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Otto Steininger

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Drugs (Pharmaceuticals)

Medicine and Health

Pfizer Incorporated

National Institutes of Health

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Making Drugs, Shaping the Rules


Published: February 1, 2004

THE drug industry has created vast markets for products like Viagra, Celebrex and Vioxx by spending billions of dollars on consumer advertising.

But to sell medicines that treat schizophrenia, the companies focus on a much smaller group of customers: state officials who oversee treatment for many people with serious mental illness. Those patients - in mental hospitals, at mental health clinics and on Medicaid - make states among the largest buyers of antipsychotic drugs.


For Big Pharma, success in the halls of government has required a different set of marketing tactics. Since the mid-1990's, a group of drug companies, led by Johnson & Johnson, has campaigned to convince state officials that a new generation of drugs - with names like Risperdal, Zyprexa and Seroquel - is superior to older and much cheaper antipsychotics like Haldol. The campaign has led a dozen states to adopt guidelines for treating schizophrenia that make it hard for doctors to prescribe anything but the new drugs. That, in turn, has helped transform the new medicines into blockbusters.

Ten drug companies chipped in to help underwrite the initial effort by Texas state officials to develop the guidelines. Then, to spread the word, Johnson & Johnson, Pfizer and possibly other companies paid for meetings around the country at which officials from various states were urged to follow the lead of Texas, according to documents and interviews that are part of a lawsuit and an investigation in Pennsylvania.

How did this play out? In May 2001, as Pennsylvania was weighing whether to adopt the Texas guidelines, Janssen Pharmaceutica, a Johnson & Johnson subsidiary that sells Risperdal, paid $4,000 to fly two state mental health officials to New Orleans, where they dined at an elegant Creole restaurant in the French Quarter, visited the aquarium and met with company executives and Texas officials, according to documents. Janssen also paid two Pennsylvania officials $2,000 each for giving speeches at company-sponsored educational seminars for doctors and nurses working in the state's prisons.

The payments were discovered a little more than a year ago by Allen L. Jones, an investigator in the inspector general's office in Pennsylvania, who stumbled upon them when he was looking into why state officials had set up a bank account to collect grants from pharmaceutical companies.

With the help of his congressman in Pennsylvania, Mr. Jones, who is 49 and a former parole officer, brought the information to the attention of federal health officials - after, he says, his superiors removed him from the investigation, citing the political influence of the drug industry. The Department of Health and Human Services has asked the health care fraud unit of the Federal Bureau of Investigation to determine whether any laws were broken, according to letters Mr. Jones has received from federal officials.

DETAILS of the drug companies' efforts, recorded in Mr. Jones's investigative files and confirmed in part by drug companies and state officials, offer a glimpse inside the drug industry's behind-the-scenes efforts to promote the new-generation antipsychotics, called atypicals because their action in the body is unlike that of earlier drugs.

There is no proof that drug-industry money changed any state official's opinion about the drugs. And compared with the billions of dollars spent marketing to doctors from their first days as medical students - or the billions spent to underwrite and publish research - the dollar amounts are small.

But questions have multiplied about the many ways that the drug industry tries to influence the medical information that determines its products' success or failure. Last month, for example, some senators sharply criticized the National Institutes of Health for allowing its scientists to accept consulting fees and stock options from drug and biotechnology companies. Officials of the agency said that its top-level scientists were no longer accepting such compensation.

Sales of the new antipsychotics totaled $6.5 billion last year, according to an estimate by Richard T. Evans, an analyst at Sanford C. Bernstein & Company. About a third of those sales were to state Medicaid programs, whose costs have ballooned with their adoption of the new medications. Texas, for example, says it spends about $3,000 a year, on average, for each patient on the new drugs, versus the $250 it spent on older medications. The escalating costs have prompted a few states to try to limit access to the new antipsychotics - efforts that drug makers have opposed vigorously.

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