Barry Blackwell’s reply to Charles Beasley’s commentary

Barry Blackwell: Corporate Corruption in the Psychopharmaceutical Industry


       Charles’s Beasley’s comments on my corruption essay are modest, thoughtful and informative. Offered from a judicious perspective of commercial neutrality they remain cautious and skeptical. Like Alfred Pletscher (Blackwell, 2017), Charles spent an entire career in the pharmaceutical industry and the voices of these two pioneers are a valuable contribution to our ongoing debate.

       Charles is selective concerning four issues he chooses to comment on. First, and in depth, estimating the cost of new drug development, then more briefly, on trends in the pricing of generic small molecule drugs, suggestions for journal editors on steps to ensure unbiased full disclosure of trial results and, finally, how to enhance the objectivity and usefulness of randomized controlled trials (RCT’s) that use active controls.

       The various cost estimates to develop a new product differ remarkably and are escalating, exponentially. From Marcia Angel’s low bid of $100M (2005) to the Tuft’s Center for the Study of Drug Development (CSDD) at $802M (2003), to more recent figures (CSDD) in excess of $2.55B (2016). The nine citations covering this range are divided between five refereed journals (NEJM, 2), (J. Health Econ, 2), (Health Policy, 1) and four websites.

       Correctly, Charles takes me to task for assuming the higher figures are inflated by industry to justify the high cost of their products. He asserts that the validity of the data should be judged from the methods employed “by those with substantial health economic expertise and no personal stake in the results,” a skill he admits to lacking, as do I.  Nevertheless, the raw data on which these computations rely comes inevitably from industry and may be falsified.  While Charles doubts “such corrupt behavior” is likely, my assertion is predicated on the opposite assumption, documented by the nine volumes the essay is built upon and the example Charles himself cites of an individual guilty of 36 criminal counts, 28 counts of theft and seven counts of lying, sentenced to 15 years in prison and ordered to make restitution of $4.2M. True, one swallow doesn’t make a summer, but we have a flock of them.

       Addressing the question of whether the cost of drugs is justifiable, Charles suggests society must struggle with the degree to which a compound is innovative and the amount of profit that is reasonable.  In quantifying these end points it is fair to point out that industry scrupulously avoids comparing new drugs to generic compounds, thus obscuring any scientific assessment of the extent to which innovation exists. Despite this void, the price of new drugs is excessively inflated based, presumably, on what the market will bear, the skill of marketing forces, the number of competitive compounds and the ingenuity of how the drug is advertised.

       A major contribution towards the degree to which a new compound is innovative depends on the side effect burden which is often only revealed long after a drug is first marketed. This is due to small sample sizes and short duration of only two RCT’s required for market approval by the FDA.

       Charles is doubtful that development costs would be lowered by handing development over to the government because of the “unwieldy and inefficient process of bureaucracies.” History casts doubt on the credibility of this assumption when one considers the success of the NIMH sponsored NCDEU program and the part it played into the mid 1970s – the same period in which true innovation occurred, compared to the “me too” epoch in which we are currently embedded. Few would contend that the quality of drug evaluation has improved since it moved from academia to for-profit entities.

       We agree that there is a decline in innovation and increasing difficulty demonstrating efficacy as treatments become more complex and lengthy. Much needed revision of FDA requirements for defining efficacy will contribute to the rising costs of drug development.

       Discussing the cost of developing new drugs and how to constrain this, Charles seems to be caught in ambivalence over a strong belief in “free enterprise and lack of government control over pricing” and recent “egregious examples … of often being exorbitantly priced.” For me, this is another example of how health care in general and medication in particular are not commodities responsive to competitive market forces because the public want the best but is unwilling to pay for second best. A person may choose to drive a Ford or a Cadillac, to wear jeans or a tailored suit, but everyone, even if they believe in heaven, wants to live forever. This is why, in every democratic country except America, health care is a right and not a product, available to better effect and at lower cost.

       With regard to the suggestions of how to upgrade the quality of published articles and editorial oversight to improve integrity and analysis of data, Charles’s suggestions are pertinent but fail to address the core issue of conflicts of interest and how to neuter them. Journal editors fear that too rigorous analysis and rejection of industry sponsored articles may invite withdrawal of industry advertising. Nor does this solve the problem of finding willing and competent reviewers without conflict of interest to serve on editorial boards, best practice guideline committees or FDA task force members. This problem will persist as long as journal editors, professional associations, and medical school administrators fail to insist that a conflict of interest be accompanied by revealing how much money, from whom and for what, allowing a neutral adviser to quantify the conflict.

       Lastly, and briefly, the suggestions about how to use an active drug comparison in clinical trials are useful, but their practical effect will only be felt when the FDA insists that some, if not all, Phase 2 and 3 study protocols add this requirement to the ubiquitous placebo. But this will increase the number of subjects, the duration of the study and, almost certainly, the cost and difficulty in recruitment of subjects.


Blackwell B. Eulogy for Alfred Pletscher. Biographies. June 15, 2017. 

July 13, 2017