0:33 Intro. [Recording date: November 19, 2012.] Russ: [This Wednesday, November 28, 2012, Nassim Taleb will be launching his new book, Antifragile with a live event at the Powerhouse Arena in Brooklyn, NY. I'll be joining him there for a conversation about the book. EconTalk episode on Antifragile when it was in manuscript. Tickets $15 and go toward the purchase of the book.]

1:05 Russ: Marcia Angell, guest. You've written about the role of pharmaceutical companies in a lot of different areas. I want to start by referring to an article you wrote for the Boston Review a couple of years ago on how pharmaceutical companies have corrupted academic research and the clinical trial process. Explain what your concern was there. Guest: Most clinical trials of drugs are now sponsored by the companies that make the drugs. And these companies have gained great control over the way the clinical trials are designed, how the data are analyzed, where and whether the data will be published. And they introduce bias into the research results throughout this process. And yet, the researchers that do the studies, the drug companies don't have their own patients. So they have to go elsewhere to find patients. And they often go to medical schools and teaching hospitals and use faculty members there to do the trials. These researchers have become sort of hired hands. They follow the recipe that's handed to them by the company and they report the trials as the company tells them to. This is corrupting research and making the public--and doctors--think that prescription drugs are much better and safer than they really are. Russ: Now, part of this process of course comes from the regulatory structure that's set up. One of the strangest parts about that structure is the fact that the clinical trials are done by the companies no matter what, as is currently established. Right? The U.S. government, the Food and Drug Administration (FDA), doesn't have its own labs and its own tests. Guest: That's correct. Russ: So, the trial process is in the hands of the pharmaceutical companies, which is a little weird. But the weirder part is the part you are emphasizing now, which is that in the process of executing those trials they are paying and rewarding academic and medical researchers, which then affects--I think your concern and mine is that that affects their research elsewhere. So, talk about how, when you were Editor of the New England Journal of Medicine, why that was such a big concern to you. Guest: Well, I began to see. I was at the New England Journal of Medicine as an editor, and I became Editor in Chief my last year there. I was there from 1979 to 2000, when I stepped down from that position. And in those 21 years, I saw an enormous change in the relationship of academic medicine and clinical research to the drug companies. And I saw more and more bias introduced into the research. It's not so much that the drug companies were paying for the research. They had always done that. It was just the terms and conditions of the research itself. It used to be, up until the middle of the 1980s, that drug companies would simply give a grant to a medical school or teaching hospital for faculty members to do research on the company's product. But the company--there were no strings attached. They simply gave the money and stood back and hoped that the research made their drug look good. They did not presume to tell the researchers how to design their study, how to analyze it; or to tell them whether they would be permitted to publish the work. All of that changed as drug companies became richer and richer and began to shower their wealth on academic medicine. It was just too good to turn down, for the academic medical centers. So, the companies began to assert the right to design the studies. They actually said that they would keep the data; and for multi-center trials, sometimes they don't even allow researchers to see their own data. That is, all of their own data. They keep it secret. They would analyze the study. And of course it would always turn out that their drug looked good. And then they would tell the researcher whether they could publish the work or not. And one of the worst forms of bias is that the drug companies will not permit researchers to publish negative results. If the drug doesn't look good, it's not published. It's buried. Now the really shocking thing about that is that all of the clinical trials that are done, in order to get approval for a new drug to come on the market, must by law be submitted to the FDA. So the FDA receives all of the data, from all of the clinical trials. And a company will do many, many trials in order to get its drug on the market. And then the FDA will look through all of these trials, and if two are positive--that is, they show the drug is reasonably safe and effective--then they'll usually approve that drug; and the drug goes on the market. But there may be, for these two studies, there may be an additional 10 studies or 15 studies that are negative. The drug doesn't look good, or it doesn't look as safe as you would hope. But they will not release the negative trials. The FDA will not release the negative trials--because they say it's proprietary. They only release the trials that the company agrees to release. In lots of cases the negative results are hidden; the positive results are published; and the negative results are hidden within the agency that is supposed to be insuring the safety and effectiveness of drugs. So, that's pretty shocking.

