Rising healthcare costs have been an ongoing challenge in the United States. Year after year, Americans continue to pay outrageous prices to cover healthcare costs, and a significant amount of these costs is due to the high cost of prescription drugs.
A 2021 report by RAND Corporation found that prescription drug prices in the US were significantly higher than in other nations, with prices averaging 2.56 times those seen in 32 other countries. Consequently, consumers in the United States pay much more for prescription drugs than most other countries in the Organization for Economic Co-operation and Development (OECD). However, they pay much less for generic drugs, which represent 84 percent of drugs sold in the US.
Behind this price disparity and the inexplicably huge costs of prescription drugs are a world of secrets and covert activities controlled by key stakeholders in the healthcare business. The Edeleheit Experience podcast recently hosted Dr. John Abramson as a guest, a clinical faculty member at Harvard Medical School, to uncover the truth. He describes the dark side of the American pharmaceutical system and how it has influenced the rising cost of prescription drugs for years.
Dr. Abramson's areas of expertise include public health policy, and he has a special interest in the pharmaceutical industry in America. He has authored two books on this subject, with his most recent title, 'Sickening: How Big Pharma Broke American Health Care and How We Can Repair It,' published in 2022. He is also an expert in national litigation with respect to the drug industry.
You can listen to Dr. Abramson share his expertise for free by registering for the Healthcare Revolution, taking place on April 26-27, 2022. Healthcare Revolution is the nation's leading conference for self-funded employer healthcare, benefits, and well-being with a strong focus on innovation. The conference is centered on helping self-funded employers achieve 3 moonshots:
1) Reduce employer healthcare and benefits costs by 25% by 2025.
2) Reimagine engagement and well-being.
3) Provide 40% of healthcare services virtually and through technology by 2025.
The Edelheit Experience podcast is hosted by the Chairman and Co-founder of Global Healthcare Resources, Jonathan Edelheit.
Jonathan Edelheit: To begin with, you wrote about the rising healthcare costs in the US in your book 'Sickening: How Big Pharma Broke American Health Care and How We Can Repair It,' could you tell us why you wrote the book?
Dr. Abramson: I wrote it because the story is not getting out about how much American healthcare costs have risen and how the health of Americans has been plummeting over the last 20 years. And the underlying problem is that doctors are getting knowledge produced by and for commercial interests.
If doctors and the public understood what really goes into making us healthy, then we would see the extent to which our efforts to achieve health, and the money we spend on trying to achieve health, are being misdirected and misused. The primary job of the pharmaceutical industry, regardless of what they try to tell us, is to maximize its revenues and return those revenues to its shareholders. It's not to make us healthier. They spend a lot of money trying to convince us that it's to make us healthier, but it's not their primary job.
So as we discuss further, you'll realize that almost all of the information about pharmaceuticals comes from the drug industry itself. And in terms of the universe of knowledge that doctors receive from new research, 96 percent of that knowledge is about drugs and devices. It's not about how to make Americans healthier; less than four percent of the money we spend on research is about how to make Americans healthier.
Jonathan Edelheit: Share with us your background and experience with pharmaceutical companies, and in trying to repair the damage they have caused to healthcare in America.
Dr. Abramson: I was a family doctor, and I went into private practice in 1982 after having been in the public health service and having done a Robert Wood Johnson fellowship, learning about statistics, epidemiology, and research design. I trained as an academic physician but decided that my real calling was to go and practice in a small making house calls and taking care of people who are dying and doing all the things that a family doctor does or used to do anyway. I enjoyed that, and I thought I would never leave family medicine. From 1982 through until the mid-90s, things were going pretty well. But around the mid-nineties, it started to become clear that the drug industry largely colored the information that I was getting as a disciplined doctor.
What changed my life was reading an article about Vioxx, the anti-inflammatory drug withdrawn in 2004 from the market in the biggest drug withdrawal ever. And this article in the New England Journal was basically minimizing the cardiovascular risk associated with this drug, Vioxx, which provided no better pain relief than over-the-counter anti-inflammatories and was supposed to have the advantage of being safer on the stomach. It turned out that Vioxx was a significantly more dangerous drug. It more than doubled the risk of heart attacks and strokes. When I saw that data on the FDA website, I realized that my patients were coming to ask me for Vioxx because it was being advertised so much. The data from the New England Journal wasn't getting telling the full story, and I decided to leave my practice and write a book that came out in 2004 called 'Overdosed America.' A week after that book came out, Vioxx was pulled from the market.
