For Big Pharma, Charity Begins at Home - and at Taxpayer Expense

Martin Shkreli

According to an article in the British Medical Journal, from 2011 to 2014 drug companies have increased the prices of four of the top 10 drugs sold in the United States by more than 100%, and the prices of the remaining six by more than 50%. 

Most people are familiar with the story of Martin Shkreli, former chief executive of Turing Pharmaceuticals. In August 2015, he purchased a generic drug called Daraprim that treats toxoplasmosis—a life-threatening parasitic infection that many AIDS patients contract—and immediately raised its price by more than 5,000 percent. He has not been alone. The price of many generic as well as brand-named drugs has skyrocketed. In psychiatry, an old antidepressant named Parnate, available since the early 1960's, can cost over $250 per month. It probably ought to be one of those five dollar generics.

What a lot of people may not know is that these price increases are part of what seems to be a scam to bleed tax dollars from Medicare. According to a recent article in Bloomberg News, within days of increasing the cost of Darapin, Turing contacted Patient Services Inc., or PSI - a charity that helps people pay for the insurance copayments on costly drugs. Turing wanted PSI to create a fund for patients who had the AIDS complication that could be treated with Daraprim.

PSI, as it turns out, is one of seven patient-assistance charitable organizations commonly known as a copay charities. There are also many smaller ones. They offer assistance to some of the 40 million Americans covered through the government-funded Medicare Part D drug program.

Having just made Daraprim much more costly, Turing was now seemingly offering to make it more affordable. But that is hardly the whole story. It is also a story about how U.S. taxpayers support a billion-dollar system in which charitable giving is, in effect, a very profitable form of investment for drug companies—one that may also be tax-deductible!

Drug companies know that, all other things being equal, the more expensive they make a drug, the fewer people will purchase it. However, if insurance pays for the drug, then this is is no longer much of an issue. The kicker is that when the Part D Medicare drug law was passed, it included a provision that Medicare, with its leverage on negotiating drug prices created by the size of its insured population, cannot bargain with drug companies for lower prices. If the insurance company uses a "charity" which covers patient co-pays and the so-called donut hole, patients will fill their prescriptions and taxpayers end up paying the huge price increases.

As the Bloomberg article points out, "A million-dollar contribution from a pharmaceutical company to a copay charity can keep hundreds of patients from abandoning a newly pricey drug, enabling the donor to collect many millions from Medicare. The contributions also provide public-relations cover for drug companies when they face criticism for price hikes."

The article added, "Fueled almost entirely by drugmakers’ contributions, the seven biggest copay charities, which cover scores of diseases, had combined contributions of $1.1 billion in 2014. That is more than twice the figure in 2010, mirroring the surge in drug prices. For that $1 billion in aid, drug companies get many billions back.

According to a recent article in USA Today, charity-run funds are now facing new scrutiny by prosecutors in two states and by The Department of Health and Human Services' office of the inspector general. But the focus is only on whether or not co-pay charities favor donor companies' drugs over those sold by other companies. No one is challenging the whole scheme.

Those who are concerned that the government spends too much money and that the national debt is too large should ask themselves why politicians prohibited Medicare from negotiating volume discounts with Pharma companies, thusly creating these lucrative opportunities for them at taxpayer expense.

Marketing Methamphetamine Clones for Fun and Profit

From 2010 (when I first started this blog) until 2013, I published several posts about the United States Department of Justice assessing huge fines against several large pharmaceutical company for off-label marketing and false advertising about several different psychiatric drugs. Somehow in September of 2014, I missed  a big one. 

That time, a large fine was assessed against my least favorite of all the drug companies, Shire Pharmaceuticals - the maker of the methamphetamine clones Adderall and Vyvanse. They also make a version of Ritalin called Daytrana.

As far as I'm concerned, this company is nothing but a dope dealer that cares only for profits and not a whit for their victims - er, I mean consumers. The company does its best to convince doctors to dope up kids who have various behavior problems - which in reality are mostly due to problematic parenting and/or chaotic home environments - with highly abuseable and dangerous stimulants. 

