Case of the Purple Pill
By Neil Swidey,
Top 10 Pharmaceuticals
Prilosec slipped from the number-one to the number-two selling prescription drug last year after its patent was about to expire and maker AstraZeneca shifted its promotional muscle to the "new Purple Pill," Nexium.
The Life Cycle of the
Worldwide earnings from the Purple Pill grew annually from the time it was introduced in 1988 until just before its patent expired last year.
Gertrude was sitting with her husband in their
"I'm every man," the serious, gray-haired guy said, nodding confidently. "And every woman," continued a blonde standing on the adjacent cliff, "whoever suffered from frequent, persistent heartburn." Over the course of 60 seconds, waves crashed, sunlight pushed through an overcast sky, and rock formations reconnected hydraulically. A dozen cliff-top baby boomers of every race spread the word about Nexium, as capsules of "the new Purple Pill" rained from the heavens.
most of the TV commercials for prescription drugs that keep Brokaw, Rather, and
The 79-year-old, who didn't want her last name used, is a longtime sufferer of serious heartburn. So she's among the many who hail the miracle powers of the original Purple Pill, Prilosec. That drug stripped misery from the lives of millions and became the world's best-selling prescription drug - and the number one medication prescribed for seniors - taking in $6 billion a year. Prilosec is so good, and patients so attached to it, that doctors jokingly call it "purple crack."
It's an expensive habit, about 4 for each daily pill, or $1,500 a year. General Motors alone spent $55 million on Prilosec for its workers last year. The drug has been the ultimate cash cow for its maker, AstraZeneca.
But by now the cow should have run dry. The main patent on Prilosec expired more than a year ago. Under normal circumstances, that would have triggered the arrival of a generic version on the market, followed by a host of generic rivals. With so much low-cost competition, we would all be enjoying lower drug costs. But that didn't happen.
Through lawsuits, the makers of Prilosec have managed to keep the generics at bay while unleashing a half-a-billion-dollar marketing blitz to move people off Prilosec and onto Nexium, their costly, patent-protected new Purple Pill, which even their own studies show to be barely more effective than the original.
How and why AstraZeneca has been able to keep the purple profits flowing sheds more light on the nation's prescription drug crisis than reams of policy papers and congressional testimony. The same tactics are being used by just about all the big pharmaceutical companies, which are under intense shareholder pressure to maintain their best-in-business profits as the patents on about 20 blockbuster drugs expire over the next couple of years.
That explains the ads for the new drug Clarinex that are everywhere, right down to the white CVS bag your last prescription came in. Schering-Plough has been feverishly working to move the itchy-eyed onto Clarinex and off its omnipresent Claritin, whose patent expires this month. Ditto for Forest Laboratories' new antidepressant, Lexapro, the spawn of Celexa, whose patent is set to expire at the beginning of 2004.
given the sheer numbers involved and its still-evolving nature, the Purple Pill
may be our best case study of the forces driving up prescription drug costs.
It's the story of a wondrous medical advance that brought relief to millions
and significantly reduced the need for surgery. But it's also the story of the
steroid-injected marketing muscle that has ensnared, among others,
is a locomotive that's barreling down the tracks, and you either
get out of the way, get on board, or get squished," says Dr. James
First things first: This prescription drug crisis you hear everyone squawking about - it's really so avoidable.
matches the highest prediction of what it would cost to topple Saddam Hussein
with a full-scale attack on
Who's responsible for the fact that prescription drug spending continues to rise 15 to 20 percent a year, doubling every five years?
The big pharmaceuticals have certainly lost much of their "best and the brightest - making life better for you" luster. That's perhaps inevitable when you pour more money into peddling your newest product than Nike does its sneakers. But there's plenty of blame to go around. The government allows drug companies to control the testing of new drugs, designing trials to suit their interests, not the consumers'.
and hospitals, under their own bottom-line pressures, make deals that help the
drug manufacturers move patients to new, expensive
drugs when cheaper, older ones might do fine. Doctors operate in a world where
drug maker freebies like Red Sox tickets, Four Seasons dinners, and
Now go to your bathroom and look in the mirror. There's a good chance that you're one of those shareholders demanding higher profits from the pharmaceutical companies, even if you don't know it. (Think about those pharmaceutical-dense mutual funds you're counting on to pay your kid's college tuition.) Now open the medicine cabinet.
