Gilead's Greed that Kills - Jeffrey Sachs - July 27 2015

Gilead's Greed that Kills

 Jeffrey Sachs

 

July, 27, 2015.

Gilead Sciences is an American pharmaceutical company driven by unquenchable greed. The company is causing hundreds of thousands of Americans with Hepatitis C to suffer unnecessarily and many of them to die as the result of its monopolistic practices, while public health programs face bankruptcy. Gilead CEO John C. Martin took home a reported $19 million last year in compensation--the spoils of untrammeled greed.

Hepatitis C is a global public health crisis, called a "viral time bomb" by the World Health Organization. 150 million people or more worldwide are estimated to be living with the disease. Untreated Hepatitis C can progress to cirrhosis, liver failure, and liver cancer. Every year, at least 700,000 people die from these complications--although HCV can be easily cured with just 12 weeks of medicines being sold by Gilead.

Gilead insists it is saving lives. It claims that it is a hero of innovation, bringing new wonder drugs to the market to cure Hepatitis C, an often-lethal disease that infects almost three million Americans and perhaps 80 million or more people worldwide. The company certainly could be a hero, but is the opposite today. Gilead is the main obstacle between tens of millions of very sick individuals and the medicine that could end their suffering and save their lives.

Gilead owns the monopoly patents on two life-saving Hepatitis C drugs, Solvadi and Harvoni. Gilead did not discover or develop these drugs, except for a brief and modest role at the end of the drug-approval process. Gilead bought these drugs from their discoverers and developers in 2011, after a decade-long discovery and development process, and just before the FDA licensed the drugs in 2013. It bought them with the knowledge that it would use its greed and lobbying power to rip off the American people and deprive people around the world of the benefits of these wonder drugs.

Gilead's gambit worked like this. The US Government funded most of the basic research for Sofosbuvir, the scientific name of the drug that underpins Gilead's two brand name drugs. Yet despite Sofosbuvir being discovered, developed, and tested through phase 2 clinical trials mainly with US Government funds, the government-funded scientist and some early investors took the patent rights. Their private company, Pharmasett, had invested less than $200 million in R&D. In truth, the US Government should own most of the intellectual property on Sofosbuvir, but under U.S. law and practices it is private investors who reap the rewards and taxpayers who bear the burden and the consequences.

Gilead paid Pharmasett $11 billion because it knew very well that it was about to rip off the American people and quickly recoup this sum and much more. Gilead announced that it would use its newly acquired monopoly rights to charge a whopping $84,000 per treatment for Solvadi (and $96,000 for Harvoni, a slightly different formulation), even though the actual production costs are estimated to be somewhere around $68 - $136. Gilead's markup over costs may be close to 1,000-to-1, probably a world record.

How did Gilead choose the price? It chose it for one reason: because it could get away with it. Washington allows this kind of abuse to occur, indeed insists upon it. Medicare is obliged -- in one of the most absurd policies of our era -- to accept whatever price a pharmaceutical company asks for its patent-protected medicines! The result is a level of drug prices that bear no resemblance whatsoever to the costs of production (including the R&D), or to the socially optimal drug pricing that would enable sick people to be cured of their illness.

Gilead says that $84,000 approximates the current last-ditch alternative (a liver transplant) but this is a ridiculous comparison; the new drug indeed allows people to be cured at a very low cost, so there is no reason to hark back to an out-of-date, ineffective approach that is too expensive for the vast majority of people suffering from the disease. Indeed, the taxpayers pay twice: first to fund the innovation, and second to feed a monopoly. From the company's point of view, soaking the taxpayer is the strategy; curing people is a sideshow at best.

By setting an outrageous retail price, Gilead tapped into federal spending on drugs under Medicare and Medicaid, and billed the US and the states for around $6 billion last year, something like $4 billion paid by Medicare and $2 billion paid by Medicaid, according to recent estimates. The federal and state governments therefore probably paid for more than half of the $10 billion that Gilead collected in revenues in the first year of sales, basically enough to recoup the purchase price in less than two years.

Given the monopoly price, tens of thousands of Americans and millions of people around the world infected with Hepatitis C are being told by their doctors, their health insurers, or Medicaid, that they don't "yet" qualify for Sofosbuvir because they are not yet sick enough. Their livers are not yet scarred enough. They are not yet dead enough. They should come back when they are nearly dead, if it's not too late.

Sofosbuvir could reach tens of millions of people worldwide if the drug were available at its true production cost (inclusive of R&D). At $500 per treatment, or even $1,000, millions of people around the world would be able to access this cure. But today, only a tiny fraction do, those who are covered by Medicare, Medicaid, or private insurance to pay $84,000 or some other astronomical price set by Gilead, or a sliver of people abroad who are lucky recipients of some specialized access program. Outside of the US, countries and patients must jump through so many burning hoops that access is fatally compromised, and the human right to health is fundamentally violated.

The end result is a continuing epidemic of Hepatitis C at the very moment that the disease could actually be eliminated or at least close to it. The New York Times has recently reported a new mass outbreak among IV-drug users, who are not able to gain access to treatment. These people are being left to die.

