November 21, 2014
Generic Drug Prices and Clinical Trials Come Under Scrutiny
by Robert Kropp
A number of recent new reports call into question some commitments to corporate social
responsibility by companies in the pharmaceutical industry. Second of a two-part series.
Addressing the response of the pharmaceutical industry to the AIDS crisis, the comedian Chris Rock
observed in 1999, “They
ain't curing AIDS because there's no money in the cure. The money’s in the medicine. That’s how you
get paid. On the comeback.”
As cynical as Rock's observation may have been, that it
struck a chord with so many suggests that at the very least the pharmaceutical industry has a
reputational problem that, in their engagement with companies, sustainable investors seek to
address. An important benchmark for assessing the performance of the industry's major players is
the Access to Medicine Index, the 2014 version of which was recently published.
while the Index does note “efforts to improve access to medicine in developing countries” on the
part of the industry, one finding accentuates the reputational risks that the major companies at
least still face: while all 20 firms included in the Index have code of conduct policies in place,
“18 were the subject of settlements or fines for corrupt behavior, unethical marketing or breaches
of competition law.”
“We clearly need to see greater advances in the institution of, and
compliance with, codes of conduct that will guard against incidents of bribery, corruption, and
unethical marketing that have resulted in expensive settlements and fines for so many companies,”
Lauren Compere of the sustainable investment firm Boston Common Asset Management stated.
Several recent news reports indicate how far many pharmaceutical companies have to go to gain
improved trust from sustainable investors and, indeed, society at large which is the industry's
most significant stakeholder.
In India, the Initiative for Medicines, Access & Knowledge (I-MAK)
filed suit this week against the US pharmaceutical company Gilead—ranked fifth in this year's
Index—seeking to prevent the company from gaining a patent there for sofosbuvir, a drug for
“Gilead is expected to charge around $80,000 for one treatment course of
sofosbuvir in the US. Even if offered at a fraction of this price in developing countries, this
drug will be priced out of reach,” I-MAK stated. “This opposition was filed to ensure that
affordable generic versions of sofosbuvir can be produced to help the millions of people infected
with chronic hepatitis C in developing countries access the drug.”
The 2014 Access to
Medicine Index actually singles Gilead out for praise for developing the drug, stating, “The
company has issued licenses allowing distribution of generic versions of the drug in more than 91
developing countries.” The Index does go on to observe, however, that “Gilead can consider more
clearly how it targets the poor in its pricing strategies, as well as how to expand licensing
agreements to include a wider range of middle income countries.”
Domestically, the Associated Press reported this week that at least ten generic
drugs have increased in price by over 300% in recent months.
In response, the AP
reported, Vermont Senator Bernie Sanders “introduced a bill that would require generic drugmakers
to pay rebates to the federal Medicare and Medicaid programs when prices of their medications
outpace inflation. Those payments are already mandatory for branded drugs, but have never applied
“If generic drug prices continue to rise then we are going to have people
all over this country who are sick and need medicine and who simply will not be able to buy the
medicine they need," Sanders, who chairs the Senate Subcommittee on Primary Health and Aging, said.
And earlier this month, in an article entitled Big Pharma
Plays Hide-the-Ball With Data, Newsweek reported on the deaths of at least 70 people, many by
suicide, who had taken an anti-influenza drug called Tamiflu, which is manufactured by the
pharmaceutical companies Roche (ranked 12th in the 2014 Index) and GlaxoSmithKline (ranked first).
According to the Newsweek article, research by the UK-based Cochrane Collaboration found “that a significant amount of
negative data from the drug’s clinical trials were hidden from the public.”
In a 2013
study, PLOS Medicine
concluded that “about half of the trials with results posted at ClinicalTrials.gov did not have
published results.” The study also found that adverse events were reported much less in the journal
publications relied upon by most medical professionals.