Do you see a bottle of Clarinex? Or maybe there's a vial of Vioxx, the new drug you pressed your doctor to prescribe for your arthritis, because it did wonders for Dorothy Hamill. ("Look how easily she can lace up her skates now!") Forget the fact that several studies have questioned whether it's any more effective than over-the-counter Advil. Or maybe there's some Viagra on the shelf. And let's just say you're half Bob Dole's age and haven't been treated for prostate cancer.
in this perfect storm of forces that conspire to make it a very expensive
time," says Dr. Thomas Lee, medical director for Partners Community
HealthCare, the largest physician network in
First, all that research after World War II didn't begin to bear fruit until the 1980s and 1990s. Now we have effective medicines for all kinds of conditions, including ways to treat impotence and depression that don't involve a couch.
Second, we've got all these baby boomers passing through middle age and either getting chronic disease or doing everything to avoid it. "Baby boomers don't want to accept that they will ever die," says Lee. Just since 1995, his Partners group has seen a nearly one-fifth increase in the number of patients taking medication regularly. And last, we've got pharmaceutical companies trying to get the maximum market for the drugs they spent so much to develop. "They're not interested in fine-tuning to make sure the people who get the new expensive drugs are those who will really benefit from it," Lee says. "They want everyone for whom there is a reasonable justification."
This is how it used to be: The boss would keep four bottles of Maalox in his desk. Every three hours, he'd grab one from his bottom drawer and take a swig. Short of surgery, there wasn't much else he could do to treat his heartburn, which is the main symptom of gastroesophageal reflux disease.
Food travels from the mouth, down the esophagus, and through a sphincter muscle to get into the stomach. Because the stomach is filled with acid potent enough to take the rust off your car, the sphincter is supposed to relax only to let food and drink in. But for the 25 million Americans who suffer chronic heartburn, the muscle relaxes way too often.
So the acid regularly flows up into the esophagus, causing a noxious burning in the upper abdomen and lower chest, especially after eating that third slice of deep-dish pepperoni pizza.
In 1977, the Tagamet revolution began. Whereas the common antacids like Maalox and Tums neutralized acid, prescription Tagamet blocked it. It made a huge difference. Still, there was a group of people who needed something more powerful than Tagamet and its successors, included in a class of drugs that came to be known as H2 blockers.
1989, that power came in spades and in the unforgettable shade of purple. Prilosec was the first proton pump inhibitor, or PPI. H2
blockers stop acid at one of three possible sites in the
cells of the stomach, but PPIs block it at the
final site of production. They're a fail-safe means of turning off the
stomach-juice spigot before it backs up into the esophagus. "Prilosec gave physicians a sense of power, a sense that we
can cure you," recalls Dr. James Reichheld, an
Prilosec was really just a niche drug when the
As most drug manufacturers do, Astra continued clinical trials to win approval for new indications to put on the Prilosec label - it eventually reached eight - and increase its customer base. (Remember, Viagra was originally developed to treat angina; that whole erection thing was just a pleasant surprise.)
Prilosec continued to grow. Then, in 1997, the FDA tied a bow on a big fat gift to the pharmaceutical industry: relaxed rules for drug advertising. It's not that direct-to-consumer advertising was a new phenomenon.
Prilosec was the perfect drug to market on TV. Millions of people have gastric problems, and many were no doubt feeling the pain right as the commercial flashed on the screen in front of them. Here was this incredibly effective new medication waiting to change their lives. And when they later found themselves sitting on a doctor's padded exam table, they didn't even have to recall the drug's name. All they had to remember was its color.