It wasn't my doing; it certainly wasn't my doing directly, as another study had come out that showed that Vioxx was dangerous and more than doubled the risk of heart attacks and strokes. It seemed obvious to Merck that they couldn't get away with hiding a second study that showed that Vioxx was dangerous, so Vioxx was pulled. I was the last guy who wrote the book about this issue, and I was all over the TV, on the Today show and many other national television shows. Lawyers saw me on TV explaining the situation with Vioxx in a way that had scientific integrity and was comprehensible to ordinary Americans. They started to ask me to be an expert in national litigation about what the drug industry was doing. I did that for about ten years inside corporate computers, literally as an expert in litigation, where I had to sign a confidentiality agreement, which means that what I see must stay secret – and I honored those agreements. But I would get to see the corporate hard drives from the executives, scientists, and marketers. I could put together how the drug companies were creating data and manipulating that data to serve the marketing goals of the drug companies and communicating that data to doctors in a way that served their sales goals while ignoring the health consequences of what they were doing.
The context of evidence-based medicine changed so radically in the 1990s. In 1991, 80 percent of clinical trials were done by academic medical centers, but by the early 2000s, this number dropped to 26 percent, which means that 74 percent were done almost entirely by drug companies. So drug companies now pay contract research organizations to carry out their studies that favor results supporting their drug marketing.
In 2009, I served as a consultant to the Department of Justice and the FBI in a case involving Pfizer for a drug used for treating arthritis, like Vioxx, called Bextra. I testified in front of the FBI and the Department of Justice. Six months later, I saw a press release from the Department of Justice, and they had issued the largest fine for any matter ever in US history against Pfizer. Then in 2010, I testified in Federal District Court in a case in which Kaiser Health Systems sued Pfizer for fraudulently marketing its drug, Neurontin, for off-label use and misrepresenting the results of the studies, and the jury in that Federal District Court found Pfizer guilty not just of fraud, but of racketeering violations. This was the first case in the United States where a drug company had been found guilty of racketeering. There's a lot of my testimony to the jury explaining to ordinary people the scientific fraud that had been perpetrated on doctors that convinced them to prescribe Neurontin for the off-label use of painful neuropathy. It hadn't been approved by the FDA. Its own consultants had said the drug was not effective, yet Pfizer went on and continued to market that.
As I mentioned earlier, 26 percent of clinical trials were done by academic medical centers by 2004, and the academic medical centers had to yield a lot of ground to the pharmaceutical industry to maintain that 26 percent. So I studied the contracts signed between academic medical centers and commercial entities, hiring them to do research. More than 80 percent of the academic medical centers that are conducting commercially sponsored research give away their rights to the data and let the drug company own the data, and 50 percent say that the sponsor will write up the results for publication. The sponsor will write up the results for publication, and the investigators may review the manuscript and suggest revisions. What this says in plain English is that 50 percent of these contracts say that the sponsor can ghostwrite the article without the authors. And the only rights the authors have are to suggest revisions, but they can't insist on revisions.
Even peer reviewers who you'd think will straighten out the facts and correct the misrepresented data do not get to see the data. The data are not submitted to the peer reviewers or the medical journal editors, nor are they submitted to the experts who write the clinical trials that set the standards for practicing doctors. This is the real situation, and this shows the extent to which the information that doctors rely on and the experts who write clinical guidelines rely on are unvetted and unverified - and the doctors the purchasers don't know it.
This is the heart of the problem, even though drugs only constitute 17 percent of total medical expenses in the United States. We've got a tail wags dog situation because the information generated by the drug companies, who pay for about 86 percent of clinical trials, is used as marketing material. So when purchasers, healthcare purchasers, and especially non-healthcare-related businesses are buying healthcare for their employees, they're buying healthcare directed by the commercially influenced knowledge that physicians receive.
Additionally, unlike other wealthy countries, the US does not have a formal health technology assessment of new drugs. The UK is a perfect example of a country that has a method of health technology assessment. In the UK, an independent organization assesses the clinical value and the economic value of new drugs to make recommendations on which drugs should be covered and what the pricing should be. And so doctors can go to that source and find out the best treatment for their patients. But in the United States, we have a commercially controlled system without independent oversight, and the doctors have been trained to practice evidence-based medicine that relies on commercially-touted information.
