Pharmaceutical systems: global perspectives

Pharmaceutical Systems Global Perspectives

John Lilja

Department of Biochemistry and Pharmacy, Abo Akademi University, Turku,

Finland

Sam Salek

Welsh School of Pharmacy, Centre for Socioeconomic Research, University of Wales, Cardiff, UK

Aldo Alvarez

San Marcos University, Lima, Peru

David Hamilton

Widening Participation Service, Glasgow University, Glasgow, UK

Pharmaceutical Systems

Pharmaceutical Systems Global Perspectives

John Lilja

Department of Biochemistry and Pharmacy, Abo Akademi University, Turku,

Finland

Sam Salek

Welsh School of Pharmacy, Centre for Socioeconomic Research, University of Wales, Cardiff, UK

Aldo Alvarez

San Marcos University, Lima, Peru

David Hamilton

Widening Participation Service, Glasgow University, Glasgow, UK

C 2008 Copyright 

John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex PO19 8SQ, England Telephone

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Contents Preface

ix

About the authors

xi

1 Introduction

1

1.1 Economic development 1.2 Systems analysis 1.3 Actors in the pharmaceutical systems 1.4 Evaluations 1.5 Data collection 1.6 Summary of results and formulation of conclusions 1.7 Social constructionism and social representation theory 1.8 The actor–spectator paradox 1.9 Decision-making processes in the drug system 1.10 How attitudes and beliefs change – the balance model 1.11 Summary References

2 A historical perspective of drug research and diffusion 2.1 The period of folk medicine 2.2 The merchant period (1500 AD to the end of the eighteenth century) 2.3 The chemical period (the nineteenth century) 2.4 The animal testing period (from 1900 to the end of the 1930s) 2.5 The drug innovation period (from 1940 to 1964) 2.6 The post-Thalidomide period (1965 to present) 2.7 Future perspectives 2.8 Summary References

3 National drug policies 3.1 3.2 3.3 3.4 3.5 3.6

Efficient organization of drug support Efficient organization of drug research Efficient organization of drug production Efficient organization of drug distribution An efficient system for drug consumption A satisfactory system of drug information

1 3 8 17 20 20 21 25 26 29 32 33

39 39 39 44 47 49 51 56 56 57

61 62 63 65 66 68 69

vi

CONTENTS

3.7 Choice of drugs with high therapeutic powers 3.8 Choice of drugs with few side effects 3.9 Low drug costs 3.10 How to develop and implement a national policy 3.11 Summary References

4 Planning the drug support 4.1 Patent and exclusivity policies 4.2 Trade name policy vs. generic name policy 4.3 Generic and therapeutic substitution 4.4 Generic prescribing 4.5 Drug registration 4.6 Drug reimbursement policies/national health insurance systems 4.7 The public and private drug sectors of developing countries 4.8 The primary health care policy 4.9 The essential drugs (ED) policy 4.10 Summary References

5 Drug research 5.1 Drug company strategies 5.2 Factors which determine the resources a drug company spends on R&D 5.3 The selection of research areas by a drug company 5.4 The research process 5.5 The project decision 5.6 The research administration after a project has been accepted 5.7 Research productivity 5.8 Ethical concerns in drug research 5.9 Summary References

6 Drug production 6.1 Background 6.2 Variations between countries 6.3 The decision regarding which drug(s) to produce 6.4 The organization of production lines 6.5 Production of drug raw materials 6.6 Drug quality 6.7 Principles of technical assistance support 6.8 The decision where to locate the plant 6.9 Determination of production quantities 6.10 Export decisions 6.11 Summary References

7 Drug prices, cost controls and profits in the drug industry 7.1 7.2

Price setting of raw drug materials Price setting of ready-made drugs

70 75 77 77 78 78

81 81 84 85 87 88 90 93 95 99 102 103

109 110 112 115 116 118 120 122 124 125 126

129 129 133 134 139 141 142 144 145 146 146 147 148

151 151 154

CONTENTS

7.3 7.4 7.5 7.6 7.7

Price setting of patented drugs Price setting of non-patented drugs (generic drugs) Price Competition Cost controls The prices a patient has to pay in the public sector in countries which have a public distribution system 7.8 Drug prices at private pharmacies in developing countries 7.9 The profits of drug companies 7.10 Summary References

8 Drug wholesaling and procurement 8.1 Importation 8.2 Different types of wholesale systems 8.3 How to evaluate a wholesaling system 8.4 Procurement 8.5 Summary References

9 Drug retail distribution 9.1 Pharmaceutical care 9.2 The degree of formal government control of outpatient pharmacies 9.3 Drug distribution aims 9.4 Summary References

10 Drug consumption 10.1 Historical perspective 10.2 Measurement of drug consumption 10.3 Factors which determine the volume of a drug consumed in a country 10.4 Factors found to be related to the volume of drug consumption 10.5 Factors which influence drug consumption at the individual level 10.6 Qualitative studies of drug consumption 10.7 Summary References

11 Marketing of drugs 11.1 11.2 11.3 11.4

Historical background The contextual factors which affect the diffusion of a drug The marketing goals of drug companies Factors determining what a drug company spends on the marketing of a new drug 11.5 The relative effects of different media and messages in commercial drug information to prescribers 11.6 Commercial media directed at the general public 11.7 A national perspective on commercial drug information 11.8 Summary References

vii 156 157 158 160 163 164 164 166 167

171 172 173 174 176 178 178

181 182 184 188 200 200

205 205 206 209 211 213 215 216 217

219 219 221 222 223 228 230 230 233 233

viii

CONTENTS

12 The market structure 12.1 The existing international market structure 12.2 The market structure in a specific country 12.3 Summary References

13 Drug control 13.1 Definition of drug control 13.2 Process model of the drug control system in a country 13.3 The processes to ensure that each aspect of drug control complies with the necessary norms or standards 13.4 Control measures 13.5 Clinical trials 13.6 Summary References

14 Drug prescribing 14.1 Normative studies 14.2 Sociological studies 14.3 Information process studies of drug prescribing 14.4 Prescription studies based on a cognitive perspective 14.5 How standard selections change 14.6 Making a diagnosis 14.7 Placebo prescribing 14.8 Summary References

15 Patients’ attitudes and behaviour 15.1 Background 15.2 Explanatory models 15.3 A process model: how a layperson deals with medical symptoms 15.4 OTC drugs 15.5 Patient compliance 15.6 Summary References

16 Drug information 16.1 Background 16.2 The role of mass media 16.3 Drug information sources used 16.4 Drug information from a sender’s perspective 16.5 Mass media campaigns 16.6 The value problem 16.7 Summary References

Index

237 237 239 240 241

243 243 244 247 248 251 251 252

255 255 258 260 262 267 268 269 270 271

277 277 278 280 288 289 294 294

301 301 303 305 308 313 314 315 316

319

Preface Drugs and medicines play vital roles in the modern world. The aim of this book is to give a comprehensive view of the drug sector from the standpoint of the social sciences. The ‘drug sector’ (the ‘drug system’ or the ‘pharmaceutical system’ as it is often called) includes all those social activities which precede the consumption of drugs in a country, i.e., drug research, drug production, drug distribution, drug prescribing, drug information and drug control. In this book a drug (or medicine) is defined as a consumer product sold for therapeutic purposes. This book is based on an earlier publication, Theoretical Social Pharmacy – The Drug Sector From a Social Science Perspective (University of Kuopio, Finland, 1988). Its author was John Lilja. However, substantial revisions and additions to that original work have been made in the preparation of this book. It is to be hoped that readers will feel that they have been provided with a comprehensive view of the pharmaceutical systems in the world. We have written specifically with the needs of pharmacy students in mind, particularly those taking master’s degrees. Our intention is that this text might be of use in pharmaceutical care or social pharmacy programs. The examples in this book have been chosen with the intention of being relevant to readers from different backgrounds with regard to both their profession and their national origin. Of course, this is no argument for prescribing the same organizational solution for all countries. Instead, the necessity of choosing solutions suitable to the cultural values held and the financial restrictions operating will be stressed in the text. The models suggested in this book are perhaps of kinds new to some readers. The authors’ aim has been to develop models which can be applied in many different countries and these will be referred to as ‘general models’ in the text. This means that the models discussed here include cultural and organizational variables which may differ from one country to another. By developing such general models of international applicability we can increase our understanding of how drug systems, overall, behave. The models suggested need to be critically analyzed, be applied to the specific situations that the investigator wants to study and be tested empirically. Ideally, readers will be inspired from these general models to search for more specific data from their own countries. Indeed it is an advantage if the text is complemented with descriptions of the national drug organization from the reader’s country. The reader is also recommended to discuss the text and the material referring to drug issues in his/her own country with others interested in drugs and society. Such a process is a valuable learning tool. Probably, the reader will find that people in his/her social network subscribe to different

x

PREFACE

values resulting in different recommendations for reform. It is the authors’ conviction that such a debate is an important part of a decision-making process leading to rational solutions. This debate makes participants more aware of the values and restrictions in their national drug sector, encourages a wider search for organizational alternatives, contributes to evaluations and assessments of the existing national drug organization and can lead to reforms which make the national drug sector more efficient in the long run. However, national solutions can be expected to differ because cultural values and financial restrictions vary considerably from nation to nation. The methods and the models in the text will, to a large extent, be borrowed from the social sciences: political science, economics, management science, sociology, social psychology and psychology. It is the authors’ conviction that methods and models from the social sciences can be valuable tools which will provide a deeper understanding of the drug system. The skills of a social scientist are needed in a world where poverty and sickness make life almost unbearable for hundreds of millions of people. The first chapter provides an introduction to familiarize the reader with social and behavioural sciences models which might be useful when studying drug systems. The succeeding chapters describe different parts of the drug system. In general, each of these chapters starts with an international overview and is followed by an analysis of the aims and functions of the component parts. The book will be updated. Thus, it would be both helpful and valuable to receive comments and suggestions for improvement from readers. We can be contacted at the following web addresses: John Lilja: [email protected] and [email protected]

Acknowledgements We wish to thank several people without whose help this book would not have been written. The Department of Biochemistry and Pharmacy, Abo Akademi University, provided an excellent sounding board for ideas and always offered encouragement and support. Also, very many thanks to Ph.D. Peeter Viilako, Tartu, Estonia, who read the manuscript and gave valuable comments and to all others who contributed with ideas at a preliminary stage of this project.

