## On drugs, mammoths, and Mahmoud

I was, of course, delighted that Columbia University invited my good friend Mahmoud to speak there, and dismayed only by the tedious introduction by President Lee Bollinger. (“Having demonstrated conclusively that today’s featured speaker is a murderous tyrant with no more right to partake in the civilized world than Genghis Khan or Attila the Hun, let me now, without further ado…”) However long your speaker’s list of achievements, crimes against humanity, etc. might be, I think talk introductions should be two minutes tops.

But since this particular event has already been covered on more blogs than the Monster has subgroups, today I thought I’d roll out an occasional new Shtetl-Optimized feature — in which, for want of anything better to blog about, I discuss some books I’ve read recently.

The Truth About The Drug Companies: How They Deceive Us and What To Do About It by Marcia Angell.

Like many in the US, I once “knew” that drug companies have to charge such absurd prices here because otherwise they wouldn’t be able to fund their R&D. This book reveals the hilarious truth about what drug company R&D actually consists of. My favorite examples: coloring Prozac pink instead of green, marketing it for “premenstrual dysphoric disorder” instead of depression, and charging three times as much for it. Inventing new drugs for high blood pressure that are less effective than diuretics available since the 1950’s, but have the advantage of being patentable. Proving in clinical trials that a new drug works better than an old one, as long as you compare 40mg of the one to 20mg of the other.

The book paints a picture of the pharmaceutical industry as, basically, an organized crime syndicate that’s been successful in co-opting the government. It trumpets the free market but depends almost entirely for its existence on bad patent laws that it helped write; it bribes doctors to prescribe worse expensive drugs instead of better cheap ones; it waits for government-funded university researchers to discover new drugs, then bottles them up, makes billions of dollars, and demands credit for its life-saving innovations.

Among the arguments put forward by the rare negative reviewers of this book on Amazon, the following was my favorite (I’ll let you supply a counterargument):

Who do you folks think are paid higher, scientists in the Unis and government programs, or scientists in the industry? … Marcia saying the Universities and the NIH are more innovative in developing drugs than the Pharma Industry is like saying (using sports analogy) Minor League baseball is better than the MLB. Which players do you think are paid more? Common sense my friends.

The World Without Us by Alan Weisman.

This book has received a lot of attention lately, and deserves all of it. The topic is: if humans disappeared tomorrow, how long would it take for the world’s forests and coral reefs to regenerate, garbage to decompose, excess CO2 to wash out of the sky, giant land mammals to reappear in North America, etc.? Of course this is just a different way of asking: “exactly how badly have humans screwed up the planet?” Weisman’s key insight, though, is that it’s less depressing to read about the world regenerating itself than about its being destroyed.

It’s hard to identify a clear thesis in this book, just lots of interesting observations: for example, that African elephants weren’t hunted to extinction whereas woolly mammoths probably were because only the former evolved to fear humans; and that, if North and South Korea ever reunite, it will be a disaster for the dozens of endangered species that now survive only in a four-mile-wide demilitarized strip between the two. The prose is beautiful throughout, and sometimes reaches heights rarely seen in environmental writing. After explaining the role of volcanoes in climate change, Weisman says: “the problem is, by tapping the Carboniferous Formation and spewing it up into the sky, we’ve become a volcano that hasn’t stopped erupting since the 1700s.”

### 32 Responses to “On drugs, mammoths, and Mahmoud”

1. Travis Says:

I know thinking about human-caused extinctions and habitat destruction gets depressing, and it’s easy to come to regard us as a solely negative influence on our fellow species and biodiversity.

Fortunately, there is one important thing that will allow us humans to contribute in a unique and positive way to the survival and prosperity of Earth’s many species: we have a space program. Not only may we some day use our spacecraft to transport Earthly life to other worlds (in fact, we may have already, if you count bacteria hitching a ride on Mars landers), but we also are developing the capability to divert asteroids from catastrophic collisions with our planet.

That’s right: the reason the dinosaurs are extinct is that they didn’t have a space program.

