HIGHLAND PARK NEWS/EAGLE ROCK POST • DECEMBER 2006 ...

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GREED: EXPENSIVE PRESCRIPTIONS
today it’s an incestuous relationship
between the pharmaceutical companies
nurturing, guiding, stroking that physician
from medical school right through till
today - so that the physician becomes one
extension, the biggest supported of the
pharmaceutical industry.
Show me where I’m wrong.
Dr. Rost: Well unfortunately, as a
physician myself I have to admit, and I’m
not doing that with an easy heart, that I’m
very, very saddened by the state of healthcare
and the way physicians act today.
Being a physician has become more of being
a businessperson than actually being
somebody who cares for peoples’ lives.
There was a recent study where they
used actors to make thousands of calls to
doctors pretending to have a depression
and asking for a particular drug. Almost all
of those who showed the symptoms of depression
got the drugs. But the worrying
part was that the other half of the actors
who didn’t pretended to have any symptoms,
half of those got the drug as well.
And here we’re talking about pretty strong
stuff - antidepressants - and the patient
got it because they pushed for them.
So clearly, direct to consumer advertising
works, and the physician very often
just wants to satisfy the patient. But many
physicians today have stopped practicing
good medicine. And we also have so many
physicians just standing with their hands
out waiting for the next trip from the drug
company, the next dinner, the next freebie.
So the whole system has become so corrupted.
We shouldn’t expect this to be
normal. The fact that we have freedom and
anybody can bribe anybody else - that’s
not freedom, that is not good society
and most countries do not allow drugs
reps to visit doctors as often they do here
and they do not allow drug reps to bring
doctors pizzas and bagels and everything
else. I mean they are pretty much stewardesses
in those offices bring them gifts
- bearing gifts. You create the relationship
that way. So we can change this - we don’t
have to have a system like this.
Gary Null: I’ve recently interviewed
a drug rep who was one of the most
popular in the United States and for two
years was in the top five most successful
drug reps in the United States out of over
100,000.
And she said that she had to understand
the psychology of using her sex
appeal, using her sense of care and concern,
how she would approach the doctor,
how she would set up a coffee table with
donuts for his patients. And that in time
no one even questioned anymore they
almost expected when they went in the
office - in his office - that there would be
something there, pizzas or whatever, given
out free to his staff. And I said, “Did he at
any point recognize that this was just a
different way, a more clever way, of getting
him to where he will prescribe your
drug?” And she said, “No. That never came
up. Sure he prescribed the drug. And the
drug I was selling, from my company, was
the drug of choice for the condition that
he was a specialist in, heart disease, that
he would give. It wasn’t that my drug was
better, that I had studies proving it was
better, it was just that I was better able to
connect with him.” Your thoughts on this.
Dr. Rost: Well there is a great book
out there by Jamie Reidy, called “Hard Sell:
A Former Pfizer Sales Rep,” who describes
exactly this and he had a very funny sentence
in the book, basically saying male
doctors, who were very busy, as soon as
they got a whiff of female perfume - their
innate reproductive desire made them
drop everything else and very willingly listen
to these beautiful women. I don’t think
that we should have our drugs prescribed
based upon male doctors’ desire for sex.
Gary Null: But that’s happening.
Dr. Rost: That’s the situation we have
today. It works equally well for male sales
reps who can charm the office staff.
Gary Null: The next area and I only
have two more questions for you because
I know you’re on a short schedule. But
it’s a very important one. I own a food
store. It’s a natural food store. There are
about twelve different departments - from
produce, organic produce, whole grains,
breads, the deli, and groceries. At the end
of the day I know my markups and they
range from about 25% to as high in some
areas as about 75%, but average about
40%. That’s not a lot and it’s real hard to
make a living. It’s hard to stay in business
with the rent you’re paying, the staff, the
insurances, taxes, etc., but you manage to
etch out a living. It’s not going to make
you rich.
I’m also an author and I’ve published
a lot of books, and I’ve been fortunate
enough to have some very popular selling
books. But I know exactly to the penny
how much that book costs my publisher. I
know how much the binding, the ink, and
everything and I know the markup. I know
if I want to buy my book I get maybe a
40% discount unless I buy a humungous
amount then I get 50%. But I know the actual
cost of the book because I frequently
buy a lot of those books and give them
away free to the poor and for years to noncommercial
radio stations I gave books.