America has handed life and death decisions to corporate greed. Gilead is indeed the death panel that we were once warned about. Yet the Gilead death panel rations a life-saving cure not because it is too expensive to provide, but because it serves the interest of a patent-protected corporate monopoly. It is time for the US citizens to demand the intellectual property rights that US Government-backed science should give them; and for the Government to use rational price-setting to tame untrammeled corporate greed and the monopoly power created by a highly inefficient and unfair patent system.

 

Non-communicable disease: will we rise to the global challenge?



Published in Australian Medicine 6 July 2015 http://bit.ly/1J1Gma6

Taking stock of progress in public health

Published in Australian Medicine 27 June 2015 http://bit.ly/1FltyZY

The Future of MJA

The MJA has served for 100 years as the major means of formal communication between the Australian Medical Association and its membership. It has done this by reporting research and providing guidance that is grounded in science for clinical practice and the formation of health policy. This was enunciated as its purpose and this is what it has done.

In line with its original purpose, the current editorial team, endorsed in this action by the AMPCo board, have begun to revise and reformat the MJA in the light of informed comment from its Editorial Advisory Committee and a formal inquiry into readers opinions and attitudes, likes and dislikes, conducted in 2014. A project planning process has been established and six teams have been formed to explore, discuss and decide on revised format, document processing, etc.

Because the MJA was fractured and traumatised by the events surrounding the dismissal of the previous editor in chief, I have invested energy in seeking to restore respect and good humour among the group. This has taken me 18 months. I have deliberated brought all members of the editorial team into the review project in part to use their considerable intelligence, qualification, dedication and experience, and in part as an expression of my desire to rebuild a team. There is no distinction made in this process among staff: ideas and critique is judged on its value, not who produced it. For example, many staff members contributed to the new cover design, the format of the revised table of contents and the decision and detail about moving research papers from print onto online save for a one-page summary for each paper. In other words, the production and editorial staff have worked in an interdependent mode in pursuit of optimal revision. 

This may seem odd, but there is nothing inconsistent here with the way that I have worked in previous settings as a cursory glance at my academic or business CVs would show. I favour using all talent available to me and I dislike distinctions and layering within the workplace, especially when working in relatively small teams - which the MJA team is.

If we are to preserve the MJA as a journal responsive both to the expectations of the AMA, to the Australian medical research community and health policy makers it will be important to maintain our capacity to change and to move relatively quickly. In the 18 months that I have worked with the MJA I have seen how much effort is required to maintain an active communication network with readers, authors, reviewers and policy makers. To produce a journal that responds in a timely and reflective approach - to the G20 and climate change and the Martin Place siege to name two - to current events requires coordination and integration of editorial and production actions at a high level.

I do not believe that it is easy to separate the medical judgement, editorial processes and production of an association-based journal for the reasons just given. The Canadian, American and British Medical Associations believe similarly and have retained integrated in-house editorial and production functions. So has the Massachusetts Medical Society that produces the New England Journal of Medicine.

Journals that have outsourced their production are very different in style to Association- Based journals. Specialty journals tend to have small voluntary editorial teams. They manage largely research-related content that is easily reviewed and then sent for publication. Many are now wholly on line and meet the comparatively narrow needs of specialties, not general medical audiences. It is easy to see how common templates can be constructed to serve the needs of many of these journals because they are variations on a theme. Those served in this way by Elsevier report high levels of satisfaction, as does the editorial staff at the Lancet, a prestigious journal by any reckoning essentially owned by Elsevier.

The Lancet, unlike the MJA, is a premier research journal but with excellent entrepreneurial flare and public profile as well. It is unique. The resources it commands, both financial and intellectual, enable it to achieve excellence. I gather that Elsevier, as one might expect, participate in the selection of the editor-in-chief, and the symbiosis between Elsevier and the Lancet is generally strong and mutually beneficial. It is possible that if the production of the MJA were outsourced to Elsevier a similar relationship could develop with time.

In brief, prominent international medical association journals that serve the needs of the entire medical profession and not specialties, that provide informed commentary and critique as well as research, are produced in an integrated way in-house. The advantages of interaction of the production team with the editorial side of the team, as we have seen in our redesign process, are substantial.

Now, my comments about the cost of outsourcing the MJA. The dismissal of the production team, most of whom hold university degrees and many of whom have years of experience (a few have been with the MJA for 20 years), would be a big wrench. The transaction costs of moving to a new and unfamiliar production team, located off site and often overseas, would be substantial. It is good to hears said that Scholar 1, our document management system would be able to 'shake hands' with the Elsevier system - an image of US and Russian Soyuz spacecraft docking in orbit comes to mind) but my belief is that it would be a managerial nightmare. Maybe I'm wrong.

As part of the economy of scale that underpins the Elsevier bid, it is likely that the format of the MJA would change to fit the templates that Elsevier applies to its other journals. Whether readers would appreciate a move toward such uniformity I do not know. Many may not care or notice, but some might and wonder whether 'their' journal had been sold off to an international agency as yet another manifestation of economic fundamentalism. These are not idle thoughts: professional associations such as the AMA (and to my certain knowledge the RACP) face major challenges in retaining the loyalty and interest of the foot-soldiers at the same time as moving more in the direction of corporatisation. What do AMA members think about outsourcing? It would be wise (for the sake of the AMA as well as the MJA) to find out.