2. Andris Says:

As usual, you are taking every anti-drug company claim for true without due verification. Apparently, everyone who is actually involved with drug development laughs at the claim “NIH and universities are doing all the work and drug companies are just packaging the results”. Here is a quite lengthy argument about that:
http://www.corante.com/pipeline/archives/2004/09/09/how_it_really_works.php

3. Christian Says:

In Germany, there is also an ex-demilitarized strip with many endangered species and I think they are handling it quite well:
http://en.wikipedia.org/wiki/German_Green_Belt

4. Gilad Says:

There are several different (‘though related) claims being made about drug companies:

1) [They] bribe[s] doctors to prescribe worse expensive drugs instead of better cheap ones

2) [They] wait[s] for government-funded university researchers to discover new drugs, then bottles them up, makes billions of dollars, and demands credit for its life-saving innovations.

3) They do things such as coloring Prozac pink instead of green, marketing it for “premenstrual dysphoric disorder”

The response quoted by Andris responds, generally, to number 2, and I tend to (partially) agree with it – drug companies don’t do “nothing”. Claim 1, bribing doctors, can easily be solved by litigation, but the problem is deeper. All around the world health care is being “managed” by various bodies, with conflicting interests, ownership, etc., and it’s very hard to pry apart what’s being done for legitimate reasons and what’s being done for bad reasons.

Claim 3 is just capitalism at it’s best. Tell CEOs that the company they’re managing needs not only to make a profit but make a larger profit every year, and you get stuff like that. In general, too much money is being spent by companies in marketing their products, instead of in making better products. It’s just cheaper to do things that way. And your average salesperson doesn’t mind lying. In the non-existent good old days, if you were a cheat the people in the village would stop doing business with you. Nowdays telemarketers get bonuses for selling useless products to confused senior citizens…
I’d be glad to hear ideas about what can be done, in general, about the ultra-capitalism-in-complex-world problem, and if anything can be done it may well help solve problems with drug companies, too.

5. Johan Richter Says:

Here is another discussion of part of Angell’s book. http://www.marginalrevolution.com/marginalrevolution/2004/12/metoo_three.html

6. Raoul Ohio Says:

Genghis Khan is arguably the greatest and smartest leader ever and can hardly be lumped with the likes of Mahmoud and Attila the Hun.

7. Scott Says:

My favorite Genghis K. quote: “The greatest happiness is to vanquish your enemies, to chase them before you, to rob them of their wealth, to see those dear to them bathed in tears, to clasp to your bosom their wives and daughters.”

8. Gus Says:

Scott, I would so love to believe that drug companies are evil, but is it really that simple? Are drug companies more evil than other companies, or are they, and every other company, just a neutral profit-maximizing machine?

As Gilad points out, consumers are as much to blame for bloated marketing budgets and dodgy advertising as are the drug companies: if Cletus weren’t such a dumbass then Monty would never get away with such filth.

One could also apply this idea to the exploitation of broken patent laws. As mindless profit-maximizing machines, drug companies would be stupid not to enact and exploit these laws, provided their consumer base would allow them to get away with it.

This brings me to my personal pet crisis. Is it the job of consumers to stay educated and rational in order to make the capitalist engine work the way it’s supposed to? Is it even possible to maintain a sufficient level of vigilance while working a full-time job, raising a family, and paying down a mortgage? Is there a better system, or is the one we have as good as it gets?

9. lylebot Says:

Sure, the Amazon review is silly, but still: drug company scientists are scientists. They’ve been through grad school, written several-hundred-page dissertations about chemistry, and presumably know something about how science works. After I read your review, I clicked over to Derek Lowe’s In the Pipeline blog about drug discovery in the pharmaceutical industry to see if he had anything to say about the book. Suffice to say, he didn’t like it.

10. Johan Richter Says:

Where did that quote come from? Yes, Genigis Khan but I am wondering how his wisdom has been preserved for later generations.

11. Scott Says:

Gus, I completely agree that Monty Burns would be stupid not to exploit Cletus’s ignorance. So the real issue is not that drug companies are uniquely evil (they aren’t), but simply that the law allows them to get away with what they do. Furthermore, this strikes me not as a deep, unavoidable problem but as a contingent, avoidable one. Angell’s book lists highly specific ways that the FDA and patent law should be reformed (example: requiring new drugs to be tested against existing drugs rather than just placebos), which fall far short of the overthrow of capitalism.