John Lilja Sam Salek Aldo Alvarez David Hamilton

About the authors John Lilja received an M.Sc. in pharmacy from the University of Stockholm in 1966. Thereafter he transferred his interest to the social sciences, economics and management sciences and took an M.Sc. in these subjects in 1969. In 1970–1971 he studied pharmacy administration in the USA. His Ph.D. dissertation, a study of how physicans prescribe drugs, was awarded by the University of Stockholm, Department of Management Science, in 1975. John Lilja has been a Lecturer in Social Pharmacy at the University of Uppsala, Sweden ˚ Akademi, Finland. and is now Professor of Social Pharmacy, Abo Among the books he has written are Physicians’ choice of drugs (1975) and Theoretical Social Pharmacy (1988). Lilja was one of the authors of Controlling Psychotropic Drugs (1983), Drug Communication (1996), New Perspectives on Depression and Anxiety – A Socio-Psychological Research Review (1998) and Youngsters, Alcohol and Cannabis Use published by the Swedish Public Health Institute (2003) and a great number of scientific articles regarding drug information, drug use, drug prescribing, psychotropics and the medicine sector. Sam Salek is Professor in Pharmacoepidemiology and Director of the Centre for Socioeconomic Research at the Welsh School of Pharmacy, Cardiff University, as well as being the Director of the internationally recognized UWC/BrAPP Postgraduate Course in Pharmaceutical Medicine. He is a member of a number of management and policy boards, including the Centre for Applied Ethics, Cardiff University. He is also a member of several national and international professional organizations, including honorary life membership of the British Association of Pharmaceutical Physicians; Honorary Fellow the Royal College of Physicians of the United Kingdom, Faculty of Pharmaceutical Medicine; and Professor of Pharmacy Practice, School of Pharmacy, Texas Tech University, USA. He speaks regularly at national and international scientific meetings and in the last decade he has given over 90 lectures related to his research areas. His main research interests are the development and clinical applications of health-related quality of life instruments. Examples of his developmental work are: United Kingdom Sickness Impact Profile (UKSIP); Renal Quality of Life Profile (RQLP); Community Dementia Quality of Life Profile (CDQLP); and palliative care specific quality of life instrument, the Cardiff Short Form McGill Quality of Life Questionnaire (MQOL-CFS). His areas of interest also include pharmacoepidemiology, pharmacoeconomics, drug safety evaluation and pharmacovigilance, drug profiling and patient knowledge, communication and patient information need, global pharmaceutical development and regulatory environment.

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ABOUT THE AUTHORS

Professor Salek is the author of over 400 journal articles and book chapters, as well as being on the editorial board of the Journal of Clinical Therapeutics, the Journal of Applied Therapeutic Research, the Journal of Outcomes Research and the Journal of Medical Economics. His books include the Ethical QALY; the eight volume Compendium of Quality of Life Instruments; Pharmacoeconomics and Outcome Assessment: A Global Issue; Pharmaceutical Ethics; Dilemmas and Solutions in Global Drug Development: Your Questions Answered; Benefit Risk Appraisal of Medicines: A Systematic Approach to Decision-Making; and Pharmaceutical Systems – Global Perspectives. Aldo R. Alvarez Risco, pharmacist and educator, received his Bachelor of Pharmacy and Biochemistry from San Marcos University and Master of Pharmaceutical Care from University of Granada. He started teaching activities in 2002 and he has participated in different exchange programs visiting schools of pharmacy and receiving invited professors. He participated in the creation of and is a professor in the Pharmaceutical Care Master Program at San Marcos University. Since 2006 he has been coordinator of the South American Network of Pharmaceutical Care (www.redsaf.org). David Hamilton is 63 years old. He has worked at the University of Glasgow, Scotland, since 1980, most of that time in the Department of Education but, lately, in the Recruitment, Admissions and Participation Service. His main interest has been in continuing professional education, particularly in pharmacy and medicine. His major concern now is in widening participation to higher education in Scotland and he is Director of the innovative PreUniversity Summer School at Glasgow.

1 Introduction

In this chapter different frames of references will be described. These will be referred to, combined and used in the analysis of the drug sector throughout the book. Accordingly, it is important to make clear what is involved and meant when certain issues are mentioned and discussed.

1.1 Economic development A number of theories have been suggested to explain underdevelopment. These can be divided into three broad groups: 1. Modernization theories: Development is seen as a progression from a traditional society and economy to a modern one (Rostow 1964). One example of such a theory is when the ‘maturity’ of a developing country is assessed in terms of the level of corruption and thefts. A reason for high levels of corruption in underdeveloped lands is that people there have to rely upon families and relatives for support in old age and in emergency situations. One result of this is that a high ranking official gives favours to their relatives. This means that the most competent person is not given a position in an organization – instead a relative is given the post even although they do not have the necessary qualifications. Not surprisingly this leads to less than efficient organizations. To change such practices is not easy and is likely to take considerable time and to require a lot of public support. 2. Dependency theories: The relationship between the industrial countries and the rest of the world is grossly unequal and the main reason for ‘the rest’ being reduced to what is little more than subservient poverty. Foreign companies transfer the profits from their investments to their home countries. This means that the ‘dependent’ country cannot use the resources to move towards economic autonomy (Gereffi 1983: 3–49). For example, new technology is often generated in rich countries, which spend far more on research Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

2

CH 1 INTRODUCTION

and development (R&D). There are, in practice, many barriers hindering the transfer of new technologies to poorer countries, e.g., low levels of education, few international contacts, patents and lack of funds for local investments. 3. Social group theories: The colonial states changed the modes of production in the Third World and established an urban elite, who have more in common with the elite in the industrial countries than with the rural masses in their own countries. The lack of national solidarity between different groups in a country is a barrier to the unification of the majority of the population behind common goals. This absence of solidarity might also be explained by the existence of different sub-cultures in many developing countries. These reflect the fact that the colonial rulers decided national borders based on their own interests and not on the cultural similarities of the people living in the area. According to social group theories, economic development does not necessarily lead to an increase in social development for the poorer parts of the population in terms of health care and education. Economic development might be seen as a necessary condition for social development, but such developments do not always occur because of this absence of solidarity between social groups in the country. To build a national social welfare system it is necessary to have a government able to transfer economic resources from the rich parts of the population to the poor parts. Health care and drug use are very much dependent on prices. However, a high price can be a barrier to health care and the use of effective drugs for the poorer parts of the population (Asfaw and von Braun. 2004). This means that the efficiency and the price setting rules in the health care and drug system will affect the distribution of the goods produced in these sectors. From the development theories we can conclude that ‘development’ is not a onedimensional concept, but is a dynamic process which can change a nation in many different ways, e.g., living standards, health care, education, legal security, legal compliance associated with a decrease in corruption in government and development of democratic institutions. This means that the function of the government is central to the development potential in a country. In countries with a high potential for development the government might be able to formulate national goals which the population is mobilized to attain. Gereffi (1983) gives an interesting example of ‘dependency’ mechanisms by describing the steroid hormone industry in Mexico between 1944 and 1963 (Gereffi 1983:53–163). This industry was started by European drug companies in the 1930s using animal parts as the raw material. However, supply of such raw material was restricted, which hindered the growth of the steroid industry. Subsequently, in the early 1940’s, research detected that barbasco originating in plants found in Mexico could be used as raw material. The Mexican company, Syntex, was supported by the Mexican government and got almost a monopoly on the production of steroid hormones from barbasco. The almost unlimited quantities of barbasco resulted in Mexican production dominating the bulk production of steroid hormones in the 1950s. Also, the growth of the industry was stimulated by the discovery that cortisone had a number of very valuable medical applications. It became almost a ‘wonder drug’ at the beginning of the 1950s. The Mexican state support of Syntex made it impossible for other Mexican companies to compete with Syntex. This protected situation did not last for any length of time. In the middle of the 1950s, US drug companies supported by the US government succeeded in preventing the Mexican government granting Syntex a protected state monopoly. From that time onward, all the Mexican producers of

1.2 SYSTEMS ANALYSIS

3

steroid hormones were given the same rights of production and sales of steroid products in bulk. However, by 1963 all these same producers had been bought by US firms. Also, the fermentation processes necessary for cortisone production had by then been concentrated in European and US MNDs (multinational drug companies). These processes required machinery, skills and knowledge that was not available in Mexico. Later in the 1960s barbasco lost its dominant position as the raw material for steroid hormone production as other plant sources replaced it. From the discussion above we can conclude that ‘development’ cannot be analyzed only in national terms. Globalization means that all countries are more or less interdependent. The rich and developed countries can facilitate or hinder development in the poor countries. It is not just a question of transferring economic resources in terms of money to the poor countries. It is also about building democratic institutions, legal systems and educational systems which meet the needs of individual countries, facilitate the introduction of new suitable technology, ensure the export of the products which the poor countries produce etc. We can further conclude that economic and social developments can be brought about in many different ways. As will be discussed later, a country which has an effective production and distribution system will find it much easier to negotiate with multinational corporations to get the technology transfers and the administrative learning to develop even more. India might here be taken as an example of such a positive development (Chapter 6). However, for a country which does not have the basic technological and administrative infrastructure, negotiations with national corporations are much more risky. The bargaining power of a multinational corporation can determine the ‘negotiated’ results. Here, international organizations, e.g., WHO (World Health Organization), NGOs (Non-Governmental Organizations), have a vital role to play. With the help of such organizations negotiations can result in a much more equal distribution of activities and profits. The poor country might get the production technology and distribution system necessary to achieve the national economic and social goals. There seems to be a double-directed interaction between economic and social development. To achieve an effective labour force health care (including effective drugs) is necessary. At the same time an effective national system of production and marketing can provide the resources for the development of better health and social care.

