Daily Walk of Shame: Money-Hungry Drugmakers

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As the Fool's online editor for the health-care industry, I've seen all kinds of strange things cross my desk. Last week, I saw one of the strangest -- and potentially one of the scariest, in my opinion -- come from drugmaker Allergan (NYSE: AGN).

Allergan, which makes the popular antiwrinkle medicine Botox, filed suit against the federal government late last week, seeking to lift the Food and Drug Administration's ban against off-label marketing of drugs on the basis that it is, of all things, a violation of the company's First Amendment rights.

Quick aside here: Drugmakers are only allowed to market drugs for approved, or "on-label," uses. However, doctors may prescribe a drug for nonapproved, off-label, uses.

Now, setting aside the issue of whether a potentially immortal entity -- Johnson & Johnson (NYSE: JNJ) is more than120 years old and still going strong -- should have the constitutional rights we mere mortals do, what Allergan is doing is filled with danger.

First, do we, as consumers of an increasingly expensive health-care system, want companies to be able to spend even more money to promote their drugs? One 2008 study, which looked at the latest-available 2004 data, estimated that in the U.S., 24.4% of every dollar of drug revenue went toward promotion, compared with just 13.4% for research and development.

Second, there's a very good reason why drugmakers are only allowed to market a drug for an on-label use: The drug has actually been tested for that use and is considered safe. Even then, problems can and do crop up. Remember Vioxx from Merck (NYSE: MRK), or fen-phen from Wyeth (NYSE: WYE)?

Besides, the Supreme Court has ruled that drugmakers are liable for problems when a drug is administered incorrectly, even for an approved use. Why would Allergan want to open itself and every other drugmaker up to a broader range of liability?

Third, companies are already pushing the envelope, going after those all-important sales. Eli Lilly (NYSE: LLY) admitted in its settlement with the Justice Department that it illegally marketed the antipsychotic drug Zyprexa; Pfizer (NYSE: PFE) did the same over painkiller Bextra. Do we really want to open the floodgates and let them do whatever they want, just to boost sales? Heck, even Allergan is under investigation for its marketing of Botox, although the company denies any connection between the investigation and its lawsuit.

You can believe that if you want.

Me? If I were an Allergan shareholder, I'd be making my displeasure known to management. After all, the shareholders own the company.

What do you think? Sound off on corporations and constitutional rights in the comments section below.

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Fool.com biotech and pharma editor Jim Mueller owns shares of Johnson & Johnson, but no other company mentioned. Pfizer is a Motley Fool Inside Value recommendation. Johnson & Johnson is a Motley Fool Income Investor pick. The Fool is about investors writing for investors and, at times, shareholder activism.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On October 07, 2009, at 12:17 PM, DannyHaszard wrote:

    Eli Lilly has received a huge criminal fine over their Zyprexa cash cow,add it all up comes to $4.6 billion, in Zyprexa settlements,fines,litigation.

    We put Lilly products in our babies they really need to clean up their act and quit with the white wash.

    Eli Lilly Zyprexa can cause diabetes

    I took Zyprexa a powerful Lilly schizophrenic drug for 4 years it was prescribed to me off-label for post traumatic stress disorder was ineffective costly and gave me diabetes.

    This is a powerful drug that can damage a young person physiologically for life.

    Please take with caution and learn as much as you can about side effects.

    Daniel Haszard http://www.1url.com/0vi

    WARNING-

    If a drug (Zyprexa) lists anything about the pancreas among the side effects, it probably means it can cause diabetes.

    Unlike your liver, the pancreas does not regenerate itself. If it gets damaged, diabetes is very likely.

    Zyprexa is glorified Thorazine at ten times the price

  • Report this Comment On October 07, 2009, at 2:10 PM, TMFEditorsDesk wrote:

    That does seem crazy...there's a reason the rules are in place...what's the incentive of extra trials for approval when you can just market the heck out of the drug for the alternate uses?

