Pharmaphobia: The Conflict-of-Interest Myth
On April 29, the House Energy and Commerce Committee released a new discussion draft of the 21st Century Cures Initiative, a bill intended to revitalize and streamline American medical innovation. The draft contains a number of important and exciting provisions, including increased funding for the National Institutes of Health (NIH), streamlining and modernization of the approval process for both medications and medical devices, and development of a breakthrough designation for medical devices to expedite approval of devices that are significantly superior to existing alternatives. While many exciting provisions from a previous draft, such as incentives for drug and device companies to develop products for unmet needs, have been trimmed in an effort to gain bipartisan support, the bill remains a welcome departure from the pharmaphobic legislation that has often characterized the Obama years.
For example, the Patient Protection and Affordable Care Act (commonly known as Obamacare) is openly hostile to the biopharmaceutical and medical-device industries, most notably in its excise tax on medical devices and in the Physician Payment Sunshine Act. The Sunshine Act requires biopharmaceutical and medical-device manufacturers to report to the Centers for Medicare and Medicaid Services (CMS) all transfers of value or payments made to physicians (broadly defined) and teaching hospitals of more than $10. CMS reports these payments on a publicly accessible website, with minimal explanations. As the law's name implies, the Sunshine Act is intended to "disinfect" physician-industry interactions, following on Justice Louis Brandeis's famous quote "Sunshine is the best of disinfectants." However, this "disinfection" is stigmatizing relationships that are critical to the development and dissemination of new medical products.
Physician-industry interactions have been critical to the development of a large percentage of the medical products that allow physicians to prevent heart attacks, cure cancers, and restore mobility to the elderly. For example, one of the highest-paid physicians in the Sunshine database is a world-famous vascular surgeon who received royalties for his invention of multiple aneurism repair devices. Similarly, Paul Offit, who invented the rotavirus vaccine that is believed to have reduced the incidence of hospitalizations for rotavirus-induced diarrhea by more than 85 percent among U.S. toddlers since its addition to the childhood-vaccine schedule in 2006, is often maligned for his industry ties. Such cases, along with research grants for clinical trials, dominate the largest payments documented under the Sunshine Act. They are unequivocally beneficial and should not be stigmatized in this manner.
Over the course of my career, medicine and industry have together made spectacular progress against diseases. Cardiovascular deaths are down 60 percent, HIV has been converted from a death sentence to a chronic disease, and cancer mortality is at a historic low. Despite such progress and the role of physician-industry interactions in fomenting it, physicians are reducing or severing their relationships with biopharmaceutical and medical device companies out of fear that their patients will mistakenly view such interactions as a sign of corruption, rather than expertise.
The idea that industry payments to physicians are inherently suspect is just one in a series of pernicious myths that have misled the public, policymakers, and even physicians — who ought to know better — when it comes to the industry's role in medical progress. Legislation based on these beliefs has damaged the medical-innovation ecosystem.
To take another example, critics charge that biopharmaceutical and medical-device companies unfairly exploit academic discoveries in the development of new products. They claim that companies add little value during the development process and then price their products exploitatively, forcing the public to "pay twice," since most academic research is government-funded. Misconceptions of this nature have proven to be important motivating factors behind harmful legislation such as Obamacare's medical-device tax and Elizabeth Warren's recent suggestion of expropriating corporate profits to increase NIH funding.
The reality is more nuanced. While academic research provides substantial background information as well as more limited information about potential drug targets, this information is often unreliable and generally requires substantial follow-up and further development by industry before a product can be tested in humans. Biopharmaceutical and device companies perform the overwhelming majority of such work. Consequently, 80 percent of new drugs and most medical devices approved by the FDA originated from inventions created solely by companies. These inventions cost an estimated $2.5 billion each to develop, once the high failure rate (more than 85 percent of products fail in clinical trials) and cost of capital are taken into account. Denying the cost and difficulty of this process does not serve patients' interests.
If we, as a nation, want to continue to lead the world in medical innovation, we cannot allow myths to unjustly color our impression of the biopharmaceutical and medical-device industries and those physicians and researchers who work with them. Several studies recently published in Health Affairs suggest that current profits may be insufficient to sustain our present level of medical innovation. We should avoid passing legislation that makes medical innovation less sustainable. Instead, we should support legislation, such as the 21st Century Cures Initiative, that streamlines regulations and facilitates innovation.
— Thomas P. Stossel is American Cancer Society professor of medicine at Harvard Medical School and a visiting scholar at the American Enterprise Institute. His book, Pharmaphobia: How the Conflict of Interest Myth Undermines American Medical Innovation is being published by Rowman & Littlefield. He advises two startup companies that he founded to develop his discoveries.