Generic Drugs And The Destruction of The American Pharmaceutical Industry

Generic Drugs and the Destruction of the
American Pharmaceutical Industry
A Case Study in Support of Federal Term Limits

This is the story of the Generic Drug Industry, how it came to be formed and its effect on the United States Pharmaceutical Industry. I worked in the pharmaceutical industry for over 30 years, most of which was in research at two different companies from 1954 to 1991. I have seen the industry from the very bottom all the way up to pharmaceutical research and quality control at the Ph.D. research scientist level. I remember how it was in the 1950's and what happened in the early 1960's and the results of the damage done by Congress.
Before 1906, there was little or no regulation of the purity or safety of food, drugs or cosmetics. Milk was often diluted with water to the point that the white was almost gone. “Whitening agents” were added to hide the poor milk quality. “Buyer Beware” was the watch word of commerce. After 1906, the government Food and Drug Association (FDA) was formed to control the quality of the products sold to the public. That was the beginning of the FDC specifications for Food, Drugs and Cosmetics . The situation was better, but in the 1930’s some sulfa antibiotics caused destruction of the kidneys and killed many who were given the antibiotics. The cause of the problem was that the sulfa drug was not soluble in the urine and when the drug precipitated in the kidney, the kidney was destroyed and the patients died. This was the reason why “Triple Sulfa Drugs” were marketed to avoid the destruction of the Kidneys. Then, the Food and Drug Administration passed laws that said that any drugs sold to the public must be safe. The drugs had to be safe but the law did not say that the drugs had to actually be effective!!. That is, the drug did not have to actually work!! This was the beginning of the Ethical Drug Companies who made sure that their products not only were safe but actually worked!! Other, so called patent medicine drug companies marketed their products in a different manner. The Ethical Drug Companies used Detail Men (the term used for drug information givers) who called on physicians and gave the information about the new drug directly to the physician to convince him that the new drug was suitable for his patients. The only advertising was directly to the physician. The detail men did not sell drugs to the physician, they only informed the physician what the new product could do. The actual point of sale was only at the pharmacy under the direction of a registered pharmacist. There was no advertising to the general public. This was done so that the physician could make the decision about which drug was best to use in a given situation without being badgered by parents who were ignorant of the problems. Sales were by prescription only, which were written by the physician. The system worked extremely well.
Other, non-ethical drug companies, known as patent medicine manufacturers, advertised directly to the public. These were the products that most often did not actually work but were marketed to the public solely by extensive advertising in magazines, catalogs and other mass media.