Purple Pill ads were everywhere - on TV, on the Web, even on the floor of
Here's the thing: Unlike many hyped drugs, Prilosec is a wonder drug that actually deserves its title. In dozens of interviews for this article, even critics of the purple juggernaut got around to saying: "It's a very good drug." But that doesn't mean a slew of people couldn't do fine on something much cheaper.
Give Drug Companies Their Due. Discoveries in many areas, such as cholesterol and high blood pressure are lengthening lives. Jeff Trewhitt, spokesman for the pharmaceutical trade group PhRMA, points out that 10 years ago we had no medicines on the market for Alzheimer’s; now we have four and 17 more in the human clinical testing stage.
Prilosec's success prompted several competitors to come forward with their own PPIs: Prevacid (TAP/Abbott), Aciphex (Eisai/Johnson & Johnson), and Protonix (Wyeth). And, of course, Prilosec me-too'ed itself last year with the launch of Nexium.
probably not surprising that me-toos have become so
irresistible. Trying to come up with genuine breakthroughs is a lot harder,
riskier, and more expensive. A recent study from
much? Take a drive out to
Hans Nilsson, the Swedish native who oversees the
Drug discovery, he says, is the attempt to make a series of increasingly complex connections to get to the finish line. If the connection works from, say, cell to tissue, you can move on. More often than not, it won't, so you have to return to an earlier step. Even at the end, when you've shown a compound to be effective and safe in thousands of humans, you might get one whose liver fails because of toxicity caused by the drug. So you start again.
The vast majority of attempts will never get to the approval stage. The trick is knowing how long to stick with it or when to pack it in. Research on omeprazole, the generic name for Prilosec, "started in the late 1960s," Nilsson says. "It was launched 20 years later. Twenty years. You never know how close you might be."
To those who question how a company like AstraZeneca can justify the staggering profits it collects from a drug like Prilosec, Nilsson again points to his sketch. "This is the answer." AstraZeneca spent $2.7 billion on R&D last year. Then again, the company also reported profits of $4.2 billion.
Still, all the competition from the me-too drugs should bring down overall health care costs, right? Maybe in any other world. But the exorbitant marketing campaigns used to launch competitors, like Prilosec me-too Prevacid, tend to drive up costs. They increase the patient population, sucking up customers who might do fine on 50-cents-a-day generic H2 blockers and moving them into the new, more powerful PPI club, whose daily admission fee runs seven to eight times higher.
Richter, the longtime
There's a phenomenon associated with PPIs called acid rebound. Because the medicine puts a brake on the acid-producing pumps in your stomach, when you stop taking it, that built-up acid can be unleashed, says Ferris.
Even if there's no full-scale rebound, most people have some recurrence of symptoms because the PPIs were powerful enough to let them resume bad habits, such as eating fatty foods. When that power's gone, they start paying for their sins. Ferris and his associates recommended extra doses of the H2 blockers at the beginning, knowing that rebound is usually temporary. But few people made it that far.
What's clear is that if you want to restrict this expensive drug to only those people who really need it, you have to start at the beginning, before they've test-driven the Cadillac. But all those TV commercials make that next to impossible. Most people have a spouse or a cousin or a mechanic who's on the Purple Pill and speaks evangelically about it ("I can eat chili again!"), so they enter the doctor's office knowing what they want. Richter explains how it works: "They come in and say: 'My husband takes Nexium. Do you think that would work well for me?' I say, 'Yes, but have you tried Tagamet? It doesn't appear that you're having symptoms that frequently.' But they say, 'Nexium and Prilosec seem to work really well.' So I say, 'Fine.' "
Besides cost, there's no downside to taking Nexium or Prilosec. But if it takes a doctor 15 minutes to talk a patient out of a more expensive drug - and that's pretty much all the time the doctor has with the patient to begin with - it's not a practical investment.
And this calculation comes from Richter, who for 20 years has refused to meet with drug company sales representatives, on principle. Think about how much more quickly a doctor might offer up the new drug if he had the Nexium golf-scoring software loaded onto his Palm Pilot or if the Nexium drug rep had just brought by lunch for the staff when he arrived to restock the sample cabinet.
the summer and fall, David Calabrese had a ritual to start his day. He would
walk into his Roxbury office and check his e-mail in search of an announcement
that the generic Prilosec had finally been launched.