    -Anand (TMFBomb)

  • Report this Comment On October 07, 2009, at 2:13 PM, nagaisan wrote:

    You have it backwards. The FDA should have no right to ban a drug at all...its rulings should be strictly advisory, and its research/rulings placed in plain English on the box and label. The decision about whether a drug is worth the risk, INCLUDING THE RISK OF ADVERTISING, belongs to the consumer and the company, respectively, not some government hacks in Washington.

  • Report this Comment On October 07, 2009, at 2:37 PM, TMFMiloBreathed wrote:

    Just wondering: When doctors prescribe medicine for an off-label use, do they have to tell the patient that it's off-label and that this means it hasn't necessarily been tested for safety for the use?

    As far as freedom of speech, drugmakers already don't have full freedom, since, for instance, they can't market something using claims that aren't proven.

    Kris (Motley Fool copyeditor)

  • Report this Comment On October 07, 2009, at 3:19 PM, TMFMiloBreathed wrote:

    And Allergan's marketing must be very good to have persuaded the young, very smooth-skinned woman in the photo that goes with this story to get a Botox injection. Or perhaps she looks so great because she's been a Botox user for a while. hmmm

    Kris (TMF copyeditor)

  • Report this Comment On October 07, 2009, at 3:39 PM, biotech123 wrote:

    Allergan is a courageous company to take on the FDA.

    Imagine that you are a cancer patient with few treatment options, and there has been a small published study conducted that shows therapy X appears to helping patients (which your busy physician has not read). The pharma industry would like to have the ability (from a legal perspective) to inform physicians about the existence of this data - with all the appropriate caveats - including that the product is not approved by the FDA for this use. As always, the prescribing decision is the physician's responsibility. If the current system is not challenged in court, patients will suffer - its as simple as that.

    And I can tell you that if I were that cancer patient, I would want that pharma company to have the ability to provide all of the available data to my physician, and then my physician and I will make a decision about my treatment.

  • Report this Comment On October 07, 2009, at 4:29 PM, zoningfool wrote:

    Being a Botox user, I found it greatly reduced--and virtually eliminated--the debilitating migraines from which I suffered for nearly my entire life. I started getting botox for purely cometic reasons--the '11's' (those annoying furrows between the brows) and pleasantly discovered that my headaches disappeared along with the wrinkles. If Allergan wants to promote this benefit in its marketing, I have no problem with that.

  • Report this Comment On October 07, 2009, at 4:35 PM, vishtr wrote:

    In response to: TMFMiloBreathed

    Doctors do not have to indicate when they are prescribing off label uses. You most likely have taken drugs for off label uses, and several drugs that are routinely prescribed by doctors across the country are not put through clinical trials for the following reason:

    They are already well known to doctors as good off label uses.

    Why would a company waste it's resources going through clincial trials (often many, many years and millions of $), when it's already being used the same way it would if it went through the trials?

    It's a bit silly, but it's the medical world we created.

  • Report this Comment On October 07, 2009, at 5:14 PM, TMFGebinr wrote:

    Hi biotech123,

    If the lifting of the restriction were limited to a situation such as you described, where a physician sought out additional information from the manufacturer, then I can see a reason for it. There could even be a mechanism whereby the company is allowed to answer such a question after informing the FDA of that and getting approval.

    But when a company claims "First Amendment rights," to me that says they want to be allowed to talk about their drugs in whatever way they see fit, without restriction. And that is a very slippery slope indeed.

    Thanks for reading!

    Jim Mueller

  • Report this Comment On October 08, 2009, at 12:40 AM, wilbur88 wrote:

    If the FDA and federal govt applied the same rules to the insurance companies that require step edit off label drug uses then they would have a little more credibility in these cases. Until then, it's all just a political game.

