Khaya Sithole: Pharmaceutical companies are addicted to profit, not cure



July 4th represents a pivotal moment in American history. In 1776, the United States declared independence from Great Britain. Founded on the principle of being “the land of the free and the homeland of the brave,” the United States would – over the next quarter of a millennium – declare itself the greatest nation in the world thanks to its commercial and political successes – and some wars between the two.

Its main driver – unbridled capitalism – was at the heart of an email exchange that took place exactly 242 years later, on July 4, 2018. That morning, Martin Elling, partner in charge of pharmaceutical practice at McKinsey, wrote to his colleague, Arnab Ghatak, referring to a charge sheet issued by the Massachusetts Attorney General against Purdue Pharmaceuticals and its directors.

At the heart of the indictment was the damning allegation that Purdue played a pivotal role in fueling the opioid epidemic who has cursed the United States since 1999.

According to data compiled by the Center for Disease Control and Prevention, overdoses of opioids – or pain relievers – have killed more than 450,000 people since 1999. The epidemic manifested itself in three waves. The first involved the rapid increase in pain medication prescriptions in the 1990s. The second wave – starting in 2010 – was fueled by the surge in the use of an illegal opioid – heroin. The most recent wave, dating back to 2013, showed an increase in the use of newer opioids like fentanyl.

In 1996, Purdue launched its record-breaking pain reliever, OxyContin. The drug, available in different doses, had a little-known problem – it could be highly addictive. OxyContin has become popular and widely prescribed, much to the delight of the company, its bankers and owners, the billionaire Sackler family.

Part of the drug’s success was linked to its aggressive marketing campaigns that sought to persuade doctors to prescribe it and to discourage the use of alternatives. A fundamental problem was the business and the clinical model – how to keep drugs and cash flowing. This formed the heart of a series of strategy sessions starting in 2009, during which the Purdue Board of Directors was treated to presentations from McKinsey.

By this time, patients’ reliance on pain relievers had become a problem in the United States, and overdoses escalated. As more patients became addicted and demanded pain relievers – even as clinical advice dictated otherwise – a black market for alternatives such as fentanyl and heroin was created.

The drug abuse crisis has become a matter of public concern, and doctors and pharmacists are under increasing pressure to justify prescribing such pain relievers to their patients. The risk for Purdue was that such high review levels would lead to decreased distribution of OxyContin.

McKinsey’s solution was to simply eliminate anxiety where it mattered most – financial risk. The management consulting firm proposed a delivery mode: For each physician who prescribed OxyContin in an adverse event such as overdose or death, Purdue would pay that physician an amount equal to at least the annual cost of OxyContin. Doctors could continue to prescribe OxyContin without worrying about the financial risks.

But a less explored issue related to the link between OxyContin, drug addiction, and overdose. The intensity of the doses – using the industry metric, the milligram equivalent of morphine (MME) – indicated that the MME of OxyContin ranged from 10 mg to 80 mg. The differences were both clinical and financial. For every 10 mg dose, Purdue would earn $ 38 from those who take two pills a day for a week. Once a patient took the more expensive 80 mg dose, weekly profit jumped 450% to $ 210.

To maximize profits, Purdue had to extend usage times and dose intensity. Its business model was to encourage doctors to prescribe higher doses, resulting in longer treatment cycles and addiction.

Once this happened, the Sackler family grew richer and their desire for profit increased. On the back of the universal recognition that painkiller addiction had fueled a national crisis, Purdue then decided to sell drugs to cure painkiller addiction such as OxyContin.

When Elling sent the email, the bottom line was how McKinsey could protect himself from liability in connection with the Purdue scandal. His most significant contribution was the recommendation that McKinsey delete all documents and emails relating to his work with Purdue. In September 2018, at stages reminiscent of Purdue’s own intention to participate in the overall opioid crisis, McKinsey – who has a notorious habit of pretending to act in the best interests of his clients – released a report titled Why we need bolder action to fight the opioid epidemic.

One such report suggested that while McKinsey was happy to advise the Sackler and Purdue family on how to fuel the epidemic to an end, they were also happy to release reports intended for those trying to solve the opioid crisis they were trying to solve. were taking advantage.

The revelations about Purdue’s business model and its role in the opioid crisis are among the revelations from the largest opioid-related lawsuits against various pharmaceutical companies, including Insys Therapeutics and Johnson & Johnson.

The risk of litigation associated with adverse events is a constant source of anxiety for drug manufacturers. These anxieties contribute to long delays between drug research, clinical trials, and deployment, which are typically measured in years rather than months. Over the past year, the rapid research, approval and deployment of Covid vaccines has raised questions about reliability, efficacy and accountability. The nature of the pandemic, measured in lives lost, demanded rapid responses.

It remains to be seen whether, in the search for quick solutions and massification, the pharmaceutical industry has exposed itself to blind spots, in particular to unfavorable reactions.

Potential litigation costs are an unquantifiable business. Seeking to cover themselves, vaccine makers have pushed for no-fault contracts, which indemnify them from any potential vaccine-related disputes. In its vaccine solidarity center, Covax, the World Health Organization (WHO) has created a no-fault compensation fund that will be the sole source of settlement for any claims relating to the vaccines it has distributed.

For acquisitions made by countries outside the Covax facility, each country is responsible for its own compensation funds.

The Minister of Cooperative Governance and Traditional Affairs, Nkosazana Dlamini-Zuma, recently published in the Official Journal the creation of such a fund for direct procurement of vaccines in South Africa. The fund will be responsible for vaccine claims. The problem is that the funding for the scheme is supposed to come from the general budget and “funds from any other source”.

But, as anyone who has observed the implosion of the Traffic Accident Fund knows, the problem with compensation funds that have no caps on claims and limited funding sources is that they end up leaving applicants and the country dry.

The model mentioned in the gazette has little merit compared to the WHO model. In the WHO model, a tax is added to each vaccine to be distributed. This ensures that the sources of funding are widely distributed. Why the South African government decided to house the risk in a bankrupt IRS is a mystery.

This global compensation may constitute unfavorable incentives for vaccine manufacturers.

As the story of the opioid crisis indicates, these companies are not immune from the obligation to put profits first. One example of corporate liability rates was lawsuits related to the opioid crisis. Last year, Purdue agreed to a $ 8.3 billion settlement and quickly filed for bankruptcy protection. McKinsey has agreed to pay nearly $ 600 million in compensation and to stop advising clients on opioid businesses.

The worrying factor for the WHO, South Africa and other countries is that in the opioid crisis, one of the manufacturers who was heavily involved and who was ordered to pay $ 572 million to the State of Oklahoma is Johnson & Johnson.

Recent interruptions in its vaccine deployment suggest that its product is the type of vaccine that would benefit from a longer trial evaluation and evaluation period associated with years rather than months. But as the world seeks to balance the urgency of the crisis with the possibility of adverse events while dealing with a company that is not immune to bending the axis towards profit rather than people, the anxieties of the past are revived.


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