The Senator Estes Kefauver Commission that held hearings in the late 1950's and into 1960 on medicinal drugs wrote and had passed into law, legislation that said that all prescription and non-prescription drugs must actually be effective for the claims that were advertised by the manufacturer. Up until this time, the FDA required the pharmaceutical industry manufacturer only to prove that their products were safe and not toxic. That is, they did not have to actually work! However, the ethical drug manufacturers such as Upjohn, Merck, Lilly, Parke Davis, etc. did the research to prove that their products were effective and spent tens of millions of research dollars to prove it . The safety of medicines was mandated by Congress in the 1930's due to the toxicity of some sulfa drug products sold at that time. The drug safety laws were very good laws as were the drug efficacy laws passed by the Kefauver Commission.
There were some unintended consequences of the drug efficacy laws. Some of us may remember Carter's Little Liver Pill's, Lydia Pinkham's Tonic, Dr. Rose's Obesity Powders, Dr. Worden's Female Pills, the long list of unproven claims that Listerine Antiseptic carried on the container and other such non-prescription products sold by Watkins and some other companies. Besides requiring ethical drug manufacturer's ( Upjohn Co, Parke-Davis, Merck, Lilly, Squibb, etc.) prescription drugs to be effective, the Kefauver laws also required that over-the-counter drugs be effective. Under the leadership of the Food and Drug Administration (FDA) and the United States Pharmacopoeia (USP), the next 10 years were devoted to analyzing all the over-the-counter drugs for content and efficacy to meet the requirements of the Kefauver laws. The analyses were done in chemical and biological laboratories under the guidance of the USP, an independent organization, separate from the manufacturers and from the FDA. Those products whose claims were not valid were told to eliminate the false claims or take the product off the market. It was during this time that Carter's Little Liver Pills, etc. disappeared from the drugstore shelf and the claims on the Listerine Antiseptic bottle were severely reduced.
Those companies whose products did not meet the efficacy requirements, and who were not willing to spend the millions of dollars to research and develop new products, decided to go out of business. If this was the end of the story, the American consumer, the drug manufacturers and the medical community would be in good shape today and the cost of drug prescriptions wouldn't be the political football it has become. The drug companies who were put out of business hired lawyers to lobby Congress and began asking for a way to sell medicines without having to spend any money for research to prove safety or efficacy studies. They even appealed to Congress with the story that ethical drug manufacturers were making “obscene” profits and should be forced to give, free of charge, the results of years of expensive pharmaceutical, medical research to anyone who asked for it. The costs of medical research were borne 100% by the ethical manufacturers themselves. The government spent nothing for the discovery and development of new drugs, with one exception. In the case of cancer, the National Cancer Institute screened molecules for anticancer activity and, if a promising candidate was found, it was offered to the ethical drug manufacturers for further research on anticancer activity, toxicity, dosage form development and clinical testing. The ethical drug manufacturers who chose to try to bring the anticancer drug to market bore the total cost of development of the potential cancer drug. The ethical drug companies bid against each other for the right to develop the potential cancer drug. The United States government recouped part, if not all, of the cost of finding the potential cancer drug. The General Accounting Office in July, 2003 was the latest federal agency to refute the claim that the cost of drug development is borne by the government. In year 2001, the government had licensing rights to only six of the top 100 brand-name drug products purchased by the Department of Veterans Affairs and to only four of the top 100 brand-name drugs that the Department of Defense dispensed. That is, only six of the top 100 drug products had ANY federal funds in their product development cost. These were mostly anticancer drugs. The politicians could not resist the votes and re-election possibilities, and passed laws handing out , FREE, the extremely expensive research results and complete recipes to make the drug product to the "generic" companies as they came to be called.
The "obscene profits" that the lawyers and lobbyists loved to talk about were nothing but smoke and mirrors. The patent life of a drug was 17 years in those days. However, what the politicians and lawyers never said, was that the patent clock starts ticking when the MOLECULE is discovered, NOT when the product goes to market. This requires at least 10 years before scientific proof of safety and efficacy and dose development is completed and the drug product is allowed on the market by the FDA. The development time for a marketed drug in those days was MORE THAN 10 YEARS. Today, it is even longer because the government makes it even more difficult! Alan F. Holmer, in the August 19, 2003 issue of Insight Magazine, points to a development time period of 10 to 15 years. Holmer, a spokesman for the Pharmaceutical Research and Manufacturers Association, also gives data on the fraction of drug molecules that successfully make it to market. ONLY ONE OF 5,000 screened molecules is approved by the FDA as a new medicine. Of these 5,000 compounds, 250 enter preclinical testing and development and only five of the 250 make it to human clinical testing and of the five in clinical testing only ONE is approved by the FDA and makes it to market. Only three of every ten marketed drugs generate enough sales revenue to match or exceed the cost of research and development of that drug!. The 250 preclinical, five clinical failures ALL represent money down the drain that must be balanced by the sales of the products that make it to market. The cost of preclinical and especially clinical testing of a new drug is enormous. The average cost of developing a new drug, according to the Tufts Center for the Study of Drug Development was $802 million in year 2000, up from $318 million in 1987. The cost in 1965 was less that one-third of the 1987 cost. These costs include the expense of research failures and the impact that long product development times have on investment costs. The time left in the patent life of a newly marketed product was less than five years! Those few years profits had to pay for the tens or hundreds of millions of dollars spent by the drug company in discovery, toxicity testing, dose development, clinical testing and marketing costs of the new product. Also, it was never said by the lawyers that the fraction of molecules that were patented and made it to market was MUCH LESS THAN 5 PERCENT. That is, over ninety-nine percent of the cost of research by drug companies was on failed medicines and profits from those drugs that made it to market had to pay the cost of ALL the research on both successful and unsuccessful drug candidates.
