Corporate deep pockets attract attention in legal actions

Millions of Americans hate big corporations, suspect them of acting in their own best interest, to the detriment of the rest of us, and delight in corporations being put in their place. Sometimes they have good reasons for this; sometimes not. But let’s face it: legal actions against these corporate giants are sometimes justified, and give people harmed by a product or action of a corporation deserved monetary compensation.

With that in mind, this item from farmfutures.com tells about “Lee Johnson, a former school groundskeeper whose doctors didn’t think he’d live long enough learn the verdict, prevailed Friday in San Francisco state court after jurors deliberated for three days” on his damage suit.

The story went on to say that the “trial was an important test of the evidence against Monsanto and will serve as a template for litigating thousands of other claims” over Monsanto’s Roundup herbicide.

Johnson got less than he was asking; being awarded only $39 million of the $412 million he sought in damages. An additional $250 million was added to punish Monsanto after finding it liable for a design defect and failing to warn consumers of Roundup’s risks. Monsanto has said it will appeal the award in this the first trial over claims that the Roundup weed killer causes cancer.

Roundup is the world’s most popular and widely used herbicide, and its main ingredient – glyphosate – was approved for use way back in 1974. Monsanto defends the ingredient as perfectly safe, however, a cadre of opponents of glyphosate that includes environmentalists, regulators, researchers, and lawyers, hotly challenge that claim.

The Wall Street Journaladded some important information to this story. An editorial described the plaintiff’s attorneys’ approach to persuading the jury of Monsanto’s responsibility in Johnson’s cancer, as “junk science.”

The Journalwent on to explain that “the problem … is that there’s overwhelming scientific evidence that glyphosate does not cause cancer,” and quoted the Journal of National Cancer Institute study of 45,000 licensed pesticide applicators exposed to glyphosate which found “no evidence of an association between glyphosate use and risk of any solid tumors or lymphoid malignancies including non-Hodgkin lymphoma.”

The editorial further cited the Environmental Protection Agency as concluding that glyphosate is safe. “In December 2017, the US Environmental Protection Agency released the draft human health risk assessment for glyphosate, the active ingredient in Roundup,” according to North Carolina State University’s Patrick Maxwell, M.S. and Travis Gannon, Ph.D. “The human health assessment concluded that ‘glyphosate is not likely to be carcinogenic to humans’ and found ‘no other meaningful risks to human health’ when used in accordance with label instructions,” they wrote.

This seems to be a classic case of “he said, he said.” Both sides have advocates with solid credentials who advocate each position.

Sometimes, however, emotions trump factual evidence. And who isn’t sympathetic to Lee Johnson, whose cancer may end his life early. And there is also the factor of which legal team did its job best.

But then there’s the very real factor that big companies have deep pockets, and therefore are prime targets. A good example of this is the current rampant overuse of drugs, and the blame often being laid at the feet of Big Pharma.

Pharmaceutical companies’ business is identifying serious medical problems affecting lots of people, and working to develop drugs to help them, not to hurt them, and our government has implemented a long, slow process to require drugs to meet strict Food and Drug Administration (FDA) standards before they are approved for use.

Even the government, however, cannot prevent the misuse of items for sale, and virtually everything can be dangerous under the right circumstances. Step ladders, baseballs, automobiles are all sometimes dangerous.

It also cannot guarantee that drugs might not end up in the hands of someone who is allergic to one or more of them. People are allergic to milk, vitamin C and sunshine, and nearly everything else.

A single drug getting to market on average results from100 or more formulas developed for testing. Promising formulas must get through a process that takes on average 12 to 15 years, and costs one-to-two billion dollars. And they only get patent protection for a maximum of 20 years from the time it is applied for, which frequently occurs early in the testing process.

This leaves a relatively short time to recoup the sky-high research costs, so that the company has money to invest in finding the next needed drug.

Why would companies send out millions of doses of an expensive product, as they are accused of, without someone ordering and paying for it? Yet, state attorneys general and other attorneys are suing drug companies, blaming them for the drug epidemic.

It seems more reasonable to look at prescribing physicians, drug distributors, and outright criminal conduct for how and why these drugs are available to people to use them improperly, resulting in much suffering and needless death.

