Faith doing Justice

Checking on drug company policies and practices

How well are Canadian consumers of patented medicines protected against over-pricing of the drugs they need? This question looms large after a reading of the recent report of Consumers International (CI) entitled Branding the Cure. CI is a non-profit organization founded in 1960 to protect and promote consumer interests. Today it has 230 members in 113 countries, five listed in Canada.

Branding the Cure applies a corporate social responsibility (CSR) test to the marketing policies and practices of Europe's leading drug companies. It notes that in 2005 total global drug sales grew 7% to $602 billion - that is, about $100 for each of the six billion people on earth. The CI report does not give Canadian figures, but according to one media report Canada's 2005 drug bill topped $16.1 billion, up only slightly from the previous year - about $500 each.

One can assume that Canadian drug companies operate like those studied in the CI report. It says "drug promotion does not operate with consumer interest in mind, but rather is more focussed on generating profits by maximizing sales revenues."

A person in need of patented medicine doesn't usually think that drug companies actively promote their own products. The CI report notes that "annually the industry spends nearly twice as much on marketing as it spends on research and development." Part of the problem is that drug companies do not readily disclose their marketing or R&D spending, but "various reports indicate $30 to $60 billion on marketing in 2004 - against an estimated $39 billion on R&D." That is, for every $100 of drugs sold world wide, drug companies spent about $10 to promote those drugs. These figures raise several questions. What marketing tactics do drug companies use? Does their spending on research and development justify their prices?

On the question of drug marketing, the CI report notes that European Union legislation does not permit direct marketing of prescription drugs. So, to market products, drug companies "now use alternative pressure points to doctors, such as patient groups, medical students and pharmacists, coupled with new tactics - internet chat groups and drug or disease websites." Other techniques involve "providing health or illness information via pamphlets, magazine articles etc, without the company actually promoting a specific product directly to the consumer or health practitioner. This type of 'nice-and-friendly' marketing is often disguised as corporate social responsibility, and has been shown to create a subtle need among consumers to demand drugs for the diseases on which information is provided." A CI briefing paper to the World Health Assembly in Geneva in May 2006 said "governments must recognize that corporate motives for profit and their monopoly over funds for health research pose grave problems for consumer health and consumer rights."

Canada has a part-time five-person Patented Medicine Prices Review Board (PMPRB) that reports to Parliament through the Minister of Health. Its new chairperson is Dr. Brien G. Benoit, an Ottawa neurosurgeon. The PMPRB website describes it as "a quasi-judicial body that protects consumers and contributes to health care by ensuring that the manufacturers' prices of patented medicines are not too high." From its posted reports, it is not clear that the PMPRB is actively pressing the Canadian government "to recognize that corporate motives for profit and their monopoly over funds for health research pose grave problems for consumer health and consumer rights." What is clear is that Parliament strengthened patent regulations in response to intense lobbying by drug companies that they needed patent protection to ensure sufficient funds for research. Yet, 2005 was the fifth consecutive year that the Canadian drug industry failed to meet the 10 per cent of sales pledged for research when patent rules were strengthened in 1987.