12. Scott Says:

Johan, the quote comes from an extremely reliable source: Genghis’s wikiquote page. (Seriously, I don’t know its provenance — does anyone?)

13. Greg Kuperberg Says:

It won’t make the world a better place to describe drug companies as “an organized crime syndicate”. Nor, more to the point, to dwell on the atypical examples where the drug companies were richly rewarded for actions that deserved no reward at all. I agree that these examples are outrageous, but they aren’t the real problem.

It is always tempting to reduce every social problem to the lopsided incidents where the outcome is totally unjust. For instance, if you are against expensive lawsuits, then you can point to this or that idiot who spilled hot coffee on himself and then sued Starbucks orMcDonald’s for ten million dollars. But most injustice is more complicated that. In most cases, society is oversolving or undersolving a real problem, or even both at the same time. Sometimes both sides can point to outrageous incidents and reduce the dispute to a shouting match. (In fact, lawsuits against the big bad corporation are a good example of that.)

Most drugs sold by most drug companies cure a real disease and provide a real service to society. Most of the time the drug companies did real research and really proved that their drugs are better than alternatives. The problem is that they may still have too much market power, and they still may be overpaid for their contribution to society.

For instance, suppose that you have a choice between two drugs that stave off heart attacks. One of them adds 8 weeks to your life expectancy and costs $1000. The other adds 10 weeks to your life expectancy and costs$20000. Who would defend a doctor’s decision to economize on your health? In this example, the more expensive drug really is better. It may also have supporting advertising that explains, entirely truthfully, that it has proven benefits. But if you do the calculation, spending $19,000 on just two weeks of life degrades health care overall. You may imagine in this case that the drug company did not do much work for this$20,000 drug. But more typically, they may have done a lot of work at all levels: research, clinical trials, marketing, you name it. The $20,000 drug may have, say, a 20% net margin that earns the drug company$4,000 per prescription, while the $1000 drug (since it has been around forever) may have a 50% net margin that earns another drug company$500 per prescription.

To be sure, the drug business has its share of sleazy marketers and lobbyists and so forth. But the real problem is a system of mostly honest people that is infested with badly distorted incentives.

14. Greg Kuperberg Says:

(Seriously, I don’t know its provenance — does anyone?)

The way to figure this out is to search for a phrase such as “greatest pleasure is to vanquish your enemies” in Google Books and walk back the citations. This one appears to be legitimate. I am looking right now at a “History of the Mongols”, by Henry Howorth, published in 1876. He cites Baron D’Ohsson, who translated primary sources.

The same method indicates to me that the famous anecdotal phrase “not even wrong” of Pauli is not well supported. Pauli did say something in that direction in a letter to Einstein, but at least in that context he was much more polite; he was not making anyone else lose face. The phrase appears many times with poor citation.

15. Douglas Knight Says:

Most drugs sold by most drug companies cure a real disease and provide a real service to society.

I think the evidence for this claim is pretty poor. Drugs and other medical interventions often work in studies, but they don’t seem to have much impact in aggregate. For example, survival rates of cancer have gone up in recent decades, but population death rates have not declined (for most cancers). The simplest explanation is that newer diagnostic techniques are identifying many more benign tumors and treatment is irrelevant.

At least drug companies have clear incentives and fairly clearly documented behavior. I worry much more about doctors and insurance companies.

16. Greg Kuperberg Says:

Drugs and other medical interventions often work in studies, but they don’t seem to have much impact in aggregate.

But the final round of studies is very large and not very different from actual typical practice.

For example, survival rates of cancer have gone up in recent decades, but population death rates have not declined (for most cancers).

Well, different things happen at different time scales. Cancer is a challenging set of diseases and the statistics-taking itself has to evolve before you can distinguish middling treatment from good treatment. In particular, the aggregate long-term death rate is a crude yardstick, because if you push death from cancer back by five years with chemotherapy, the patients will still die of cancer five years later. Moreover, a major role of treatment is to improve morbidity rather than mortality. That said, the total number of deaths from cancer did decline two years in a row recently, despite an growing and aging population. The age-controlled death rate has been declining for a while, even if you also control for smoking. Chemotherapy really does work, and it really has improved lately.