In spite of all this, the United States Ethical Drug Industry was so good at developing new drugs that they could still stay in business. The United States had the best medicines anywhere in the world! There was a reason why the system worked, but the reason was never mentioned to the voting public by the lawyers or politicians. While bringing a drug to market was extremely expensive, only those drugs that were better than what was already on the market for a particular disease could be expected to successfully compete in the market place and thus give a return on investment. For this reason, when a patent life ran out, other ethical drug companies chose NOT to make and try to market a copy of the innovator's product because the copy still had to have data gathered by the copier, proving the copy product had safety and efficacy and still had to sell it at a price competitive with the same medical product that was already on the market for the same disease. For this reason, the huge cost of developing new drugs and paying the cost of failed research could be recouped since it was usual for the innovator to enjoy selling the product for years, UNTIL A COMPETITOR MARKETED A DRUG THAT WAS BETTER THAN THE ONE ALREADY ON THE MARKET. The system guaranteed that only better medicines would make it to market and the public would then enjoy the very best pharmaceutical products possible. All this was destroyed in the 1960's by the generic drug laws. The ethical drug manufacturers warned congress what would happen to the industry, but politicians chose to ignore the warning and looked only at votes for re-election. Laws were passed in the 1960's forcing the ethical, innovator drug companies to give, free of charge, all the information necessary to make any product that the generic company decided to ask for when the patent life ran out. The ONLY requirement asked of the generic drug company was that they make several batches of the medicine product and submit data to the FDA demonstrating that the generic product batches FUNCTIONED the same as the original innovator's product. The word “functioned” means that the generic copy of the drug was absorbed, distributed, metabolized and eliminated in the body the same as the innovator's product and that the drug content of the dosage form was the same as the original marketed drug. Many of the generic drug companies contracted out the laboratory work needed to prove compliance. Even so, some of the generic companies were unable to reproduce the product even when they had all the recipes needed to make it. Some of those failed generic companies went to the drug store, bought the innovator's product and submitted it as if it were their own work. Generic companies who resorted to this deception and were discovered were usually put out of business. Some generic drugs, to this day, do not reproduce the original marketed product but are still allowed to be sold. Dilantin is one such drug that has unacceptable generic competition. I have personal experience of the dangers of using invalid generic forms of Dilantin products. It is common knowledge by most physicians and pharmacists that the generic copy of Dilantin does not work correctly. The physician is forced to exactly specify in the prescription which product is to be dispensed in order to avoid the generic product. My own personal experience shows that insurance companies ignore the problem and still try to require that the generic form of Dilantin be dispensed instead of the innovator’s original product to increase the insurance companies profits. The American public is not getting the quality of drugs it used to get. Buying drug products from foreign companies gives no guarantee that the product is what it is purported to be. Some foreign purchased drugs have turned out to be nothing but water! It is also common for the foreign manufactured drugs to contain less active drug than is needed for therapeutic efficacy. The foreign manufacturers do not care and the United States cannot check efficacy of all imported medicines.
The result of the advent of generic drug products is that the ethical drug companies no longer can be assured of recouping the cost of research and development of new drug products. I was a research scientist at the Upjohn Co. when all this was developing. There were only a few choices available. The financial choices that ethical drug companies had to make were (a) go out of business, (b) look for a buyer or a merger partner to try to stay in business, (c) stop expensive research on new drugs and sell only the ones existing in their catalog, which eventually were obsolete, (d) decide that the company's' research capabilities were good enough to still discover, develop, manufacture, and market medical products and compete with the generic and other ethical drug companies. The Upjohn Company thought they were capable of competing. Upjohn attempted to use the prostaglandin family of drug molecules along with other drugs designed for the treatment of stroke as the next big sources of new products. They were wrong, but they did try and cannot be blamed for trying. The Upjohn name does not exist anymore in medical products. Upjohn, Syntex, Squibb, Dow Pharmaceutical, Parke-Davis, Warner-Lambert, Pharmacia and many other famous drug companies do not exist anymore or are just part of larger organizations. Foreign drug companies who do not have to give their products to generic companies do not have the problem and are buying American companies and in some cases exporting jobs. Research expertise is cheaper in other countries.
Greed and political expediency is destroying the American Pharmaceutical Industry, reducing the quality of medical care, exporting jobs to other countries and putting the United States on a slippery slope to national medical mediocrity.
Those ethical drug companies who are still in business (Merck, Lilly, Pfizer, etc.) are forced to raise the price of their products in order to pay for the research and development of new drug products that is the heart of their existence. When the price goes up, the generic companies, who do no research, seize the opportunity and raise their prices also.
Generic companies currently lead the pack in the percentage rate of increase in drug prices! The promise of cheaper, better drugs made in the 1960's was nothing but a pack of lies! This history of generic drugs is not new. It was known as far back as the 1970's and the current state of affairs was predicted in the 1960's when congress was considering the generic market. The ignorant, uninformed, government-does-it-all, socialist attitude of the media, is part of the problem. Can the mistakes that were made be corrected and the price of prescriptions brought back to more reasonable levels? I don't think so. The generic drug manufacturers have a huge financial stake in the industry and besides, the ethical drug manufacturers, in order to meet the generic competition must maintain prices. The biggest losers are the American public and the patients who die because the medicine that could have healed them could not be brought to market. If you believe that government laboratories could do the research and development and bring new drugs to market, you have not understood what the problem really is.
The present research efforts of the non-generic pharmaceutical companies are focused on bio-engineered drug products. These products are extremely difficult to produce and may eventually cause the generic drug industry to decide that it would be too expensive to make the raw materials needed in such drug products. The generic companies can always send the jobs to other countries to try to meet the requirements. However, Congress might force the innovator's of the bio-engineered medical products to sell the critical ingredient to the generic company so that the generics too will continue to damage the American Ethical Pharmaceutical Industry. This is a sad state of affairs. What can we do to avoid such mistakes in the future? I believe the greed and thirst for power and re-election can only be controlled by removing the possibility of making a lifelong career out of politics. That means Federal Term Limits.
