Seat at the table, hand on the pen
Oligopolies are most effective when they not only sit at the table, but when they help legislators in the hard task of writing guidelines and regulations. That's well illustrated in a New York Times article called "Making Drugs, Shaping the Rules" by Melody Peterson (2/1/2004).
Peterson shows that merely marketing drugs is not enough; better yet to "persuade" state health boards to mandate them for patients, making it hard for doctors to prescribe an alternative, even when the alternative is cheaper and equally, or more, effective.
Ten major drug companies, for example, used such tactics to make sure that state mental hospitals and Medicaid adopted their drugs in preference to others, Notable among these were new antipsychotic drugs made by Johnson & Johnson in preference to generic drugs whose patents have run out. These tactics were recently brought to light by a Pennsylvania lawsuit.
Ten drug companies chipped in to underwrite the initial effort by Texas officials to develop the guidelines. Then, to spread the word, Johnson & Johnson, Pfizer and possibly other companies paid for meetings around the country at which officials from various states were urged to follow the example of Texas.
The companies apparently flew various state commissioners to New Orleans, wined and dined them, and paid others generous fees for speaking at company-sponsored seminars. It's still controversial, according to the article, whether the new drugs are that much better than the older, cheaper ones. But one thing is certain: there's a large amount of money in the market for antipsychotic drugs, around $6.5 billion last year.
The Texas guidelines set out the acceptable pharmacology not only for psychosis, but also for schizophrenia, depression, attention deficit disorder, and bipolar disorder. The drug companies involved reply that they are only trying to improve treatments based on the extensive research they have done. They see their task as educational only. But there's a pretty thin line here between education and salesmanship, especially when state and federal governments can't do the extensive testing required, and when the drug companies commission their own tests for efficacy. And there's really no counter-weight, either from neutral researchers or less-wealthy generic competitors.
Influencing government decisions in any health field is becoming more and more critical for drug companies' financial health. As more and more, doctors and hospitals are placed in the position of simply diagnosing a disease and prescribing an "acceptable" drug, the more drug companies will use their money and influence to make sure they are one of the acceptable drugs. The "persuadability" of underfunded state health commissions makes them easy prey for the drug companies, and when they act in concert, as they did in Texas, they can safely divvy up the pie and jointly unseat generic drugs.
