There is a fatal flaw when the free market regulates drug companies

Deborah Orr

The Independent

09 October 2004

It has not been a great week for the pharmaceutical companies. On Sunday, Panorama alleged that GlaxoSmithKline had dawdled in submitting evidence to the industry regulator about the possibility of its antidepressant Seroxat triggering suicidal thoughts in young people.

Now similar accusations, in The Lancet and in The New England Journal of Medicine, are being tossed in the direction of another company. The US company Merck and Co, it is suggested, knew for up to five years that there might be problems with its arthritis painkiller Vioxx before it raised the alarm. Now, it turns out, the drug may have triggered up to 27,000 heart attacks, with a possible 7,000 fatalities.

Once again the spotlight is on the inadequacy of the industry's regulation, the contradiction between acting for profit and working for human benefit, and the vexed question of whether the market really is the robust self-regulator that its proponents claim it to be.

Most informed members of the public find it ludicrous that both the industry regulator and the majority of the research into new drugs are paid for by the companies themselves, and that the communication of their efficacy is also handled by the drug companies. Many believe that such a system is open to abuse.

Proponents of the free market explain that this is not as mad as it seems. Testing new drugs costs a fortune, and there is no reason why others should stump up the cost of developing drugs for private companies, or for regulating their use.

It is not as if, after all, the pharmaceutical companies, or the regulator, have an interest in putting dangerous drugs on the market. For them to do so causes illness or death, creates massive bad publicity and cripples the unfortunate companies with legal fees.

The idea is that the market itself, and the checks and balances already in place, are enough to give the industry the incentive to make their drugs as safe as possible. There is, however, a huge flaw in this argument, and perhaps the same flaw is in operation to some extent even with products less invasive than medicines.

This is that no matter how much research is done prior to a product's launch, the effect it has on the individuals in the huge market sample is never going to be entirely predictable. Especially in the case of children, the truth is that even when they reach the market, the users of a new drug are still guinea pigs.

But at this point, after the companies are convinced that their drug is safe enough to sell, the checks and balances that previously abjured them to be cautious still do. Except that now the incentive is to keep quiet, because if they admit to a problem they are liable, and may face ruin. It is at this point in free market regulation that the checks and balances do the opposite of what they are meant to. They tempt people to ignore or deny unwelcome evidence, because once some damage has already been done, and some liability has been admitted, then the lawyers move in. For a lot of people since the industry was restructured three decades ago, this flaw has proved fatal.

Business as usual

Lovely to see Donatella Versace back doing what she does best, which is schmoozing all her celebrity friends in the hope that this will prove enough to maintain her fashion house as a "superbrand". At this year's Milan shows, despite recent difficulties, her superstar clients still turned out in force to support her.

Is it naive of me to believe that such loyalty probably suggests that she is quite a formidable personality? Donatella is ridiculed for her half-dead bleached hair, her ghastly leather tan, and for her whorish dress designs. She also talked in a strange way, although her odd mannerisms were finally accounted for when it emerged recently that she has been an enthusiastic user of cocaine.

Few believed that she could succeed as head designer after her brother Gianni was murdered, and sure enough, the company's been sinking slowly ever since. Yet, her family and friends remain keen to protect and excuse her.

The most insouciant example of this confidence came last week, when a spokesman for the company was quizzed about how it was inevitable that Donatella's difficult year would show in the quality of clothes. The spokesman assured the fashionistas that all was well. Donatella's absence had made no difference at all. "Italians are always on holiday during August," he shrugged. It may not show much in the clothes, but there's certainly still a lot of style at Versace.

Glaring evidence that our rape laws do not work

Poor Lisa Burgess, just 19 years old, is the latest victim of our inappropriate rape laws. Attacked by a man she knew in her home, she was also viciously beaten and seriously injured in a separate incident a couple of weeks later. She was determined to pursue the rape case and seek justice. But she fell into a dreadful depression when the Crown Prosecution Service decided not to proceed with the case against her alleged attacker. Three months later, she was found dead in her b athroom, of an overdose of drugs.

What, even if the CPS was right in its judgment that the evidence of Ms Burgess would not be enough to convict her alleged assailant, might have kept hope of justice alive for Ms Burgess?

Why, the same system of vigilance that ought to have helped to have put away Ian Huntley, long before he ever moved to Soham. Ms Burgess ought to have been assured that her allegation was being kept on file, and that if any other person ever came forward with a similar complaint against him, she might have her day in court.

Instead she felt that no one would ever believe her again. No doubt the man she accused has no such worries at all.

• Obviously, it is a low point for British broadcasting that the makers of the reality show The Farm chose to manipulate Rebecca Loos into manipulating a pig in order to satisfy this nation of sniggering schoolchildren. But I don't feel the RSPCA has quite got the point. The group feels that the pig's dignity has been violated. I suggest that the pig doesn't have much preference between the hand of Ms Loos and that of a horny son of toil. It is intensive farming that removes the dignity of pigs, not silly girls with stars in their pants.