7:47 Russ: Yeah. I agree with you. I just want to mention, and we'll come back to this later, that most economists who have written on the FDA are critical about their bias in the other direction--that the FDA is too cautious, that it's too expensive to approve new drugs, and that new drug approvals and innovation have slowed because of the costs and time it takes: particularly the time costs of getting a new drug approved. How do you reconcile those two views? Is one of them right? And they both right? Guest: Well, one of them is self-serving. And it's singing the song of the drug companies. But the facts are quite different. First of all the FDA is faster than any of the other regulatory agencies in other countries. It is the fastest, now. And it's the fastest because it's paid to be the fastest. That is, drug companies now, for each new drug that's reviewed, to get approval must pay a user fee--what's called a 'user fee'--to the FDA. And that user fee can only go, or the lion's share of it can only go to speeding up the approval of drugs. Those user fees now account for over half of the budget of the part of the FDA that approves new drugs. So, the FDA now has a financial incentive to approve as many drugs as it can, as quickly as possible, because these user fees are per drug review. So, the faster you turn them out, the better it is. And it's easier to approve a drug than to disapprove the drug. And also, one other factor in this is that the FDA uses some standing expert advisory committees to advise them about approval. And they consist of distinguished experts from around the country. These people are paid, often, by drug companies. That is, they are on the payroll in one way or another--they are consultants or they are on speakers' bureaus. So, there is extraordinary conflict of interest there as well. The question of innovation--you said that some people feel, economists feel, this slows up innovation: The drug companies do almost no innovation nowadays. Since the Bayh-Dole Act was enacted in 1980 they don't have to do any innovation. The Bayh-Dole Act says that publically funded laboratories in universities, medical schools, and at the National Institute of Health (NIH) itself--these are almost all NIH-funded--that the researchers who discover something can patent that. The institution can patent it, the university, the teaching hospital. And then license it exclusively to one of the big drug companies in return for royalties. So, you can see what happens there, the results of that. First of all, it puts the medical schools and teaching hospitals in the role of junior partner of Big Pharma--of the big drug companies. And so they can get royalties; and some of them get a lot of royalties. And the second effect is that the drug companies no longer have to do their own basic research. That's the creative part. That's the innovative part. They can license in or buy from startup companies, companies that are started up by the researchers in the universities, they can buy from them or license in from them the early discoveries. And then all they have to do is the late development. And that's the clinical trials. Now that is an expensive part of the process. But it is not an innovative part of the process. Russ: No, that's for sure. It's required by law. But let's just get a couple of facts on the table. I know these facts are sometimes elusive. Or ambiguous. Research and development budget of the pharmaceutical industry is, in 2009, was about $70 billion. That's a very large sum of money. Are you suggesting that they don't do anything--that that's mostly or all marketing? That they are not trying to discover new applications of the basic research? It seems to me basic research is an important part. Putting that research into a form that can make us healthier seems to be a nontrivial thing. You think they are--what are they doing with that money? Guest: I can tell you what they are doing with that money. If you look at the budgets of the major drug companies--just go to their annual reports, their Security and Exchange Commission (SEC) filings, you see that Research and Development (R&D) is really the smallest part of their budget. If you look at the big companies you can divide their budget into 4 big categories. One is R&D, one is marketing and administration; the other is profits, and the other is just the cost of making the pills and putting them in the bottles and distributing them. The smallest of those is R&D. The smallest is Research and Development. Profits usually are about the same. Marketing and Administration is more than twice as much. Russ: Right, but you are making the strong claim that they don't do any innovation; that they mainly free ride on the work of others. Guest: Yes. And what they do with their R&D--they are very secretive about these things. But what they do do, for sure, is sponsor the clinical trials of drugs, the innovative ones of which have been discovered in publically funded labs. And then taken in, either through licensing or through purchasing a small company, by the big companies. And then the late stage development, which is the clinical trials, which is the most expensive part of the process. But it's not innovative. Russ: No, for sure. Guest: It's no secret how to do a clinical trial. The other thing they do is to get top-selling drugs that usually were discovered in publically funded labs, many years ago, like Mevacor, which was the first of the statins to lower cholesterol and came on the market in 1987, or Prozac, which was the first of the Selective serotonin re-uptake inhibitor (SSRI) anti-depressants that came on the market the same year. What they do is get these top-selling drugs, twiddle a molecule enough to get a new patent and new exclusive marketing rights, and then market that. And you can now see that there are many statins to lower cholesterol. Probably the most successful was Lipitor. But now we are going on to Crestor and a bunch of others. But these were called 'me-too' drugs. It's a shower of drugs, all in the same class with no real difference that anyone can put their finger on. And that's what they do. They turn out one of these after the other.