When the United States Congress passed laws forming the Generic Drug Industry in the 1960's, the existing pharmaceutical industry had warned Congress that the laws would destroy the American Pharmaceutical Industry. By the early 1970's the effect of the laws was apparent to the ethical drug manufacturers and a strategy was needed to counter the loss of the market if the American drug manufacturers were to stay in business.
The term "Ethical Drug Manufacturer" means that the products were advertised only to physicians. Physicians were visited by "Drug Detail Men" whose job was to meet with the physician and give the medical, scientific details why the product was better for a particular disease than what was already on the market. The real advantages of the new drug were emphasized and the physician could write prescriptions for the new product if he was convinced that it was better than what was already on the market. The physician decided which drugs to use and the insurance companies stayed out of the loop. There was no advertising in general distribution magazines allowed by mutual agreement of the American Pharmaceutical Manufacturers Association (PMA).
Those manufacturers that had opted to continue pharmaceutical research needed some way to recover the part of the market lost to the generic companies. Most of the companies were forced by the realities of the market place to form their own generic subsidiaries and essentially "join the enemy". This strategy allowed the ethical, research based, drug companies to take advantage of the generic drug laws passed in the 1960's. Cross licensing of marketed products among the research based manufacturers became the method of competing with the generics. Cross licensing allowed a company to increase its product list without the expense of research to develop new products. Each cross licensed product was marketed with a different trademarked name that the ethical drug manufacturer chose. This meant that many different trademarked medicines were really the same product. This required ENORMOUS increases in advertising costs if the cross licensed product had any chance to outsell the equally good product on the market from the innovator or other companies that had cross licensed the same product for their own catalog. The politicians and lobbyists loved to point at the increased advertising expenditures as a reason for federal control of the manufacturers. This, when Congress itself had caused the problem in the first place in the 1960's by passing laws forming the generic drug industry. This reminds me of the man who murdered his parents and then pleaded mercy from the court because he was an orphan. Congress caused the problem and then complained it existed.
At the same time, the patent life clock for a product was ticking and when the patent expired, the generic companies jumped in and began competing with the innovator as well as those companies who had previously licensed the medicine from the innovator manufacturer. The end result was that NO ONE gained anything, the research on new medical products was greatly reduced and the physicians and public had fewer choices and fewer new drug products were added to the market. People died who did not ever get the chance to be treated with drugs that might otherwise have been brought to market. The huge increases in advertising costs required to compete meant higher selling prices to the public, higher costs to the insurance companies and eventually federal and state laws to control the runaway market costs. The politicians love to pose as saviors of the consumer.
Those ethical drug companies who survived did so by buying up the competition to obtain their products. Buying the company who was the innovator of a highly prescripted product was more cost effective than trying to compete using the generic subsidiary licensing strategy. Thus, big companies became ever larger, the number of research based companies continues to decrease and foreign companies buy the American companies to obtain their products and then jobs are sent overseas to lower-cost labor markets. The August 2004 issue of Scientific American (pg. 24) reports the transfer of drug research and development and clinical testing out of the United States to India. The jobs are leaving the United States because the Ethical Drug Manufacturers must look for a way to compete with the generic marketed products. Pharmaceutical giants Novartis, Pfizer and Eli Lilly have commissioned Indian firms to perform R & D services, including clinical testing. As “foreign companies set up shop in India, expertise will grow. Each year business has grown 60 to 80 percent with almost 90 percent coming from International
(American ?) companies”. Before 1970, American Pharmaceutical Companies who wanted to market their products in foreign countries, were usually faced with a special set of research and clinical studies mandated by the targeted foreign countries’ governments. For the privilege and permission to market the product in the foreign country, the American pharmaceutical companies were required to repeat some research studies already completed in the United States. These studies were often part of the drug research and clinical phase of the approval process. Most of the countries, since they did not have the equivalent expertise of the United States’ FDA, depended on FDA approval for marketing in the United States as proof of the medicines’ safety and efficacy. These additional studies were required by the host country to give their economy a boost and to obtain a part share of the profits made by the pharmaceutical company. This was a reasonable request in most cases. The American pharmaceutical companies viewed these redundant studies as an additional but scientifically unnecessary cost to marketing in the foreign country. The data obtained from the additional studies played no critical part in the decision to allow the drug product to be marketed in the host country. The host country still relied on the American FDA approval of the drug product for safety and efficacy assurance.
This distinction is important because it shows that the American Pharmaceutical Industry did not need to reduce research costs by exporting the studies to prove safety and efficacy but did so only as an exercise to satisfy the host countries’ expectation of a share in the profits.
However, after the advent of Congress’ institution of the generic drug industry and the concomitant loss of funds to support research on new drugs, the American Pharmaceutical Industry began to export critically needed studies. The pharmaceutical industry looked for countries whose research expertise was sufficient to satisfy the American FDA requirements to prove safety and efficacy. Over the last 30 years these countries have developed their expertise and now jobs that used to be available to American scientists are now exported to other countries. Predictably, Congress and the media scream about the “greed and lack of concern for American jobs” when in truth, Congress’ greed and lust for power caused the problem.
High paying, tax producing American jobs are leaving the United States. Congress was warned in the 1960's that this could happen but they paid attention only to the next election and the number of votes they could get to stay in power. It is a lie that re-election and political experience produces better Congressional decisions.
Isn't it time the American Voter said "enough is enough" and demand federal term limits to keep politicians from making decisions based on power and re-election. The political party and philosophy that puts the welfare of the American citizen first will win the trust of the voters and will gain the opportunity to make the United States a better place to live. .

