We’ve often gotten on the soapbox here at the Prescription Access Litigation blog to preach against the evils of preemption. Preemption is the constitutional doctrine that when state law and federal law are in conflict, the federal law trumps or “preempts” state law.

Pharmaceutical companies and the FDA have been arguing aggressively in the past few years that consumers should not be allowed to sue drug companies under state law when they are harmed, injured or killed by defective or dangerous drugs, as long as those drugs have been approved by the FDA. For years, the FDA’s position was the lawsuits under state law did not interfere with the FDA’s regulation of drug safety. But that position changed abruptly under the current administration.

The issue has been a hot one - the Supreme Court recently decided (in Riegel v. Medtronic) that consumers’ lawsuits against medical device manufacturers are preempted. In October, the Supreme Court will hear arguments in Wyeth v. Levine, and will decide whether consumers’ cases against drug companies are also preempted.

Yesterday, the House Committee on Oversight and Government Reform, chaired by the indefatigable Rep. Henry Waxman (D-CA), held a hearing on preemption, “Hearing on Whether FDA Regulation Should Bar Liability Claims.” (One mainstream media story on the hearing, from the Associated Press, can be found here).

The hearing had numerous noteworthy and learned people presenting testimony, but most of them were not the source of the press attention that is certainly unusual for an issue as arcane as federal preemption. It was actor Dennis Quaid, who testified, who was the source of the sudden press interest in this arguably vital but obscure constitutional debate.

Dennis Quaid testified because his newborn twins nearly died when they were given 1,000 times the correct dose of the blood thinner heparin. The overdose was the result of a mixup, caused by the fact that the labels of the vial for the correct dose and the vial for the dose that is 1,000 times higher are virtually indistinguishable. Quaid and his wife have sued the manufacturer, Baxter. He testified against limiting consumers ability to file lawsuits to hold drug companies accountable for the kind of harm that his newborn twins suffered.

We blog about this here today because Mr. Quaid’s testimony is so harrowing and so underscores the need to protect consumers’ access to the Courts. Rather than offer our own commentary on this subject, we’ll let Mr. Quaid’s testimony speak for itself. We repost here in its entirety. (You can also find links to the other panelists that testified here, on the Committee’s website.)

Here is Dennis and Kimberly Quaid’s written testimony:

Testimony of Dennis Quaid and Kimberly Quaid Before the Committee on Oversight and Government Reform of the United States House of Representatives May 14, 2008

Chairman Waxman and Members of the Committee:

Thank you for inviting my wife, Kimberly, and me here today to share our experience as parents of two infants harmed by the negligence of a prescription drug manufacturer. As I’ll explain, our newborn twins nearly died because of a drug company’s failure to put safety first. It is our hope that these proceedings will raise public awareness of the issue before the Committee today: When the U.S. Food and Drug Administration (FDA) approves the sale of pharmaceutical drugs, does that preempt the right of consumers to sue the manufacturer if the drug later causes injury or death?

This is an issue, I’m sure, most Americans are not aware of, but it is one that could adversely affect all Americans, our family included. As many of you already know, our twins received a potentially fatal overdose of the bloodthinning medication Heparin last year.

Our Life-Altering Story

Thomas Boone and Zoë Grace Quaid were born on November 8, 2007.

They were four weeks premature, but healthy and beautiful, and, after three days in the hospital, we took them home to begin our new life as a happy, much-expanded family.

On their eleventh day of life, Kimberly noticed an irritation on T-Boone’s belly button and Zoë Grace’s finger. Being nervous new parents, we took TBoone and Zoë to the pediatrician immediately, and, after examining them, he sent us to Cedars-Sinai Medical Center – one of the top hospitals in Los Angeles – for a more in-depth diagnosis. Lab tests at Cedars revealed that both of our twins had a staph infection, and we were told that they would have to be admitted to the hospital to be put on a continuous intravenous drip of antibiotics. Our hearts sank as we accompanied the twins to the pediatric ward, where they were placed in a room to begin their treatment.

At about 11:00 am the next day, a nurse came to the room and said she needed to replace the now empty bags of antibiotic. According to standard procedure, the nurse was supposed to clean the IV lines connected to our twins’ little arms with 10 units of a blood thinner medication called Hep- Lock, the idea being that the very small dose of heparin contained in Hep- Lock allows the IV to flow freely. What was not standard procedure was that she mistakenly injected the twins with a massive overdose of 10,000 units of the drug Heparin, which is 1,000 times the normal 10-unit dose of Hep-Lock our babies should have received. This happened while Kimberly and I were present in the room.