1.2 Systems analysis A system is defined as a set of components which are mutually dependent (Churchman 1968). This definition, however, does not say anything about the character of the system. In fact almost everything can be regarded as a system. This means that the system concept can be applied to innumerable different areas. For example, a photo of a classroom from above with the students and the teacher sitting at their desks can be seen as a physical representation of a system – the classroom. However, the classroom situation can also be described by tape-recording the noises and voices in the same system – the classroom. Clearly these two portraits of the classroom differ. However, it is not a case of one being true and the other false. They are just two different descriptions of the same system. The description which should be selected is dependent upon the problem under discussion. For solving some problems a photo taken above the classroom may be of greater help. For other

4

CH 1 INTRODUCTION

The environment

The system

(e.g., pharmacy customers)

(e.g., a pharmacy)

Figure 1.1 The pharmacy as a system

problems a tape-recording may be of much more use. It is up to the researcher to select the best way to describe the system given the problem they want to solve. A ‘closed’ system does not interact with factors outside it – its environment. However, social systems are almost never of this kind. They are instead ‘open’ systems which interact with their environment. The ‘environment’ is defined to include all those factors which influence the system but are not to any significant extent influenced by it. Figure 1.1 indicates a simple system and its environment. Sometimes there is a clear boundary between the system and its environment. At other times it is up to the researcher to define the boundaries of the system. We can take an example from the pharmacy sector. Before the Second World War each pharmacy premises (the house or the flat where the pharmacy was located) was regarded as a ‘system’. The chief of the pharmacy was expected to run it as efficiently as possible. Today, the locality from which the customers in the pharmacy come is most often thought of as the relevant system towards which the efforts of the staff should be directed. This means that the pharmacy should be concerned with providing drug information, not only for customers, but also for the general public living in the neighbourhood of the pharmacy. The environment in this system includes the knowledge, as well as the attitudes and the demands, of both the people and the health care personnel in the neighbourhood. To include a factor in the environment does not mean that the factor is beyond further analysis. Whether a factor in the environment should be considered in detail or not depends on the influence it is expected to exert on the system. Those environmental factors which play an important part in determining the efficiency of the system have to be included in any analysis. Let us take another example from pharmacy. To set up a time-schedule for the personnel in a pharmacy, consideration must be given to the number of customers expected per hour during the day. Over a period of days the number of customers per hour can be recorded. Then, the mean number of customers for each hour can be calculated, e.g., the number of customers expected to come in between 8.00 and 9.00 in the morning. For each hour a satisfactory number of staff can be decided upon to ensure there is adequate personnel on duty during these hours. In the example just described, the analysis of the environment was limited to the measurement of the number of customers per hour during the day. However, an analysis may go deeper and include a study of the factors which determine the customer patterns. Culture, defined as learned, shared and inter-related symbols whose meanings provide a set of orientations for the members of the culture, is an essential part of the environment to which pharmaceutical companies have to adapt. The national culture is an important consideration for marketing managers. However, pharmacies and other pharmaceutical companies will

1.2 SYSTEMS ANALYSIS

5

also have to take into account the national business culture because this is a vital part of the environment. The aim of a system description is to provide a model of the system under study. A full system analysis might include the following parts: 1. What are the specific goals of the system and how are these goals measured? 2. Which are the most important factors in the environment that influence the achievement of these goals? 3. What are the components of the system and how are they related one to another? 4. What are the resources available? 5. How is the system managed and controlled? 6. What are the alternative management systems? 7. Which of these management systems could more effectively achieve the predetermined goals? All responses to these questions cannot be undertaken without specific value orientations. These are based upon the assumptions that efficiency is important, that options can be described to facilitate decision-making and that rational choices can be made to achieve long run efficiency. However, these are the same value orientations upon which this book is based. To understand a problem it is necessary to study it and formulate models of it on different levels (Churchman 1968). We might start with a model on a high level and later continue on to models describing systems on the lower levels. For example, a national analysis of a country’s drug production, drug distribution and drug consumption might only give a rough picture. If we want to go into the lower levels of the system, we have to analyse the education systems in medicine and pharmacy. We might also have to analyze how drugs are produced by the drug companies and the factors which influence their production. To understand the drug distribution system we would have to analyze the norms and laws regulating drug distribution and the operations of the pharmacies. A system analysis of drug use has to include data about the prices set for drugs and the social insurance systems in the country etc. Figure 1.2 provides a graphic description of a national pharmaceutical system and will be used as the basis for the analysis in succeeding chapters. The components identified and expressed as boxes in Figure 1.2 are regarded as ‘functions’ or ‘tasks’ which are to be found in almost all pharmaceutical systems. However, if we compare the contents or the processes in a specific function we shall find significant differences between countries. This means that the organizations and the social processes vary between countries. Still, if we analyze a specific component (or function) we shall find that each component produces a similar type of output, e.g., drug production results in outputs in the form of industrially produced medicines of different kinds. Of course, the outputs vary between countries in terms of the amounts and types of drugs produced reflecting the different national traditions, premises and resources. So Figure 1.2 provides a simplification of the pharmaceutical systems we find if we apply a global perspective. These differences between countries have to be kept

6

CH 1 INTRODUCTION Drug research

Drug production

Drug wholesaling Drug control Drug distribution

Drug prescribing Drug information Drug use

Figure 1.2 A national pharmaceutical system (or a ‘drug system’)

in mind in the analysis of a specific component. It is to be hoped that the contents of the variations will be made clear in those chapters of the book in which the components are discussed separately. In Figure 1.2 the contacts and the influences are marked by arrows. Of course, the figure illustrates only a few of the influences which might be found in a specific country. In fact, the network of contacts varies between countries. Figure 1.2 also provides an over-simplified picture of the homogeneity of each component in a country. For example, the distribution systems can vary considerably between different parts of a country. The greatest such variations are usually found in geographically large countries. Here the distribution system has to be adapted to regional differences, as in India, China and the US. In geographically smaller countries we find few internal variations. However, there are a great number of other factors which influence the degree of organizational variation in a country. In small, rich lands with strong national and government welfare systems we find the most homologous structures. This is particularly so in countries with populations of similar ethnic and economic backgrounds. The Nordic European countries, e.g., Sweden, Norway and Finland, are nations with a limited degree of structural variation in regard to drug distribution. In contrast, in Latin America the huge differences in family incomes, the short periods of democratic tradition, weak governments and the difficulties for many countries there in collecting money for public health care by general taxes go a long way to explain why we see the existence of different systems for the payment of health care for different parts of the population (e.g., Lloyd-Sherlock 2005).

Contextual factors which influence a national pharmaceutical system Contextual factors (national factors outside the pharmaceutical system) have a strong influence on the structure and the processes of a national pharmaceutical system. These

1.2 SYSTEMS ANALYSIS

7

contextual factors can be classified into the following groups: 1. National cultures: As discussed by Hofsted (1994) there are variations in the culture which affect the structure and processes in national organizations. For example, the culture of countries differs according to the importance given to individualism as opposed to collectivism (Hofsted 1994: 49–78). If we focus on the health care sector, the degree of collectivism might be more evident than in the general culture. For example, the National Heath Service (NHS) system in the UK was developed as a result of the experiences of the two World Wars. In the NHS, medicines were provided for the public without charge when this system was introduced in 1948. However, the UK NHS has its roots in the welfare changes at the start of the twentieth century when the Liberal administration, anxious to maintain its appeal to the increasing numbers of working-class voters in the face of rising competition from the newcomer that was the Labour Party, made important and extensive welfare reforms (Szreter 2004, Chapter 2). The NHS system, in turn, had a strong influence on other drug reimbursement systems introduced in Europe after the Second World War (e.g., Anderson 2005). 2. National experiences: Because of the need for financial constraint, drug control was an issue which received considerable attention following the introduction of the NHS. This is indicative of how government finance can have a big impact on how, nationally, drug control is organized and which aspects of drug control receive specific attention (Anderson 2005). 3. International experiences: The Thalidomide catastrophe in 1961 had major consequences for drug control systems in most countries (Chapter 2). Countries which had no controls in place for the marketing of drugs now introduced appropriate legislation etc. Today, reports of side effects from drugs travel very quickly between one land and another because of the information superhighway. The internet has become more and more important as a vehicle for distributing data about drugs. 4. International strategies: Drug control strategies are now discussed more often at a global level in both the scientific and news media (Chapter 13). Similar concepts are often used even if the specific ways the strategies are applied to a national setting differ. Sometimes this results in confusion because the same concepts can be given quite different meanings when used in a global perspective. 5. Economic factors: In the European countries, we find national health insurance systems which cover the entire population. In other parts of the world such systems are seldom found. For example, in Africa, Asia and Latin America only a small proportion of the population has satisfactory access to modern drugs at reasonable costs. In Latin America and Asia the majority has to buy drugs at their full price in the pharmacies. And even if the price of the drug is low, most of the poor – and they are many in these lands – cannot afford the drugs they need (Chapter 3). Many former communist countries, e.g., China and the Soviet republics, underwent a considerable political and economic transformation at the end of the twentieth century. This affected, not only the pharmaceutical sector and the health care sector, but the entire nation. Many former state-owned production and distribution institutions were privatized. The same happened

