News release from the Montreal Economic Institute

If properly executed, the Smith government’s plans to have management of some hospitals transferred to independent operators could help improve access to health care, according to a researcher at the Montreal Economic Institute.

“The wait times that have become characteristic of Alberta’s and Canada’s health systems are amongst the longest in the developed world,” explains Krystle Wittevrongel, director of research at the MEI. “When we look at European countries that perform better on access to care than we do, the existence of competition between care providers is the norm.”

Alberta Premier Danielle Smith has announced plans to introduce competition to the province’s health care system by transferring authority over hospital management to non-governmental health operators.

The move is intended to drive better performance from Alberta Health Services.

A recent MEI publication found that autonomous not-for-profit hospitals tend to perform better than their government-run peers, as seen in Germany, France and the Netherlands.

However, according to the researcher two key ingredients are necessary for the model to function effectively.

The first is managerial autonomy, which has been shown to help bring decision-making closer to front-line health professionals and lead to faster and more efficient adaptation to changing health needs in a region.

The second ingredient is the reliance on an activity-based funding model in which a hospital receives a set amount of money for each treatment carried out within its walls. Under this system, Wittevrongel says, each additional patient treated represents an immediate source of revenue for the facility.

Under the current funding model, hospitals receive a fixed budgetary envelope every year, which they then spend on patient treatment over the course of the following twelve months. Since every new patient is a source of cost, this often leads to rationing of services, explains the researcher.

“With the right incentives and competition, our province’s hospitals could treat more patients than they do now,” notes Ms. Wittevrongel. “By introducing such competition, the Smith government is taking a step in the right direction.

“It just needs to make sure it enacts the right incentives for this reform to reach its full potential and increase access to care in the way Albertans want and deserve.”

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The MEI is an independent public policy think tank with offices in Montreal and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

From the Brownstone Institute

By  Julie Sladden 

It was one of those conversations you never forget. We were discussing – of all things – the Covid injections, and I was questioning the early ‘safe and effective’ claims put forward by the pharmaceutical industry. I felt suspicious of how quickly we had arrived at that point of seeming consensus despite a lack of long-term safety data. I do not trust the pharmaceutical industry. My colleague did not agree, and I felt my eyes widen as he said, “I don’t think they would do anything dodgy.” Clearly, my colleague had not read the medical history books. This conversation slapped me out of my own ignorance that Big Pharma’s rap sheet was well-known in the profession. It isn’t.

With this in mind, let’s take a look at the history of illegal and fraudulent dealings by players in the pharmaceutical industry; an industry that has way more power and influence than we give them credit for.

Before I continue, a word (not from our sponsor). There are many people working in this industry who have good intentions towards improving healthcare for patients, dedicating their lives to finding a cure or treatment for disease. Some therapeutic pharmaceuticals are truly life-saving. I probably wouldn’t be here today were it not for a couple of life-saving drugs (that’s a story for another time). But we must be very clear in our understanding. The pharmaceutical industry, as a whole and by its nature, is conflicted and significantly driven by the mighty dollar, rather than altruism.

There are many players and different games being played by the industry. We ignore these at our peril. The rap sheet of illegal activities is alarming. It seems that barely a month goes by without some pharmaceutical company in court, somewhere. Criminal convictions are common and fines tally into the billions. Civil cases, with their million-dollar settlements, are abundant too.

A 2020 peer-reviewed article published in the Journal of the American Medical Association outlines the extent of the problem. The group studied both the type of illegal activity and financial penalties imposed on pharma companies between the years 2003 and 2016. Of the companies studied, 85 percent (22 of 26) had received financial penalties for illegal activities with a total combined dollar value of $33 billion. The illegal activities included manufacturing and distributing adulterated drugs, misleading marketing, failure to disclose negative information about a product (i.e. significant side effects including death), bribery to foreign officials, fraudulently delaying market entry of competitors, pricing and financial violations, and kickbacks.

When expressed as a percentage of revenue, the highest penalties were awarded to Schering-Plough, GlaxoSmithKline (GSK), Allergan, and Wyeth. The biggest overall fines have been paid by GSK (almost $10 billion), Pfizer ($2.9 billion), Johnson & Johnson ($2.6 billion), and other familiar names including AstraZeneca, Novartis, Merck, Eli Lilly, Schering-Plough, Sanofi Aventis, and Wyeth. It’s quite a list, and many of the Big Pharma players are repeat offenders.

Prosecuting these companies is no mean feat. Cases often drag for years, making the avenue of justice and resolution inaccessible to all but the well-funded, persistent, and steadfast. If a case is won, pharma’s usual response is to appeal to a higher court and start the process again. One thing is clear; taking these giants to court requires nerves of steel, a willingness to surrender years of life to the task, and very deep pockets.

For every conviction, there are countless settlements, the company agreeing to pay out, but making no admission of guilt. A notable example is the S35 million settlement made, after 15 years of legal maneuvering, by Pfizer in a Nigerian case that alleged the company had experimented on 200 children without their parent’s knowledge or consent.