Sincerely, Older!! Wiser??

Addendum #1
: Sept. 23, 2004: Kalamazoo Gazette, September 14, 2004. Schering-Plough, Bayer Form Alliance. “Struggling New Jersey pharmaceuticals company Schering -Plough Corp. and German chemical and drug maker Bayer AG have formed an alliance under which Schering- Plough will take over US. marketing of Bayer’s primary-care medicines. The partnership, announced Monday, September 13, 2004 could give Bayer a bigger presence in the world’s biggest drug market, while offering Schering-Plough badly needed new products to sell and a potentially key marketing partner for some of its drugs in Europe and Japan.
Under the alliance, Kenilworth-based Schering-Plough’s 3,500 salespeople will take over U.S. marketing of Cipro and Avelox, both broad-spectrum antibiotics for respiratory and skin infections, plus the blood-pressure drug Adalat and some small established primary-care drugs. Schering-Plough’s sales force also will handle U.S. promotion of Bayer’s impotence treatment Levitra.”
“Schering-Plough needs products, and this is a way of getting them temporarily until they can develop their own. ”said drug-industry analyst Mike Krensavage of Raymond James & Associates. “Bayer certainly could use the marketing assistance of Schering -Plough.”
Schering -Plough said the partnership, expected to become effective on Oct. 1, would slightly reduce earnings for the rest of 2004, partly due to integration and transition costs, then would add slightly ( italics mine) to earnings starting in 2005.”
The primary-care products will remain the property of Bayer and continue to be sold under the Bayer brand name. (note-this means that Schering-Plough will not be classed as a generic drug producer, and that most of the profits will go to Bayer, a foreign drug manufacturer. The research jobs will remain in Germany, only the sales jobs will be filled by American citizens.) Schering-Plough will pay a “substantial royalty” to the German company on net sales of the products Schering-Plough spokesman Steve Galpin Jr. said.” “Bayer is best known in the United States for its aspirin.