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CH 1 INTRODUCTION

in the drug field. For example, in the Czech Republic, free health care was replaced by a health care system based on national health insurance contributions (Svobodny et al. 2004). In China, because of the more difficult economic situation, the health care system introduced was one in which only the employed part of the population received health insurance. However, it does seem now that China will in the near future introduce some health insurance scheme for that part of the population which is unemployed (Wang 2004). 6. Infrastructural factors: From a global perspective there are considerable variations in infra-structural factors which make it easier or more difficult to establish effective pharmaceutical systems. These factors can, for example, include administrative inefficiency, corruption, lack of satisfactory food and water supplies to the population, ineffective transportation and communication systems, political conflicts expressed as wars and discrimination against parts of the population. This means that poor countries have much more difficulty in finding viable solutions in comparison to rich countries (Johnson-Romuald 1980). To some extent international aid can compensate the poor countries, but the level of this aid is too low, e.g., in Africa, to sweep away such difficulties.

1.3 Actors in the pharmaceutical systems It is possible to identify eight groups of actors in most national drug systems (opinion leaders in the mass media are not regarded as a separate and independent category, but are included as actors represented within the eight groupings): 1. Drug prescribers 2. Other types of health care personnel 3. Drug distributors 4. Drug producers 5. Drug quality controllers including drug regulating authorities 6. Drug price controllers and drug reimbursement controllers 7. Politicians 8. Patients and their organizations The strategies and relative power of these actors vary between countries reflecting historical and organizational factors. Each of these groups should not be regarded as entirely separate from the others. In fact, a group can acquire a much stronger position by establishing alliances with other groups (Traulsen and Almarsdottir 2005). Such an alliance can be regarded as cooperation between group leaders or as cooperation between well-informed persons who are members of more than one of the groups. For example,

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9

a physician may have a political position and at the same time be a member of a patient organization. There are a number of political science models which can help us in any analysis of the cooperation and conflicts between interest groups. Firstly, there is the ‘corporatist’ model, which emphasizes that most powerful interest groups often cooperate. However, a national government might unite the weak groups in the country. But in other lands, governments might mainly express the interests of, for example, the upper class or the business sector (Cawson 1986, Reed 2002: 26–33). In contrast to Marxist theory, the corporatist model includes the possibility of intraclass and intersectoral conflicts. A central theme in corporatist models is that a limited number of influential groups organize around a few interests and, thus, hold political dominance. In the drug sector this means that governments and control agencies might give preferential treatment to the drug industry ahead of the consumers. This is because the drug industry is much more efficiently organized than the consumers. The drug industry is also likely to have the knowledge which facilitates efficient drug control. In some situations the drug industry has the option of threatening a government that it will leave the country if its interests are not favoured (Reed 2002: 29 and Section 1.3, when drug producers are discussed). Secondly, there is a group of political science models, the public interest theories (sometimes called ‘capture theory’), based more on empirical data from US regulatory experiences (Bernstein 1955, Reed 2002: 34–41). According to this model, a regulatory commission passes through four phases: gestation, youth, maturity and old age. The first phase can be a long period, perhaps 20 years. In the second phase, conflicts between the regulators and the regulated can develop. During the third phase the agency becomes more like a manager than a policeman and accepts the regulations to become an essential part of the industrial system. Personnel can circulate between the agency and the regulated etc. It is likely that the industry will acquire more benefits from regulation than other interest groups. This relationship grants the industry a form of legitimization for its activities (Reed 2002: 36–37, for references). However, the regulatory agency carries the political obligation to protect public health. The third class of political science theories to be mentioned here are ‘global systems models’. According to these models, regulation cannot just be analyzed in a single country. An analysis of regulations has to consider transnational and global aspects (Reed 2002: 41–48). The globalization process is neither universal (some countries will not become involved) nor painless. Globalization occurs at different levels – globalization of firms, globalization of markets and globalization of regulation. The last-named means that regulations will cross national boundaries. There is a great risk that the globalization of regulations will mainly favour the industrial interests because the consumers and the public do not have the organizational power or knowledge to argue for their interests (Reed 2002: 180–181). The ICH (International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use) process can be seen as an example. It is an organization with six sponsors representing the drug regulatory agencies and the MNDs of the big industrial countries. Its main aim is to act as a debating chamber with a view to the international harmonization of medicine regulations in the EU, Japan and USA where most R&D for new medicines is done (Reed 2002: 185). It seems that it was the international organization of drug companies (IFPMA – International Federation of Pharmaceutical Manufacturers Associations) that took on the role of administration of the ICH (Reed 2002: 172). However, most of the discussions about the international harmonization of medicine regulations take

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CH 1 INTRODUCTION

place in conferences from which reports are produced (Reed 2002: 173–175). One important aim of ICH is to reduce or obviate the need to duplicate the testing carried out during the R&D stage of new medicines to make it easier to establish global drug markets (Reed 2002: 176). One of the democratic problems with the ICH process is that, initially, not all countries participate and not all interest groups participate because the areas addressed represent the largest regulatory authorities in the world (Reed 2002: 183–184). For example, there is a risk that proposed new regulations might exclude competition in the future (Reed 2002: 203). If we use the three political science models to analyze drug control, we find that the global pharmaceutical sector has a lot in common with other industrial sectors. This means that many of the problems in the regulation of the pharmaceutical sector are also found in other industrial sectors. Nor can we expect the pharmaceutical sectors to behave very differently from other international industrial sectors. Sometimes ‘government’ decisions are used as explanations of changes in a national pharmaceutical system. However, ‘government’ is not a simple concept. How a government is organized differs from nation to nation and which interest groups have the most influence on different parts of a government varies. Conflicts between government agencies because of different goals are not uncommon, e.g., that between commercial goals – to develop a national drug industry – and the health goals (Lofgren and de Boer 2004). Also, new political groups can come into power and can change government policy-making (see the experiences of Latin American countries in Section 1.3). The way drug prices are controlled varies considerably between countries (Chapter 7). In some places political groups exert a strong influence on the way prices are set, e.g., by compulsory price control on all industrially produced drugs. In others, political bodies only control the price indirectly by encouraging competition in the drug industry. There seems to be a trend towards some of the problems previously handled by professional groups now being dealt with by political bodies. The reason for this is that governments in many countries have become more involved in financing medical care and have a greater interest in the welfare of their inhabitants. These ‘value’ changes have been brought about by accidents like the Thalidomide catastrophe (Chapter 2). However, conservative governments usually support the drug industry more than do liberal or social democratic governments, which are more likely to be interested in controlling it (Harding 1986). It might be noted that the most radical drug reforms to increase drug availability among the poor parts of the population have been undertaken by military regimes. This was the case in Brazil in the 1970s (Accion Internationales por la Salud, 1987: 81–86) and in Bangladesh at the beginning of the 1980s (Chowdhury, 1995). In both cases the military introduced an essential drug policy combined with import restrictions and government tenders. One reason for military regimes making radical reforms is to show the population that change in the health care system can be achieved. Also, there are few opportunities for opposing political forces to voice their criticisms of any political changes and, indeed, to stop the changes. However, political reforms seldom achieve their intended aims. For example, in 2000 the South Korean government introduced legislation in which prescribing and dispensing of drugs were separated (in many Asian countries physicians are allowed to both prescribe and sell drugs). The aim was to stop over-prescribing, prescribing of drugs of limited value and prevent physicians prescribing medication which gave them the highest personal profits. However, the attempt at reform was badly managed. The doctors protested, saying they

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11

would strike with the result that the government had to raise their wages (South Korea has a system of private health care, but it is financed by a national insurance system). The number of drugs prescribed decreased, but the physicians prescribed more expensive drugs so the total drug costs rose. And the consequence? The one group that clearly benefited from the reform was the international drug companies, which increased their market share (Kim, Chung and Lee 2004).