Unaware of the catastrophe that had just occurred, Kimberly and I spent the afternoon and early evening standing vigil over our twins until our doctor suggested we go home and get some rest. We were exhausted, not having slept the night before. The twins seemed to be resting comfortably, so we decided to go home, but not before leaving express instructions to the doctors and nurses to call us if anything changed in our infants’ condition. We had no way of knowing at that point that the potentially lethal quantity of Heparin in their tiny bodies was turning their blood to the consistency of water.

After we left, a nurse on duty noticed that Zoë Grace had an abnormal seepage of blood coming from a place on her foot where blood had been drawn. No alarms were raised. Incredibly, sometime after 7:00 pm, both babies were injected with yet another 10,000-unit overdose of Heparin. One nurse prepared the medication, and then handed it to the instructor nurse, who then handed it to the nurse in training as the instructor lectured the trainee on how infants must only receive a 10-unit dose of Hep-Lock. They then left the room and continued their rounds.

At about 9:00 pm, Kimberly and I were at home trying to get some restless sleep when Kimberly was suddenly struck with a hammer blow of overwhelming dread. She became inconsolable, crying out with a mother’s intuitive certainty that our babies were in trouble: “They’re passing,” she said. This did not make sense to me. I had called the nurse’s station an hour and a half earlier and had been told that the twins were fine. But, to calm Kimberly’s fear, I called again and was put through to the nurse in our room. Kimberly wrote down the time for some reason. The nurse told me in a measured tone that the twins were fine. I was assured. Kimberly became less frantic, and we both eventually fell into a fitful sleep.

But the twins were not fine. In fact, they were fighting for their lives. Their now water-thin blood was flowing out of every place that they had been poked or prodded. They faced the very real possibility of hemorrhaging through a vein or artery, causing massive brain damage or failure of one of their vital organs.

Our babies could have died that night, and we would not have been there for them.

Early the next morning, Kimberly and I arrived at the hospital, only to be met at our babies’ room by our pediatrician and hospital staff. We were taken aside and told what had happened. Suffice it to say, it was the beginning of the most frightening day of our lives. It was spent helping tend to our infants who were still bleeding profusely and severely bruised from internal bleeding. They were both screaming in pain, and God only knows what they were feeling. I am not sure even a lab rat had ever received such a high dose of the Heparin that was causing them to bleed out. At one point as the doctors tried to clamp shut a bleeding wound in the remnant of TBoone’s umbilical cord, blood spurted six feet across the room and splattered on the wall. The bleeding went on all day. Although the twins had been administered Protamine, a medication to counteract the Heparin overdose, their blood’s inability to coagulate literally remained off the charts all day and into the night. Kimberly and I did a lot of praying.

Finally, after more than forty hours, their coagulation levels dropped into the measurable scale and continued to fall, eventually back into the normal range. T-Boone and Zoë Grace had survived, apparently with no damage so far, thank goodness. But we have no way of knowing what the long-term effects may be.

We Were Not Alone

How had this happened? The answer became apparent after interviewing the doctors and nurses. We discovered that the bottle of 10-units of Hep-Lock and the 10,000-unit bottle of Heparin – both manufactured by Baxter Healthcare Corporation – were deadly similar in labeling and size. The 10,000-unit label is dark blue, and the 10-unit bottle is light blue. And if the bottles are rotated slightly, as they often are when stored, they are virtually indistinguishable.

We later learned that the similarity of the labels for the two products had led to the overdose of infants at a hospital in Indianapolis little more than a year earlier, in September 2006. Just like with T-Boone and Zoë Grace, hospital staff used the 10,000-unit Heparin product, rather than the 10-unit Hep- Lock, to flush the infants’ IV lines. Tragically, three infants died, and three others were severely injured.

More than four months after the Indianapolis incident, Baxter sent out a warning to hospitals concerning the potential for deadly mix-ups in the two products. A full seven months after that – in August 2007 – Baxter submitted changes in the labeling of the higher-concentration Heparin to the FDA. Baxter was permitted by FDA regulations to revise its labels, without prior FDA approval, to add or strengthen a drug warning or precaution, or to enhance drug safety by strengthening an instruction about a drug’s dosage and administration. So, although the FDA did not approve the changes to the Heparin label until December 2007, Baxter starting using its new labels in October 2007. Baxter described the changes to the Heparin labels as “an increase of 20 percent font size, a unique color combination, and a large cautionary tear-off label” warning that the product is not intended for “lockflush.”