All of which is not to say that large companies don’t sometimes do things wrong. And when that happens, they should be punished.

But they should not be an automatic target of lawsuits, as they often are.

Getting it right in the battle against opioid overdose deaths

According to the Centers for Disease Control, Alabama, Tennessee and West Virginia – in that order – lead the nation in prescriptions for narcotic painkillers. Nationwide, there were close to 60,000 deaths in 2016 from drug overdoses.

How is this possible, when narcotics are strictly controlled? A popular target for blame for this problem is the pharmaceutical industry, which is often the focus of criticism. “We would not have a drug problem if manufacturers weren’t trying so hard to sell them,” the reasoning, such as it is, goes.

But making and selling drugs is what drug manufacturers do: they spend millions or billions of dollars over a decade and often longer to find the right formula to create a product that will help people suffering from a medical condition. They work to get the product through lengthy clinical trials and the stringent FDA approval process. Then, they must sell enough of that product during the patent protection period to recoup the costs of its development so the company can invest that money in another product’s development.

Also understand that drug companies do not provide addictive drugs to individuals, neither the legal users, nor the illegal users. They provide them to distributors, or directly to pharmacies, and unless someone steals them or distributes them improperly, they will contribute not one bit to a drug problem.

Far too many prescription drugs do get to users through “pill mills,” and some physicians who don’t have sufficient information about the effects of some drugs as they need may, as a result, over-prescribe them. And, obviously, these problems must be addressed.

However, a recent Daily Signal article tells us that the painkiller abuse problem is not primarily caused by prescription drug abuse and misuse, although the news we hear might convince many of us that drug companies are at fault.

The article, written by former director of the Office of National Drug Control Policy, Bill Bennett, who is also a former U.S. Secretary of Education, and Robert L. DuPont, MD, president of the Institute for Behavior and Health, explains that of the 60,000 deaths in the U.S. in 2016 from drug overdoses, 33,000 of them were opioid related.

And, they add that our news media mistakenly focus more attention on prescription drugs, instead of the illegal ones. Is that because Big Pharma is an easy and popular target?

Bennett and DuPont, in fact, say, “nearly 70 percent of our nation’s opioid deaths do not come via prescription abuse.” “The main problem today, and the growth for tomorrow,” they say, “is illegal opioids such as heroin, illegal fentanyl, and a hundred other synthetics, not legal drugs used illegally or in ways not as prescribed.”

They cite data from the Obama administration’s press office in 2015 saying that there were 33,091 opioid overdose deaths, 12,990 of which were from heroin. Another 9,580 were from synthetic opioids, mostly illegal fentanyl.

They propose a two-phased attack on the problem. First, fight harder against illegal drugs coming into the U.S. through better border enforcement to stop the drug traffic from and through Mexico, as well as working to have Mexico eliminate its poppy crops; have stricter monitoring of international mail services; and crack down on cartel activity, both here in the U.S. and at their source.

The second phase acknowledges that most money directed at the problem goes to “treatment, recovery, and urgent overdose reversal,” which they say is certainly important, but it is not enough. “We need to improve engagement in treatment, reduce dropout, and address the far too common outcome of relapse with sustained recovery—meaning no use of alcohol, marijuana, or other drugs,” by recovering addicts.

“But the main unaddressed nature of the opioid crisis,” Bennett and DuPont say, “is focus and energy on prevention.” This includes serious efforts to educate the public about what is in their medicine cabinets and how to keep those drugs out of the hands of those for whom they aren’t prescribed, and to educate the public about the dangerous nature of the drugs sold on the street. It is critical to also work to counteract the youthful use of alcohol, marijuana, tobacco and other drugs, where they say 90 percent of addictions begin.

Citing the rising death toll from illegal drugs, which they note is much greater than the crack cocaine problem in the 80s, the authors call for more effective action by political leaders, parents, the entertainment industry and health care professionals.

Looking back to the late 1970s and 1980s Bennett and DuPont recount how the nation conquered the serious drug problems of that time. “The nation rolled up its sleeves, went to work, talked about it, taught about it, and reversed it—and by 1992 we had cut drug use in half, and even more in some age groups.”