Addendum #2
January 7, 2005: Kalamazoo Gazette, November 30, 2004. Merck’s Retention Plan Offers Severance. “Merck, seeking to keep Managers and other company leaders from jumping ship after the $38 billion loss in market value since September 30, 2004, have been forced to adopt a plan to give severance packages to 230 executives should control of the company change and become a take-over target”. “Merck faces thousands of lawsuits from lawyer’s clients who claim Vioxx hurt them or their relatives”. The lawyers who have advocated suing the company smell money and are willing to destroy a pharmaceutical company to get it. This is one more step in the destruction of the American Pharmaceutical Industry. Merck’s market value is about 61.4 billion, which is half that of Glaxo-SmiithKline, an English Corporation, and less than one-third of Pfizer, the world’s largest pharmaceutical company.
First it was the tobacco industry, then the target became the fast food industry and now the target is the pharmaceutical industry. Lawyers have no integrity!!.

Addendum #3
There are two possible solutions to the problem of the destruction of the American Pharmaceutical Industry. The high cost of drugs can be brought down if the law that destroyed the ability for Ethical Drug Companies to recoup their research costs can be changed. The critical point in the process is the length of time that the drug company that did the research is allowed to SELL a product that contains the new drug molecule. Presently, the patent clock starts when the molecule is discovered so that only about five years of exclusive patent life is left when ( and if ) the new drug product goes to market. The length of the exclusive marketing time must be returned to the pharmaceutical company that paid for the research to bring the new product to market. There are two possible ways to accomplish this.
The marketing patent life clock should start when the product is first put on the market. This allows at least 17 (19 ?) years, the present length of a drug patent, for the drug company to recoup its investment in research and development. As it stands now, the patent clock starts when the biologically active molecule is discovered, not when it is first marketed. However, the protection of the intellectual property of the company who first discovered the molecule must be maintained so that the same molecule could not be developed by drug companies who did not spend any funds to discover the molecule. This requirement would need a change in how the patent process functions and probably would not be a politically easy change. The change would return the profits to the company who did the research to bring the new drug molecule to market. The generic market would not be able to copy the drug until the marketing patent had run out.
The other possible solution to the drug cost problem is to return the system to what existed before Congress screwed it up in the 1960’s. As mentioned before, the previous system worked because it made no sense to copy a marketed drug because it would be no better than what was already on the market. Thus, the funds not spent on advertising to outsell the same drug sold under a different trade name could be saved and put to use in discovering new drugs. As long as there was no product on the market better than what was already there, the physician based , not magazine based, advertising worked well. A possible way to return to the system that worked is to prevent any generic copy of a drug to be sold as long as the drug in question was the best drug for that particular disease. The physicians know what is the best drug and prescribe accordingly. When a better drug product, for that disease, was brought to market then the generics would be allowed to copy and sell the second best drug for that disease condition. I know, the politicians and public would scream that the best drug is being withheld from the public for profit reasons, but the alternative is to destroy the American Pharmaceutical Industry, reduce the number of new drugs being brought to market, force sick people to forgo any cure and continue the transfer of high paying technical jobs to foreign countries. Ronald Reagan was correct: Government is not the solution to a problem, government is the problem!

Addendum #4
When Medicare was first passed into law in the middle 1960’s, the price of prescription drug products was so low that Congress did not find it necessary to include any prescription drug benefit in the Medicare laws. It was only after Congress screwed-up the process that the drug prices spiraled out of control and are still rising.
When President Bush signed the recent Medicare Prescription Drug benefit bill, it put even more pressure on the American Pharmaceutical Industry to survive and now, the new law itself has become a super-expensive boondoggle that threatens the United States Budget and is making the voters confused, angry and will raise their taxes to a level never before seen!! Government is stupid!!!!

Addendum #5
The razing of the Upjohn research buildings in downtown Kalamazoo and the concomitant loss of very high salary, tax revenue jobs is the result of government stupidity and is not caused by unfeeling corporate culture. The stock investors in a pharmaceutical company have a valid interest in the profitability of that company. The Eli Lilly company of Indianapolis, Indiana saw the problem early and decided to NOT go public for investment purposes. Eli Lilly is probably the only private owned major pharmaceutical company left in the United States.

Addendum #6
Kalamazoo Gazette, December 45, 2007
By Jennifer Sterling
Associated Press
Bristol=Meyers To Lay Off 4,300, Close Half Their Plants
First Pfizer, than Merck, now Bristol-Meyers -Squibb plans to cut jobs as the pharmaceutical industry wrestles w3ithpr0fits being siphoned off to generic drugs.
Bristol-Myers Squibb, whose best selling product is the anticoagulant Plavix, said Wednesday it would lay off about 4,300 employees ands close more than half of its manufacturing plants in a broad restructuring aimed at cost saving of $1.5 billion by 2010.
Bristol-Myers is the latest brand-drug maker to reduce its work force as the industry struggles to battle generic competition after expirations of key drug patents
Pfizer Inc. the world’s largest drug-maker earlier this year said it plans to cut 10,000 jobs to
counter expected revenue losses from generic versions of its anti-depressant Zoloft and Norvasc blood-pressure treatment. Merck & Co. also plans to slash about 7,000 positions by the end of 2008 as it faces generic competition against its top-selling Fosamax osteoporosis treatment and a potential threat against its cervical-cancer drug Gardasil from GlaxoSmithKline’s Cervarix, now available anisotropy and awaiting U.S approval.
The job cuts at Bristol-Myers represent 10 percent of its staff and will largely be made in 2008 and 2009. The company also said it will close more than 50 percent of its factories by 2010 and reduce by 60percent the number of brands in tits mature products portfolio by 2011. Looking ahe4ed, the company expects a sharp downturn in earnings and revenue after Plavix’s key patent expires ins November 2011. Chief Executive James Cornelius said Wednesday.
Bristol-Myers also lowered its 2007 net earnings forecast. It now expect 2007 net earnings of $1`.15 to $1.20 per share, compared with a prior forecast of $1.28 to $1.33.

