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                                                                                BUSINESS, Page 42

Special Report: Drug Safety

Can Drug Firms Be Trusted?


Yes, usually, but a spate of fraud allegations shows that the
testing process needs reform

By CHRISTINE GORMAN -- Reported by Mary Cronin and Andrew Purvis/
New York and Dick Thompson/Washington


    Even to a nation grown accustomed to multibillion-dollar
business frauds, the allegations are shocking. A Scottish
psychiatrist has charged Upjohn of Kalamazoo, Mich., with
falsifying scientific evidence regarding the safety of the
sleeping pill Halcion (annual worldwide sales: $240 million).
The accusation has prompted a federal investigation. Dow Corning
Wright of Arlington, Tenn., stands accused of failing to report
that its silicone-gel breast implants were associated with
severe side effects -- including the development of autoimmune
disorders like rheumatoid arthritis and lupus. That product and
similar implants made by other manufacturers have been placed
in 1 million to 2 million American women. If fraud has occurred,
the cost cannot be compared with chicanery in other industries,
for at stake is more than the customers' investment. It is their
health and, in some cases, their very lives.

    The charges of fraud have struck an industry already
reeling from allegations of deception, greed and insufficient
attention to their products' safety. The Food and Drug
Administration is currently investigating an alleged cover-up
by Hoffmann-La Roche of the lethal effects of its liquid
anesthetic Versed, which has been linked to 40 deaths from
respiratory failure. And while fraud has not been alleged
against Pfizer, the New York City-based company will set aside
$500 million for problems arising from one of its now
discontinued artificial heart valves, which exhibit a sometimes
fatal tendency to crack inside the body.

    Meanwhile, Eli Lilly is battling several lawsuits that
claim, on the basis of scant evidence, that the antidepressant
Prozac can cause extreme agitation, suicidal tendencies and even
an impulse to murder.

    A critical social contract between manufacturers,
regulators and the public seems to be unraveling. "I just don't
trust the drug companies as much as I once did," says New York
City real estate agent Peggy Mathews. "Halcion and silicone
implants stand out like beacons, putting us all on the alert."
She has reason to worry, says Dr. Sidney Wolfe, a consumer
activist who heads Public Citizen's Health Research Group. "The
heart of the problem is the dangerous amount of control the
industry has over testing. Hundreds of people have been killed
and thousands injured because data have been falsified."

    Is Wolfe just crying wolf? Or has a pervasive corruption
-- which the FDA seems powerless to stop -- spread throughout
the pharmaceutical and medical-device industries? Upjohn and
Dow Corning strenuously deny any wrongdoing.They point out,
rightly, that only a small proportion of consumers report
problems with their products, and that it is naive to expect
perfection in so large and complex a business. In the U.S.
alone, there are 3,000 types of drugs on the market and more
than 1.5 billion prescriptions written every year. A small
number of incidents with a handful of drugs is hardly an
indictment of the entire system.

    In addition, say some drug-industry experts, the system
has a built-in incentive for companies to be honest about their
products' quality. "The negative fallout of dangerous drugs is
much worse in many cases than not getting the drug approved to
begin with," says Dr. Kenneth Kaitin, assistant director of the
Center for the Study of Drug Development at Tufts University.
"If a drug has to be pulled from the market, it's very bad for
public relations, financially and in every possible way. It just
doesn't make sense that they would intentionally conceal real
problems."

    That kind of thinking had been the basis for a
relationship of trust between the medical-products industry and
the FDA. Historically, the agency has counted on the
pharmaceutical firms, when they apply for approval of a new drug
or device, to carry out the necessary testing themselves and to
do it honestly. Though agency panels scrutinize the results of
industry research, they rarely demand the raw data, relying
instead on the analyses and conclusions drawn by the company.
The FDA simply does not have the personnel or the budget to do
all the research itself -- nor would it be practical for it to
do so. "That road leads to madness," says Dr. Jere Goyan, dean
of the school of pharmacy at the University of California, San
Francisco, and former head of the FDA. The FDA is designed to
act as a brake, not a developer.