16:00 Russ: So why does anyone pay the premium? Now, just to make it clear to our listeners, the original drug has a patent life of a certain length. It includes the clinical trial period. So the time that the drug is patented and you can charge what is effectively something close to what you might call a monopoly price is limited in years. And when that runs out, of course, profitability plunges. And I understand the incentive of pharmaceutical companies to try to maintain that through a tweak in, what you are suggesting, is mainly in name only, in terms of its effectiveness. Why would anybody pay a premium for that new drug when they the old one is so cheap? Guest: Because of marketing. I told you--they spend twice as much on marketing as they do on research. And particularly if you watch television in the evening, the news shows, it's marketing one drug after the other. And it not only markets the drugs--it markets the medical conditions they are used to treat. It convinces people who watch shows, that mainly older people watch, it convinces them that there is a brand new drug, a miracle drug for every ailment and discontent they can come up with. And so if they are shy, suddenly they have Social Anxiety Disorder and they need Paxil. If they ate too many Big Macs and they have indigestion, they need Nexium. And so the advertising of the medical condition is at least as big a factor in this as the marketing of the particular drug. And in fact research has shown that when you have a lot of drugs in one class, and most of these are designed to treat lifestyle diseases or conditions--that if you push one of those drugs, if you pushed, say, Zoloft, it would increase sales of the other SSRI anti-depressants in the same class. Because the market was so expandable that the market just grew bigger and they all benefited. Russ: Well, now I'm fortunate. I don't have any cholesterol problems and I don't take any antidepressants. But let's talk about someone who does. Someone who has got, lets say, both of these unfortunate situations. They've got high cholesterol and they've got issues with depression. They're going along, taking Lipitor and whatever was pre-Zoloft for this. And now they get this new drug that they create--what was it, Crestor? Guest: Mmmhmmm. Russ: And a new antidepressant drug. And the improvement is very small, maybe none. Although sometimes I suspect that there is probably some improvement--maybe fewer side effects. Guest: How would you know? That's the problem. Russ: Well, I wouldn't know. But somebody-- Guest: No one would know. Russ: But you'd think that the person who was paying for it would object to paying an enormous premium when there's a cheap alternative that was maybe almost as good. Guest: Well, you see, they believe there's an improvement. When the drug companies sponsor trials of their new drugs, and as I told you, they will design the study, and the studies are usually designed in such a way that the new drug is compared with a placebo--that is, with a sugar pill. It's not compared with whatever was already being used to treat that condition. It's not being compared with an older drug. And so when the drug is approved by the FDA all we know is that this drug is probably better than a sugar pill. We don't know whether it's better than the drug that's already being used. It may be better; it may be worse; it's more likely the same. At equivalent doses. That's another trick they play: When they do compare a new drug with an old drug, they often compare it with the old drug at too low a dose so that the new drug looks more powerful. But anyway, what happens is that all of these new me-too drugs in one class spill onto the market. There is no scientific way to know whether any is better than any of the others at equivalent doses. But they are marketed as though they were better. And so people and physicians--who get their information from some of the same places--the public come to genuinely believe that Crestor must be better than Lipitor, that the new drug must be better. And one example of how this worked was in a drug called Prilosec, to treat indigestion, essentially; to treat too much acid in your stomach. And Prilosec was the top selling drug in the United States for a while. Everybody was buying Prilosec. Expensive prescription drug. It was getting to the point where exclusive marketing rights were going to end. And so, what was the company going to do? Well, what they did was to get a form of Prilosec, essentially a form of Prilosec but the molecule was just different enough, name it Nexium, put Prilosec on the market as an over-the-counter drug, and then start to push the new purple pill, Nexium. And suddenly everybody who had been on Prilosec was now getting prescription Nexium, high cost prescription Nexium; and then they could buy Prilosec, the same drug, essentially over the counter. But they didn't do that because Nexium was promoted as if they were different. Which it wasn't. Russ: So, I'm only making the point that if that actually the case-- Guest: It is the case-- Russ: No, but if it were actually the case that I had to choose between Prilosec at an enormous discount to Nexium with my own dollars, I'd probably buy Prilosec over the counter; but when the comparison is Prilosec out of my own pocket versus Nexium paid for by somebody else, I may as well go with the one that's better. Guest: But neither is better. Russ: Well, let's say--well, but one is free to me or close and one is not. Guest: Yes. I think that's true. Russ: My only claim is that part of this thing that bothers you--which bothers me, too--is--although the profit motive of the pharmaceutical companies is part of the problem, it seems to me that the other part of the problem is we pay for much of our medical care with other people's dollars. And that allows the corruption of the process. So, for example, as you point out, if doctors are getting lots of goodies--conferences and swag and other things from the industry--they are going to be happy to prescribe those new drugs. And convince themselves, perhaps inappropriately, that they are actually better when they really aren't. Guest: Yes. That's true. And that is a problem in our health care system. As you must know. We have an irrational health care system and this pointed to one irrationality of it. Another thing is that the manufacturer of Nexium essentially bribed hospitals by stocking them with Nexium that was almost free, so that when patients were in the hospital they would be given Nexium, because it was cheap for them in the hospital. But then when they were discharged, they were discharged with a prescription for Nexium. And then they were on their own to get it. Either their insurance company would pay for it, as you say often happened, or else they would pay for it out of pocket. But you can see how a company was able to seed the hospitals with essentially free Nexium so that everybody would be discharged on that drug.

