My Weblog: kutahya web tasarim umraniye elektrikci uskudar elektrikci umraniye elektrikci istanbul elektrikci satis egitimi cekmekoy elektrikci uskudar kornis montaj umraniye kornis montaj atasehir elektrikci beykoz elektrikci
According to Forbes magazine, in 1985 there was nearly universal agreement that people should be invest heavily in pharmaceuticals. Companies like Merck, Eli Lilly, Pfizer, Sanofi, Roche, Glaxo and Abbott were touted as the surest route to high portfolio returns. Today, they are not so much.
According to Forbes, Merck, once a leader in antibiotics, is laying off 20% of its staff, half of them in its research and development (R&D); the lifeblood of future products and profits. Lilly is undertaking another round of 2013 cost cuts. Over the last year, about 100,000 jobs have been eliminated in big pharma companies, which have implemented spin-outs and split-ups.
What happened? In the old days pharma companies had to demonstrate their drug worked; called product efficacy. It did not have to be better than existing drugs. If the drug worked, without big safety issues, the company could launch it. Then the business folks took over with ads, distribution, salespeople and convention booths, convincing doctors to prescribe and us to buy. Big pharma companies grew into large, masterful consumer product companies. Leadership’s view of the market changed, as it was perceived safer to invest in Pepsi vs. Coke marketing tactics and sales warfare to dominate a blockbuster category than product development.
Currently, the drug industry is faced with two big challenges. First, declining prescription drug sales, especially in the United States, and second, losing patent protection for many profitable drugs. To make up for these down drifts, the industry is relying increasingly on new markets such as China and Africa. That expansion, however, is tainted by unsavory commercial practices.
The Economist Intelligence Unit projects USD 166 billion in drug sales in China by 2017, making it a natural market for companies looking for further growth. In Africa, the size of the market is still small. However, the rapid growth of many big cities offers interesting opportunities for development. Pharmaceutical spending in Africa may reach USD30 billion by 2016, from approximately USD18 billion now. According to the World Health Organization (WHO), Africa has 11% of the world’s population, yet it accounts for 24% of the global disease burden.
The rebound of the economies in several Latin American countries has made the region an attractive market as well for the drug companies. The Latin American market is estimated at USD70 billion in sales. Brazil, which is the largest market in the region, grew by 10% in 2010 and now generates sales of USD26 billion, according to IMS Health, a company that provides information services and technology to the drug industry.
In China, relationships between doctors and patients are under stress. One reason is the unethical relationship between many doctors and several drug companies. Although the practice of bribing doctors is not new in China, recent demands for new and more effective measures against this practice have surfaced against some well-known drug companies. According to The Economist Intelligence Unit estimates, up to 30% of the cost of drugs are kicked back to doctors to increase sales.
There are several ways in which drug companies bribe doctors. They range from making cash payments and all-expense-paid trips to presents for their families and even “sexual favors.” Drug companies also bribe hospitals to stock their drugs so that doctors can prescribe them. Among the latest allegations is GlaxoSmithKline (GSK) staff improperly used cash and other incentives to boost the prescription of Botox in China. The British firm sells this substance under agreement with the patent-holder Allergan. Although China now accounts for only a portion of the company’s total earnings which is about USD1.2 billion in 2012, compared to USD40 billion in worldwide sales, the country is one of the company’s fastest growing markets.
Allegations against GSK are not limited to China. In the summer of 2012, the company agreed to pay a USD3 billion fine to settle criminal and civil charges with U.S. federal and state governments resulting from illegal activities carried out over 10 years. The British pharmaceutical group was accused of selling antidepressant medications in the United States for unapproved uses on children, concealing critical evidence from the U.S. Food and Drug Administration.
In addition to GSK, several other companies have been accused of rampant bribery, among them Eli Lilly, Pfizer, AstraZeneca, Sanofi, Novartis, Novo Nordisk and UCB. A former employee of Eli Lilly has accused the company of spending more than USD490,000 to bribe doctors in China. Over the last year, both Eli Lilly and Pfizer have been accused of making illegal payments in China. The Swiss drug maker Novartis was also accused of bribing doctors to prescribe its anticancer drug Sandostatin LAR.
In Africa, drug companies have been accused of testing dangerous drugs in children or conducting drug tests without obtaining informed consent. In Nigeria, a panel of medical experts accused Pfizer, Inc. of having violated international law during a 1996 meningitis epidemic by testing an unapproved drug for use in children. According to Nigerian officials, Pfizer’s illegal actions killed 11 children and left dozens disabled. Pfizer never obtained authorization from the Nigerian government to give the untested drug to nearly 100 children and infants. Nigerian medical experts stated that an oral form of Trovan, the drug used in the test, had apparently never been given to children with meningitis. On July 30, 2010, Pfizer agreed to pay USD75 million in a settlement to have the charges dropped.
According to WikiLeaks, however, Pfizer allegedly conspired to have Nigeria’s attorney general drop the charges instead of having to pay up. According to a report by Public Citizen’s Health Research Group in Washington, D.C., GlaxoSmithKline, Pfizer, Eli Lilly and Schering-Plough accounted for more than half of all financial penalties imposed on drug companies in the last two decades. In Latin America, drug companies have pursued an aggressive policy in the market. This policy has been harshly criticized because it translates into increasing prescription drug prices for consumers.
Given all these alluring business opportunities for profit-strapped pharma firms, it is important to recall a crucial bit of history. It goes to show that those politicians in developing countries who have the courage and sense of civic responsibility to oppose these policies are bound to pay a high political price for it. Consider the case of Argentina. In 1966, Dr. Arturo Umberto Illía, who had been elected President of Argentina in 1963, was overthrown. Among the reasons were the limits he tried to put on the drug companies in Argentina. In 1964, the “Medicine Law” was passed, tightening regulations on the pharmaceutical industry. That law also granted the Ministry of Health the authority to control prices of basic medicines.
This law had also forced pharmaceutical companies to present to a judge an analysis of the costs of their drugs and to formalize all existing contracts. Impartial observers and people along the political spectrum believe that these restrictions alienated business interests and were decisive in Dr. Illía’s overthrow by a military coup. Emerging markets offer exceptional opportunities for prescription drug companies’ development. That development, however, should happen in accordance with international norms and practices and not only with the companies’ profit in mind.