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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.

Yet, 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 hepatitis C.

“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 to generics.”

“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 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.


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