Baxter explained that the new labeling was designed to help reduce the risk of medication errors. But, shockingly, Baxter failed to recall the misleadingly labeled bottles that were still on the market and stocked in hospitals ready for use. Kimberly and I think that this was a dangerous, potentially deadly decision, made by Baxter for financial reasons. Companies recall automobiles, they recall toasters, they even recall dog food, but Baxter failed to recall a medication that, due to its labeling, had killed three infants and severely injured three others. More than a year after the Indianapolis tragedy, the same medical nightmare happened to our twelve-day-old infants – and all because Baxter had not acted as a responsible corporate citizen.

Baxter knew that an estimated 7,000 Americans die each year as a result of medication errors, knew that 61 percent of life threatening or lethal errors involve intravenous drugs such as Heparin, and also knew that Heparin was among eight high-alert products that were involved in more than 31 percent of all medication errors that caused harm to patients. Yet, even with all of this knowledge, Baxter did not change the labeling of its Heparin injection products until months after the Indianapolis tragedy. And Thomas Boone and Zoë Grace would have to fight for their lives because the new product labeling, introduced by Baxter only one month before, had not yet made it to the shelves of Cedars-Sinai, and Baxter had done nothing to see that the look-alike Heparin products were removed from pharmacy shelves immediately.

Although mistakes occurred at Cedars-Sinai hospital, doctors, nurses, pharmacists, or other staff who make medical errors are not bad people. Indeed, choosing a career devoted to curing the sick and easing the suffering of others is one of life’s highest callings. But the overdosing of our twins was the result of a chain of events, and the first link in that chain was Baxter Healthcare. Because of Baxter’s inaction, a tragedy was waiting to happen again.

What Can Be Done?

Since this brush with tragedy, I have found out that medication errors are unfortunately all too common. Approximately 100,000 U.S. patients die every year because of medical errors in hospitals alone. It’s a toll we would never tolerate in aviation, nearly the equivalent of a full 747 crashing every single day.

I have also learned a lot about the legal system – and it was surprising, I have to tell you. Like many Americans, I believed that a big problem in our country was frivolous lawsuits. But now I know that the courts are often the only path to justice for families that are harmed by the pharmaceutical industry and medical errors. Yet the law is stacked against ordinary people.

For instance, in my home state of California, a 1975 law caps compensation to malpractice victims. The cap has never been raised for inflation. The practical effect is that people without the wealth to pay legal fees up front are unable to get their cases before a judge or jury.

Now we face something with potential to be even more sweeping and even more unjust: federal preemption. The Supreme Court is about to decide whether to bar most lawsuits over drugs and their labeling, as long as the drug was approved for marketing by the FDA. After many years of rejecting arguments that FDA actions should preempt lawsuits involving injuries from products regulated by the FDA, White House appointees at the FDA reversed that position in 2002, and now argue that FDA approval immunizes the manufacturers of dangerous products from liability for the deaths and injuries they cause.

We sued Baxter Healthcare Corporation in November 2007. Baxter has filed a motion to dismiss the case, relying on the same preemption argument that the drug industry and the FDA has made before the Supreme Court – that when the FDA allowed its Heparin drug onto the market, it gave Baxter the government’s seal of approval – a “get out of jail free” card that denies us the right to hold the company accountable. (Of course, Baxter never mentions the FDA regulations that encourage and sometimes require manufacturers to fix their drug labels immediately, without getting the FDA’s permission first.) So, says Baxter, our suit may not be heard by a judge or jury.

It is hard for me to imagine that this is what Congress intended. You tell me, Mr. Chairman: When it passed the Food, Drug, and Cosmetic Act in 1938, did Congress intend to give appointed bureaucrats at the FDA the right to protect a drug company from liability, even when the company cuts corners and jeopardizes our safety?

A federal ban on lawsuits against drug companies would not just deny victims compensation for the harm they experience. It would also relieve drug companies of their responsibility to make products as safe as possible, and especially to correct drug problems when they are most often discovered – years after their drugs are on the market.

Permitting bureaucrats who are under pressure from their bosses and the drug companies themselves to yank our access to the courts is incomprehensible. We have all heard about understaffing and backlogs at the FDA, and about drug-safety scrutiny that is patchy at best. If the Supreme Court rules in favor of the drug companies, it will eliminate one of the most effective deterrents to letting the bottom line win out over public health and safety.

I am in the entertainment industry, but what happened to us, and what is happening in the courts of our country, is no fiction. It is all too real. That is why I have decided to speak out and try to do something.

Kimberly and I have established a non-profit foundation to call attention to medical safety issues and seek ways to improve medical safety from the bedside up. Everybody gains from a safer health care system—from patients to nurses and doctors to hospitals and insurance companies.