If the production of the MJA were outsourced, then there would be no point, and no capacity, in pursuing the program of reform that we are half way through. The distraction of negotiating redundancies and the massive amount of transactional activity required to switch systems would soak up everyone's time and energy. I don't want anyone telling me that I don't know this: having overseen the transition from one medical curriculum to another when dean at the University of Sydney I have serious relevant experience.

I fully understand the desire of the AMPCo board to save money, especially with declining revenue from advertising and data bases that have degraded and need urgent repair. The enthusiasm for DoctorPortal will require resources. I am aware that the operation of the MJA is not optimally efficient. I can see ways in which we can effect savings. Once the review process is complete I have in mind to work with the whole team to determine where we can make savings and then, over the next two years, make them. This will be done firmly, humanely and visibly.

The responsiveness of the MJA to member needs could be improved by better communication with the AMA. This needs rehabilitation: we need to get into discussion with the AMA State Branches as well as Federal AMA.

In summary, I freely accept that the board has a choice to make. If the journal production is outsourced then much of its distinctive flavour may suffer and there will be a complex and expensive period of transition. Savings may accrue in two or three years. If the decision is taken to retain production in-house then we will pursue our program of reform and then go in search of efficiency savings. This is NOT unfamiliar territory to me - I have managed effective budgetary savings in several other organisations in which I have worked while being true to humane values and honouring the purpose of the entity.

 

A nail in the heart of the MJA

Efforts to cut the cost of producing the Medical Journal of Australia have driven a nail into its heart.  

An obsession with the bottom line, a failure to understand how the journal is produced, a failure to comprehend its content, nature and purpose, an ignorance of the immense social network of people of goodwill who have supported the Journal by providing articles and reviews over its 101 years, a predominant financially-dominated management approach, an absence of clarity regarding future managerial (as opposed to editorial) direction, have caused this calamity.  

I have received hundreds of emails, text messages and phone calls from doctors, research workers, managers and readers of every stripe, aghast at what is happening with the Journal. 

As the old adage goes, if all you have is a hammer, everything looks like a nail.  Financial challenge for every newspaper, magazine and journal is not in dispute.  Economies are needed.  But these must be carefully tailored to publication in question, not bought off the shelf.

Here is an analogy for what has happened at the MJA. 
Suppose a health service board took the view that the cardiac surgery unit was costing too much and, without telling the surgeon, asked for bids from cheaper, external providers of dubious repute and questionable practices to provide the by-pass pump service.  This false economy would catastrophically mistake the nature of the integrated surgical team.  Quality would be threatened. A Mid Staffordshire Hospital-style catastrophe, http://qualitysafety.bmj.com/content/23/9/706.extract. where the board did not regard clinicians as colleagues, never ventured into the wards and had no idea of what was going on, would be in the making.

Take an economic fundamentalist approach if you wish, and say that voluntarism is out of date, but the MJA has always run and depended on a community – yes, a community – of scholars.  

More than 900 research workers, scientists, clinicians and other scholars provide peer assessment of research papers,  write critical reviews, editorials, perspectives, eulogies, letters (and even the occasional poem) at no charge.  

The unpaid Editorial Advisory Committee helps guide decisions about the form, content and style of the Journal. They do so because of their love of Medicine, the value they attach to collegiality, the value they attach to science, to evidence, to education and to understanding in research, clinical practice, public health and health policy, the pleasure they get from communication, the rewards that come from seeing their ideas, critically refined by review, appear in print.  

You will never understand how the MJA or any other respected scientific journal works by staring at its bottom line, however long you look.

Now acknowledging the true nature of the MJA community affects how you view its economy.  The view that I have provided does not prevent careful quest for efficiency and indeed encourages the search for new outlets and revenue lines.

It encourages the exploration of new media and new communication platforms, and it does not entrench antiquated, paper-based production.  

It takes account of the editorial team in its entirety – the medical editors, the associate editors, the members of the production team – and does not categorise them as those who do the thinking and the others who just ‘move words around on the page’ as the AMA president put it recently, ‘and make the Journal look pretty’. 

What I call the MJA community can be the dynamo for genuine innovation and reform that has a better chance of sustainability than simply outsourcing part of the operation – the equivalent to the pump team – to an outside agency, especially one that causes academics, librarians, students and research managers to express horror at the prospect, based on their experience.

Professor Leeder is former editor of the MJA and emeritus professor at the Menzies Centre for Health Policy at the University of Sydney.

Published in Australian Doctor 8 May 2015.  http://bit.ly/1L5wCPb

Limiting the availability of essential medicines for all

Published in Australian Medicine, 20 April 2015. http://bit.ly/1OxPFXS

 

Designing hospitals to meet new needs

Published in Australian Medicine 16 March 2015 http://bit.ly/1ILl2ra