This problem is entirely preventable, and certainly can be dramatically reduced. “In sum, let us commence a strategy to stop the problems of abuse before they start,” they wrote. “It will take a nationwide effort, from the president’s bully pulpit down to local community messaging.”

Certainly, focusing on the real problem will produce positive results.

Trump’s difficulties solving problems identified in the campaign

During the presidential campaign, Donald Trump identified and pledged to repair a number of problems facing the country. Among those problems were high tax rates, over-regulation, repealing and replacing Obamacare, the high cost of prescription drugs, immigration, and strengthening the military. All these need solutions, and all will be difficult to solve.

Illustrating the difficulty in changing entrenched policies and practices is the high price of prescription drugs. Early on, the administration’s handling of this issue seems confused. President Trump has changed his focus a couple of times; part of the process of learning the differences between running a business and running a country, perhaps.

He is caught between helping consumers get better prices, and at the same time not hamstringing the companies that manufacture crucial and beneficial medications.

First, Trump met with prominent Democrats, like Representative Elijah Cummings, D-MD, and promised to lower drug costs, and then he met with drug company executives and backed away from that promise.

The goal hasn’t really changed, but figuring out how to get there is tricky, and the reality is that the president has limited power to bring it about.

Many are content to blame high drug prices on greedy pharmaceutical manufacturers, and that sometimes is a reasonable criticism. But that view ignores the steep hill manufacturers have to climb to get needed drugs to market. It takes the creation of 1,000 drug formulas before the right one is found and gets through that step to clinical testing and patent protection, and only 8 percent of those getting to the testing phase actually pass FDA requirements for approval.

Thus, many years and millions or billions of dollars later, a beneficial drug makes it to market. The pharmaceutical company then has to sell enough of the product in the remaining few years of the exclusivity period or patent protection to cover those enormous costs before other companies are free to produce a generic form without investing much to do so.

And then, someone who takes the drug and has a bad experience may sue the manufacturer, despite the stringent quality requirements for FDA approval, and the fact that the drug was prescribed for the plaintiff by a physician. Such lawsuits add to the substantial costs of manufacturing drugs.

If Trump negotiates with manufacturers to get prices down and threatens that if they don’t lower prices the government – the largest drug buyer – won’t buy their drugs, he risks preventing Medicare and Medicaid recipients from getting what in most cases are the best drugs on the market. And without sufficient profit from their products, pharmaceutical companies will be substantially hampered in funding research necessary for new and better drugs.

Even a successful negotiation for Medicaid/Medicare has no effect on those Americans with private insurance through their employers, or through exchanges, or otherwise. Their prices would undoubtedly rise as drug makers try to recoup money lost due to the government paying lower prices.

“In addition, prescription drugs often substitute for, and reduce, other health-care costs — by, for instance, reducing surgeries or hospital stays,” wrote Michael Tanner, a senior fellow at the Cato Institute published in National Review. “Limiting the availability of prescription drugs, therefore, may do less to reduce overall health-care costs than we think.”

Going back to the steep hill drug manufacturers must climb to produce a marketable drug, working to streamline the FDA’s approval process can certainly reduce the length of time it takes and also reduce the cost to get drugs through the approval maze and to market. For example, when Mylan acquired the EpiPen and raised the price by about 400 percent, two manufacturers had competing products that had been awaiting approval for five years. Had there been a streamlined approval process, there would have been no EpiPen price gouging.

Tanner also points out that during this fiasco, “in Europe there were three different versions of the product on the market.”

“And finally,” he wrote, “we can inject more consumer choice into the health-care system by expanding health savings accounts and transitioning Medicare to a system of premium support. Nothing more effectively disciplines a market and forces down prices than engaged consumers spending their own money.”

It is easy to outline solutions; it is much more difficult to actually get them done.

Only 30 days into his presidency, Democrats and much of the media criticize Trump for nearly everything he has done and not done, and a good bit comes from some on the Right, as well. The traditional honeymoon period, where a new president is allowed 100 days to get his administration formed and active, ended before it began for Trump. And to be objective, the president often pokes the bear, further complicating things. But there is little recognition for the things Trump has accomplished, compared to the manic nit picking that passes for news these days.