We are meeting with experts from all over the country to formulate a strategy for safer health care. Americans pioneered the safest aviation system in the world; though highly complex, it is 99.9% error free. The human body is also very complex and hard to perfect. But we should strive for perfection, and we know that at the very least we can do much better. We can hope that the Supreme Court will not put more barriers in front of patients who are harmed by drug companies. But if the Court goes along with the FDA and rules for the drug companies, I respectfully ask this Congress to pass corrective legislation on an emergency basis, just as it should do immediately to correct the recent Supreme Court decision immunizing the makers of defective and mislabled medical devices. We Americans need some balance on the scales of justice in our country.

My family blessedly survived a huge drug error, triggered by the misconduct of a drug manufacturer. Others are not so fortunate. If they are denied access to our courts, they will have no compensation for their injuries, and society will lose one of the most effective incentives for safer drugs.

Readers: It’s a week of all-star guest blog posts here at the Prescription Access Litigation blog, and we’re going overseas. Earlier this week, we brought you Sarah Rimmington of the consumer advocacy group, Essential Action, with a post on “the WHO’s negotiations on R&D and the developing world.

Today we bring you another great post by a Guest Blogger, Sonia Shah. Sonia is the author of “The Body Hunters: Testing New Drugs on the World’s Poorest Patients,” a book exposing the exploitation of patients in developing countries in pharmaceutical clinical trials with little or no oversight. It’s a peek into the all-too-real world that the book and movie The Constant Gardener addresses.

American drugmakers are increasingly turning to developing countries as sites for clinical trials testing new drugs or new uses for old drugs. Unfortunately, the protections in place for patients in many countries are scant, if not absent. Until recently, the Helsinki Declaration provided some protection for such patients — admittedly, it was often inadequate or underenforced, but it was better than nothing. Now the FDA has renounced the Helsinki Declaration, and the consequences for pharma’s “test subjects” are dire. But I’ll let Sonia Shah give you all the details….
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With hardly a word in the mainstream press, the FDA has gutted the rules restraining drug companies from exploiting clinical trial subjects in developing countries.

With 80 percent of clinical trials failing to recruit sufficient numbers of test subjects on deadline, drug companies increasingly export their trials to developing countries, where sick, undertreated patients abound. It’s faster, it’s cheaper, and it’s easier to conduct the placebo-controlled trials that companies and the FDA prefer. There is precious little oversight of these trials.

Unlike for domestic trials, the FDA does not require advance notice before drug companies take their trials outside US borders. And with 90 percent of trials failing to gain FDA approval, a massive number of trials are conducted, fail, and then vanish with no agency review at all—and little public record, if any at all.

Until now, the FDA’s sole requirement for these overseas trials is that they adhere to the Declaration of Helsinki (or local rules, on the off-chance that they are more stringent). Signed by the United States and 34 other countries in 1975, the Declaration of Helsinki consists of several dozen pithy principles to govern ethical research on humans, and is widely considered the gold-standard in research ethics. Crafted and updated by the World Medical Association, a group representing dozens of national physicians’ organizations from around the globe, the Declaration of Helsinki (DOH) urges that participants’ voluntary informed consent be obtained, that independent committees to review and oversee trials be used, that investigators prioritize their subjects’ well-being, that research subjects be assured access to the best health interventions identified in trials, and that their societies enjoy a “reasonable likelihood” of benefiting from the results of trials.

t’s not a perfect document. It’s very short. It’s a little vague. The FDA does not bother to enforce it. Even when they know of infractions—such as in Pfizer’s trial of the antibiotic Trovan in Nigeria, which not only failed to procure informed consent, but didn’t even have an oversight committee in place at the time of the trial—the FDA has done nothing and approved the drug anyway. We know of that particular trial’s violations only because the Washington Post exposed them several years later. In reporting for a book I wrote on clinical trials in developing countries, I similarly found many examples of trials clearly in violation of Helsinki provisions that were nevertheless reviewed and approved by the FDA.

The FDA has been agitating against the DOH since the late 1990s, when the World Medical Association strengthened the document’s restrictions on placebo-controlled trials, which an unlikely alliance of industry, public health and academic researchers angrily challenged. The strengthened DOH, the FDA’s medical director Robert Temple railed, “doesn’t look like a group of suggestions that are worth discussing.” Under pressure from the agency and drug companies, the World Medical Association diluted the objectionable language about placebo trials—cue the increasing vagueness—but by then the FDA was on the warpath. Just as President Bush opted out of international treaties on climate change and anti-ballistic missiles, in 2001, the FDA bucked two decades of its own precedents, and refused to adopt updated versions of the internationally sanctioned Declaration of Helsinki. That done, in 2004, the agency proposed dumping the DOH from its codes altogether, and on April 28 announced the it would indeed be summarily excised starting in October.