    But relying on drug marketers to analyze research data has
serious drawbacks. Raw data are often ambiguous; the medicine
vial can be half empty or half full. Considering that it can
take an investment of $200 million and 10 years to bring a drug
from the lab bench to the pharmacy, manufacturers have a
powerful incentive to look on the bright side, particularly when
problems turn up late in the game after millions have been
expended. "They definitely have rose-colored glasses," admits
Robert Temple, chief of the FDA's office of drug evaluation.

    Still, the system mostly seems to work. Last year the
government carried out 203 random inspections of clinical
investigators and discovered just eight studies that were
significantly flawed. (Offending researchers can be permanently
barred from submitting any drug tests to the FDA.) The low rate
of skulduggery has remained constant since 1962, which helps
explain why there has historically been a "gentlemanly working
relationship between the FDA and industry," says Dr. Norman
Anderson, a professor at the Johns Hopkins University School of
Medicine who has served on numerous science advisory panels for
the FDA.

    The silicone breast-implant scandal may, however, change
that relationship. Anderson's own trust in the system was
shattered on Dec. 12, when he sat down and read scores of Dow
Corning documents, including 17 internal memos dating as far
back as the mid-1970s, about silicone-gel breast implants. The
information surfaced during a liability suit in Michigan. When
he finished, Anderson wrote and hand-delivered both the
documents and an urgent letter to the FDA demanding that all
such implants be promptly removed from the marketplace. "This
appeal is not made lightly," Anderson wrote. He noted that Dow
Corning officials had assured an FDA review panel, of which
Anderson was a member, that the company had disclosed all
relevant information on implants. "I am now in possession of
unprotected court documents which indicate this was not true."
Anderson's conclusion: the memos leave "little doubt of [Dow
Corning's] misrepresentation of the facts."

    The resulting furor rattled the FDA like no scandal since
the thalidomide scare of the early 1960s. Following Anderson's
appeal, the agency declared a moratorium on all silicone-gel
implants, pending further review. "It's the ultimate case as to
why you need a strong agency," says FDA Commissioner David
Kessler. Now, says Kessler, "the honor system is out the
window." He promises that companies will be subject to intensive
audits in which investigators will scrutinize how data are
analyzed and presented by the manufacturers. Says he: "People
have to know that we have the will and resolve to deal with
those who have crossed the line."

    Brave words from a bureaucrat with limited power. Although
the FDA is entrusted with guaranteeing the safety of all
medical drugs and devices in the U.S., it is poorly armed for
the job. For example, unlike almost every other federal agency,
the FDA lacks the legal clout to subpoena a company's internal
records if a problem is suspected. Congress woke up to the
problem last fall, at Kessler's prodding, and introduced a bill
that would have enabled the agency to seize corporate documents.
The threat of a presidential veto halted the measure, though the
new revelations about Halcion and breast implants seem likely
to revive the initiative.

    The drugs scandals of the '90s are prompting other calls
for heightened regulation. One proposal, currently making its
way through Congress, would give the FDA commissioner emergency
powers to pull any drug from the market. At present, about all
he can do is jawbone a recalcitrant company into withdrawing a
dangerous product. "It's easier for the Consumer Products Safety
Division to recall a toaster than for the commissioner of the
FDA to recall a dangerous drug," grouses a Capitol Hill staff
member. Even so, the measure is strenuously opposed by both the
Pharmaceutical Manufacturers Association and the White House,
which sees it as burdensome regulation.

    Would-be reformers are also pushing the FDA to adopt a
more strenuous review of drugs after they have been approved
for marketing. Such postapproval monitoring is already being
tried in Canada, Britain and Sweden, where officials can tap
into data from a national health-care system. The reasoning
behind the push is quite straightforward. Clinical trials
typically include a few thousand people and can therefore pick
up only the most obvious and prevalent side effects. Once a drug
enters the market, hundreds of thousands or even millions of
people start using it, often for sustained periods of time --
when more subtle or long-term risks may come to light. Such was
the case with "beta-blocker blues," a syndrome of fatigue and
mild depression sometimes associated with regular use of a
popular category of heart drugs called beta blockers. The
syndrome went undetected in clinical trials.