Early detection is the notorious confounding variable, but it does not explain everything. With modern imaging, the doctors can see how big the tumors are, and they can see chemotherapy wipe out the tumors. There was a great article on this recently in Harvard Magazine.

What is true is that cancer is ripe for much more expensive treatments that are only slightly better. And aggressive advertising for these treatments is a bad thing. The ads are technically truthful and educating patients is a good thing. But any advertising for any product is intrinsically biased, and each patient is biased in his or her own favor.

17. Koray Says:

Oh, so that’s from where they stole Arnold’s “To crush your enemies, see them driven before you, and to hear the lamentation of the women.” quote in Conan the Barbarian.

From what I’ve seen in House MD, drug reps sleep with doctors to get to Mick. That doesn’t sound so evil to me.

18. cody Says:

thats been my main attraction to acadamia. that and all the girls and kickbacks.
has Weisman (or has anyone else) estimated the rate of C02 release of us vs. volcanoes? i guess im sure that someone has, or the information should be readily available… does anyone happen to know it roughly? im just curious. like does our yearly release compare to a major eruption or, what…

19. Ze Says:

We’ve got a nice system for handling pharmaceutical companies in Australia.

Most of the medication is subsidised by the federal govt and they handle the negotiation with the drug companies.

You can still get private scripts for things that aren’t covered by the PBS (Pharmaceutical Benefits Scheme) but you pay the full price.

The useless medications don’t make it on there and the good ones do.

I think that health is one of the areas where socialism works better than capitalism since the consumer simply isn’t educated enough to know the difference. If people were educated and knew what they were getting and the pro’s and con’s of each then capitalism would work better but since we don’t , we clearly need some regulation and public health services.

It’s my understanding that the USA medical care is top notch for those who can afford it but overall a much poorer alternative for most people compared to other first world countries.

20. milkshake Says:

It is not true that most drugs come from academia research (but some of them do). Pharma sales reps do bribe doctors and misrepresent their products – and they are instructed and trained to do so. It is their job and it is the failing of the doctors that they allow it.
The biggest problem with pharma is in the bad management though. Corporate bullshit, red tape and political infighting hurt research productivity. Big pharma research has quite mixed productivity record if it is measured against the dollar expenditure on it. Pharma companies are in fact hugely wastefull.

There is a nearly complete decoupling between what the management does about their research and the quality of drug they will end up with. It takes years, the outcome is uncertain – luck plays a big role in the drug discovery. But one idiot in the top management who brings in few more like-minded bulshitters can ruin the research environment to the point that it will not recover. And it takes years for bad decisions to show and nothing points to the personal responsibilty of managers who demoralized their research staff and made the cover-my-ass or lunatic decision, lied about the status of the research projects and by making unrealistic promises they set others for failure. They can do this for years at end, awarding themselves massive bonuses for their contribution. (If they were in short-cycle business like consumer electronics retail and made similar “contributions”, their would keel over within a year)

Then there is problem with unrealistic expectations of stock-holders. They bring in a vastly overpaid CEO with a mandate to “turn the company around”. But there is nothing the management could immediately do about the failing research (that was likely the source of the trouble – and even if they could there will be no visible results for the next 5 years) . So the top management will implement all the short-term fixes, such as marketing the hell out of their current drugs, licencing in some some drug candidates or buying up a smaller company that seems to have some good ones, firing their own research staff because it saves lots of money etc.
Also they like to tell “the acceptable truth” to the investors, make cheery projections and give promises on without checking first if they could make good on them.

If the top management is paid in stock options, they will have huge incentive to keep the share price high, sometimes at huge long-term loss. Say, if you have a unimpressive drug in phase II of clinical trials you could save lots of money by dropping it because the late stages of clinical trials are the most expensive ones and the drug is going nowhere but the investors may not like to hear about it. And if the stock falls, suddenly million-worth of your own stock options will be underwater. (And you can postpone the reckoning by “reinterpreting” the results, assuring the investors that everything is on the right track. In the end its not your own money that you keep pouring into the dud, and you will cash out your options before the disaster strucks.)