In its place, the FDA will incorporate “Good Clinical Practice” rules. Good clinical practice sounds, well, good, but these rules are no replacement for the Declaration of Helsinki. Unlike Helsinki, which describes ethical principles agreed upon by the international medical community, GCP rules are bureaucratic regulations crafted by regulatory authorities and drug industry trade groups, behind closed doors. They offer little by way of ethical precept. There is no injunction, for example, that research subjects be assured access to study drugs after trials end, or that their communities have a reasonable likelihood of enjoying the benefits of the research, principles of justice enshrined in the DOH.

The FDA’s move against the DOH is more than a symbolic change. With drug companies rushing to countries where the domestic regulatory infrastructure is weak at best—India, where Pfizer and GlaxoSmithKline have set up global clinical trial hubs being perhaps the prime example—and the FDA turning a blind eye, the business of protecting impoverished, sick, undertreated patients from exploitative experimentation falls almost entirely upon local people convened by clinics and hospitals to sit on FDA-required ethics committees. Theirs is a nearly impossible job, much of it shrouded in secrecy. Some, from India and South Africa, spoke to me, anonymously. They told me of how their clinics and hospitals desperately need the income drug-industry trials bring in. Of how, often, their bosses sit on the committees with them, pressuring members to approve as many experimental protocols as come in. They are overworked, underpaid, and poorly trained—if trained at all—in the principles of research ethics. Even the most courageous among them find it difficult to challenge problematic experiments and interrupt the flow of industry dollars.

And yet, they do, and when they do, they rely upon the only set of rules that their administrators and drug company clients consider legitimate: those backed by the FDA.

The last-stand oversight of local ethics committees has clearly been insufficient. A growing body of evidence, from anthropological research to case studies, suggests that the consent of trial subjects in many poor countries is uninformed, and worse, non-voluntary. Many clinical-trial companies openly promote the non-voluntariness of trial subjects in developing countries, not as a reason to conduct fewer trials, but to conduct more. (Specifically, they promote the low dropout rates, a telling signal of coercion.) Anecdotal evidence of the abrogation of the principles of justice—the lack of access to study drugs after trials end, the inaccessibility of the benefits of research, whether because of brand-name prices or the irrelevance of the resulting drug—abounds.

That’s how bad it has been with the Declaration of Helsinki on the books. What we don’t know is how many more violations have been averted by the nameless, faceless people sitting on ethics committees in developing countries, relying upon the strictures of the Declaration of Helsinki. There is no way to know how many times they’ve been able to extract guarantees, protections, and promises from industry researchers, or to amend experiments so that subjects’ rights and safety are better protected, thanks to the principles of the DOH.

All we can know is that come October, thanks to the FDA’s scrapping of the gold-standard in research ethics, their already difficult work will be made more so. The vulnerability of research subjects in developing countries—often the poorest, the sickest, those with the fewest options—can only grow more fraught.
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Thank you to Sonia Shah for writing this insightful piece on the FDA’s scrapping of the Helsinki Declaration. To learn more about Sonia’s books and articles, visit her website at soniashah.com

Dearest Readers: From time to time, it is our pleasure to bring you posts here on the Prescription Access Litigation blog written by guest bloggers. Our latest guest blog entry is by Sarah Rimmington of the consumer advocacy group Essential Action.

It’s safe to say that most Americans are blissfully unaware of negotiations that just recently went on at the World Health Organization (WHO) in Geneva to address how pharmaceutical research & development (R&D) can benefit the literally billions of people in developing countries who lack the resources (money) to pay for prescription drugs that in many cases cost more for a single pill than many of those people earn in a day, or even longer. The issue has been conveniently ignored by the mainstream media in the United States, despite the role that American drug companies play in opposing an agenda that would bring access to medicines to many of the world’s poorest people.

We here at the Prescription Access Litigation blog tend to cover only prescription drug issues here in the U.S. (and there’s plenty to cover just in this country, mind you). But occasionally we want to use our modest blog to call attention to issues outside the borders of the U.S. The pharmaceutical market has become truly a global market, with more and more clinical trials being conducted abroad, and more and more of our drugs being produced abroad, so we here in the U.S. couldn’t ignore these global issues even if we wanted to.

Without further ado, let me turn to Sarah Rimmington, for her report on the WHO’s recent negotiations and what they mean for the issue of access to medicines for the developing world:

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On May 3, representatives of more than 100 nations finished what was supposed to be the final round of talks at the World Health Organization (WHO) in Geneva. These talks were meant to spur a medical research and development (R&D) system that works for the developing world.

