studies
Educate
Well trained in sales

Tactics
Personality types
Off label claims
Pharmaceuticals
Pharmaceuticals
Academic Medical
Centers

Eliminated drug reps

No lunches
No dinners
No trips

Eliminated drug
samples
Pharmaceuticals
No samples
Patient needs to pay
to get prescription
Funding issues
Efficacy

Wasted 30 day supply

Not aware of
potential new
treatments
Pharmaceuticals
Pharmaceuticals
"An internal study done by Merck & Co. several years ago calculated
the "return on investment" from doctor-led discussion groups was
almost double the return on meetings led by the company's own
sales force. According to the document, doctors who attended a
lecture by another doctor wrote an additional $623.55 worth of
prescriptions for the painkiller Vioxx over a 12-month period
compared with doctors who didn't attend.
That compared to an increase of only $165.87 in Vioxx prescriptions
by doctors who attended a meeting with a salesperson.

Scott Hensley, Barbara Martinez To Sell Their Drugs, Companies Increasingly

Rely on Doctors: For $750 and Up, Physicians Tell Peers About Products;
Talks Called Educational, The Wall Street Journal, July 2005
Pharmaceuticals
The Physician Payments Sunshine Act created the Open
Payments Program, administered by the Centers for
Medicare & Medicaid Services (CMS). The program is
designed to create greater transparency around the
financial relationships of manufacturers, physicians, and
teaching hospitals.

The Sunshine Act requires certain pharmaceutical and

device manufacturers to report payments or other
transfers of value given to U.S. physicians and teaching
hospitals. Reports are made once a year and posted on a
public website via the Open Payments Program.
Pharmaceuticals
Data collection for reporting began on August 1,
2013. Manufacturers must report payments or transfer if value for
the following:
Funding for research
Travel
Honoraria
Speaking fees
Meals
Educational items like textbooks and journal reprintswhether
made directly to a physician or teaching hospital or indirectly
through a third party
The Sunshine Act applies to all physician specialties as well as
general practitioners
Pharmaceuticals
My Personal Approach

Prescribe medications
majority are generic

Continue if effective

Prescribe medications
with a proven track
record
Participation Question
Which of the following
does the FDA not
regulate?

A Microwave Ovens
B Pet Foods
C Herbal Supplements
D Cigarettes
Pharmaceuticals
The Food and Drug Administration (FDA), which
originated in 1906 by an act of U.S. Congress, regulates
the modern pharmaceutical industry. The agency is also
a scientific and public health agency with oversight for
the safety of most food products, radiation-emitting
consumer products, cosmetics, and animal feed.

"Pharmaceutical Industry." International Encyclopedia of the Social Sciences.

2008. Encyclopedia.com. 31 Jan. 2016 <http://www.encyclopedia.com>.
Pharmaceuticals
Foods: dietary supplements, bottled water, food additives, infant formulas
other food products (although the U.S. Department of Agriculture plays a
lead role in regulating aspects of some meat, poultry, and egg products)
Drugs: prescription drugs, non-prescription (over-the-counter) drugs
Biologics: vaccines, blood and blood products, cellular and gene therapy
products, tissue and tissue products and allergenics
Medical Devices: simple items like tongue depressors and bedpans,
complex technologies such as heart pacemakers, dental devices, and
surgical implants and prosthetics
Electronic Products that give off radiation: microwave ovens, x-ray
equipment, laser products and sunlamps
Cosmetics: color additives found in makeup and other personal care
products, skin moisturizers, cleansers, nail polish and perfume
Veterinary Products: livestock feeds, pet foods, veterinary drugs and
devices
Tobacco Products: cigarettes, cigarette tobacco and smokeless tobacco
Pharmaceuticals
In 1964, after the
thalidomide tragedy the
World Medical
Association set standards
for clinical research.
Pharmaceutical
companies were required
to prove efficacy and
safety of the drug in
clinical trials before
marketing them
Pharmaceuticals

Clinical trials of new

medicines occur in three
testing phases.
Pharmaceuticals

Phase I includes drug tests in a

small group of about 20 to 100
healthy volunteers to determine
safety
Pharmaceuticals

Phase II trials involve 100 to 500

volunteer patients who
participate in controlled trials to
determine whether the
medicine effectively treats the
disease
Pharmaceuticals

