[NVIC] Lowering Standards for Vaccines, Drugs

[Guest guest]

January 10, 2007

National Vaccine Information Center

e-news

" The pharmaceutical industry is getting bad press. Recent books by Marcia

Angell, the former editor of the New England Journal of Medicine, and

Jerome Kassirer, another former editor of the journal, have harshly

condemned the industry for recklessness, insensitivity and all-consuming

greed.....critics like Angell and Kassirer are absolutely wrong to portray

the nation's big drug companies as heartless, avaricious behemoths that act

in whatever manner they choose and always get their way. The truth is, the

pharmaceutical industry is too heavily regulated. Its big problem today is

not that it's free to run roughshod over the needs of consumers, but that

it operates in a hostile and excessive regulatory environment that

frustrates sound business decision- making and keeps down pharmaceutical

company share prices in the stock market......- Attorney and pharmaecutical

industry consultant A. Epstein, LA Times

Barbara Loe Fisher Commentary:

The power and influence of the pharmaceutical industry in American health

care is profound. Attorneys, such as Epstein, and medical doctors

inside and outside of government who profit from their association with the

pharmaceutical industry, often call for less stringent regulation of drugs

and vaccines. They want to do away with almost all government requirements

that vaccines and drugs be proven safe and effective and they oppose strict

guidelines preventing federally employed scientists and medical doctors

from taking money from drug companies.

It is dangerous when medical doctors and public health officials use

loosely regulated vaccines (and drugs such as anti-depressants and cancer

treatments) on citizens while simultaneously enjoying immunity from

accountability in a court of law when those prescribed vaccines and drugs

injure and kill. Since September 11, 2001, there has been an assault by

drug company lobbyists on government regulations and informed consent

rights when it comes to the consumer's right to have full information about

the risks of vaccines and drugs and make voluntary decisions about using

them. The result of this assault on the informed consent ethic has been to

endanger the lives of all Americans who seek medical care.

" Buyer Beware' is an old motto that is truer now than it has ever been

when it comes to health care in America.

http://www.latimes.com/news/opinion/la-oe-epstein22dec22,0,4633594.story?col

l=la-opinion-rightrail

The myth of the big bad drug companies

They're not greedy, they're over-regulated. The result is fewer pills to

cure our ills.

The LA Times

December 22, 2006

By A. Epstein, RICHARD A. EPSTEIN is a professor of law at the

University of Chicago and a senior fellow at the Hoover Institution who has

often consulted for the pharmaceutical industry. His recent book is

" Overdose " .

Click here for the URL:

THE PHARMACEUTICAL industry is getting bad press. Recent books by Marcia

Angell, the former editor of the New England Journal of Medicine, and

Jerome Kassirer, another former editor of the journal, have harshly

condemned the industry for recklessness, insensitivity and all-consuming

greed. They gain sales by spicing up their titles with inflammatory phrases

about " deception, " " complicity " and how drug companies " endanger your

health. "

I take a different approach. I don't defend every business decision made by

the great pharmaceutical research houses. To the contrary, much recent

commentary suggests that many such companies have committed themselves to a

blockbuster-drug model — in which a company's success or failure depends on

a few vital, high-selling drugs — that may prove unsustainable over the

long haul. If so, I believe that those firms should suffer the financial

consequences of their mistaken business choices. Government bailouts are no

more appropriate for Merck and Pfizer than they are for Chrysler or Ford.

Nonetheless, critics like Angell and Kassirer are absolutely wrong to

portray the nation's big drug companies as heartless, avaricious behemoths

that act in whatever manner they choose and always get their way. The truth

is, the pharmaceutical industry is too heavily regulated. Its big problem

today is not that it's free to run roughshod over the needs of consumers,

but that it operates in a hostile and excessive regulatory environment that

frustrates sound business decision-making and keeps down pharmaceutical

company share prices in the stock market.

Consider the following: Ever-tougher conflict-of- interest rules in the

National Institutes of Health and such academic medical centers as the

University of Pennsylvania, Stanford and Yale have reduced opportunities

for fruitful collaboration between industry, government and universities.

More stringent requirements for clinical drug trials — including rules that

demand larger test populations and more extensive documentation — have

reduced the flow of new drugs to market. (Between 1996 and 2000, the FDA

averaged about 153 new drug approvals. Between 2001 and 2005, the number

was down to 55, with only 15 in 2005 and 29 in 2004.)

In addition, the industry faces major liability risks. Consumer fraud

legislation adopted in many states has generated massive, often eye-popping

claims for refunds of the original purchase price — in some cases even for

drugs that have worked as promised or on the part of people who have not

taken the drugs at all.

All these developments spell higher costs for the companies.

Simultaneously, regulatory attacks on the industry's pricing model,

including recent proposals to have the government negotiate rates for all

senior citizens covered under Medicare Part D, threaten its revenue stream.

The pharmaceutical industry operates in a high-fixed-cost and low-margin

environment. It costs, on average, more than a billion dollars to get the

first pill to market. All subsequent pills, however, can be made and

marketed for only a few additional dollars or cents. Of course, no user

ever wants to pay the big bill for that first pill. Instead, each fervently

hopes to pay as close to marginal cost for the subsequent pills.

The problem with that is that unless someone pays for developing that first

pill, there's no second pill to take. The central challenge to drug pricing

is to figure out, quite literally, who swallows (and in what proportions)

that huge front-end cost. Unfortunately, no company has a precise method to

fairly, reasonably and palatably allocate the cost of drug development

among the varied classes of subsequent consumers — large HMOs, hospitals,

full-service pharmacies and Medicaid for starters. Each buyer has a strong

incentive to push as many of those costs as possible onto someone else.

The upshot is a rough-and-tumble bargaining game in which drug prices vary

substantially across different market segments. But the corner drugstore

doesn't have the same leverage to play one drug manufacturer off against

another, so it usually pays higher prices for its wares than a large HMO.

The resulting confusion leads to loud calls for equitable, industrywide

price controls. But price controls would have the same dire consequences as

they would in any other industry. Investment dollars will quickly move

elsewhere if the regulatory system does not allow manufacturers to maximize

their revenues over the useful life of the drug (which, incidentally, never

exceeds the 11 or so years of patent protection).

Repeated studies, both domestic and foreign, have shown that price controls

dull the incentives of pharmaceutical companies to develop new drugs. Even

talk of price controls depresses investment.

Because of its high-fixed, low-variable cost structure, the drug industry

will never reach perfect competitive equilibrium. But in our second-best

world, ponder carefully the different consequences of two strategies. The

first seeks to expand supply by avoiding regulation and encouraging the

entry of new companies into the business. The second seeks to hold down

prices by direct controls.

The second approach leads to low prices today but systematic shortages

tomorrow, while the first leads to greater innovation today and greater

choice tomorrow. We must be careful not to mistake price controls for a

cure when they are in fact a disease. Let our new reformist Congress beware.

*************************************************************

National Vaccine Information Center

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Sheri Nakken, R.N., MA, Hahnemannian Homeopath

Vaccination Information & Choice Network, Nevada City CA & Wales UK

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