The WHO Intergovernmental Working Group on Public Health, Innovation and Intellectual Property (IGWG) was set up in 2006 to develop a plan to promote new medical research and development (R&D) mechanisms to serve the twin goals of promoting innovation to meet the particular needs of developing countries, and ensuring that important medicines are accessible to people in the developing world, regardless of their income.

Despite difficult and incomplete negotiations, delegates to the IGWG took an important first step by agreeing to explore some common sense measures to promote developing country-focused innovation that does not compromise access to medicines.

Patent monopolies result in high prices
Why are R&D incentives that promote innovation plus access (”I plus A”) so important? The current patent monopoly-based system of R&D has proven inefficient at advancing a needs-driven public health agenda. This is true for rich countries as well as poor, but the situation is much worse in poor countries. This has nothing to do with the ethics of Big Pharma. It is how the system is designed. (For more information on the challenges faced by developing countries under the current R&D system, refer to this report.

The current corporate sector system of R&D is driven by the prize offering of a patent monopoly. Patents are not worth much if they offer monopolies on sales to a population that — no matter how large — has little buying power. And if the prize incentive is too small, it will not induce R&D, no matter how much it may be needed as a public health matter.

Here’s what this means in practice: Developing countries comprise 80 percent of the world’s population but amount to only 13 percent of the global market for medical products. A review by Doctors Without Borders of new drugs introduced between 1975 and 2004 found that of 1,556 new drugs put on the market, only 21 were for “neglected diseases” — diseases endemic to developing countries

It is also the case that the products developed to treat diseases that occur in all countries whether rich or poor (such as cancer, heart disease and HIV/AIDS) are often not appropriate for conditions in developing countries. For example, not enough R&D is invested in creating products that do not require refrigeration, an important feature for products to be used in countries with warm climates and unreliable electricity.

The value of the patent monopoly is based on the holder using it to profit maximize as a monopolist. It is therefore no surprise that companies holding patent monopolies charge high prices. This is what the patent enables. High prices are an increasing problem in rich, developed countries, but the brand-name pharmaceutical industry’s current pricing model — which commonly runs into the thousands of dollars a year for a single medicine, and may involve charges of more than $100,000 — leaves new medicines completely out of reach of the vast majority in developing countries.

Spurring developing country-focused innovation plus access
The WHO IGWG was set up to create a global strategy and plan of action focused on advancing developing country-focused innovation that also ensures the fruits of the innovative process are available to the people that need them.

Public health experts and advocates encouraged IGWG delegates to embrace this mandate and examine systemic approaches to support R&D that do not rely on patent monopolies or the prospect of charging high drug prices as a reward, and to identify mechanisms to make the fruits of R&D widely accessible. See statements by Essential Action and Doctors without Borders.

There are a lot of good ideas, large and small, about how to do this. Notably at the IGWG talks that ended on May 3, Bolivia and Barbados put forward a series of concrete proposals for non-patent prizes to incentivize R&D, with the resulting products to be made immediately available in generic form at competitive prices. The prize proposals focus on incentivizing several priority health needs of developing countries, such as the development of a diagnostic test for tuberculosis, new treatments for Chagas disease, and priority medicines and vaccines. The countries were hoping that the final strategy that came out of the negotiations would reference the proposals as examples of the types of initiatives that countries should examine when implementing new R&D strategies for developing countries.

There is no guarantee that these types of prize funds would work in creating innovation where now there is none or much too little. But they are interesting and provocative proposals that, in keeping with the mandate of the WHO talks, concentrate on health problems specific to developing countries.

Progress and setbacks in Geneva; one more year for bold action on R&D
The good news out of Geneva is that countries came to consensus on several important issues. These include an agreement to explore R&D incentives like prizes, and to encourage future discussions of an R&D Treaty, which would involve agreement that all countries should have to contribute to global R&D, or at least participate in the R&D system, but that there should be differential obligations based on degrees of wealth.

The bad news out of Geneva is that despite this progress, much work remains to be done to promote R&D models that will work for the developing world. IGWG delegates did agree to create a working group on financing for R&D. But one concern is that the draft strategy does not specifically reference the importance of examining the Bolivia and Barbados proposals — as well as proposals that may be developed by other countries – and that the new working group will not look at such proposals.

Another concern is that because of resistance from developed countries such as the United States, the EU, and Canada, consensus was not reached on concrete proposals to actually implement the urgently needed new incentive mechanisms. A significant amount of negotiating time was lost debating core principles such as the role of patents in creating barriers to access to medicines, and the importance of promoting the use of already-agreed to flexibilities available under international trade law to promote access to affordable generic medicines where patent protections remain a problem. A number of these issues remain unresolved and will be the subject of further talks, to take place at a later date and concluded by May 2009. For more information on the recently concluded talks see comments from Doctors without Borders and Knowledge Ecology International.

