As I mentioned on Friday, I’m in Chicago right now attending the American College of Surgeons annual meeting, where I’ll be until Wednesday afternoon. If there are any of my readers who happen to be surgeons attending the meeting, drop me a line and maybe we can get together. In the meantime, here’s a blast from the past from the past. This post first reared its ugly head almost exactly three years ago; so if you haven’t been reading at least three years, it’s new to you. Unfortunately, I see nothing that has changed since I originally wrote this. If anything, I underestimated the problem. Ain’t it great to have three years’ perspective on something you wrote?
One of the favorite gambits that alternative medicine mavens like to use to defend their favorite remedies when a skeptic starts asking uncomfortably pointed and specific questions their scientific and evidentiary basis is to accuse said skeptic of being “in the pocket of big pharma.” Indeed, I’ve written before of the “pharma shill gambit,” where alties accuse skeptics of being nothing more than shills for the pharmaceutical industry (to which I always respond that it would be a dream come true to be paid for doing nothing more than posting skepticism about non-evidence-based medicine to a blog and Usenet but that unfortunately I’m just doing this as a hobby). There’s no doubt that big pharma makes a nice, juicy target, and no one claims the industry is without its problems. It’s also true that there’s a lot of money in pharma. But there’s also a lot of regulation and huge expenses. For example, between R & D costs, the costs of doing the clinical trials to demonstrate safety and efficacy, it costs around $800 million to bring just a single truly new drug (known as a “new molecular entity” or NME) to market, but can be about 60-70% less for a new drug in an established class of drugs (a.k.a. a “me-too” drug. Still, that’s righteous bucks (at least $250-300 million). By comparison, you’d think that the alternative medicine and supplement industry is a scrappy and poor underdog.
You’d only be half right. The alternative medicine industry may be smaller than big pharma right now, but it’s hardly poor. As fellow ScienceBlogger Abel Pharmboy, who happens to subscribe to the Wall Street Journal, including the Health Industry Edition, pointed out the other day, there’s big money in alternative medicine, quoting from the article about a Chinese company known as Tong Ren Chan (subscription only):
The brand is a household name in most of China, not unlike Tylenol in the U.S. Chinese medicine is traditionally sold by a specialist at a local shop that concocts mixtures of dried plants and animal products from wooden boxes behind the counter. One Tong Ren Tang store in Hong Kong sells everything from the thinly sliced horn of a young deer, which doctors say helps kidney problems, to an 85-year-old wild ginseng root that can be ground into a powder and used for heart failure — selling for 1.08 million Hong Kong dollars, or about US$138,700. There are dried larvae for asthma as well.
“The overall expenditure on drugs will increase tremendously in the long term,” says Gideon Lo, an analyst who follows Tong Ren Tang at DBS Vickers in Hong Kong. “Tong Ren Tang is the leader. … If you are bullish on the long term, you must buy the market leader.”
Ah, the altie says. That’s a Chinese company. In the U.S., big pharma still rules. Well, yes but perhaps not for that much longer. A while back, I blogged about an example here in the U.S., namely Airborne , the dubious herbal “cold preventer” that made its “discoverer,” a schoolteacher who dabbled in herbal remedies, fabulously wealthy:
For one thing, it makes for an excellent creation story. In the late 1990’s, Victoria Knight-McDowell, an elementary-school teacher in Spreckels, Calif., grew weary of picking up colds from her students and began “researching Chinese and holistic medicine and the use of herbs and vitamins to boost the immune system,” an official company history explains. She and her husband then decided to market her “natural formula of 17 ingredients” in 1997. They used the money her husband had made selling a television script. They handed out samples in malls and gradually got distribution in various stores. Kevin Costner became one of many celebrities to declare his confidence in the product. In 2000, Knight-McDowell gave up her teaching gig, and by 2004 annual sales hit $90 million. Along the way, Knight-McDowell appeared on “Dr. Phil,” and Airborne was discussed on “Live With Regis and Kelly” and other shows.
Pretty good bucks, I’d say. And, best of all, from Knight-McDowell’s perspective, there isn’t all that pesky regulation or those requirements to demonstrate safety and efficacy. Knowing a good opportunity when they see it, pharmaceutical companies are getting in on the action, paying big bucks to gobble up companies that make over-the counter medications, alternative remedies, and nutritional supplements:
GlaxoSmithKline has splashed out $566 million to buy US consumer healthcare firm CNS in a cash deal that expands its over-the-counter operations.