24:36 Russ: So, just to clean up a couple of loose ends before we move on. And I want to continue this discussion in a different area, but I want to just ask you a couple more things. You said that FDA approval is now the fastest. I used to read--and maybe these were isolated cases--that there would be drugs available in Europe long before they were available here because their approval was faster. Is that just not true anymore or were those isolated cases? Guest: It's not true any more. Yes, that used to be true but it's no longer true. It's faster here. Russ: And you think it's because of those fees? They incentivized? Guest: Oh, it's explicit. It's not just my opinion on this. The deal--this is called the Prescription Drug User Fee Act (PDUFA), which was first passed in 1992--and includes these user fees; and has to be renewed every 5 years. And the Act had as a part of it the speed with which the FDA would reach a decision about new drugs. And if it was considered an important new drug, then they had 6 months to review it. This is not very much. And if it was an ordinary drug, a me-too drug, then they had up to a year. But very, very fast. And that was explicit. Russ: And what had it been before? In terms of the length? Guest: Well, it varied. It varied a lot. It was never, in my judgment, outrageously long. But it was longer than a lot of European countries and Canada. That's no longer the case. Russ: So, I want to also go back to the point about the corruption of research centers, medical centers, and academics. You talked very poignantly--I don't know if 'poignant' is the right word--tragically, about a lead author in a New England Journal of Medicine piece who was receiving, I think it was $500,000 a year in consulting fees from the pharmaceutical industry. And that is disturbing. I think that corrupts. I am sure the doctor would explain: I'm a scientist, I'm a doctor, I would never let this affect me. But as an economist-- Guest: that's what they'd say. Russ: And I find that--the word I would use is 'implausible.' It's imaginable but it's implausible. So, the question is: How much do we want to blame universities and faculty? We have this problem in economics as well. It's a little bit subtler because there aren't as many direct payments that people can receive--from industry at least. They do get lots of, they have the opportunity, in economics, to have power, depending on some of the things they say. They can increase their chances of being involved with the Federal Reserve for example, which is very prestigious and leads to lots of other things. So, I think this is a problem in lots of areas. But what role do we--why is it that universities allow themselves to be essentially corrupted in this way? And I do think it is corrupting. Guest: It's good money. You say that the drug companies can't directly give money, but they do. Russ: I meant for economists. They can in medicine. It's much harder in economics. Guest: Oh, yeah. But here they just hand it out by the bushelfuls. There was one study that showed 94% of physicians in the United States get some money in some way from drug companies. Russ: Well, that could include a free pen. Guest: Meals. They get a free pen and they get a trip to Hawaii, too. Russ: The pen's not as good as the trip, yeah. Guest: It varies, the size of the gift. But yeah, gifts do generate a certain sense of reciprocity. Russ: No doubt. Guest: And the money just keeps flowing. Many doctors wouldn't have to pay for any meal at all if they didn't want to. Russ: I feel sorry for any of the 6% that didn't get anything and are listening now. Guys, get on the gravy train. Get out there. You've got opportunities. Guest: Well, bless them. Russ: Probably they have a clean conscience. Maybe they sleep better at night. Guest: I don't know. I think that the medical profession has come to believe a myth that's propagated by the industry, and the myth is this: That the industry somehow can both be an investor-owned business whose fiduciary responsibility is to enhance the value of the shareholder's stock, to make as big a profit as they possibly can; that they can simultaneously be that, be in the business of selling drugs, and at the same time be unbiased, neutral, research and education institutions. And doctors have swallowed that in this part of their professional lives even though they know better than to swallow such a fiction in any other part of their life. Russ: For sure. Guest: They wouldn't go to a Honda dealer and say: What's the best car to buy? And yet they will ask a drug company sales person what is the best drug to buy. And so, they tell themselves this because it's profitable. And it's now, even though these changes are relatively recent--I'm old enough to remember before all of this was true, before 1980; I'm old enough to remember when they actually had to do their own innovative research--this has so permeated the medical profession that now young doctors believe it's just a necessary part of medicine. And it's not.