Reading through the case reports, the pattern of behavior is reminiscent of the movie Groundhog Day with the same games being played by different companies as if they are following some kind of unwritten playbook.

Occasionally there is a case that lifts the lid on these playbook strategies, revealing the influence of the pharma industry and the lengths they are willing to go to, to turn a profit. The Australian Federal Court case Peterson v Merck Sharpe and Dohme, involving the manufacturer of the drug Vioxx, is a perfect example.

By way of background, Vioxx (the anti-arthritis drug Rofecoxib) was alleged to have caused an increased risk of cardiovascular conditions including heart attack and stroke. It was launched in 1999 and, at peak popularity, was used by up to 80 million people worldwide, marketed as a safer alternative to traditional anti-inflammatory drugs with their troublesome gastrointestinal side effects.

In Peterson v Merck Sharpe and Dohme, the applicant – Graeme Robert Peterson – alleged the drug had caused the heart attack he suffered in 2003, leaving him significantly incapacitated. Peterson argued that the Merck companies were negligent in not having withdrawn the drug from the market earlier than they did in 2004 and, by not warning of the risks and making promotional representations to doctors, were guilty of misleading and deceptive conduct under the Commonwealth Trade Practices Act 1974.

In November 2004 Dr David Graham, then Associate Director for Science and Medicine in FDA’s Office of Drug Safety provided powerful testimony to the US Senate regarding Vioxx. According to Graham, prior to the approval of the drug, a Merck-funded study showed a seven-fold increase in heart attacks. Despite this, the drug was approved by regulatory agencies, including the FDA and the TGA.

This finding was later supported by another Merck-funded study, VIGOR – which showed a five-fold increase, the results of which were published in the high-impact New England Journal of Medicine. It was later revealed by subpoena during litigation that three heart attacks were not included in the original data submitted to the journal, a fact that at least two of the authors knew at the time. This resulted in a ‘misleading conclusion’ regarding the risk of heart attack associated with the drug.

By the time Peterson v Merck Sharpe and Dohme, an associated class action involving 1,660 people, was heard in Australia in 2009, the international parent of MSD, Merck, had already paid $4.83 billion to settle thousands of lawsuits in the US over adverse effects of Vioxx. Predictably, Merck made no admission of guilt. The Australian legal battle was a long, drawn-out affair, taking several years with more twists and turns than a cheap garden hose (you can read more about it here and here).

Long story short, a March 2010 Federal Court finding in favor of Peterson was later overturned by a full bench of the Federal Court in Oct 2011. In 2013, a settlement was reached with class action participants which resulted in a mere maximum payment of $4,629.36 per claimant. MSD generously waived their claim for legal costs against Peterson.

What’s notable in this battle was the headline-grabbing courtroom evidence detailing the extent of alleged pharmaceutical misdeeds in marketing the drug. The pharma giant went to the lengths of producing sponsored journals with renowned scientific publisher Elsevier, including a publication called The Australasian Journal of Bone and Joint Medicine. These fake ‘journals’ were made to look like independent scientific journals, but contained articles attributed to doctors that were ghostwritten by Merck employees. Some doctors listed as honorary Journal board members said they had no idea they were listed in the journal and had never been given any articles to review.

But wait, there’s more.

The trove of internal emails presented in evidence revealed a more sinister level of operation. One of the emails circulated at the pharma giant’s US headquarters contained a list of ‘problem physicians’ that the company sought to ‘neutralize’ or ‘discredit.’ The recommendations to achieve these ends included payment for presentations, research and education, financial support of private practice, and ‘strong recommendation(s) to discredit.’ Such was the extent of intimidation, that one professor wrote to the head of Merck to complain about the treatment of some of his researchers critical of the drug. The court heard how Merck had been ‘systematically playing down the side effects of Vioxx’ and their behavior ‘seriously impinge(d) on academic freedom.’

This alleged systematic intimidation was as extensive as it was effective. Result? Merck made over $2 billion per year in sales before Vioxx was finally pulled from pharmacy shelves in 2004. In his testimony, Dr Graham estimated that between 88,000 and 139,000 excess cases of heart attack or sudden cardiac death were caused by Vioxx in the US alone before it was withdrawn.

These systems of influence, manipulation, and tactics were largely operative when Covid arrived. Add to that the ‘warp speed’ development of novel ‘vaccines,’ government green lights, pharmaceutical indemnity, and confidential contracts. Now you have the makings of a pharmaceutical payday the likes of which we have never seen before.

It should come as no surprise then, the recent announcement that five US states – Texas, Kansas, Mississippi, Louisiana, and Utah – are taking Pfizer to court for withholding information, and misleading and deceiving the public through statements made in marketing its Covid-19 injection. That these cases are filed as civil suits under consumer protection laws is likely just the tip of the pharmaceutical playbook iceberg. No doubt the discovery process will hold further lessons for us all.

Author

Julie Sladden

Dr Julie Sladden is a medical doctor and freelance writer with a passion for transparency in healthcare. Her op-eds have been published in both The Spectator Australia and The Daily Declaration. In 2022, she was elected as a Local Government Councillor for West Tamar in Tasmania.