Of course, it is hard not to wonder if pressure from the brand-name pharmaceutical industry – which is based in rich countries and which along with its allies remains ideologically committed to opposing any tinkering with patent monopolies – influenced the disappointing outcomes at IGWG. Industry is concerned that tinkering in the case of health problems related to developing countries will eventually threaten the patent monopoly system in the rich world, or interfere with its ability to expand sales to the wealthy in middle-income countries.

But it’s not too late. WHO member countries have another year to finalize the R&D agreement that comes out of the IGWG process; they must be encouraged to use this time wisely by taking concrete steps to advance experiments with new institutional arrangements to promote the complementary public health objectives of innovation and access. It is time to ignore those who would subordinate public health to patent veneration or commercial concerns, and enact bold solutions that have the potential to benefit us all.

For more information on the World Health Organization R&D talks see:

• An article on the recent conclusion of the talks
• Knowledge Ecology International’s IGWG webpage, which has links to key resources on this topic
• The WHO IGWG page
• The most recent version of the WHO IGWG global strategy and plan of action

Recently, we posted an entry here titled “What is Abbott trying to hide? Maker of Norvir asks Court to deny public the right to see documents.” We’re pleased to report that the Court denied Abbott’s motion to keep some documents under seal. We analyze these documents below.

In 2003, Abbott Laboratories (NYSE:ABT) raised the price of its HIV/AIDS drug Norvir (ritonavir) by 400% overnight. Norvir is used in combination with other “protease inhibitors,” (PIs) and it “boosts” the effectiveness of the PI it’s used with. Abbott also makes a combination pill called Kaletra that includes both Norvir and its own PI – when they raised the price of Norvir, they didn’t raise the price of Kaletra.

Prescription Access Litigation coalition member SEIU Health and Welfare Fund filed a national class action lawsuit against Abbott. The lawsuit claimed that Abbott violated federal anti-trust laws, alleging that Abbott raised Norvir’s price in order to boost sales of Kaletra, at the expense of competing PI drugs that require Norvir as a booster. In a nutshell, the lawsuit argued that Abbott tried to “leverage” its patent-protected monopoly over Norvir into a monopoly over the market for protease inhibitors.

As we’ve discussed before, Abbott has fought throughout the litigation to keep documents regarding the price increase of Norvir sealed. Abbott’s lawyers recently argued that a set of documents that they wanted shielded from public view contain “highly confidential information related to … how Abbott analyzes, views and makes strategic business decisions in the HIV pharmaceutical market.” [Order, p2.

But after a Judge recently ordered some of the documents unsealed (a copy of the Judge’s order is here) it became clear why Abbott wanted to keep what was in these documents hidden from public view.

First, these documents revealed Abbott’s disregard of how a price increase would affect HIV/AIDS patients. An email from Abbott executive Jesus Leal shows three strategies that Abbott considered to drive up sales of Kaletra, despite the potential interference with patients’ existing or future treatment regimens.

One strategy was to sell Norvir in three ways: as an ingredient in Kaletra, as a separate pill priced at five times its former price, or at the original price in a liquid form that Abbott executives admit tasted “like someone else’s vomit.” Given that many protease inhibitors have nausea as a possible side effect, even considering a strategy that would force the many HIV patients who could not afford a five-fold price increase resort to taking the foul-tasting liquid Norvir is reprehensible.

Another strategy considered was to stop selling Norvir altogether, and offer only Kaletra. But switching to Kaletra is not medically appropriate for many HIV/AIDS patients, because they eventually have to change to different PI drugs as the virus mutates and becomes resistant. A premature switch to Kaletra would deprive patients of a treatment option that they would otherwise have held in reserve until absolutely necessary.

Further, one side effect of Kaletra is hyperlipidemia (high cholesterol), which leads to higher risks of heart attack and stroke. Thus Kaletra may be less appropriate for some HIV patients than other treatments which combine Norvir(ritonavir) and other PI drugs as necessary.

Abbott considered – and eventually adopted -- a third strategy – continue selling Kaletra, but increase Norvir’s price to five times its former price. Since this time, Kaletra sales have grown significantly, from $400 million in 2003, to between $682 and $900 million in 2004, and $1.14 billion in 2006.