Minnesota-based CNS manufactures Breathe Right nasal strips and FiberChoice dietary fibre supplements and GSK is paying $37.50 per share, which represents a premium of 31% over the US firm’s stock price at close of business on October 6.
The deal is expected to close by early 2007 and GSK said it will be neutral to earnings next year, and accretive from 2008.CNS had sales of $118.5 million for its last financial year, which was up18% over the previous 12-month period, and the vast majority of that (86%) came from revenues generated in the USA.
Breathe Right is sold in 27 countries and FiberChoice is marketed solely in the USA, but John Clarke, president of GSK Consumer Healthcare, said “this outstanding business provides a great global growth opportunity.”
Meanwhile hundreds of companies sell herbs, nutritional supplements, and Chinese medicine. With this, it shouldn’t be surprising that some alternative medicine companies are starting to engage in the same sorts of dubious promotional tactics and price-gouging that big pharma is rightly castigated for indulging in, including promoting conflicts of interest in doctors:
Federal Parliamentary Secretary for Health Christopher Pyne announced the planned investigation yesterday after complaints about a lack of legal guidelines for the sale of complementary medicines by doctors.
Sunshine Coast general practitioner Scott Masters told The Australian he knew of a doctor practising nutritional medicine who had confessed to buying $10,000 worth of vitamin E at the start of each year and then selling it on to patients for a total of $100,000.
“That’s not a bad mark-up,” Dr Masters said. “This is entirely legal, although there are major ethical concerns about conflict of interest.”
Dr Masters said his practice received an increasing amount of material from the promoters of supplements.
“I can sell all these products directly to patients at a mark-up I consider reasonable,” he said.
The danger of doctors having financial interests in a product was that they might fail to prescribe a medicine that actually treated their patients’ complaints.
Dr Masters said the community was right to be concerned about pharmaceutical companies attempting to influence doctors to prescribe particular drugs.
But too little attention was focused on the way in which producers of complementary medicines sought to influence doctors.
Mr Pyne said the ACCC was reviewing the code of conduct of the pharmaceutical industry after claims of inducements being offered to doctors.
“I have inquired as to whether they have a similar code of conduct for the complementary medicines sector and they do not,” Mr Pyne said.
As EoR put it, commenting on the above story:
Critics complain doctors receive inducements to promote pharmaceuticals, but these are of paltry value due to self-regulation by Medicines Australia. Viagra’s self-raising calculator is cute, but a $10 gift ceiling usually makes for a marginally decent biro or mildly embarrassing brolly.
On the other hand, Big Altie’s dispensers are enjoying their hayday. I heard a back-of-the-stables rumour of substantial inducements offered to a GP (afflicted with an altie-friendly diploma) to endorse and sell neuraceutical products. He refused.
The worry about doctors receiving kickbacks to sell alternative medicines has led to an ACCC investigation, “with a view to the ACCC recommending a code of conduct similar to that applying to pharmaceuticals”. This would block bribes to doctors – now how about to so-called “health professionals”?
My point here is not to defend big pharma or the conflicts of interest that come about because pharmaceutical companies are prone to giving inducements to doctors to prescribe their product. My point is to echo Abel in pointing out that there’s a lot of money in alternative medicine and nutritional supplements, and the industry is growing. As the industry grows, it naturally starts to behave not unlike the way big pharma behaves, whose excesses have led to a backlash and increasing numbers of hospitals and doctors refusing to accept gifts of other than nominal value from drug reps. Moreover, alternative medicine companies do not have to deal with anything near the regulatory hurdles that traditional pharmaceutical companies do (you know, pesky little requirements that the drug be safe and effective and stuff like that). As these companies become more profitable, it is not unlikely that many of them will be purchased by pharmaceutical companies and become part of big pharma themselves.
What all of this means is that it’s nothing more than a massive fallacy to imply that alternative medicine sellers are somehow above the commerce of it all, that they are untainted by financial concerns. They aren’t, and are probably becoming less so. Arguments over the efficacy (or lack thereof) of any treatment or drug should be confined to the scientific evidence.
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