I have written several posts on the huge increase in prescriptions for these medications in children over the last twenty years or so. Now, we are seeing a huge increase in prescriptions of these drugs to adults for the adult version of "ADHD." While there may be both adults and children with minimal brain dysfunction who have a real disorder that requires this medication, most people who are given this diagnosis present with symptoms which are caused by other factors. The biggest ones: the effects of bad environments mentioned above which create anxiety and low moods, and amphetamine abuse. The later patients lie to their physicians in order to get the drugs. 

The drugs not only get people high, but are also used as performance-enhancing drugs for mental activities—much like steroids are used to enhance performance for physical activities.

Currently, medications to treat ADHD are one of the most lucrative sectors of the US drug market, totaling more than $10 billion in sales - 83 million prescriptions in 2014, according to data from IMS Health, ”with adults using more of these medications..." The “2013 edition of the Diagnostic and Statistical Manual of Mental Disorders... relaxed the definition for” ADHD in adults."

ADHD symptoms are easily faked. A 2010 study found that 22% of adults tested for ADHD exaggerated their symptoms. And that was probably only those subjects who would admit to it! Such exaggeration has been made much easier by the wide availability of online symptom checklists. 

Getting back to the matter at hand, Shire Pharmaceuticals LLC  paid a $56.5 million fine to resolve civil allegations that it violated the False Claims Act as a result of its marketing and promotion of these drugs. As one can easily see from the above figures, that's actually a very small cost of doing business. Among other things, they marketed Adderall XR based on unsupported claims that Adderall XR would prevent poor academic performance, loss of employment, criminal behavior, traffic accidents and sexually transmitted diseases. 

Shire medical science liaison allegedly told a state formulary board that Vyvanse “provides less abuse liability” than “every other long-acting release mechanism” on the market.  However, the government contended that no study Shire conducted had concluded that Vyvanse was not abuseable, and, as an amphetamine product, the Vyvanse label included an FDA-mandated black box warning for its potential for misuse and abuse. Shire also made allegedly unsupported claims that treatment with Vyvanse would prevent car accidents, divorce, arrests and unemployment. 

Interestingly, the Justice Department was alerted to these marketing practicing by whistleblowers. The allegations arose from a lawsuit filed by Dr. Gerardo Torres, a former Shire executive, and a separate lawsuit filed by Anita Hsieh, Kara Harris and Ian Clark, former Shire sales representatives. The lawsuits were filed under the False Claims Act’s whistleblower provisions, which permit private parties to sue for false claims on behalf of the government and to share in any recovery. 

The marketing of stimulants for "adult ADHD" is as heinous as the marketing to children and teens. According to an article published by Medscape, "... the prevalence of [supposed] ADHD in adults these days is about half that in children. For years, the legitimacy of the adult ADHD was based on the belief that it was a condition that started in childhood and, for some, persisted into adulthood. 

But last year that hypothesis was shaken by the publication of a provocative, long-term study that followed more than 1,000 New Zealand children until age 38. In that study Terrie Moffitt, PhD, a psychologist at Duke University, and her colleagues found that in childhood, 6% of those in the study had ADHD. At age 38, that number had dropped to 3%.

And the biggest surprise was the lack of evidence of significant overlap between the two groups. Only 5% of those with ADHD in childhood still met the criteria at age 38. And only 10% of those who met the definition at age 38 were among those with the supposed condition in childhood.

The Medscape news article concluded from this data that "Studies suggest people diagnosed with ADHD as adults may have a condition that differs from ADHD seen in children." Wow. I would come to a different conclusion. Namely, that most of these patients did not have "ADHD" at all, but something else entirely.

And in yet more marketing-of-dope-to-children news (without a peep out of the pesky National Institute for Drug Abuse or the FDA), there’s a new, candy-flavored amphetamine on the market. Adzenys is chewable and fruity! Dr. Alexander Papp, affiliated with University of California, San Diego, asked, “What’s next? Gummy bears?”