BMJ  2003;327 (20 September), doi:10.1136/bmj.327.7416.0-g

Editor's choice

A bad week for drug companies?

The United States is hugely important for drug companies. The pharmaceutical market is worth more than $150bn, and annual spending has been rising by almost 20% a year (p 642). Prices are not regulated in the way they are in many other countries, and companies are allowed to advertise directly to consumers—so boosting consumption. But now the cost of drugs has become an important political issue, and a bill has been introduced into Congress that would require government agencies to gather evidence "comparing effectiveness [and] cost effectiveness" of the most commonly prescribed drugs "relative to other drugs or treatments for the same disease."

The bill aims to reduce costs, but it could also improve quality. The proposal is to conduct many more head to head trials of common treatments—trials like the ALLHAT (antihypertensive and lipid lowering to prevent heart attack trial), which showed that diuretics are just as good as much more expensive drugs for treating hypertension. The whole world stands to benefit from such trials.

The industry is lobbying against the bill, but its problems are much deeper than congressional irritations. Companies are failing to produce enough new drugs, and the investment bank Dresdner Kleinwort Wasserstein thinks that the industry is operating a business model that is unsustainable (Guardian 12 September 2003). Companies have on average been producing three "new molecular entities" a year, but the bank predicts this will decrease to 0.3 per company. The industry has been increasing sales by 12%-15% for 30 years, with half of the increase coming from raised prices. Now globalisation and political endeavours are making such price increases impossible.

The answer, the bank suggests, is further mergers —only mergers with a difference. Companies should now concentrate on particular therapeutic areas—cardiovascular, cancer, etc. This could give them "dominance" (which sounds like a polite word for a monopoly) in those areas. The result could be just a handful of companies.

The bill before Congress stops short of proposing that a drug would have to be shown to be better than other drugs before being given a licence. Europe doesn't require such a demonstration either, but the National Institute for Clinical Excellence (NICE) in England and Wales looks for evidence that a treatment is appreciably better than what is already available before advocating its use in the NHS, which is most of the market in Britain. NICE has just been independently evaluated by the World Health Organization, and an important recommendation is that it "break its close links with the drug industry and make its processes more transparent" (p 637). The institute has set new standards of transparency, but drug companies have insisted on some of their material being confidential. The material should be made publicly available.

(rsmith{at}bmj.com)

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