Health care professional groups In many places, like the Nordic European countries, the professions have a strong influence on the decisions taken by government organizations (e.g., Vuorenkoski, Toiviainen and Hemminki 2003). However, seen from an international perspective, there appears considerable variation in the power of professional bodies between countries. Where there are old professional bodies and most health professionals are members of trade unions, these professional bodies tend to be powerful. This is the situation in many European countries. But weak professional bodies are to be found in many other places, e.g., in Africa, Asia and Latin America. From a historical perspective it is interesting to note that physicians in cooperation with pharmacists developed the first forms of drug control targeted at industrially produced drugs being marketed by brand names but with a secret content (so called ‘patent medicines’) during the nineteenth century and the beginning or the twentieth century (Anderson 2005, Chapter 2). Physicians as a group play an important role in the drug system as prescribers in many lands. Often they come from high-status families and gained entry into medical school via an extremely competitive system (Mechanic 1979: l77). However, in countries with neither a national social insurance system nor a national drug reimbursement scheme most drugs are sold without a prescription. The situation in Latin America can be used as an example. There the physicians as prescribers have a much less important role in the drug system than in the European countries which have national social insurance systems and where most drugs, in terms of monetary value, are prescribed. In the UK, the British Medical Association (BMA) was very successful in getting physicians to prescribe by generic names before the introduction of the NHS in 1948. Later, as a result of the full reimbursement system and because newly produced drugs were introduced, the percentage prescribed by generic names fell from 80–90 per cent, at the beginning of the 1940s, to less than 20 per cent in the 1970s and at the beginning of the 1980s. However, new prescribing incentive schemes have been brought into operation and today, in percentage terms, more drugs are prescribed generically than by branded names. In this way the UK has been an inspirational example for other European countries in the introduction of generic prescribing and generic substitution (Chapter 4). Few politicians want to be in open conflict with physicians although this sometimes does occur in the drug sector. However, the opposition of physicians in Sri Lanka to the introduction of an essential drug list and a central purchasing system is perhaps the bestknown example on such a conflict (Lall and Bibile 1978). Still, physicians have a more favourable attitude to medical reforms once they have been introduced (Umeh et al. 1986). There are a number of well-known cases where physicians have initiated new national drug policies. For example, in the 1970s, some radical physicians in Bangladesh established

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CH 1 INTRODUCTION

a non-profit making organization, which provided health care for the poor, and founded a drug company to produce inexpensive drugs. The same group of physicians convinced a new government to introduce stricter drug control in 1982 and to remove a large number of unnecessary drugs from the market (Melrose 1982). However, physicians, as a group, are not as homogenous as often thought (Umeh et al. l986). For example, sometimes conflicts occur between medical researchers and clinicians as to how a new drug should best be used. There appear to be three groups within medicine: one of leading figures whose influence is all pervasive, another of highly specialized leaders whose influence appears to be specific and narrowly circumscribed to technical matters only and a third group, the largest, of ‘ordinary physicians’ (Freeborn and Darsky 1974, Armstrong 2002). The power of the physicians has been discussed by a great many authors (Mechanic 1979: 185, Lupton 1994: 105–121). The following factors are often suggested as the main sources of this power: 1. Their professional role is legitimated by national laws. 2. They are the official gatekeepers who ration the use of scarce services and resources. 3. They have expert knowledge and practice which most patients do not have. 4. This knowledge and practice put them in a strong position in negotiations with patients. 5. Patients expect physicians to have the necessary competence to solve medical problems. 6. The physicians have often well-organized social networks. Among researchers there is a debate on the balance of power in the doctor–patient relationship and whether there could, indeed should, be changes in favour of the patients. Probably a total ‘balance’, i.e., 50:50, is neither possible nor desirable. The reason is that few patients would want to go to a physician with the same knowledge and experience as themselves (Lupton 1994: 105–121). It is important to make a distinction between power imbalances and communication barriers. Effective communication is possible even among parts which have quite different power positions. However, this requires that both parts have an empathic understanding of each other (see the actor–spectator paradox discussed in Section 1.8). In many developing countries, paramedics in the public sector diagnose and prescribe much more than in the industrialized countries. The reason is that there are few trained physicians. We still need to learn more about how these groups act and how best they should be supervized to achieve optimum results. Also, in developing countries, traditional healers often hold strong positions based on their important social roles (Fabrega and Silver 1973, Chapter 15). Pharmacists as a group have considerable influence in most drug distribution systems as indeed physicians have in most medical care systems. However, the role of pharmacists varies considerably between countries because of organizational differences. For example, in Iceland in the 1990s the younger pharmacists were one of the supporters of a change in the drug distribution system from one based on personal privileges (as was the tradition in

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the Nordic countries) to one which gave every pharmacist the right to set up a pharmacy (Morgall and Almarsd´ottir 1999, Anell 2005). However, in most other countries similar initiatives have to come from political bodies. Since drug production was taken over by industry (Chapter 2) there has been a lively debate among pharmacists about their professional identity. They have been described as both over-educated and under-utilized (Shuval 1981). However, the pharmaceutical care movement, starting in the US and Europe at the end of the twentieth century, is a response to this situation (Bradley, Holme Hansen and Kooiker 2004 and Chapter 14). According to the pharmaceutical care principle, the pharmacist should try to get a better understanding of the customer’s entire social and medical situation, and it is up to the staff in the pharmacy to provide information and support in dealing with the problems the patient-customer faces. In this process empathy is an important skill, which helps pharmacy staff to understand the thoughts and feelings of customers (see Section 1.7). Also, pharmaceutical care demands that pharmacy staff give customers information about their medical and health problems and not just about the drugs they are buying. In the practice of pharmacy, conflicts occur between professionalism and commercial values (Manasse 1981). These conflicts are handled in different ways in different countries. For example, in developing countries, the pharmacist’s role might be much broader than in lands more influenced by Western medicine discourses. The pharmacy staff can act as a broker between traditional medicine beliefs and Western medicine. In such a setting they can understand the customers’ way of thinking and help them to handle illnesses expressed in folk terminology (Cosminsky 1994).

Drug producers Drug producers will in this book include all organizations involved in research, production and marketing of drugs. Traditionally a drug company included all these functions. However, there is now a trend that drug companies might focus on some of these functions and ‘outsource’ the other functions. For example, the so-called ‘biotechnology companies’ focus on drug research and make alliances with traditional companies for marketing. As a general rule, drug companies are today very active in forming alliances with others – university departments, research organizations and other drug companies (Kneller 2003). New research findings indicate that drug companies will become more commercially successful if they form such alliances (Danzon, Nicholson and Sousa Prereira 2005). The drug control system in Europe and North America has been developed by interactions (both conflicts and alliances) between professional groups, political groups, government bodies and drug producers (for historical descriptions see Bruun 1993 and Abraham 1995:36–86). In the UK, the pharmaceutical companies had established a national organization by the 1930s (Anderson 2005). This organization had an important role when a conflict arose at the beginning of the 1950s between the drug industry and the government regarding the costs of prescription drugs within the NHS as a result of the introduction of fully reimbursed prescriptions (the patient paid nothing for prescription drugs) (Anderson 2005). In most other countries such organizations developed later. However, there are a number of other well-known cases when there has been considerable dispute between the pharmaceutical industry and government organizations. For

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CH 1 INTRODUCTION

example, in the 1980s in Peru, a government drug control agency, CONAMAD, wanted to introduce an essential drug scheme for the private distribution sector, i.e., only essential drugs should be allowed to be imported and sold. However, the pharmaceutical industry protested and threatened to stop the drug supply to the country. The government had to give up its plan and changed its proposal so that there was to be an essential drug list for the military, police and the public hospitals only (Accion Internacional por la Salud 1987: 69). In the 1970s it was generally believed that the international drug industry was well organized and effectively controlled the technology of drug production and drug prices. However, since then it has been revealed that the drug industry had much less control of technology and drug prices than was earlier assumed. Drug production units can be set up without any help from multinational drug companies by relying on support from international organizations in cooperation with independent consultants. When the WHO (World Health Organization) set up, in the 1970s, a system for buying drugs (‘essential drugs’) by tender for a group of developing countries, it was found that the drug industry could not control the drug prices in the way which had been assumed ten years previously (Chapter 3). Also, many old drug products have lost their patent protection although still regarded as medically very valuable. This means that non-patented generic drugs play a much more important role today than in the 1970s (Chapter 4). However, a national drug industry can still have considerable influence on a nation’s drug policy (Lang 1974, Silverman, Lee and Lydecker 1982: 125). For example, countries with a strong research-based exporting drug industry also have an interest in introducing strong patent laws (Chapter 4). Many governments want to encourage a viable indigenous drug industry. Among other things this means that the prices should not be set too low for the drugs produced within the country. It also means that coordinating networks between government bodies and the drug industry should be organized (Lofgren and de Boer 2004). As will be discussed in Chapters 3 and 4, the pharmaceutical industry has a considerable influence on the clinical trials performed and, from this, on the medical culture. Clinical trials and the methods used for these trials can have a marked affect on the appearance of new diagnoses and drug indications, especially in the field of psychotropics. However, the pharmaceutical industry is not an independent actor here because it must cooperate closely with the medical science community and with the individual medical experts who are responsible for the planning of the trials and methods used in them (Healy 1997: 212–213). The drug industry also influences repetitive decisions like prescribing and self-medication via the commercial information it provides (Mather 2005, Chapters 11 and 12). Today, most of the big pharmaceutical companies has their own websites directed to the general public. In the company websites, medical discourses which might favour use of the company’s medications are given priority. This means that the websites could be regarded as a part of he companies marketing strategy (Read 2008). The drug companies have also been active in campaigns against ‘alternative drugs’ (Walker 1994). In a number of studies, the relationship between the drug industry and medical experts has been analyzed. For example, it is not unknown for drug companies or contracted research organizations (CROs) to provide established academics with manuscripts all but ready for publication (so called ‘ghost authors’). In this way a report on a new drug is published in a respected medical journal apparently authored by respected scholars (De Vries and Lemmens, in press) though subsequently subjected to peer review. Another feature of

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contacts between drug companies and medical experts that become too close is that experts linked with the drug industry risk losing their independent role as interpreters of clinical evidence and advisers to the drug control agencies (Braithwaite 1984: 298–305, Lexchin 1990, Abraham 2002b, Kassirer 2006, Rost 2006). However, opinions among medical experts on this issue are not uniform. Some are eager to avoid close contacts with industry. Others believe that good relationships between themselves and industry are essentially sound and beneficial (Doran, Kerridge and McNeill 2006). In developing countries, it seems not to be unusual for MNDs to bribe public officials to facilitate national drug registration and drug marketing (Braithwaite 1984: 11–50). However, most of the data supporting this view is from the US and rather old. This makes it difficult to assess how big a part bribery plays today in international drug marketing.

