Back room drug deals

 

DRUG BUST Alan Cassels

“The very word ‘secrecy’ is repugnant in a free and open society and we are, as a people, inherently and historically opposed to secret societies, to secret oaths and to secret proceedings. ”

– John F. Kennedy

ARE YOU familiar with the line, “If you’ve nothing to hide, you have nothing to fear?” That’s the slogan often used to attack those who express concern about personal privacy – the ones who say they’re worried about the proliferation of surveillance cameras, databases and other data-collection devices that track us like bloodhounds, recording our every encounter with the legal, commercial, educational and medical systems. Where is all that information kept? How correct is it? Who is using it? Can it be used for purposes for other than which it was intended? Will it ever come back to haunt us even if we have “nothing to hide?” Scary thoughts indeed.

While personal privacy is an issue that gets a lot of attention, leading to a growing level of public concern about exactly how personal data are being used, there’s another side to the secrecy issue. And that’s the fact that many decisions, especially vital decisions that affect healthcare, are made in secret, not open to the sunlight of public scrutiny. Most people would find it astounding that, in Canada, millions are spent on healthcare decisions made behind closed doors. Even if these decisions are being made by well-meaning policy makers fully preoccupied with advancing the public interest, secretive decision-making, by its very nature, means there is no way for third parties to verify whether or not the public interest is best served.

One example on my radar, although details are sketchy, is the way different provincial drug plans cut deals with drug companies about listing their drugs. These so-called product listing agreements allow companies to get their new drugs on the formulary – the list of drugs the province will pay for – without having to reveal how much or how little they are paying the government. They also don’t have to reveal how much more patients and private insurers may have to pay outside the government plan for the same drug. The public may be getting a real steal on a certain product, which just might be providing incredible value for taxpayer money, but the name of the game is secrecy; no one is supposed to know.

Let’s say a company wants its new drug listed on the Ontario Drug Plan and it asks the Ontario government for a certain price. After negotiations about the number of doses and the number of patients likely to use the drug, the product will be listed. If the company sells more of the drug than it projected, it might be required to pay back some of those additional costs to government. These agreements may have research requirements built into them to better monitor how the drug is being used in the general population. This is all conjecture, of course, because the deals are made in secret. What actually happens within a product listing agreement is a big, black box and no one, except the government negotiators and the manufacturer, knows what kind of money the drug is costing the taxpayer or the consumers who are not covered by provincial plans.

Are these fair agreements? Should they be made in the open? That’s my default opinion, but without knowing the specifics of these deals, it’s necessary to withhold judgement. Hopefully, given all the pressure exerted on governments to keep costs down, such secret deals are actually resulting in maximum value for the dollar.

Let’s broaden this question and ask ourselves if we’d welcome governments secretly negotiating on our behalf for other public goods. Would we allow the building of a new Port Mann Bridge or a new Sea-to-Sky Highway to be negotiated in secret? What would we say if prospective builders got together with government officials and hammered out financial deals where the public couldn’t know how much money is changing hands?

Some say the secrecy is necessary because of the way the drug industry and the different public pharmacare programs are structured in Canada. For instance, Quebec has a “most favoured nation” clause that requires manufacturers to provide the Quebec government with the lowest price among all the provincial plans. Maybe doing deals in secret is the only way any other province can get the fairest price. It’s hard to tell, but a recent paper published by Aidan Hollis, an economist in Alberta, found that BC carried out a sole-sourcing contract with a drug company that involved secret rebates to Pharmacare. The problem he saw was that the alleged price reductions for Pharmacare recipients meant higher prices for everyone else not covered by Pharmacare. Hollis concluded: “A tendering process with secret rebates is not transparent, nor is it fair to impose high costs on those patients whose purchases are not covered by Pharmacare.”

“Transparent.” That’s the word that seems most antithetical to the word “secrecy” and one that pharmaceutical companies absolutely love to fling at governments for being secretive. In fact, if you’ve been listening to the comments from drug lobbyists and their favourite disease groups about public agencies that critically evaluate drugs – Canada’s Common Drug Review and UBC’s Therapeutics Initiative, for example – the word “transparency” is thrown down like a gauntlet. Why aren’t these organizations more “transparent” they ask?

Am I the only one to notice the faint whiff of hypocrisy when drug companies are cutting secret deals with provincial governments to list their drugs, even as they publicly demand transparency in government-sponsored analyses of new drugs?

The drug companies’ version of the word transparency is simple: these groups want to know who’s at the table and they want to know the name, rank and serial number of the key lobbying targets. They want to know which levers to work, hence demanding greater and greater transparency around the decisions governments make about drugs because the more opaque the decision-making process, the less chance the drug companies have of influencing governments’ decisions.

Fair enough, right? Yet these demands from the pharmaceutical industry lead to some hard questions regarding the industry’s offerings in terms of their own transparency. Sure, they are companies and companies need to keep secrets – proprietary information, ya know – and I can accept that. However, we in the public know almost nothing about what the industry is doing to influence healthcare decisions, such as how much they spend to influence physician prescribing.

Dr. Joel Lexchin, a Canadian expert in pharmaceutical policy and author of one of the best books on the drug industry in Canada –The Real Pushers, New Star Books, 1984 – has estimated that the drug industry in Canada today spends about $50,000 per doctor, per year, marketing its products to physicians, but we don’t know for sure. (With 6,000 practising doctors in BC, that’s about $300 million per year.) Do we know how the money is spent or to what extent it influences prescribing decisions? Of course not. All of that information is confidential, secret and non-transparent.

Another worrisome aspect of transparency relates to the way Health Canada respects drug manufacturers’ requests for confidentiality of unpublished data – that is, the company’s clinical data our regulator examines before it allows a drug to be sold in Canada. We researchers who are interested in what those data show –especially in terms of drug safety – can’t get them. That information is considered confidential and we can only see summaries of the data that support the approval of a drug.

Data on drug safety, data on what provinces pay for drugs and data on drug company spending to influence prescribing are certainly on my menu of what I think needs to be brought into the light of day under the banner of greater transparency.

Yet even while governments in Canada jump to satisfy the industry’s strident desire for greater transparency, they tend not to demand, in return, greater transparency for those things obviously in the public interest. At the very least, we would hope they would strike a balance so that the glare of transparency can shine on both public and private matters. However, the way the companies and governments currently deal with transparency issues reminds me of the slogan used to describe the recent spate of bailouts of private banks in the economic slowdown: “The privatization of benefits and socialization of costs and risks.”

Maybe our democratically elected governments need to say this to the drug companies: “We’ll give you transparency of our decision making processes when you provide us equal clarity on your business decisions. You can’t have us working in a glass house while you work in a batcave.”

Alan Cassels is a drug policy researcher at the University of Victoria and author of The ABCs of Disease Mongering: An epidemic in 26 Letters.

cassels@uivic.ca

 

1 thought on “Back room drug deals”

  1. Thanks. This is highly informative. I hate having drugs pushed at me although I recognise that they are often necessary for staying alive. Sometimes I feel that I absolutely don’t have enough background info to make an informed decision and I think that as a democracy there are some things we should have full disclosure on and one of those things is most definitely pharmaceuticals and the companies that produce them.

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