Drug companies face backlash from new foes

The Pharmaceutical Manufacturers of America (PhRMA), which represents the brand-name drug companies, defends its practices and says that it put out a new set of guidelines for its sales representatives last summer. "We clearly indicate that sports events and lavish entertainment are inappropriate," says PhRMA's Jeff Trewhitt. "You will see a lot less of that in the future."

Consumer activists are also hopeful the guidance will have an impact. But they note how deeply ingrained such marketing practices are in the medical culture. Larry Sasich, a pharmacist and research analyst at the consumer group Public Citizen, says the federal guidance reads like "a little primer for the world's largest corporations on how they should behave ethically and honestly."

"It makes you wonder where these companies have been in the first place," he adds. "But the message is that the federal government is going to go after" them.

Other analysts, like Robert Blendon of Harvard's School of Public Health, don't think the warning will have a "huge effect" on company spending. "But it will have an effect on the ethics of the profession and public confidence," he says. "People don't want their physicians to have an economic stake in the drugs they're prescribing."

The drug companies' marketing practices are just one area of their business practices under assault. In the last three years, dozens of lawsuits have been filed against drug manufacturers challenging some of their patent practices.

A patent for a new drug lasts 20 years. Under the federal Hatch-Waxman Act, a company can gain a 30-month extension if it files another patent for its drug. Generic drugmakers maintain that their brand-name rivals routinely file frivolous patents, particularly on their most lucrative products. In some cases, they file multiple patents to get multiple extensions and keep generic versions off the market indefinitely.

PhRMA's Mr. Trewhitt calls that a gross distortion. He notes that since the 1984 passage of the Hatch-Waxman bill, which opened up the playing field more to generic drugs, the market share for generic drugs has increased from 19 to 47 percent.

But this summer, the Federal Trade Commission found that drug companies have been filing more multiple patents since 1998. In eight instances involving blockbuster drugs, it said the companies had filed questionable patents in an effort to keep generic drugs off the market.

After the report was issued, the industry suffered a rare defeat in the Senate on the drug bill now under consideration in the House. PhRMA opposes the legislation, saying it will make it more difficult to do research and bring new drugs to market.

In another attack on the industry, 29 states filed a class-action suit last spring against Bristol-Myers Squibb. They say the company entered into an illegal antitrust agreement with a generic drug company to keep its less-expensive generic version of a cancer-fighting pill off the market. The company denies wrongdoing.

Consumer advocates believe the growing pressure on the industry will eventually impact the cost of health insurance. "It's a step in the right direction," says Ronald Pollack of Families USA. "But ultimately, we're gong to have to be very clear and say some of these practices are illegal and punish people if they continue them."

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