Phase III includes 1,000 to 5,000

patients taking the new drug
and being monitored to confirm
effectiveness and identify any
side effects with comparison to
patients in the placebo (inactive
substance) group
Pharmaceuticals
Several characteristics distinguish the
pharmaceutical industry from other
industries. A newly released
pharmaceutical agent is usually available
only by physician prescription. Patients in
effect transfer decision-making authority
on the appropriateness of medications for
their ailments to their physicians
Pharmaceuticals
A prescription may become available OTC
(i.e., without physician prescription) for a
non-chronic condition that is relatively
easy to self-diagnose and has low potential
for harm from self-medication under
conditions of widespread availability
Pharmaceuticals
The pharmaceutical industry manufactures
innovative products with government-granted
patent rights that may be extended after
application approval from the FDA. Patents give
researchers and inventors exclusive rights to
market an invention for twenty years before
others may duplicate and sell it. Therefore,
producers of new drugs are free to limit the
supply and set prices that reflect profit-
maximizing mark-ups with exclusive marketing
rights
Pharmaceuticals
Generic Medication
is identical -- or bioequivalent -- to a brand name
drug in dosage form, safety, strength, route of
administration, quality, performance
characteristics and intended use. Although generic
drugs are chemically identical to their branded
counterparts, they are typically sold at substantial
discounts from the branded price
Prescription
Name of patient
Patients date of birth
Medication
Dosage (mg)
# amount
Sig how to take
PO
BID
qhs
Prescription
E-prescribing
Sends the Rx
electronically to a
pharmacy
Can renew
electronically
Government set up
incentive payments
and penalties if not
10% of prescriptions
were not electronic in
2013 and 2014
Pharmaceuticals
Pharmaceuticals
One of the most expensive marketing campaigns in the
history of the drug industry was the nearly $500 million
spent by AstraZeneca to switch people from its
profitable drug Prilosec to the "new purple pill" Nexium.
In 2000, Prilosec was the world's largest-selling
prescription drug, with annual sales of more than $6
billion, and it accounted for 39 percent of AstraZeneca's
income. The problem for AstraZeneca was that the
patent protection for Prilosec was due to expire in 2001.
The loss of patent protection would mean the
introduction of generic versions that would be priced
significantly lower.
Pharmaceuticals
Astra-Zeneca, just before the patent was about
to expire, received FDA approval for Nexium. To
protect its profits, AstraZeneca began the $500
million campaign with ads appearing
everywhere proclaiming, "Today's purple pill is
Nexium, from the makers of Prilosec." The
company also added 1,300 sales reps to promote
the product directly to physicians. As a result,
the introduction and promotion of Nexium
allowed AstraZeneca to prevent the revenue loss
it would have experienced with competition
from generics.
Pharmaceuticals
In 2003, although revenues from Prilosec
slid to under $1 billion as many patients
and doctors switched to less expensive
generic alternatives, sales of Nexium were
$3.9 billion. Even when Prilosec did go
OTC in 2004, AstraZeneca managed, by
"accidental" shortages of the identical
OTC version, to keep up sales of the
prescription version, which costs six times
as much.
Pharmaceuticals
In clinical trials the only difference between Nexium and its off-
patent parent drug are modest improvements in some symptoms at
distant time points; however, it is standard in these trials to
compare 20mg of Nexium to 20mg of Omeprazole. In other words,
the trials that have justified the use of this drug compared to the
generic only show that when two times the amount of the active
compound is used (1 nexium = 2 omeprazole), a slight improvement
in some symptoms (87% vs. 90% for cure of gastroesophageal reflux
disease at 8 weeks) is achieved.[1-2] This is a result that is certainly
not worth 4-8 times the cost.

1. Lind et al., Esomeprazole provides improved acid control vs. omeprazole in

patients
with symptoms of gastro-oesophageal reflux disease. Alimentary Pharmacology and
Therapeutics 14.7: 861-67, 2000.
2. Kahrilas, P. J. et al., Esomeprazole improves healing and symptom resolution as
compared with omeprazole in reflux oesophagitis patients: a randomized controlled
trial.
Alimentary Pharmacology and Therapeutics 14.10: 1249-58, 2000.
Pharmaceuticals
Industry
Produces medications that help alleviate
suffering and cure certain diseases
Pharmaceuticals
Industry
Influence
Power
Money
Consumers
Understanding of advertisements
Influence your physician into a
medication choice
Newer is not always better
Opportunity
Greetings General Health and Activity Class Student:

We are conducting a survey to understand your health and thoughts about health while you are taking
a general health and activity (GHA) class. We would like to use this information in the future to
develop programs for promoting health in communities. The purpose of this study is research. This
research study is not a part of any course credit.

Below you will find a link to an online survey. The survey takes 10-15 minutes to complete and asks
about your current physical activity participation and some things that are related to physical activity.
We will invite you to participate in a similar but shorter survey at the end of the semester and every
six months for 36 months. To be eligible for the survey you must be 18 years of age or older and
enrolled in a GHA class at Penn State University Park.
Participants are eligible to enter a weekly drawing to win a $50 gift card.

We appreciate your time and welcome your questions. If you would like additional information about
this survey or project, please feel free to let us know.

Kind regards,
Zack Papalia, Melissa Bopp and the Physical Activity and Public Health Lab Research Team

https://pennstate.qualtrics.com/SE/?SID=SV_3ypsXJlw36RbbCd
Questions