Mergers and acqusitions in Big Pharma have been hugely contraproductive in the last few years (with lots of project and jobs lost) but this is exactly what the exects *could* do. Becoming a top manager at #1 or #2 pharma company, and moving your headquarters into newly-built highrise is what they their career is all about. People with background in finances or law and lifelong experience of fooling the investors have very little in common with the people in the labs. But it is primarily research-based business they are supposedly running.

21. milkshake Says:

And also, keep Mahmoud out of this – he is no mass murderer. He really wants to become a monster but they won’t let him and all that he can do is to give these ridiculous speeches. People who speak Farsi insist that he is much funnier in original, the translation supposedly ruins his oratory flourish.

22. Gus Says:

Scott said:
Furthermore, this strikes me not as a deep, unavoidable problem but as a contingent, avoidable one. Angell’s book lists highly specific ways that the FDA and patent law should be reformed.

You make it sound so easy. But how much of your time and money are you willing to spend fighting against lawmakers and drug companies to fix the FDA and patent laws?

Knowing how to solve a problem does not imply that we have the resources required to solve it. In many cases, the deck is stacked against us because our enemy’s livelihood is positively correlated with how hard he fights, whereas ours is negatively correlated.

I would have much more faith in the system if battles like this one were few and far between. One messy battle against drug companies may be winnable, but it seems as though there’s always a new Monty Burns out there trying to swindle us (e.g. Verizon, environmental issues, etc.). Often, Monty has us out-manned, out-gunned, and has greater incentive for victory. Is it an inherent property of imperfect capitalism that, in the long run, it is always possible to maintain vigilance? Or are we doomed to increasingly draining battles and inevitable failure?

23. Johan Richter Says:

“Most of the medication is subsidised by the federal govt and they handle the negotiation with the drug companies.”

We’ve got the same system in Sweden basically. Of course this means that we are free-riding of the USA who pays for the drug development.

I agree that healhtcare markets will work a lot worse than many other markets, like the market for pencils or for cloth. I think there is much the same problem every time you need to hire an expert to tell you what to do and this expert will also be hired to provide the services you require. So I think the problem also exists with various types of mechanics, the market for financial advice etc.

That said being said, I am not sure socialism works any better. Especially in countries with poor quality of goverment which my impression is that the US is an example of. Lets not forget that the ignorant consumers in the market system will become ignorant voters in a goverment-run system.

24. Scott Says:

Gus, I never suggested that beating Monty Burns was easy. But this particular fight is anything but hopeless; the Lisas have battleships in it as well. They’ve already won in much of the developed world — and even in the US they might start winning after the 2008 elections. We’re not talking here about some naïve, hopeless band of surrender-monkeys like the Green Party.

25. Gus Says:

I never suggested that beating Monty Burns was easy.

Oh, fine. I suppose that’s the extent to which you’ll allow me to hijack this thread. Question for you: is it better to be a hopeless surrender-monkey or a deluded complicity-monkey? 😉

While we’re trading pleasantries, when can I expect lecture 12 to appear?

26. Scott Says:

While we’re trading pleasantries, when can I expect lecture 12 to appear?

Soon! Just yesterday I signed on an undergraduate research assistant to help with the Democritus notes. He seems as dedicated and enthusiastic as I am lazy and unreliable.

27. BB Says:

From Andris’ link defending the drug companies, see the quote:

It would help a great deal if the compounds exist in a form that’s suitable for making into a tablet, and if they’re stable to heat, air, and light. They need to be something that can be produced by the ton, if need be. And at the same time, these all have to be structures that no one else has ever described in the history of organic chemistry. To put it very delicately, not all of these goals are necessarily compatible.

This and milkshake’s post above suggest that perhaps the free market/patent laws/short-term stock performance oriented model is not the ideal one for developing drugs. (I don’t know if there’s a better way though.)

28. ScentOfViolets Says:

I’ve also heard the theory – and I don’t think you can immediately dismiss it out of hand – that just about all the ‘good’ compounds, formulations, what have you, have already been discovered. There seems to be a certain sense to this. After all, as noted above it’s not enough for a drug merely to be efficacious. It’s got to be fairly cheap, fairly stable, has to be able to enter the body in a fairly restricted way and overcome several barriers to reach the targetted area without being reduced to some useless residue, etc. So its not out of the question that there are a strictly limited number of possible formulations that meet all these criteria.

