Pennies a pill, or high numbers on the bill? – On the struggle between brand-name drugs and generics

Not long ago, I by chance got my hands on an Issue of the International Herald Tribune, the global edition of the New York Times. You know, looking at things from the other side of the great pond can sometimes be very eye-opening. It sure was for me this time. In the issue, Journalist Katie Holmes wrote a most insightful article entitled: “Why generic drugs don’t get more respect”. For all of you who are not into pharmacy that much, I am neither, a generic is usually a copycat version of a brand-name drug. Before being allowed to sell a generic on the market, the producing companies (in the US and in the European Union) have to give prove that their generic drug is as effective as the original one. The advantage of generics compared to the original pills is simple: While their effectiveness matches the original’s, their price is much lower, “many generic drugs cost pennies a pill”, as Holmes puts it. Instead of buying and prescribing expensive brand products, a generic brings about the same effect and helps saving money for patients and the health system. So it is pretty obvious, that people should demand more generics, doctors should more often prescribe them, and health systems should rather cover costs for generics than for expensive brand pills – so far so good. But hey, life would be too easy if everything would go according to a reasonable idea. So despite most people knowing, that it might be a good thing to do, to use generics more often, Holmes cites researchers, who found quite the opposite to happen. Let’s read what Holmes has to report thereon:

“In 2007, researchers at Brigham and Women’s Hospital in Boston surveyed more than 1,000 patients about their views on generic drugs. Participants agreed overwhelmingly that generics were ‘a better value’ than branded drugs, and fewer than 10 percent believed that generic drugs caused more side effects. More than half expressed the opinion that Americans should be taking more of them. But when it came to the patients themselves, only about 38 percent said they preferred generics over brand-name drugs. ‘It’s some bizarre thing that’s in the deepest part of their psyche,” said Dr. William Shrank, the lead author of the study. “They have all the pieces of information to make the right decision, but there’s something that’s holding them back.”

Read the original article here: http://www.nytimes.com/2013/10/06/sunday-review/why-the-bad-rap-on-generic-drugs.html?pagewanted=all&_r=0

Now guess, what could it be, that is holding patients, or more generally speaking: people, back to make the right choice? Well, non-surprisingly, I would suggest that public relations has got something to do with it. Without naming PR, Holmes already points clearly into to that direction, when she cites an article published in Preventing Chronic Disease, wherein researchers suggest some straightforward reasons. Let us read in once more:

“Brand-name drugs were perceived as being of higher quality, or as causing fewer side effects. But other explanations were more complex. Some patients said, they felt forced to ‘settle’ for lesser drugs because they were poor and black. (…) Other studies have shown that people with higher education and income levels are more likely to view generics positively, but scepticism about generic drugs is not limited to the poor and disadvantaged. A recent study found that almost 50 percent of doctors held negative views of the quality of generic medications, and more than a quarter said they would rather not use generics for either themselves or their families.”

That far the termites have spread! Within these lines we see clear hints to pr-effects, resulting from long periods of persuasion. So let us have a closer look at them:

  1. If only 38 percent of the people asked, preferred generic over brand-name drugs, despite their advantage in terms of prices, it shows that there is a general idea that higher prices always have to be explained with higher quality of the product in question. There might be some truth to the argument, but not necessarily. A Mercedes might be of higher quality than a Volkswagen, but then again: not necessarily. Especially not, if one would just replace the star by a VW. With drugs, where the ingredients are exactly the same, and only the packing is different, quality cannot derive from the product itself. There have to be other factors, driving prices beside the product itself.
  2. Hence, patients/customers feel that something must be wrong with generics. Once again let us cite Holmes: “Part of the problem, some suspect, is the name itself: “Generic” conjures up the budget aisle at the local supermarket. And this kind of quality, everybody knows who has been in a supermarket lately.”
  3. Thirdly, we can see that information alone is not sufficient to come to the conclusion that would be most reasonable. The spin of information, obviously, also matters, and image, and service, and so on. Information, for all, is useless as long as one cannot understand the background, from which they are originating.
  4. Long term lobbying of pharmaceutical companies seems to work with physicians, who should know that there is no medical difference between generics and brand-name drugs. But obviously, the long enduring persuasion by consultants and drug sellers, who of course want to sell the more expensive drug on behalf of the company they represent, seems to have some effect, at least.
  5. Images can persuade people to do irrational things. Poor people who rather take (and pay for) expensive pills (but presumably also well educated people), fall for urban legends as the following example, given by Holmes shows: “’I think that the doctors and manufacturers use us as guinea pigs to see which ones we will buy the most’, a woman told researchers.” That application for procedures for generics are as strict as those for brand-name products, is then just a lie generated by public relations, the “smart” customer is not falling for.

Surely, this is no grand plan to trick the entire population into buying expensive drugs. But it is a raging battle fought by the means of public relations on behalf of the big players in the pharmaceutical market. India, for example, has long gone another way, and started to become the world’s leading manufacturer of generics. Therefore, international companies put a lot of efforts into hindering Indian producers to copy their brand-name drugs, and selling them for a small split of the original price. Not long ago, in 2012 the Swiss company Novartis lost a landmark case in India, concerning a drug for cancer treatment, called Glivec). Cancer medication is very expensive. Treatment costs around 27.000 $ per month, per patient in Western countries. And since cancer has been diagnosed increasingly over the last decades among Europeans and Americans, the market is growing. And when it comes to saving patients lives, we start to support whatever is necessary, because we feel ethically obliged to do so. That’s why companies do not have a hard time to press for high prices on the market – and never forget that it is not only about production, but about marketing, lobbying, advertising and public relations, too. Consequently, cheap generics produced in India pose a threat to major drug producing companies as Novartis or Bayer. “According to estimates the development costs for Glivec range from 10 million to 1 billion US-Dollars depending on who is asked. Novartis claims to have spent 1 billion US-Dollars, whereas Non-Profit organisations talk about a much smaller amount of money.” (Brachvogel et al. 2013) To prevent Indian companies from producing their own generic drug against cancer, Novartis even offered to treat all Indian citizens, suffering from the special kind of cancer Glivec was designed for, for free.

See the news on the court decision here: http://www.youtube.com/watch?v=j4tPJxKhDNI

By being so generous, Novartis would have killed two birds with one stone. Novartis would have boosted its image as a caring company, that helps the poor who cannot afford medication at all. And they would have stayed in the driver’s seat, able to dictate prices on cancer-drugs as used. Well, Novartis won’t go bankrupt after losing the case in India. Lobbying is never only one single match, but an ongoing effort to persuade people, doctors and politicians, that there actually is a difference, where there is no difference. And the system still works. Even though patients in Europe would profit from cheaper generics, health systems still support expensive treatments, sanctioned by politics, who which often side with the industry instead of patients who just accidently happen to be citizens and voters, too. But then again, who wants to be a guinea pig, testing some cheap magic pills from India? If they cannot even feed their entire population, how could they produce medicine that matches Western companies’ products? And so, once again, the consumer is too smart to fool. He doesn’t take the offer and rather pays a dozen times more than he actually would need to. It just feels so good to know, that pharmaceutical companies just take care of their customers and put, generous as they are, most of their earnings into research, to cure people one day. But are we learning to fight these scourges of humanity for good, or do we just learn the perfection of controlling them? Well, this is another story, for another day.

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