    Currently the FDA relies on spontaneous reporting of
postmarketing problems by physicians who prescribe the drugs or
manufacturers who may receive complaints from doctors. It is a
seriously flawed system, says Joe Graedon, author of several
consumer-oriented books about prescription drugs. First, says
Graedon, if a patient has a problem -- say an upset stomach or
itching skin -- he or she may not make the connection to a drug
or medical device. Second, even if the patient does make the
link, the doctor may dismiss it. Third, a physician simply may
not take the time to report a suspicious problem to the FDA or
drug manufacturer. "It means extra time, extra paperwork, and
there is always the fear of litigation." Graedon believes the
FDA should contract with large medical groups -- major HMOs, for
instance -- to keep data bases on adverse reactions.

    The Bush Administration might even be persuaded to go
along with this extra regulatory step. For several years now,
it has been pressuring the FDA to streamline its approval
process. Agency officials have been reluctant, and the recent
scandals have proved them right. But streamlining approval may
make more sense if postapproval surveillance is beefed up.

    Drug companies are marshaling their forces to oppose
increased government oversight. Those that stand accused are
also conducting somewhat belated counteroffensives to limit the
legal damage and repair their frayed reputations. Dow Corning,
which has been widely criticized for reacting insensitively to
the implant debacle, announced that it has retained former
Attorney General Griffin Bell to lead an independent
investigation into its development and marketing of implants.
The company has also agreed to make public 90 additional
documents and to ensure that it provides accurate information
to the thousands of women calling the company for advice.

    Upjohn is meanwhile reassuring physicians that reported
problems with Halcion occur only at high doses and if the drug
is taken for long periods of time. At the FDA's request, Upjohn
revised the drug's package insert to warn patients not to extend
its use beyond 10 days without consulting their physician. Last
week the firm filed a libel suit against its Scottish accuser,
Dr. Ian Oswald, and the British Broadcasting Corporation for
televising allegations of fraud. Upjohn is also actively
appealing the British Department of Health's decision last fall
to ban Halcion.

    The negative publicity has affected the whole industry,
prompting several companies to curry favor with the public. Last
month Bristol-Myers Squibb announced that it will donate 17
different brands of blood pressure- and cholesterol-lowering
drugs for use by patients whose doctors will certify that they
have no insurance or other means of paying. In addition, Bristol
Myers, Syntex and Merck have announced that they will provide
12.5% price rebates on drugs dispensed in federally financed
public health programs for the poor.

    All the goodwill gestures in the world seem unlikely to
deflect the growing movement toward further government
regulations of the pharmaceutical industry. Experts caution,
however, that hastily written rules, even if they are produced
with the best of intentions, can backfire. The Orphan Drug Act,
for instance, was passed in 1983 to encourage the development
of drugs for rare diseases. The law provides an extra economic
incentive, in the form of a seven-year monopoly, to companies
that market products for maladies that afflict fewer than
200,000 people. Though it has done some good, it has also been
widely blamed for the outrageous prices of certain medications,
including aerosolized pentamidine for AIDS patients, and for
allowing some companies to make a killing when an "orphan drug"
has turned out to be useful for a common disease. Congress is
working on revising the measure.

    Despite such regulatory pitfalls, the time is ripe for
putting some teeth into the FDA. A profit-driven system cannot
be so dependent on trust, particularly when lives hang in the
balance. Doctors and their patients also bear some
responsibility for using drugs wisely. "All drugs have risk,"
observes physician-activist Wolfe. "Most of the time the
benefits outweigh the risks. But there is abysmal ignorance on
the part of the public about side effects." In a culture that
has long been addicted to the quick fix, a healthy respect for
the power of the pill -- negative as well as positive -- may
prove to be the best medicine of all.