Calabrese is the pharmacy director for a network of 2,500 doctors associated
AstraZeneca's Prilosec patent expired in
October 2001. So Calabrese and many pharmacy directors like him across the
country - for HMOs, physician groups, and hospitals - built those expected
savings into their drug budgets this year. The fact that they have not
materialized may well help drive up everyone's insurance premiums next year, he
says. It doesn't matter if you never get heartburn. You could be one of those
people who can guzzle a whole bottle of
Late one Friday night last month, Calabrese got the e-mail message, but it didn't say what he had expected. He quickly forwarded it to a few co-workers, putting "Ugh" in the heading.
AstraZeneca had long ago filed suit against four companies planning
to produce generic Prilosec, claiming infringement
not on the main patent but on secondary ones. The trial began last December in
a federal court in
She ruled that three of the four generic companies had infringed on AstraZeneca's patented method for inserting a "subcoating" between the main Prilosec molecule and its purple shell. Critics had scoffed at this claim, pointing to a host of drugs that have similar subcoatings. But a patent is a patent, the judge ruled, and this one doesn't expire until 2007.
AstraZeneca spokesman Jim Coyne called the decision a "vindication." The case, he said, "has always been about defending our intellectual property." The company's chief executive, Tom McKillop, told The Financial Times of London that the court action clearly paid off for his company: "Our defense strategy has already given us longer exclusivity over the last few months. And now it is likely to give us some months more and maybe even a lot longer than that."
The two generic companies poised for a quick, aggressive launch were shut out. Earlier this month, they announced that, in exchange for a share of the profits, they would assist the one tiny firm that the judge said could launch a generic Prilosec. Still, AstraZeneca may appeal the part of the ruling that gave that firm the green light. Says Calabrese: "There's a flicker of light at the end of the tunnel, but I'm not very confident we'll see a generic Prilosec anytime soon."
The world's other big pharmaceutical companies cheered the ruling, and their stock responded accordingly. Most are in the same patent boat as AstraZeneca. The 1984 Hatch-Waxman Act awarded drug makers 17 years of patent protection (later extended to 20 years) for drugs they create. The clock usually starts ticking long before a drug is launched. These days, when the 20 years is up, brand-name drug makers do not allow their blockbusters to go off patent quietly into the night. They file for all sorts of extensions.
And they have become increasingly savvy in obtaining patents for every conceivable feature of a drug, from its coating to how it combines with other drugs to its color. Other brand-name companies, like the makers of Prozac, lost their patent infringement cases. But AstraZeneca's victory is a strong sign that it can pay to take generics to court.
Meanwhile, all the court delays have given AstraZeneca time to move market share to Nexium, and that's where hospitals like Mass. General and Brigham and Women's come in. In exchange for getting Nexium at a fantastic discount, the hospitals agreed to make it their primary PPI. The switch will save Mass. General alone more than $300,000 a year. And the price discount is clearly worth it for AstraZeneca, since patients will be discharged on Nexium, residents will be trained on Nexium, and doctors across the country will be told that Nexium is the first choice of world-famous Mass. General.
AstraZeneca spent $478 million last year on its Nexium promotional campaign, according to IMS Health, and hired an additional 1,300 sales reps just for the new Purple Pill, according to Scott-Levin Consulting, a health care research firm. The push has been incredibly effective. Some 42 percent of Prilosec prescriptions have been converted to Nexium, according to data from the investment firm Dresdner Kleinwort Wasserstein.
Nexium is actually just one-half of the molecule that makes up Prilosec. The theory is that it improves the efficacy of a drug when its most effective part is isolated, in this case the "S isomer." Many specialists doubt this claim. Nonetheless, this route to a new product is becoming more common in the industry.
