Tragedy of the CommonsDouglas McCormick

June 2, 2005
Pharmaceutical Technology, Pharmaceutical Technology-06-02-2005, Volume 29, Issue 6

A myopic focus on short-term growth can endanger the community. The question is, can we enlighten our self-interest before the edifice falls down around our ears?

This has been a month full of personal distractions. In all the rush, real insights have been in short supply, and two last-season books have lain, neglected, on the nightstand: Jared Diamond's Collapse: How Societies Choose to Fail or Succeed (Viking Penguin, New York, 2005) and Marcia Angell's The Truth About the Drug Companies: How They Deceive Us and What To Do About It (Random House, New York, 2004).

Douglas McCormick

Collapse examines societies under terminal stress, and assesses four environmental factors—ecological damage, climate change, hostile neighbors, friendly trading partners—along with the choices the societies make to respond to them.

Most interesting is Diamond's account of failed past societies, most of them small and isolated: the Easter, Pitcairn, and Henderson Islanders of the South Pacific, the Anasazi of the American Southwest, the Mayans of Central America, and the Vikings of medieval Greenland. Oversimplified, their common story is this: Expanding human populations over-exploit the land and limit their options for change (as, for example, the destruction of large forests deprives future generations of the trees needed to build boats for fishing, trade...or escape). These changes bring the society to the brink of famine. Then even a small change—a cold spell, a drought, a war, or interruption of vital foreign trade—tips the balance and the society spirals down into starvation, barbarism, and extinction.

Angell's book is an extended and vitriolic attack on almost every aspect and assertion of the American pharmaceutical industry. I'm no fan of my industry's excesses, and had hoped for a reasoned and constructive critique. This isn't it. The Truth was a hard slog, with sections like this:

"Drug companies claim drugs are so expensive because they need to cover their very high research and development (R&D) costs.... Implicit in this claim is a kind of blackmail: If you want drug companies to keep turning out life-saving drugs, you will gratefully pay whatever they charge. Otherwise, you may wake up one morning and find that there are no more new drugs."

Angell goes on to deny the value of industrial R&D, suggesting instead that valuable new drugs are almost exclusively the product of academic and government research, which Big Pharma then expropriates. (At passages like these, I would close the book and walk away for a few days.)

Like Captain Renault in Casablanca, Angell is shocked, shocked to discover that pharmaceutical companies operate as businesses, follow their own self-interest, and strive to maximize their return on investment within the existing rules.

I keep trying to square Angell's jaundiced view with the people I know in the industry: with few exceptions, they are intelligent, hardworking, and honest. I've known a couple of fakes and manipulators, but few have prospered. Yet, as we reject Angell's rhetoric, we should not ignore either the data or the feeling of being exploited that lie behind it. Even I believe that we, the pharmaceutical industry—with our wealth and our intelligence, acting out of self-interest and spurred on by commissions and bonuses—are indeed corrupting the practice of medicine. But we, with 7% of the healthcare dollar, are not the only ones.

Angell's prescription is extreme: Strengthen the FDA. Create an independent institute to oversee clinical testing. Curb monopoly marketing rights. Get Big Pharma out of medical education. Open pharmaceutical R&D budgets to public scrutiny. Establish reasonable and uniform pricing.

Above all, though, Angell would "shift the emphasis from me-too to innovative drugs." Here, she says (and she has a point), in markets crowded with nearly identical products, marketing slides into shilling. Here is where the great corruption lies. One suspects, though, that she doesn't understand exactly why me-too's are so attractive: they offer manu-facturers entry into a known market, with known class effects and a well-established approval pathway. In short, they provide a lower-risk, defined- return R&D investment. Yes, endless copycat products do seem a waste of precious R&D dollars, but they are a prudent business decision. Nobody faults an automaker for building the fifth small pick-up truck.

And yet. Read together, Collapse and the distorted Truth show how a myopic focus on short-term growth can endanger the community. The question in each case is, can we enlighten our self-interest before the edifice falls down around our ears?

Douglas McCormick is editor in chief of Pharmaceutical Technology, dmccormick@advanstar.com