EVERYONE KNOWS HOW HIGH THE COST of prescription medicines is these days—for

instance, medication to combat leukemia or multiple sclerosis can cost $5,000 to $10,00 per
month, and treatment with the new pill that cures hepatitis C in nine out of ten patients costs more
than $90,000.
Those high prices are at least part of the reason that year after year, for over two decades the
drug industry has been far and away the most profitable sector of our economy. However, many
people are also inclined to accept high prices as the cost we must bear for drug research and the
development of new medicines.

But, in fact, the prices drug companies charge bear little relationship to the cost of making or
developing them, and those prices could be cut dramatically without coming close to threatening
their R&D budgets. Less than 15 percent of the sales revenue of the large pharmaceutical
companies goes into R&D, half what they spend on “marketing and administration.

Moreover, the pharmaceutical industry is nowhere near as innovative as most people

The idea is to grab a share of an established, lucrative market by producing something very similar
to a top-selling drug.” This is made possible by the fact that the FDA will generally approve a drug
if it is better than a placebo. “It needn’t be better than an older drug,” Angell says. “In fact, it may
be worse. There is no way of knowing since companies do not test their drugs against older ones
for the same conditions at equivalent doses.”

Of the seventy-eight drugs approved by the FDA in a recent year, only seventeen contained new
active ingredients, and the FDA classified only seven of those as improvements over older drugs.
And none of those seven came from a major U.S. drug company.

When it comes to research and innovation, the record of the big, profitable pharmaceutical
corporations contrasts poorly with that of the small biotechnology companies that are responsible
for most of today’s medical advances. CV Therapeutics of Palo Alto, California, is one such
company. Founded by cardiologist Louis G. Lange, it has developed a new drug, ranolazine,
which promises to be the first new treatment for angina in over twenty-five years. The Journal of
the American Medical Association has praised ranolazine as helping patients for whom standard
therapies have failed.

But this medical breakthrough has brought an ethical dilemma with it. Patients in Russia and
Eastern Europe constituted 60 percent of the 1,000 or so test subjects involved in the studies that
enabled CV Therapeutics to develop the drug. Now that the drug is ready, does the company
have a moral obligation to make its drug available to them?

Other drug companies today are struggling with the same dilemma. They frequently test
experimental drugs overseas, where there is less red tape and both doctors and patients are keen
to participate in the tests. In Russia, for example, doctors are eager for the money they can get
as study monitors, traveling to medical offices to make sure protocols are being followed. They
also receive medical equipment such as treadmills for exercise testing.
For their part, patients see it as a chance to get medications that they cannot afford to buy and
that their government doesn’t pay for. Moreover, says Richard Leach, the American business
manager of a company called Russian Clinical Trials, “Eastern European and Russian people
tend to be very compliant. . . . They will follow the trial and they will do whatever is asked. If they
have to keep a diary, they do it. If they have to make office visits, they do it.”

With at least 40 percent of drug testing now done offshore, critics worry that drug companies are
exploiting their human subjects. In the United States and other well-to-do countries, experimental
subjects must be given full information about the nature of the research, and they have a right to
refuse to participate without penalty or consequence for their usual health care. Not so in Africa
and many poor regions, where doctors profit from enrolling their patients, and local officials
sometimes encourage whole villages or provinces to enroll in research programs. Conducting
research overseas not only saves drug companies, money, but it also circumvents FDA
restrictions, which require companies to gain its approval before human testing in the United
States can begin.

The FDA obliges companies to describe their proposed research in detail and to file plans for
guaranteeing informed consent and for monitoring the progress of the study. They must set up a
review board to monitor each clinical trial and to ensure that risks to human subjects are
“reasonable in relation to anticipated benefits, if any, to subjects, and the importance of the
knowledge that may reasonably be expected to result.” In addition, all risk must be “minimized.”

Requirements for foreign research are much looser, and there is very little oversight. “Companies
can conduct preliminary studies of drugs in poorer countries before formal testing even begins,”
writes Marcia Angell. “Quite literally, the participants are used as guinea pigs, subjects of research
that really should be done on experimental animals.” And when it comes to formal testing, the
FDA may not learn about it until the company applies for final approval of its new drug.

These moral issues, however, are not the concern of companies like Russian Clinical Trials. Nor
do they see it as their business to ask what happens when the studies end. Dr. Alan Wood,
general manager of Covance, another American firm that conducts medical trials in Eastern
Europe, says quite plainly, “What our clients do is not our affair.”But what about the drug
companies themselves? What, if anything, do they owe overseas test subjects when their new
drugs pan out?

Some companies never even sell their drugs in the poor countries where they were developed.
Others do, but often there are few patients who can afford them. “This is something that the
biotech industry, as it develops more and more drugs, will have to come to grips with,” says Carl
B. Feldbaum, president of the Biotechnology Industry Organization. “It’s not that we are lacking
compassion, but the economics are tough.”
“Do we have an obligation to everyone in the trial or to everyone in the community, the province,
the nation, the region, or the world?” asks Dr. Ruth Faden, director of the Berman Bioethics
Institute at Johns Hopkins University. “We really haven’t figured this out.” She acknowledges,
though, that “many physician investigators feel uncomfortable with the idea of using patients in
studies and then not being able to continue to help them when the trial ends.” We seem “to have
hit a wall of moral unease,” she says. “I’m not sure exactly where we ought to end up.

Dr. Lawrence O. Goskin, director of the Center for Law and the Public’s Health at Georgetown
and Johns Hopkins Universities, is also troubled. Drug companies, he says, should not be seen
as “the deep pocket that helps every- one,” yet there is something disturbing about “parachute
research,” in which a company drops into a country, conducts its drug research, and then leaves.
“It raises the question of what ethical obligation if any, there might be to give back and make sure
there is access to the drug after the trials are over.”

Drug companies are businesses, of course, and they have to decide whether they can earn
enough money in a foreign country to justify applying for approval to market a new drug there,
then setting up a business office, and hiring a sales force. Even if they decide to provide the drug
to patients free of charge—so-called compassionate use—things are not so simple. They still
have to set up a distribution system, train doctors to administer the drug, and monitor the patients
who take it.

In the case of life-saving drugs, such as those for combating AIDS, many companies do, in fact,
provide them for free or at low cost in poor countries, especially to patients who were involved in
their development. But with a drug like ranolazine, it’s more complicated. Angina can cause
terrible, crushing chest pains, and it can make the lives of chronic suffers miserably. Ranolazine
can cut in half the number of angina attacks a patient suffers, but it’s not a life-saving drug. It
improves the quality of patients’ lives, but it doesn’t extend them.

Dr. Lange, meanwhile, is torn. His company is not a charity, and because CV Therapeutics is
small, it can’t afford to market ranolazine in countries where few people have enough money to
buy it or to set up the distribution systems necessary to give it away. “We’re not Merck,” he says.
“But we’re concerned.”