Addendum #7
Feb. 29, 2008
This email is a forward of an email I received today from the Family Research Council. Their timing could not be better. It is ignorance and the ego centric power of government that is destroying America. Government now wants an increase in federal employees to better monitor drugs imported from other countries, all of which would not be necessary if Congress would stop trying to fix something that was not broken 47 years ago. I am glad I am 73 years old. I will be dead before my grand and great grand kids have to live in an America destroyed by our own government
(Note--This is a copy of an email received from the Family Research Council and is not my words.
Protect your family from dangerous foreign-made pharmaceuticals
February 29, 2008
Chairman John Dingell (D-Mich.), head of the U.S. House Committee on Energy and Commerce, and Rep. Bart Stupak (D-Mich.), chairman of Energy and Commerce's Subcommittee on Oversight and Investigations, need to hear from you today about an alarming issue that touches the health of all American individuals and families. It's the U.S. government's systemic failure to inspect foreign pharmaceutical manufacturers.
In the past year Americans have learned that "globalization" appears to mean allowing unsafe foreign-made products into the U.S. For example, there have been numerous recalls of unsafe toys. The country that is most guilty of exporting dangerous goods to the United States is China, but the Chinese are not alone. CNN's Lou Dobbs has done great work bringing a seemingly endless array of consumer safety problems to the attention of the American people on his nightly show.
As if that weren't bad enough, recent press accounts reveal that the U.S. Food and Drug Administration (FDA) has a major crisis on its hands regarding the inspection of foreign drug-manufacturing plants. One catastrophe, in particular, has captured the public's attention. A Chinese plant that produced the main ingredient for the anti-coagulant heparin was never inspected. The imported drug has been linked to 21 U.S. deaths and hundreds of cases involving complications. Reports have also surfaced about a Chinese company that manufactures methotrexate, a drug that is used in the worldwide abortion trade.
These news stories have brought attention to a November 2007 report by the Government Accountability Office (GAO-08-224T) that shows clearly how the inspection system for imported drugs is in a state of meltdown. Only 2% of Chinese plants are inspected annually, and, from 2002-2007, only 12% of Chinese plants had been inspected compared with 90% for both Ireland and Switzerland.
We have also learned that the FDA inspects American plants every two years, but no required inspection period exists for foreign plants. In the United States the FDA conducts unannounced inspections of manufacturing facilities, but it does not do this overseas. Furthermore, FDA does not supply translators to its inspection teams, so they typically rely on translators provided by the business being inspected.
Family Research Council believes that legislation should be enacted to protect the health of our people. Any new laws written to address this problem should include the following provisions:
FDA must specifically hire and train staff, including specially trained translators, to conduct foreign inspections;
FDA must rapidly work toward a goal of inspecting foreign plants at rates equal to those for American plants - approximately once every two years;
Americans should be informed when they buy drugs as to the country of origin of the drug product and ingredients they are purchasing;
"Country of origin" information should also be made available on the FDA website;
Products made in foreign plants that are not subject to unannounced inspections should not be importable into the United States; and,
Congress should authorize and appropriate sufficient funding to carry out these objectives.

Addendum #8 March 2,2008
I made a survey of over-the–counter products at local drug stores to see what was on the labels as far as “Active Ingredients” and what were the claims listed on the label. The question I asked was “Was the requirement, required by the Kefauver Commission, that all over-the-counter products be effective for the claims on the label”??
Listerine antiseptic was one of the few over-the-counter products to survive the purging of products that were not effective for the claims on the label. Listerine survived the 1960’s testing by removing all claims that could not be proven to be true. The present Listerine product is used only as a topical antiseptic (that is, it kills many germs on the skin). The Listerine package contains the following information that confirms the effectiveness of Listerine antiseptic. “ The ADA Council on Scientific Affairs acceptance of Listerine Antiseptic is based on the finding that the product is effective in helping to prevent and reduce gingivitis and plaque above the gumline when used as directed.”
Other over-the-counter products do not have the ADA council approval as
shown below. Drugs that do not have the ADA Council approval on the package instead have the following statement: [This statement (label claim) has not been evaluated by FDA and is not intended to diagnose, treat or cure any disease or prevent any disease]
This disclaimer means that the law requiring all drugs to be effective is now a dead letter as far as many over-the-counter products are concerned. In many cases, we are back to the situation before the Kefauver laws were passed. Except now, we have the generic market and most prescription drug prices are drastically higher. Experience is no virtue in government, incompetents need to go and we need federal term limits.

PRODUCT NAME LABEL CLAIMS PRICE
Watkins Liniment Backache, Arthritis, Strains ???
Active Ingredient Sprains, Bruises, Temporary Aches, Pains,
3.5% Camphor (counterirritant) of Muscles and Joint

2. Heart Burn MD Teats heart burn $16.99
Proprietary Blend (This means that
the manufacturer will not say what
is in the product)
[ Statement—The statement (ie. Label claim) has not been evaluated by FDA and is not intended to diagnose, treat or cure any disease or prevent any disease.]