Dr. Doug Levine, AstraZeneca's executive director for gastrointestinal clinical research, says Nexium represents a clear improvement over Prilosec. But in most of the company's trials, the effects of 40 milligrams of Nexium were compared against 20 milligrams of Prilosec. In the two instances where they were compared at equal strength, only one showed a statistical difference, and that was a 3 percent shorter healing time.
Dr. Jerry Avorn, chief of the Brigham's pharmacoepidemiology division, says flatly, "Nexium is not at all better in any meaningful way than Prilosec." One of the nation's leading experts in the study of physician prescribing patterns, Avorn has made it his life's work to try to outsmart the drug companies.
Asked why his hospital decided to take the Nexium deal, he leans back in his chair, scratches his Abe Lincoln-style beard, and sighs. Noting that he didn't make the decision, he says he does understand it. Hospitals are under incredible pressure to keep their costs down.
A deal like this could prevent the Brigham from having to lay off nurses. "It's not like anybody is taking home extra money in a valise at the end of the month by doing this," Avorn says. But he acknowledges the "bad outcome" it produces: a new cycle of patients with unnecessarily higher drug tabs.
It's yet another sign of what's wrong with our health care system, he says, and why fixing it seems so hopeless. "You've got hospitals doing what's good for hospitals, HMOs doing what's good for HMOs, and drug companies doing what's good for them," Avorn says. "We've got this crazy patchwork, with everyone against everyone else, and you end up with these paradoxes like Nexium."
So How Do We Stop This Drug Cycle From Truly Spiraling Out Of Control?
For insurers, the answer seems to be learning to say no a lot more. Most are implementing aggressive cost-control programs, such as "prior authorization," in which doctors have to obtain approval from the insurer before putting a patient on a particularly expensive drug when there are comparable, cheaper drugs available.
MassHealth, the state's Medicaid program for the poor, spent $25 million on Prilosec last year. In August, it stopped paying for the drug unless a doctor could prove that a patient needed it over a cheaper alternative. Harvard-Pilgrim Health Care, Tufts Health Plan, and Blue Cross Blue Shield have all introduced their own prior authorization programs. But in a system already larded with excessive bureaucracy, few see this as the right way out. Avorn calls it the "1-800-NO-YOU-CAN'T" route.
Also, because each insurer is out there cutting its own deals with all the various drug manufacturers and pharmacy benefits managers, there's little consistency in restrictions. Tufts, for instance, drew fire from many of its members a few years ago when it said no to Claritin. But because it got a good deal on Nexium, the new Purple Pill is not on Tufts's prior authorization list.
What seems clear is that consumers will soon be much more aware of what drugs actually cost, because insurers and employers will be passing on a much bigger chunk of the bill. It won't be a matter of a $25 copay rather than $10. They will either have to be prepared to pay full freight for the Cadillac or get used to riding in the Hyundai.
answers may lie in
Federal regulators recently announced a plan to crack down on the most flagrant wining and dining of doctors by drug companies. But it's not at all clear that anyone has the stomach for real revolution, such as having an independent body with the consumers' interests in mind take over the entire testing process for new drugs.
There is momentum elsewhere, though. Last month, President Bush proposed new rules aimed at limiting the ability of brand-name drug makers to stall generics. And last year, John McCain and Charles Schumer persuaded colleagues in the US Senate to pass an even tougher measure designed to curb all those patent lawsuits that the Hatch-Waxman Act unwittingly spawned.
it's been stalled in the House, the measure is being pushed aggressively by a
coalition of consumer groups and some of Big Business's biggest guns - General
Motors, Wal-Mart, Motorola - which bear much of
today's health care costs. "We've zeroed in on Prilosec,"
says Brad Cameron, a
Then again, it may not be wise to bet against the purple powerhouse that has defied every expectation since its launch 13 years ago. The 39-year-old Cameron has had heartburn since he was in college. He confesses that when his symptoms got worse recently, he went to see his doctor. "My best friend's on Prilosec," he told his doctor. "It works for him. How about Prilosec for me?"
Neil Swidey is a member of the Globe Magazine staff. He can be reached at email@example.com.
© Copyright 2002 Globe Newspaper Company.