30:55 Russ: Well, let me ask you an overall question. Later we'll get to some alternative ways we might think about having research lead to pharmaceuticals that improve our lives. But you are correct that in the post-1980 period, the profitability--I assume it's gone up; I know it's very high-- Guest: It's way up. Russ: So let's say, if we think of 1980 as sort of a turning point, or the Bayh-Dole Act as a turning point. What year was that? Guest: I think it was 1980. And then there were other related pieces of legislation. But also the criteria for getting a patent were relaxed considerably at the same time. The courts changed the definition of the requirement for a patent. It used to be that to get a patent on the drug it had to be of practical use; it had to be novel; it had to be non-obvious. It couldn't just be the next step in the process, but it had to be a leap. And it had to be practical. Which, before--I think the courts visited this in 1981--but before that, 'practical' meant that it had to have some use at the bedside. That was changed to mean that it had to have some use in further research. Russ: So, this has definitely led to greater profits. It's led to this opportunity for drug companies to coopt academic research in the ways you've described. I don't any of that either. So, we're on the same page there. We're going to disagree, I think, about how to make it better. But we agree that it's a bad thing. But if we step back and we ask an unanswerable question--but we can speculate--if we step back and say, okay, these changes have certainly led to some unattractive effects on academic research, on the medical profession; they've certainly led to greater profits for the drug companies and this backscratching relationship between these groups. But if you were a person with a heart condition or other medical problems in 1970 versus say, today, are you going to argue that the drugs available to me today are only a little bit better than they were then? Or are they dramatically better? Or are they the same? Guest: Now, I'm arguing about where they came from. Russ: Okay. Guest: For example, the treatment of AIDS now is just remarkable compared with what it was when AIDS first burst on the scene in the early 1980s. Russ: Of course. Guest: This was all NIH research. Not the companies that make and sell the drugs, but the NIH. That's what I'm arguing with you about. But I also make the case that there have been some real downsides of this in terms of health. It's not just the economic skewing or the bias for its own sake. If you look at Vioxx, for example, that probably caused on the order--tens of thousands of deaths that were completely unnecessary. Tens of thousands of heart attacks and strokes. And here's another example of the power of the drug companies. When it became clear to everyone--now, it had been clear to Merck, even before the drug was on the market--but when it became clear to everyone in 2004 and Merck pulled Vioxx off the market, a few months later the FDA got two of its standing committees and combined them. One was the data monitoring committee and the other was arthritis committee, I guess. Got the two of them together and had public hearings over 3 days: Should Vioxx be kept off the market? Should Celebrex, which is essentially a weaker Vioxx, come off the market? Should Bextra come off the market? Should the me-too drugs that were in the pipeline be allowed out? And so forth. And the drug companies, Merck and Pfizer, brought in a lot of people to stand up at these hearings and say that without their Vioxx or without their Celebrex their life would be miserable. The people who had had heart attacks of course were not brought in to testify. And after 3 days the committees voted that all of these could be on the market. There were 32 members of this combined committee. A few days later, the New York Times reported that of these 32 experts, 10 of them had financial ties to Merck or Pfizer, the makers of the COX-2 inhibitors, which is what these drugs are called. Ten of the 32 had financial conflicts of interest. And if those votes had been discounted, all of those drugs would be taken off the market except for Celebrex, which would be allowed to stay on with a black box warning. Russ: My preference would have been to keep them all on the market anyway and let people act like adults: Tell the risks and let them choose. There were many people who stockpiled those drugs because they were afraid they would lose their supply. And if our only standard is perfectly safe drugs, we are not going to have many drugs. So, I do think there's a tradeoff there. But your point about the corrupting influence is also true. That's totally wrong. Guest: It is totally wrong. And I would disagree with you. I mean, imagine saying, if you needed a head aortic stenosis [?] and you needed a new valve that caveat emptor--you'll choose your own valve. That would be silly. That's why you have an FDA. Russ: Why is that? Guest: Because you have no way of knowing. Russ: Well, that's true of everything in my life. What we have, we are all imperfectly informed. We all find lots of ways-- Guest: Well, you know, you like this shirt better than that shirt and it doesn't matter too much if your opinion is wrong. But here it does matter. Russ: I think I'd be a little more careful if there weren't an FDA. I think I'd try to find out a little bit more than just sort of hoping I'd trust the doctor--who is often wrong anyway. That happens. Guest: Yeah, yeah.

