HEALTH CARE/Joan Retsinas

Outsource! Outsource! The Pharmaceutical Mantra!

The pharmaceutical magnates (aka Big Pharma) have distilled the wisdom of capitalism into one word: outsource.

The key to profits, outlined in Das Kapital as well as in MBA courses, is to grow revenue, while shrinking costs. On the revenue side, Big Pharma has excelled. Most Americans regularly swallow, inhale, or inject something legally prescribed. One estimate holds that we spend $1,000 per capita on drugs – a figure that has crept up. Part of the surge reflects the success of modern medicine: we treat conditions that we never treated before, with better results. From cystic fibrosis to asthma to leukemia, today’s patients fare better than their counterparts a generation ago. (To anti-vaccination parents out there, we do not have a cure for measles, only a vaccine).

Yet we also treat a hodgepodge of “lifestyle” ailments. Thanks to Big Pharma, we Americans need never grow bald, impotent, fat, or sad. As for non-pharmaceutical ways to bolster well-being, like exercise, diet, and sociability, physicians don’t prescribe them as readily as they prescribe the quicker remedies.

The marketing has been two-pronged. Those ubiquitous media ads promise patients nirvana, admittedly with sotto voce fine-print warnings. And the marketing to physicians has been subtle yet effective, from drug-sponsored “lectures” to information on off-label benefits. Give Big Pharma a solid MBA “A” for bolstering revenue.

On the cost side, Big Pharma has been equally diligent. They have lobbied to tamp down Food and Drug Administration surveillance. They have funded the campaigns of Republicans keen on cutting FDA budgets. But there is only so much Big Pharm can do within the USA. After all, we have those pesky wage rules, safety rules, environmental rules. Regulations upon regulations, as conservative politicians lament.

The solution? Astoundingly easy. Go overseas. Find places without those pesky regulations. Take a page from other behemoths, the ones that make sneakers and computers and furniture. Drugs are not so different, just another commodity. So make them overseas. You will produce more drugs, to satisfy a growing market, at lower costs.

As for FDA oversight, the industry can rest assured that a poorly funded FDA will not be able to oversee much. Look at its track record. Domestically, the FDA is supposed to inspect United States plants every 2 years; overseas, a plant can go as long as 13 years without seeing an inspector. And the FDA does not employ its own translators, but relies on the plant’s personnel. To add to the regulatory wasteland, the FDA doesn’t have an accurate count of plants that export drugs: the Government Accounting Office pegs the range from 3,000 to 6,000+.

Admittedly, in the last few years, the FDA has ramped up its overseas surveillance. India, for instance, supplies 40% of our over-the-counter and generic drugs. In 2013 the FDA inspected 160 plants in India, three times the number in 2009. (That ramped-up inspection has plummeted the revenue of Indian drug-makers.)

Not surprisingly, with all these drugs pouring into the marketplace, some patients will suffer “adverse events,” which can range from itchiness to death. The causes vary; e.g., contaminated medication, an unpredicted reaction, an off-label use for an inappropriate patient, improper use. Or the “adverse event” may have nothing to do with the drug. Inspectors must be medical detectives. The FDA wants “somebody” to monitor these drugs, amass data, analyze results.

Big Pharma doesn’t disagree. They couldn’t. (Their executives and shareholders are also their customers). But corporate honchos see a trifecta of increases: costs, regulations, administrative angst. You can imagine the corporate boardroom discussions.

The solution is, again, easy: Outsource. The word-du-jour is pharmacovigilance. You can hire companies overseas to do this – at a lower cost than if you stayed in the USA. The Wall Street Journal promises: “New Outsourcing Frontier in India: Monitoring Drug Safety Business Is Booming as Regulators Require Closer Tracking of Side Effects” (Feb. 1).

Of course, to do pharmacovigilance well, whether outsourced or not, we will need to increase the requirements for compliance, insure regular monitoring, institute meaningful sanctions – in short, we will need more regulations, more money for the FDA. Since corporate wizards outsource to keep costs low, those wizards face a challenge that may outstrip MBA ingenuity.

Joan Retsinas is a sociologist who writes about health care in Providence, R.I. Email

From The Progressive Populist, March 15, 2015

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