Drug control The way drug control is organized varies considerably between countries, even if most have systems of compulsory registration before marketing. However, in some lands, registration means as little as submitting documentation that a similar drug is already being produced there or elsewhere. However, in other countries, the control procedure is much more detailed and demanding for the producer. The new system within the European Union (EU) is an example. Most new drugs in the EU are now registered at the EMEA (European Medicines Evaluation Agency) in London. If a drug is accepted by the EMEA it can be sold in all European countries. However, it can also be registered in just one European country. In such a situation the drug would only be accepted for marketing in that country (Abraham and Lewis 2000), only becoming subject to EU review if a request to market in an additional member state is received. There are few detailed studies published of organizations and of strategies used by national drug control bodies, e.g., Bruun 1983, Abraham 1995. However, from these studies and those of other sectors of government we can conclude that civil servants are much influenced by the way they are recruited and the way they are socialized into their work. In many countries there has been a link between professional groups (physicians and pharmacists) and control bodies, which has made it easier for the controllers to implement their decisions (Abraham 1995: 36–86, Vuorenkoski Toiviainen and Hamminki 2003). This means that controllers probably favour the views of the professional groups and the dominant social and political discourses. From a gender perspective it probably means that opinions of women have less influence than those of men (Hollander 2006). However, in drug reimbursement decisions, the administrators who classify the drugs try to make their decision transparent to avoid opposition later from influential groups (Mitton et al. in press). Whether this is a problem, from a democratic point of view, depends on whether the professional points of view are in conflict or not with other opinions and values in the country concerned. Countries tend to vary to what extent they encourage close association between drug control agencies and the drug industry. Also, there might be a variation over time because of changes in political power or in regard to new administrative strategies. For example, in a situation where a government wants to increase the market strength of the indigenous drug industry, reforms might be made to increase cooperation between government agencies and the drug industry (Abraham 2002a, Lofgren and de Boer 2004).

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Patients and their organizations Patients in most countries expect, want and need drugs. This is especially so in many poor countries where industrially produced drugs, and especially injections, are seen as a symbol of effective modern medicine (Barnett, Creese and Ayivor 1980, Birungi 1994, Reynolds Whyte and Van der Geest 1994, Kotwal 2005). This practice of using injections leads to many problems, high costs, infection risks etc. (Jitta, Whyte and Nshakira 2003). The high demand for industrially produced drugs is the result of the beneficial reputation these drugs often have acquired in developing countries. This has come about not only as a result of modern drug marketing but also via an appreciation of and perceived advantages of better standards in developing countries. This demand for medication has had a number of consequences. Politicians are in favour of measures to make drugs available in order to get support from the electorate. However, this great demand for drugs can also lead the public to buy drugs of limited or no medical value because of the advertisements of the drug industry or local drug distributors (Melrose 1982). Since the 1980s new codes of practice and legislation have been introduced to prevent this. However, more detailed data about the effects of these regulations is required to make a valid judgement about the global situation today. Probably there is a great variation between the developing countries regarding this issue. The position of patients varies considerably between countries. Those lands with national social insurance systems, i.e., usually those with a high per capita income, have drug reimbursement schemes which ensure that most of the cost of prescribed medicines is paid by the reimbursement systems and only a part directly by the patient (Chapter 4). However, many countries with a low per capita income cannot afford such a system covering the entire population and are forced to let the patient pay most of the drug costs. However, a number of African countries are an exception to this rule, e.g., Kenya and Tanzania. There, governments have set up a ‘public sector’ in which drugs at low or no cost are distributed to rural areas. However, public sector drug distribution systems often face considerable financial problems. In practice this means that the public sector provides only some of the drugs which the population needs. The most important drugs at the public health care clinics might be out of stock for long periods (Gelders et al. 2006). This is because the demand for them is higher than the supply due to a lack of public funding. Those patients who can afford to do so will go to private outlets to get their drugs (Jitta, Whyte and Nshakira 2003 and Chapter 9). Traditionally, patients have not organized themselves into pressure groups. However, since the middle of the twentieth century patients in industrialized countries have established their own groups centred upon specific, often severe, diseases. This might be regarded as an example of ‘empowerment’ by organizational activities (Furnham 2005: 412). Also, since the 1960s these groups have been supported by consumer organizations interested in drug and health matters. However, the political interest and activity in health matters vary among the social groups. The highest social class usually has the most knowledge and interest in political health matters (Koos 1967: 126–137). One reason for this is that they think that they can influence political decisions. If a group is able to successfully put their problem on the political agenda, politicians might take up their issue and fight for the interests of the patient group (e.g., Washer and Jofe 2006). For example, in Nigeria, national leaders revitalized the expanded program on immunization at the beginning of the 1990s. However, it was other political groups which advised people against vaccination, at about the same

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time. It was argued that polio vaccination was contaminated with anti-fertility substances as a plot to reduce Muslim populations (Renne 2006). Even in countries with rather low per capita income, independent patient and consumer groups (non-governmental organizations, NGOs) have been set up (Traulsen and Almarsdottir 2005). For example, in many countries affected by HIV, groups have been formed to demand better health care for HIV patients (e.g., in Chile, Brouselle and Champagne 2004). NGOs have been very active in encouraging international bodies like the WHO to continue to address drug problems especially those facing Third World countries (Melrose 1982). A number of women’s groups have come into conflict with those parts of the drug industry which market hormone replacement therapies (HRT) aimed at menopausal or postmenopausal problems. The women’s organizations argue that the indications for HRT in commercials issued by the drug companies are too wide and cannot be supported by clinical trial data. Because this type of drug has been heavily promoted in direct advertisements in the US, a big market has resulted. According to the critics, the potential side effects have not been given enough consideration in the marketing campaigns. In 1991 women’s organizations succeeded in getting the US Congress to take the initiative in setting up a new research programme to establish the value of this kind of drug. The results from the study showed that HRT use was associated with a number of serious medical problems. These findings resulted in a 40 per cent drop in sales after the report had been published in 2002 (Palmlund in press). In the UK and the Netherlands there has been a long tradition of anti-vaccination movements (Blume 2006). People in these movements argue that vaccinations should be avoided because of the health risks. They perceive a conflict between vaccination and natural immunity. A healthy life style will, according to them, reduce the medical risks more than do artificial means such as vaccinations. The movements articulate their opinions in the public media, e.g., newspapers, journals, pamphlets. For individual members in the movement, the group’s discourses give them a type of personal identity based on their right to have an autonomous opinion (Blume 2006).

1.4 Evaluations An evaluation can be defined as a measurement of the extent to which an organization (or a programme) has fulfilled a number of specified goals. Modern evaluations were introduced in the 1930s as a result of the growth of government welfare programmes. Many policy evaluations of government pharmaceutical regulations have been undertaken in Europe and the US. Mainly they have been directed at evaluations of the drug reimbursement system, the price control system, to rationalize drug prescribing and to increase productivity in pharmacy production (Kanavos et al. 2004). There have also been evaluations of the essential drug policies in a number of countries (e.g., Ratanawijitrasin, Soumerai and Weerasuriya 2001). An evaluation is often viewed as a series of steps which all investigators must take during this type of study. The steps in an evaluation are also similar to those in a system analysis (see above).

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CH 1 INTRODUCTION

Deciding the aim of the evaluation Evaluations have many different aims. However, the aims may be classified into four broad groups:

r To determine if the programme resulted in the expected positive results (this is often called ‘an outcome analysis’).

r To determine how the process of the programme can explain the positive or negative results (this is often called ‘a process analysis’ and can be of great help in developing better programmes).

r To

determine the optimal organization of the programme (a special form of process analysis).

r To

determine if the programme was properly implemented (again, a special form of process analysis).

Sometimes the system as such is regarded as ‘a black box’ in the evaluation and the analysis is restricted to the outcomes only (Cronbach 1982, Pawson and Tilley 1997). This means that no real effort is made to understand which production factor is most important in achieving a high level of goal satisfaction. To facilitate the development of better programmes it is recommended always to combine outcome evaluations with process evaluations (Healy 1997: 107–109, Dean 2004, Lilja et al. 2007, Lilja, Giota and Hamilton 2007). Evaluations vary depending how complete they are supposed to be. In some studies only a few effects are considered while other studies are aimed at giving a more comprehensive picture.