  • Report this Comment On October 08, 2009, at 4:07 AM, ladocsc59 wrote:

    What seems to get lost in these conversations is that "marketing" means conveying the results of clinical trials or case reports to physicians. I cant for the life of me understand why information about medical innovation should be kept from the people who need that information to help their patients. Does anyone really believe that a government bureaucrat who doesn't even practice medicine is in a better position to evaluate the usefulness of a medicine than a doctor? Why shouldn't a representative from an innovator company be able to present information on additional uses of a medicine to doctors? Zoningfool mentions a wonderful benefit of botox that physicians and patients have uncovered in their use of botox. Can someone explain why this information shouldn't be shared with other intelligent (remember its still awfully hard to get into medical school!) doctors?

    Allergan may not have the law on its side, but they sure are doing the right thing for patients. One can only hope that they prevail!!

  • Report this Comment On October 08, 2009, at 7:36 AM, jwg1234556789 wrote:

    "Remember Vioxx....?"

    Yes. What I remember is that the FDA pressured Merck to withdraw from the market what may have been the most effective and safest arthritis agent in the history of medicine. What I also remember is that Vioxx, while possibly dangerous to post-MI patients, was safe in everyone else. I also remember that Vioxx could have saved millions of chronic NSAID users from dying of GI bleeds.

    Before making a reference, you should really get your facts straight.

  • Report this Comment On October 08, 2009, at 8:41 AM, zoningfool wrote:

    I agree with ladocsc59--while I started out getting botox for vanity reasons, I will continue using it if only for the relief of my migraines. I have tried numerous otc and prescription drugs for these headaches nearly my whole life (since I was 8 yrs old) with little relief.

    At first I thought it was a coincidence that my migraines 'happened' to disappear after I got botox and 'happened' to return only when the wrinkles began returning. Then I realized the pattern was too consistent to be mere coincidence. Believe me, I passed this info on to my PS at the first opportunity and will continue to pass it along to anyone else who mentions they suffer from migraines--which is part of the reason I posted my experience here. Personally, I'd much rather use botox injections which are limited to particular forehead muscles than drugs which have systemic implications and far more negative side-effects--not to mention lack the benefit of making you wrinkle-free :-)

    I cannot speak for other pharmaceuticals or their manufacturers--it should probably be a case-by-case situation tempered with common sense as well as full disclosure. But basically outlawing companies and doctors from sharing information with each other or their patients seems overreaching, imho.

  • Report this Comment On October 08, 2009, at 5:29 PM, EBerg13 wrote:

    Off marketing of drugs can be life saving, too. Years ago my Down Syndrome infant daughter went on the U-series, now marketed as nutri-vene. In six months she went from lying on her back to crawling to walking. Off marketing of drugs also led to an injection that prevents the decay of a spinal cord after a serious injury, some of the AIDS treatments and other good things. I agree that drug advertising is out of hand, but so is the interminable testing over and over again of drugs that have already been proven as safe just because someone found a new use for them.

  • Report this Comment On October 12, 2009, at 11:45 AM, scheller75 wrote:

    Zyprexa does not "cause" diabetes; it has a side effect of weight gain. There are other Anti-Psychotics on the market that do not have this, (Geodon).

    This why most MD's do not prescribe this to a patient with an eating disorder.

  • Report this Comment On October 22, 2009, at 9:30 PM, solomed wrote:

    As a physician who injects Botox on a regular basis, here is what is ridiculous about the FDA. They have approved Botox for use on the "11" lines between the eyes, so that can be discussed by the drug reps. However, it was NOT approved for the forehead wrinkles or the Crows feet lines at the corner of the eyes, so that cannot be discussed. It was FDA approved to treat excessive sweating for the underarms, but excessive sweating of the hands cannot be mentioned by Allergan. Makes a lot of sense right? I have been using it to treat migraines for years, but Allergan cannot mention it yet.

    For some "orphan" treatments, such as using it to treat tinnitus (ringing in the ears), it does not pay for Allergan to perform the clinical trials needed for FDA approval. However, pilot studies seem to show it helps, but the cannot discuss it due to the restrictions by the FDA.

    I hope that Allergan prevails and this much needed information can be disseminated to other physicians who can then discuss it with their patients.

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12/3/2009 11:29 AM
JNJ $64.25 Up +0.37 +0.58%
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