37:48 Russ: So, before we move on to alternatives, I want to talk about the piece you wrote in the New York Review of Books, which ties in to an episode we did here on EconTalk with Gary Greenberg about the definition of mental illness and the role of pharmaceuticals in dealing with mental illness versus talk therapy. Talk about what you argued in that article and how it ties in to what we've been talking about so far. Guest: Well, it ties in directly in the sense of all medical conditions. Mental health conditions are the most subject to being broadened. Because the boundary between wellness and mental condition is very blurry. So, if you can change those boundaries you get a lot more customers. Let me give you an example from another area that you mentioned earlier. You mentioned high cholesterol. One of the things that the drug companies have done through the experts that are on their payroll is to change the standard as to what constitutes high cholesterol. For a while it was anything over 280; then it was anything over 240; then it was over 200. And each time you drop the threshold you have increased the market by millions of Americans. And the same is true of high blood pressure. Each time you drop the standards--it used to be 140 over 90 was considered the cutoff for hypertension, and then they decided there was something called pre-hypertension, which is 120 over 80--each time you change the definitions you increase the market. You see this in mental illness. Each time you change the definition, each time you say there's such a thing as pre-schizophrenia and that should be treated, you have increased the market. And that's what I was writing about, the incentives of the drug companies and the psychiatrists, to increase the market and to use exclusively drug treatment. There is a lot of evidence that many of these treatments, while they have side effects, are not very effective in treating the conditions they are meant to treat. It's particularly true of the anti-depressants, that they are essentially placebos; since the FDA has all the negative studies and they are never published, the literature is very biased and it give people the impression that these drugs work. It gives them an unrealistic impression that they work. So, what you have is a combination of the conditions themselves multiplying, of more and more conditions being added to the Diagnostic Statistical Manual (DSM), which is the American Psychiatric Association's so-called bible, that has all of the diagnostic standards for all of the mental health conditions. The DSM, each edition--we're now about to have the DSM V--has more and more and more disorders in it. And many of these people who write the DSM have financial ties to the companies that make the psychiatric drugs. So that the more conditions you have, the better it is for the drug companies to make the drugs. Russ: Now, what kind of reaction did that article generate? I know you got a lot of push-back from psychiatrists. Guest: Yeah. Well, the American Psychiatric Association didn't like it, and the psychiatrists didn't like it. One of the things I pointed out was that psychiatry used to be talk therapy and a psychiatrist would have one patient every 50 minutes. And now they refer to themselves, psychiatrists, with the same training, refer to themselves as--what is it--psychpharmacologists. I think that's what they call it. Russ: They should call themselves pharmacists. That sounds like what they are really doing. Guest: What they do now is they use the DSM and they ask a series of questions, in a short time: Do you have any 5 of these 9 criteria for major depression? Oh, okay, you answered yes to 5 of the 9. Therefore I will give you this drug. Goodbye. If you want to talk to somebody, you can go and see a lesser person, a social worker or a psychologist and I'll move in the next person; and I can do three of these in an hour. And I'll make roughly twice as much by handing out prescriptions as I would have to talk to you and find out what your problem is. That's a big change. Russ: I assume the psychopharmacologists or whatever you've called them would object to that description of their role. Guest: Well, some of them don't. And in the NY Review of Books piece that I wrote on it--it was a 2-part article--I was reviewing some books on that. And one of them was by a psychiatrist who said exactly what I told you. And he said: I do this; I see three patients and hour; I make more money doing this. He was quite honest about it. Russ: I assume he also believes he's helping them, though. Guest: He does. Russ: And he could be right. Guest: But not as much as many other psychiatrists would want to say. And he's also very skeptical that there's any difference between one of these drugs and the other. So, a lot of psychiatrists will say: Yes, this is the way it is.