Identification of the system and its goals At first it may seem a simple task to identify the system and its goal. In reality, however, it is much more demanding because the real goals are frequently hidden from the evaluator. Administrators and decision-makers often establish official goals of very little practical importance to further their own interests. To these groups an evaluation can be a frustrating activity because they are under scrutiny and run the risk of being criticized for not achieving the planned goals. One strategy used by administrators is to hide the real goals until the evaluation study is over. They then reveal the goals and criticize the evaluator for not doing their job properly (Patton 1990). Of course this does not always happen. Some administrators know that they are doing their job as well as they can under the circumstances. In such situations we can expect them to be frank about the goals and decision criteria they use in practice. One type of evaluation is to compare the working of some components (or programmes) in one country with similar components (or programmes) in another country. Such comparisons can be of doubtful value because countries often have different national or cultural aims with a programme. For example, a similar program can have different goals and these goals can vary depending on the country and in one country over time (Ratanawijitrasin, Soumerai and Weersuriya 2001). Also, countries vary in regard to their experiences, education levels and

1.4 EVALUATIONS

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the technological competence available, e.g., to set up drug production units in a country is very much dependent on the degree to which similar production facilities exist in the country. If such production has not taken place before it is much more difficult to establish such units. It takes time and resources to build an effective production system (Chapter 6). However, even if there are these units present in the country there might still be considerable barriers to drug production. If there are cheap foreign drugs on sale it can be difficult to set up viable drug production facilities because such foreign competition can make indigenous drug production unprofitable (Chapter 6).

Identification of the evaluation dimensions and the decision on how to measure these dimensions In health planning, priority is often given to the effects on the health of the population (measured by a health status indicator, e.g., morbidity, mortality) and to the costs of achieving these benefits. However, most programmes or organizations in the drug system cannot be evaluated in this very simple way. Decision-makers, administrators and evaluators normally have to consider factors other than health effects and costs in the analysis of a drug system. For example, when establishing a drug industry in a country the aim is not only to improve the health of the population but to industrialize the country, to employ people and start a process of development. In drug distribution it is not only a matter of health improvement, but it is also a question of satisfying the demand for better health care and of delivering health care as rapidly as possible. However, for the evaluation of essential drug programmes some dimensions (policy indicators) have been suggested (Ratanawijitrasin, Soumerai and Weerasuriya 2001 and the discussion in Chapter 3). But the evaluator must allocate priority depending on the national and local situation. Also, to get an essential drug strategy to work efficiently, it is often necessary to set up complementary programmes, e.g., an education programme (Ratanawijitrasin, Soumerai and Weerasuriya 2001). Another problem in the evaluation of drug systems is that it normally takes many years before significant results can be measured following a reform. During this period a number of other factors in the environment may have changed so it can be difficult to determine the effects the reform produced. It is important to state the goals of the system in such a way that the level of fulfilment can be measured in practice. Too often the aims are formulated so generally as to be of little use in practice. The translation of these general formulations to operational dimensions is one of the tasks in the evaluation. A system may produce unintended side effects. If this happens the unintended consequences have to be included as a part of the evaluation. It is important to note that the quality of care is a multidimensional concept. It is possible to make a distinction between (Stekelenburg et al. 2005):

r Observed quality of care – here both the professional processes and the medical outcomes can be used as indicators.

r Perceived quality of care – here the patient’s own assessments are used. For example, the quality of life before and after a treatment can be used as one of the indicators. Here both processes and outcomes are used as indicators.

20

CH 1 INTRODUCTION

These two main dimensions are not always correlated. For example, many traditional healers provide a high perceived quality of care in a developing country, while the observed quality of care according to professional standards could be rated low. However, the degree of association between these dimensions is very much dependent on how professional processes and medical outcomes are defined.

1.5 Data collection To ensure accurate data, normal social and behavioural science procedures should be used. Sometimes administrators are asked to describe the results they have achieved during the period of evaluation. Such data may complement information recorded by more objective methods, but cannot be used alone as a reliable source in the evaluation of the system. However, it may provide interesting information about the processes in the system. To ensure accurate results it is better to collect data from different sources and by different methods. Each method and source has its shortcomings and should be analyzed accordingly (Patton 1990). Often it is necessary to collect historical data about the system. For example, the way the system was set up will often have lasting consequences. Historical data often throws light on how the system is organized today. Production figures, cost data, published sources, surveys and observations are all important sources in an evaluation. In some cases it is possible to use an experimental approach to determine the outcomes. Firstly, a number of experimental groups (who are given the programme) and control groups (who are not given the programme, but a placebo programme) are selected by a random process. The target values are measured before and after the implementation of the programmes. The differences between the active programme and the placebo programme can then determined by a statistical process. However, in practice this can be very difficult to organize. The people involved can have opinions on which programmes they want. The motivations of the administrators and the participants can also differ between the active programme groups and the placebo programme groups. The placebo programme group might detect that they have been given a placebo. The programmes might not be provided in the way the planners intended. The administrators probably managed the programmes according to their own views and taking into account their views on the target values to be achieved (such changes probably occur in both the active and placebo groups) (Lilja et al. 2007, Lilja, Giota, Hamilton, Larsson 2007).

1.6 Summary of results and formulation of conclusions The most demanding part of the evaluation process is often the summary of the results. Frequently, considerable data has been collected. Some sources can be used directly, whereas other types of data have to be analyzed statistically. At the end the evaluator has to give priority to some of the results found. Often administrators and decision-makers want to emphasize their views on how data should be presented and the conclusions that should be drawn. An evaluator may have

1.7 SOCIAL CONSTRUCTIONISM AND SOCIAL REPRESENTATION THEORY

21

difficulty in avoiding being affected by these pressures (Patton 1990). Some evaluators can be expected to be more influenced than others. For example, students doing evaluations may hope for a future career in the organization and so may produce an evaluation which pleases system administrators and decision-makers. Of course, this is not an argument against student evaluation studies, but this possibility must be taken into account. An important task is to determine the sample size in the study. If the results in one geographic area are compared with the results in another similar area (which was given another treatment) the sample size is two! Having one observation from the experimental treatment and one observation for the alternative treatment it is not possible to find significant differences – we need a much larger sample size to determine if the two treatments are drawn from the same population or from two different populations (see a textbook about statistical testing). However, many authors think that the sample size is the number of people reached in the experimental treatment and the number of people in the alternative treatment. Whether this is an acceptable practice or not depends on the how the treatment was undertaken. If each person is treated individually it might be argued that the number of people in the experiment is the ‘true’ sample size of the experiment group. However, often there is a marketing campaign in which the entire population in an area is included. The results in this area are then compared with those in another area where there has been another marketing campaign or perhaps no marketing at all. In such cases the sample size is one for the experimental group and one for the comparison group, because the results at each site reflect the social interactions between the members of the target groups. Because of the limited sample sizes we cannot determine if the effects are drawn from different populations or not, i.e., whether the treatment gives a significant difference or not in the results compared with the effects noted in the control group.

1.7 Social constructionism and social representation theory Philosophical views influence how to collect data. We can identify two scientific points of departures (Gergen 1985, Burr 1995): 1. Data ought to be reported by describing individual variables, e.g., attitudes, the ages of the group being analyzed. This strategy can be described as the ‘positivistic standpoint’. 2. Data ought to be reported in the form of ‘social constructs’. This standpoint might be called “social constructionism’ which emphasises that we must consider why a variable is defined as it is in a study. This means that social constructionism is a more critical approach than the positivistic standpoint. The discourse of a group means the system of thoughts, expectations and feelings towards a problem. This includes the metaphors used when discussing a medical problem (Lupton 1994: 54–71, Washer and Jofe 2006). The social constructionist is not willing to measure a phenomenon just by a number of variables analyzed from an observer’s perspective. They want to know how the individual or the group constructs its perspective toward the phenomenon under study.

22

CH 1 INTRODUCTION

The two standpoints can be illustrated by an example. Let us take depression (Lilja et al. 2002). In a positivistic study about depression, the degree of the condition might be estimated by a depression scale aimed at measuring the level of the symptoms. However, in a study based on social constructionism the researcher tries to consider how different groups in society define and use the concept ‘depression’. For example, it has been found that different groups, e.g., the public, physicians, experts, often have different definitions and views regarding ‘depression’ (Lilja et al. 2002). These social constructs include phenomena which are related to ‘depression’, the preferred therapies etc. Which phenomena are included depends on the group which expresses the constructs and the researcher who identifies the discourse. Social constructionism is often of great help in understanding how rural people in developing countries look at different sicknesses and therapeutic options. Many of the concepts used in a traditional community in a developing country are not found in more affluent communities. For example, a health worker in the Philippines has to understand the lay concept of ‘weak lungs’ to diagnose, treat and advise patients with tuberculosis (Nichter 1994). Another example from the Philippines indicates that lay people determine the effects of a drug by how the drug ‘feels’ in the body. Such ‘feelings‘ might be interpreted as side effects from a Western scientific perspective (Tan 1994). In a traditional African society, people distinguish between illnesses caused by natural factors, by black magic (somebody purposely transmitting a illness to another) and by evil spirits (Hielscher and Sommerfeld 1985). In many traditional cultures spiritual forces are supposed by the general public to have an important therapeutic role. For the health workers it can be an effective strategy to accept some parts of such beliefs and to try to combine the traditional beliefs with more modern perspectives (Golomb 1988). The hot–cold distinction is another medical model often found in traditional societies (this will be discussed more in Chapter 15). Also, in countries with rather high per capita incomes, lay discourses can be identified which deviate from the discourses used by health professionals. For example, Norgaard, Sorenson and Morgall (2000) found that local patient medication records (PMRs, see Chapter 9, a system where the pharmacy staff collects and stores data about the drugs prescribed in the pharmacy) were interpreted very differently among the health care professionals and lay people. These differences in social constructs are probably a barrier to the use that could be made of PMRs in the country analyzed. Britten (1996) has analyzed ‘orthodox’ and ‘unorthodox’ accounts provided by the public about drugs and medicines. By the orthodox accounts she means those discourses by which the public justified the opinions and behaviour of the health professionals. By unorthodox accounts she means those personal opinions expressed by the public, e.g., regarding alternative medicine. As may be expected, those individuals who gave orthodox accounts were less critical of doctors than those who gave unorthodox accounts. Those who gave unorthodox accounts had their own ideas about modern medicines which often were negative (Britten 1996). The expected effects of the information given might be greater if the existing discourses are known by the sender compared with a situation where the sender does not know the existing discourses in the target group. Health workers are considerably helped by having a fairly good knowledge of the discourses which can be found in the field (Lupton 1994: 100–103). Based on this knowledge the information might be adapted so that the receivers can understand the information provided, e.g., in the treatment of diabetes (Bissell, May and Noyce 2004). This is of special importance in a developing country where the explanatory