Exhibit 18 also reveals that Abbott planned to argue that their price increase was necessary because it was “no longer feasible for Abbott to provide a production line of Norvir capsules at the current price.” Abbott executives speculated that a price increase had a notable weakness - the company would face “exposure on price if forced to open books.” They were right. Their own released documents show that it was profit motivations and market factors, not ‘feasibility’ that caused Abbott’s unconscionable 400% price increase of the widely needed drug Norvir.

It is apparent from these documents that patient and consumer concerns were secondary to, if not absent from, Abbott’s financial considerations. One released document [Exhibit 39] has a chart summarizing a proposed slide presentation on the price increase. Not surprisingly, the one slide summary labeled “Public Relations and Activist Slide” has no summary at all, just a question mark “(?).” This shows that Abbott knew that it would be lambasted by activists for its unconscionable price increase, and that there was no good response to this criticism.

The only remorse or reservation shown in these documents was a comment by Abbott’s Vice President of Global Pharmaceutical Development, John M. Leonard, M.D. He responded to Abbott’s proposals to limit access to Norvir “I think we are on the right (but uncomfortable) track.” [Exhibit 28] ‘Uncomfortable’ is a gross understatement given that the price hike Abbott was proposing increased the annual cost of Norvir for an uninsured patient from $1,300 to $6,600 a year.

The true purpose of the price increase demonstrated: Boost Kaletra sales

The documents also showed that Abbott quintupled the price of Norvir in response to the declining market share of Kaletra relative to protease inhibitors made by competitors. Kaletra sold almost $400 million in 2003 but new PI drugs having fewer side-effects made by other drug companies threatened Kaletra’s future sales.

One slide summary in Exhibit 28 shows that Abbott knowingly increased Norvir’s price in order to push the cost of using a competing drug Reyataz to a “significantly higher price.” This, Abbott speculated, would create “formulary pressures” i.e. pressures on insurers to cover Kaletra instead of Reyataz, or to increase the co-payment that consumers would have to pay for Reyataz.

Another slide summary showed that Abbott saw the treatment improvements from Reyataz not as a boon to HIV/AIDS treatment and to patients, but as a form of unfair gain by their competitor Bristol-Meyers-Squibb (BMS) at the expense of Abbott. Ironically, Abbott didn’t consider raising its price by 400% to be unfair gain at the expense of HIV/AIDS patients.

These released documents don’t reveal much about Abbott’s price hike that wasn’t already known (see, for instance, an article that originally ran in the Wall Street Journal here) but they do reinforce how coldly calculating Abbott was in considering how best to put profits before HIV/AIDS patients.

Abbott recently submitted a Motion for Summary Judgment to the Court hearing the Norvir class action. If this motion is denied, a trial in the case is currently scheduled for August 2008.

Readers, what do you think of the released documents? Do they change your opinion of Abbott? Or just reinforce it? Please post your thoughts in the comments.

And by the way, here are links to all the documents the Court agreed to unseal:

• Exhibit 1 (Rebuttal Expert Report of Joel W. Hay, PHD.)
• Exhibit 4 (08-09-2004 Depisition of Abbott executive Jesus Leal)
• Exhibit 5 (08-11-2004 Deposition of John Leonard)
• Exhibit 8 (12-19-2005 Deposition of Jodi Devlin)
• Exhibit 14 (9-3-03 Strategic Plan)
• Exhibit 18 (09-12-2003 Email from Jesus Leal re three pricing options for norvir)
• Exhibit 20 (07-13-2003 Email from Michelle Jones re 07-13-2003 PR article regarding Reyataz efficacy with Norvir)
• Exhibit 27 (09-10-2004 Deposition of Abbott executive Heather Mason)
• Exhibit 28 (09-22-2003 Email from Dr. John Leonard re Kaletra’s decline and Norvir’s growth with introuction of competitor pi’s)
• Exhibit 29 (08-04-2003 Emails from William Dempsey and John Thomas)
• Exhibit 32 (09-10-2003 Email from Joseph Serio Jr re decline in Kaletra market share)
• Exhibit 38 (Notice of Rescheduled meeting dated 09-25-2003)
• Exhibit 39 (09-29-2003 Email from Jesus Leal re Slide list)
• Exhibit 45 (2006 Jan Monthly Market Research Report re HIV drugs)
• Exhibit 47 (03-24-2006 Declaration of Michael P. Hannan, Product Director, Protease Inhibitors, Glaxo-Smith-Kline)
• Exhibit 49 (12-14-2007 Deposition of Douglas F. Greer, PHD re Profitability of PI’s developed for use with Norvir)
• Exhibit 50 (08-08-2007 Deposition of Dale Kempf re Patent issues)
• Exhibit 51 (07-24-2007 Deposition of Dr. John M. Leonard, Abbott VP)