44:12 Russ: So, let's talk about some alternative policies that might change this. I assume there are people with different perspectives. Many of them are of course biased on the other side. Or in the pay of people who would be hurt by any possible changes. My solution to this is to make people pay with their own money. That would help, I think, make the world a better place and get rid of a lot of this. Guest: Make a lot of dead people. Russ: Well, I don't think so. I think the world would be a lot healthier. But obviously I could be wrong. But where would you push us, given these incentives that exist and the potential for corruption? What can we do to reduce it? Guest: Well, you won't agree, clearly. Russ: That's okay. Fire away. Guest: I feel that in life and death matters, matters that are very important to people's health, the government has a responsibility. That that's what a decent society does. And there are a few specific things I would argue for. One, I would stop PDUFA. I would get the FDA off of the industry's payroll. I think the public agency--I don't like the term 'user fees,' because it seems to me that the drug companies are not the users. The public is the users. And I think the FDA should be publically supported and supported well enough to do it strong. And members of advisory committees should have no conflicts of interest. Russ: And by the way, I totally agree with you on that, just like I also agree that the Board of the Federal Reserve of New York should not have people from the New York investment banks on it. Guest: Okay, good. Russ: These are all things that we've done--there's no 'we'--things that have happened due to the incentive to take advantage of the system the way it's currently constructed. Guest: Yes. Yes. Well, so far we agree. Russ: Carry on. Guest: The other thing is I would advocate that placebo-controlled trials not be accepted if this is a me-too drug. If there are already drugs to treat the condition on the market, that a clinical trial should compare the new drug with whatever is being used. Sometimes you might want three arms, particularly if you are not so certain any of the drugs on the market are very useful. You would, in the clinical trial be trying the new drug in a third of the population, an old drug--the best available drug--in a third, and a sugar pill in the other third. But I would not permit the use of placebo-controlled trials to continue. This is important because if this happened the ripple effects throughout the system would be enormous. You wouldn't be able to make a fortune simply by turning out me-too drugs. Because in most cases if you required that the new drug be compared with an old one, it wouldn't be any better. And so it would never get on the market. That would force the drug companies to do what they say they are already doing, which is to work on innovative drugs instead of turning out a whole host of me-too drugs. That would have ripple effects that may not be immediately apparent. I would want to break the connection between the drug companies and the research itself. That is, I think they should sponsor, they should pay for research on their own drugs. But it should go through an independent, perhaps another institute in the NIH, that would then put out requests to do the trials from the academic medical centers. So that the design of the studies and so forth would not be left to the drug companies. The medical schools and the physicians, I would want them off the payroll of the drug companies. And I think this is something that the medical schools should enforce. And they used to enforce it. The problem is that they too are now on the payroll of the drug companies. That is, through Bayh-Dole and directly. There has been a study that shows that, first of all, most medical schools are getting money directly from companies that are sponsoring research done by faculty within medical school. That the chairman in most departments in medical schools are getting personal funding and also getting departmental funding. All of that should be stopped. And you asked me earlier where I thought the blame lay for this. And I think it's, in a sense, you could say the drug companies are doing what drug companies do, and maybe they go overboard. Certainly almost every big drug company has paid huge fines for fraudulent marketing. But okay, you could say they are just trying to do what they do, which is to make a profit. The medical profession has no such excuse. They have no fiduciary responsibility to make a profit. They are tax exempt--the medical schools--and yet they are behaving like businesses. So, I think that the doctors, I think they are more to blame. And they really ought to get their house in order. Russ: I just want to mention for those who might be confused, who are listening and haven't heard the term before: Bayh-Dole--the Bayh of Bayh-Dole is b-a-y-h. It's referring to the Senator who company-sponsored the legislation that Marcia and I have been talking about a couple of times now. So that's the Bayh-Dole Act, which changed the property rights and relationship between some academic and research centers, and allowed universities to profit from their discoveries. And then sell those to drug companies. Guest: To royalties from drug companies.