Congress needs to stop hemming and hawing, and get busy, and the Democrats and anti-Trump media need to abandon their obstruction and focus their criticism on things that really deserve it, and give the Trump presidency the same hands-off treatment Barack Obama received for eight years, or at least until the honeymoon is really over.

The wildly outrageous costs of pharmaceutical drug production

Drug companies – “Big Pharma,” as they are called – are targets in America. Especially with Mylan’s recent EpiPen pricing issue and earlier when Turing’s odious CEO Martin Shkreli raised the price of Daraprim by more than 55 times, from $13.50 per pill to $750 per, and his smug reaction to criticism over that questionable move. There are bad guys in all areas of life, of course, and pharmaceutical companies are no exception. Perhaps these two examples are evidence of bad players at work.

Without getting into the minutiae of either of these situations – and certainly not defending either Mylan or Turing – here is some badly needed and eye-opening information about the business of producing pharmaceuticals.

Making drugs is a business, and like other manufacturers drug producers find something people need or want and produce it. Life-saving drugs, or drugs that improve our health are valuable and needed. Drug companies spend billions of dollars over many years to develop useful, needed pharmaceutical products, improve them so that they will meet or surpass the FDA’s strict standards, and once approved market them.

In June of this year, the American Action Forum released research addressing the process of producing new drugs. The process “is extraordinarily expensive and time consuming,” the article stated. “A Tufts University study found that the average cost to bring just one drug to the market is about $2.6 billion. It takes an average of 15 years from the time a drug developer first begins testing a new formula until it is approved by the FDA. Only 1 in 1,000 drug formulas will ever enter pre-clinical testing, and of those, roughly 8 percent will ultimately receive FDA approval.”

Let’s say PharmX creates 100,000 drug formulas, but only one in a thousand, or 100 of them, gets to pre-clinical testing and only eight will receive FDA approval. PharmX will have invested on average $2.6 billion in each one of the eight. The company has to sell enough of each of those eight drugs to pay for its development, and to have enough left over to finance new research and development, and some profit.

Like other inventors, drug companies patent their products, or receive an exclusivity period. A patent is issued for 20 years from the date of filing, and drug makers usually file early in the development stage to prevent other companies from moving in on their idea. If it takes an average of 15 years to get a drug through approval and to market, the pharmaceutical company has on average only five years to sell enough of the drug to recoup the $2.6 billion in development, approval and marketing costs. At the end of the patent period and/or the exclusivity period, another drug maker might make a generic form of the drug, and sell it for a lot less.

So, when you do the math for a drug with development costs of $2.6 billion, you find that if PharmX charges a dollar a dose, it will have to sell 2.6 billion doses in five years just to break even. If PharmX charges $100 a dose, it will have to sell 26 million doses in five years, just to break even. John LaMattina, senior partner at PureTech venture capital, noted that drug development “is a high-risk, expensive, and long-term endeavor.” Classic understatement.

Another aspect of this issue is when drugs made by US companies cost more at home than they do in other countries, such as Canada. It doesn’t seem right that Canadians can buy American drugs cheaper than Americans can. But what is the drug company supposed to do when the Canadian government, or another government, wants to buy millions of dollars of its product at lower than market price when it is trying to recoup billions in costs? There are likely other drugs made by other companies that treat the same disease that these governments could buy instead, so should the drug company pass up that opportunity, leave the millions of dollars on the table, and perhaps suffer financially as a result, while a competitor sells millions of dollars of its product to these countries at a below-market price?

Another obstacle to manufacturers’ ability to recoup the cost of bringing a new drug to market is that regulations imposed by other countries, perhaps to protect one of their own companies, makes the potential market for sales smaller.

And, despite the rigorous development and testing process required to gain the FDA’s approval that the drug is safe for public use, the required warnings about potential side effects and such that go on product sheets, and the fact that drugs are prescribed by patient’s doctors, drug manufacturers still get sued by patients.

Doing business in the U.S. is a real challenge, with often burdensome and unreasonable regulations and other hurdles that must be negotiated that make producing needed and wanted products and services difficult and expensive.

The more expensive drug production is, the greater the need for high prices. While we would all like lower prices for drugs and healthcare in general, we also want to continue to have companies developing new and better drugs and medical devices.