Jonathan Edelheit: Could you share some of the other therapeutics that were pushed as that primary drug when they're less effective, and how this affects us in our everyday lives?
Dr. Abramson: I'm going to talk about two drugs: Humira and Insulin. First, let's talk about Humira, which has been the bestselling drug in the United States for many years. It is now approved for nine indications, the most common of which is rheumatoid arthritis. This is from the FDA-approved label for Humira. Now, a little bit of background on labels. The drug companies own the labels. The FDA has to agree to the label based on their analysis of the science. But the drug company owns the label, so any hint that the label is somehow biased against the drug company is not valid. And that's just a background.
If you check through the FDA-approved labels for Humira, you will find that it says Humira is the first-line drug for rheumatoid arthritis, and it can either be used alone or in combination with methotrexate, one of the disease-modifying anti-rheumatic drugs. So let's compare Humira, which costs about $72,000 a year, to methotrexate, which costs about $480 a year. That's a big difference; somewhere around 200 times. So using the indices ACR 20, ACR 50, and ACR 70, which are the American College of Rheumatology criteria for 20 percent improvement, 50 percent improvement, and 70 percent improvement, respectively, we will also find big differences in the effectiveness of both drugs. One of the studies comparing both drugs found that for ACR 20, we see that after one year, methotrexate has nine percent more improvement than Humira does. And after two years, methotrexate has seven percent more improvement than Humira does. And if we go to ACR 50, which is a more general criterion of success, we see that after a year, methotrexate is five percent better than Humira. And after two years, it's six percent better than Humira, and if we go to ACR 70, there's not that much difference. But many non-healthcare-inclined business owners, including the Pharmacy Benefits Managers (PBMs), do not know this. The PBM is probably getting very attractive rebates from AbbVie, which manufactures Humira, to promote or make Humira readily accessible to their employees. But I would want to have a program that at least suggests to doctors that there's no evidence of the superiority of methotrexate over Humira as single-drug therapy for rheumatoid arthritis. That's what the facts show. The problem is that that's not the community standard because AbbVie, the manufacturer of Humira, has spent more money advertising Humira to the public and marketing to doctors than any other drug for most of the last eight years or so. So if there was an attempt by a single business to minimize the use of Humira as the first drug for rheumatoid arthritis, there would be a perception that the drug that the employer was imposing inferior care on their employees.
It's a little bit more complicated story for insulin. We had animal insulin from 1923 through 1982. The insulin used came from animals and then bioengineering. In fact, insulin was the first bioengineered drug. So instead of using animal insulin, there was bioengineered insulin called recombinant human insulin. The molecules are exactly the same as human insulin, but the bioengineered form doesn't fold quite like the human insulin, so it's not 100 percent the same, but it's pretty close. When recombinant human insulin came out, it had the prima facia advantage of being pure and exactly human insulin instead of taking animal insulin. And it took over the market very rapidly with a cost of $500 a year. There was no evidence that it worked better, but it took over the market very rapidly because of the claims of innovation.
Then in 1996, the first of a newer generation of bioengineered insulin called insulin analogs came out. They rapidly took over the market, arguing that they could better reproduce the physiological response of insulin. But the insulin analogs were also never shown to be superior to recombinant human insulin and probably animal insulin, though the test was never done. So now we have a situation where about 90 percent of type two diabetics are being treated with insulin analogs for about $5,200 a year instead of recombinant human insulin for about $500 a year. But there's no evidence of superiority for patients with type-two diabetes. Yet doctors have been convinced because of articles in medical journals. The drug companies have hired PR firms to convince doctors that tighter control is advantageous for type two diabetics. Consequently, 90 percent of type two diabetics are being treated with insulin analogs, and in the United States, we're spending about $20 billion because of this.
The UK's National Institute of Clinical Excellence, which is their Health Technology Assessment Organization, says that there's not a demonstrable benefit to the expensive insulin for type two diabetics and that British doctors should start their type two diabetes patients who need insulin on recombinant human insulin, and if for any reason, there's an idiosyncratic need for the more expensive insulin you go up. But we don't do that in the United States, and our doctors don't have a standard go-to place that would inform them of that. And our business owners have not gotten together and demanded that such information be independently analyzed so that all businesses can operate on it so that they won't look like outliers trying to stint on their employees.
Jonathan: How do pharma companies manage even the slightest resistance from healthcare workers who might perceive that, for example, there might be a better, less expensive drug than Humira, which they should switch their patients to?