So what should the pharmaceutical companies do if this is in fact the case?

29. Greg Kuperberg Says:

I’ve also heard the theory – and I don’t think you can immediately dismiss it out of hand – that just about all the ‘good’ compounds, formulations, what have you, have already been discovered.

In one sense, this is probably true; in another sense, it can’t be true. Most drug discovery has a big element of trying simple chemicals at random. You can sometimes make a good guess by comparing similar chemicals, or you can suppose that certain sets of drug symptoms travel together. But to a great extent biology is still uncharted chemistry, so drug discovery is still very unpredictable. If they are reduced to trying simple chemicals at random, then they probably have found most of the low-hanging fruit. Any more low-hanging fruit is at best well-hidden.

On the other hand, if biochemistry is so poorly understood, that is the same as saying that they have built very few ladders to take higher-hanging fruit. They have built some though. There are brilliant examples of new cancer therapies that no one could possibly have engineered 30 years ago. For instance, they know how to kill certain rare cancer cells with genetic engineering. Even that much is a big game of genetic expressors, promoters, and inhibitors, but then there is the problem of changing the genes in every cancer cell. They achieve that by infecting the patient with a genetically engineered virus. To be sure, genetic therapy for cancer is not just a pill sold by drug companies, but there are similar multi-step advances with chemotherapy and vaccinations and so forth.

So what should the pharmaceutical companies do if this is in fact the case?

On the contrary, I think that when they find fruit that is only slightly higher than the branches that have been picked clean, that is exactly when they least deserve a lot of revenue. When there are diminishing scientific returns, then the health care system should stick to the tried and true.

30. Craig Helfgott Says:

Greg, you might want to look up the history of the McDonald’s coffee lawsuit before you point to an “outcome that is totally unjust”.

In brief, the lady in question suffered 3rd degree burns to her groin(!) and had to undergo 8 days worth of skin grafting surgery as well as 2 years of follow-up. She had originally asked for McDonald’s to cover her medical costs ($20K), and when they repeatedly refused to settle out-of-court, she took them to court. At which point it was discovered that McDonald’s serves its coffee at 180 degrees Fahrenheit, and that this would cause 3rd degree burns in 12 seconds. I’ll skip the rest of the story, which you can look up (Wikipedia, for once, actually has a fairly decent synopsis). I don’t necessarily agree that there should have been a multi-million dollar penalty for this, but the point is, that you’d have to look quite a bit farther to find an “outcome that is totally unjust”. 31. Greg Kuperberg Says: Of course to the extent that the hot coffee story has two sides, then it is an example of my larger point that most of society’s trouble is problems that are oversolved or undersolved, rather than completely unjust outcomes. But even now that I have read the Wikipedia article, a lot of people would still see the story as a monstrosity of litigation. I personally am not super-upset about this, but some would argue that even if the lady got third-degree burns, it was completely unreasonable to blame McDonald’s at all, much less make it pay millions. So it remains an example of the sort that I see as distracting and atypical. A more typical lawsuit (or criminal law) story is one in which no one would think of taking the defendant’s side, but nonetheless the defendant is penalized far out of proportion with the sin. For instance, there is a Berkeley restaurant called Hs Lordship’s that was sued for lack of handicapped access. They had no wheelchair access to the restaurant’s tables downstairs, and one occasion a disabled college student was humiliated on her graduation day because she had to be carried downstairs. She sued and won$30,000 in compensatory damages, plus \$500,000 in punitive damages. The restaurant was clearly in the wrong; it had long violated several handicapped access codes. As far as I know, the way that they carried her downstairs and back up the stairs really was outrageous and ruined her evening. You could even argue that it needed to be “sent a message”. Moreover, the award wasn’t quite so astronomically large; it wasn’t millions of dollars. But still, who wouldn’t volunteer to be carried downstairs for 500 grand?

32. Greg Kuperberg Says:

The restaurant was clearly in the wrong; it had long violated several handicapped access codes.

Well, according to the story as published.