And then recently I did some research
on pharmaceuticals because I was listening
to a debate, this goes back about a
year, and the debate was this: The reason
we have the most expensive drugs in
the world in America is because so much
money goes into research and development
- upwards of a billion dollars and I’m
thinking, “Is that possible?” I didn’t know
- I wasn’t going to make a decision until I
had my facts. And I began to look carefully
at this and here’s what I have and I’m
willing to put this on the record and have
it challenged.
Let me take a few products. Let me
take, for our arguments sake, take two.
I’m going to take Prozac, 20mg, 100
tablets. Retail price currently is $247.47.
The actual generic active ingredient for
100 tablets, for all hundred tablets for
Prozac is 11 cents. Do the math - that is
a 224,783% markup. One more, Xanax
- 1 mg, 100 tablets, currently as of today
$136.79. The actual cost for those 100
tables of the generic active ingredient
is two tenths of 1 penny. That means the
markup is 569,858%. Let me say that again
-569,000% markup from the cost of the
generic active ingredient in
that 1 mg dose of Xanax to
$136.79 for the actual retail
price. I have never in my life
seen markups like this. I know
of no other business that has
markups like this and as a
person who knows something
about pricing and economics
I’m absolutely flabbergasted
by that. Your thoughts please.
Dr. Rost: Well this is what
you get when you don’t have
a free market. Drug companies
claim that the U.S. is the
only free market. That’s really
untrue. The U.S. drug market
is a monopoly - they can
charge whatever they want.
What are you going to do? If
you have a car that costs too
much you can walk away, but
when you’re sick you can’t
walk away. You need the drug
to survive, to live, to go on.
And when you don’t have a
good partner, a strong partner
to negotiate with, as you
can imagine, you’re going to
pay the highest prices.
Where does this money
go? Very simple - it goes
into two areas. Number one
- profits. Number two - into
marketing and selling even
more drugs. As a mater of
fact in 2002, if you look at the fortune
500 list of the largest 500 companies, you
take just the drug companies, the top 10
drug companies, together the top 10 drug
companies had a higher profit than all the
other 490 largest U.S. corporations. That’s
what you get.
Gary Null: Wow. That I was not aware
of - I appreciate that insight. My final question
for you - why is it that the board of
directors, the top executives of these
pharmaceutical companies are not put
to the task of acting, not just responsibly
for their company and their products,
which they have a responsibility both
fiduciary and a moral responsibility, but
also the issue should they not charge a
reasonable price to make a reasonable
profit so that the public that may need
that drug can actually afford it instead
of having to not be able to afford it. Why
isn’t there some moral equation that is
not discussed? And as a medical doctor,
as an executive of one of the largest
pharmaceutical companies in the
country, I’m sure at some point this issue
has arisen somewhere in the corporate
headquarter system. Has it not?
Dr. Rost: Well, you know, the problem
we have is that when you are that
wealthy, you’re also equally powerful
and there are many people and many
politicians with their hands out asking
for assistance. One example is the Medicare
drug bill, which was going to give
free drugs to the elderly in 2006 - it’s
still going to cost $3000 out of your own
pocket for the first $4000 of drugs. But in
addition to that, that drug bill included
legislation that made it illegal for the
government to negotiate drug prices.
You know it’s so completely counterintuitive.
Why should the taxpayers pay
full price when the government could
have negotiated? When you have a
powerful industry that can buy its way
into a democratic government that’s
what you get.
Gary Null: I want to thank you for
your candor, your openness, and your
honesty. It is a refreshing discussion
instead of the normal propaganda and
defensiveness that I would hear from
other individuals from within the industry.
Dr. Rost I thank you very much.
Dr. Rost: You’re very welcome. It
was really a delight.
Gary Null: That was Dr. Peter Rost.
He is also senior vice president at Pfizer,
medical doctor and answered some
very important questions for me. So I
hope you enjoyed that
Dr. Rost was speaking on behalf of
himself, not Pfizer.Gary Null can be heard
locally on KPFK 90.7 FM Wednesdays from
Midnight until 5:30 AM. For more info. visit
www.garynull.com
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