3. Cholest-Off Lowers Cholesterol Naturally $34.99
Sodium 5 mg
Plant Sterols 900 mg
Pantethne 150 mg (antihyperlipoproteinmic)
[Statement—The statement (label claim) has not been evaluated by FDA and
is not intended to diagnose, treat or cure any disease or prevent any
disease]

4. Triple Flex Treats Joint Pain $24.99
[Statement—The statement (label claim) has not been evaluated by FDA and
is not intended to diagnose, treat or cure any disease or prevent any
disease]

5. Walgreen’s SAM-E Mood & Emotional Support, $29.99
Joint Comfort, Liver Health
S-Adenosylmethionine 400 mg (anti-inflammatory,
treats chronic liver disease)
[Statement—The statement (label claim) has not been evaluated by FDA and
is not intended to diagnose, treat or cure any disease or prevent any disease]
6. Breathe Right Snore Relief $???
Water, alcohol, glycerine, polysorbate 80,
essential oils

7. Cooling Icy Blue Pain Relief $4.99
Menthol 2% ( anti- itch treatment—not pain relief)

8. Joint Flex Arthritic Pain Relief $18.99
Camphor 3.1% (anti-itch treatment—not pain relief)

9 Capzasin HP Arthritic Pain Relief $9.99
Capsaicin 0.1% (counter irritant)

10. Bengay Pain Relief $8.99
Camphor 4% (anti-itch)
Menthol 10% (anti-itch)
Methyl Salicylate 30% (anti-itch)—(Caution—ingestion of small amounts
can be lethal)
None of these ingredients have any measured topical pain relieve.
11. Blue Star Ointment Powerful Pain Relief $7.49
Camphor 1.24% (anti-itch) This has no pain relief activity.

12. Aspercreme Pain Killer $6.79
Trolamine salicylate 10% (anti-itch)—(Caution—ingestion of small amounts
can be lethal)

13. Australian Dream Pain Killer $29.99
Histamine dihydrochloride 0.025% (gastric secretion, antiallergenic]
14. Absorbine Jr. Pain Killer $7.49
Menthol 1.27% ( anti-itch) [no pain relief activity]

15. Memoryl Memory Improvement $39.99
Vitamin E, Folic Acid,
[Statement—The statement (label claim) has not been evaluated by FDA and
is not intended to diagnose, treat or cure any disease or prevent any
disease]
[ Note—This product was imported from Italy]

16. Pre-Tense Relieves Nervous Tension $24.99
Combination of plant and other natural substances.
[Statement—The statement (label claim) has not been evaluated by FDA and
is not intended to diagnose, treat or cure any disease or prevent any
disease]

17. Relaxane Stress Relief $10.99
Combination of plant and other natural substances
[Statement—The statement (label claim) has not been evaluated by FDA and
is not intended to diagnose, treat or cure any disease or prevent any
disease]

18. Finest Natural ?????????Not Stated $8.99
Proprietary Blend (note—This means that the manufacturer will not say what
is in the product
[Statement—The statement (label claim) has not been evaluated by FDA and
is not intended to diagnose, treat or cure any disease or prevent any
disease]

19. Joint MD Joint Stiffness and Cartilage Support $14.99
Mixture of plant and other natural substances
[Statement—The statement (label claim) has not been evaluated by FDA and
is not intended to diagnose, treat or cure any disease or prevent any
disease]
All of the above products use substances that have no biological activity for the stated uses. The government has allowed "medicines" to be sold on the market that are no better and worse than those banned in the 1960's by the laws passed by the Kefauver Commission in 1960. In other words, we are back to the situation that existed before any of the useless over-the-counter products were tested and banned in the 1960's. Consequently we now have generic products that have destroyed the American Pharmaceutical Industry and we are paying many times the price that existed before the 1960's. Government does not solve any problems, Government IS the problem.

Addendum # 9 Medicaid Pays For Deadly, Unapproved Drugs
Kalamazoo Gazette, Nov. 24, 2008
The FDA and Medicaid are part of the Health and Human Services Department, but the FDA has yet to compile a master list of unapproved drugs and Medicaid---which may be the biggest purchaser---keeps paying.
Medicaid chief Herb Kuhn said “ It raises a whole set of questions, not only in terms of safety but in the efficiency of the program. In other cases, they [medications] have made people sicker, maybe even killed them. The FDA banned injectable versions of a gout drug called colchicine after receiving reports of 23 deaths. Among the other drugs identified were Carbofed, [colds and flu] Hylira, dry-skin, Andehist [ decongestant] and IC AR PRENATAL, a vitamin tablet.


Copyright 2008