1.7 SOCIAL CONSTRUCTIONISM AND SOCIAL REPRESENTATION THEORY

23

medical models can differ considerably between the health professionals and the general public. For example, when planning a preventive intervention to decrease the risks for sexually transmitted diseases, the planners first determined the discourses of the target group regarding STDs. Based on this knowledge the content of the intervention programme could be planned, in this case in the form of an interactive video. The intervention was found to be more effective compared with the same information delivered in book form or in a commercial brochure (Downs et al. 2004). Also, identifying the discourses among the public can be very important in projects where the aim is to detect why people in developing countries put off visits to health care centres (Kumaresan and Maganu 1994, Lew-Ting 2005). If we know the reasons for the delays, an information campaign can be organized to change this state of affairs. The cultural discourses found in a population also affect the attitudes to drugs in general, and to the side effects of drugs. For example, in a UK study it was found that students of Asian origin had more negative views about drugs in general, and regarded them as more harmful than students of European origin (Horne et al. 2004). To understand health organizations it is also important to know the social constructs used by health professionals (Lupton 1994: 93–94). For example, the debate between physicians and alternative medical practitioners has been analyzed by the discourses they have used. Of course, each alternative medical movement, e.g., herbalists, hydro-therapists, homeopathists, has used somewhat different discourses. However, when deciding upon treatment, the alternative therapists still stress the importance of the patient’s own opinions, whereas the official medical therapists emphasize the importance of scientific data (Brown 1987). If we want to understand the organizations and the reforms in pharmaceutical systems, then we need to know the social constructs of the experts who influence the organizations and the reforms. Sometimes one ‘discourse’ becomes so established in a country that it is difficult to see that this has happened if you are living there. The perspective of an outsider can then help to detect the discourses on which the organization, the system, is built. Social constructionism can be used in an analysis of changes in discourses. For example, in one study the researcher analyzed how people from the Peruvian Highlands altered their health and therapy discourses when they moved to a city on the coast. It was found that many with the traditional discourses regarding health and therapies changed to a more Western approach after leaving the Highlands. The degree to which a person changed their discourses was influenced by how long they had been living in the rural Highland area. Those who had spent many years there before leaving for the city kept more of their traditions than those who were young when they left their original home (Davidson 1983). A group of patients might also choose to develop an alternative to an existing medical discourse. For example, new alternative discourses have been found among AIDS patients (Lupton 1994:76–78). Also, some types of patient non-compliance, e.g., refusal to take a prescribed drug, can also be interpreted in terms of alternative ‘resistance’ discourses to medical power and dominant medical discourses (Lupton 1994: 113–117). Some resistance discourses, such as non-compliance, can be found more often among powerless patient groups than among patients with higher education and more economic resources (Lupton 1994: 114). However, other resistance discourses and strategies can be found among the more educated patients. For example, they go and learn almost everything about their medical condition and regard the physician more as a colleague than a superior (Lupton 1994: 116).

24

CH 1 INTRODUCTION

Health professions can also try to introduce new discourses to help patients. For example, giving a patient ‘hope’ can be interpreted as a discourse change (Lupton 1994: 68). However, the same thing can in more sociological terms be called ‘social support’. We can also analyze the difference in genders by examining the discourses used. Men and women have different ways of thinking and feeling about medical problems and this can affect their decision-making processes when falling ill. Also, health professionals can have somewhat different discourses depending on whether they themselves are a man or a woman. They may also behave differently when communicating with a male or a female. However, it is important to note there is considerable variation both inside a society and between societies in regard to the gender discourses (Lupton 1994: 69–71). Social constructionism has also been used in the analysis of adjustment to illness (Sharpe and Curran 2006 and Chapter 15). When a patient becomes aware they are suffering from a serious illness they start to work on the illness representation: the effects on identity, causes, consequences, cure, control and expected changes over time. These discourses seem to be rather unstable, but can help the individual to cope with their condition. If the illness representation does not provide enough solace, the individual can start to alter their self-image, which can take a longer time. In this process, the individual may well reconsider the priorities which have previously given their life meaning. However, when the individual cannot find a satisfactory adjustment, then psychological symptoms in terms of depression and anxiety can result (Sharpe and Curran 2006). For the social constructionist there is no single objective perspective. There are only the shared subjective realities that are created as people interact (Hutchison 1999: 48–50). These social constructions are created when people interact. For a researcher, qualitative data collected by personal interviews or focus groups are often used as a base to describe the social constructs of a group of people. However, most social constructionists accept that there is some form of reality, such as sickness and death. But they believe that the cognitive and emotional contents of these realities, these concepts, vary considerably because of the different social constructs people have. Of course, a researcher might use both a positivistic and a social constructive perspective depending on the circumstances. In fact, there are a number of different perspectives we can use to study how individuals and the environment interact, e.g., the conflict perspective, the rational choice perspective, the psychodynamic perspective, the development perspective, the social behaviour perspective and the humanistic perspective (Hutchison 1999: 37–60). The main advantage with social constructionism is that we acquire knowledge of how different groups in society interpret and regard a phenomenon. We have to understand the social constructs of our target group to communicate effectively. Based on this knowledge, we can adapt our communication to the meanings and the views of the target group. This will probably increase the probability of the message being understood by the receivers (Chapter 16). Many researchers interested in social constructionism study the discourses found in the media and how these change over time and how they vary depending on the media and where the media is published (see Chapter 16). The ‘theory of social representations’ is very similar to social constructionism (Wagner and Hayes 2005). For example, in a social representation study from Eastern Europe, it was found that the social constructs towards HIV and AIDS among the general public were strongly associated with the religious cultures in the samples drawn from the different countries (Goodwin et al. 2003). The main difference between these two theories is that the social representation theory, more so than social constructionism, stresses the importance of

25

1.8 THE ACTOR–SPECTATOR PARADOX

culture as the medium by which the discourses are transferred from one person to another. Social constructionism emphasizes the individual’s own cognitive and emotional processes as a force which determines the personal discourses.

1.8 The actor–spectator paradox The actor–spectator model is a socio-psychological model with three different components (Lilja et al. 1997). There is an actor, there are the meanings which they give to their own behaviour and there is at least one spectator who gives another meaning to the actor’s behaviour (Figure 1.3) The behaviour of a pharmacy customer can be taken as an example. The customer enters a pharmacy and asks about a non-prescription drug for their medical problems. The questions they ask might be regarded as their behaviour. They explain their medical problems by their own discourses (see the section on social constructionism above). The discourses behind their questions give meaning to the questions they ask. However, the pharmacy staff might give another meaning to the questions asked. From studies in situations similar to the one described here, we know that the spectators (observers) use ‘personality constructs’ to interpret the behaviour of other people. When a spectator sees another individual (the actor) they classify the behaviour of the actor according to what the spectator believes the actor’s intentions are (Schneider et al. 1979: 53–54). This means that observers (spectators) think about the motives of the actors being evaluated. When people apply personal theories they often use stereotypes. For example, when an elderly person asks a question in a professional–patient encounter, this may be interpreted as indicating they are ‘a worried patient’. However, when a young patient asks the same question this may be regarded as ‘curiosity’. This means that spectators have constructs regarding how the people they meet think and feel. Pharmacy staff have similar constructs. They interpret the question in the light of what they think lies behind the customer’s problem. However, the customer might have other social constructs behind their questions compared with those assumed by the pharmacy staff. From empirical studies we know that actors themselves are likely to understand their own behaviour in terms of situational factors. On the other hand, the observers often base their constructs on the assumed personality of the individual observed (Lilja and Larsson, 1993, Lilja et al. 2000).

The spectator’s interpretation of the actor’s behaviour

The actor’s behaviour

The actor’s own interpretation of their behaviour

Figure 1.3 The actor–spectator paradox

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CH 1 INTRODUCTION

The actor–spectator paradox means that the actor and the spectator live in different worlds. However, the differences between these worlds can be diminished by communication. If both participants, when communicating, have an empathic attitude they can acquire a better understanding of the other’s points of view (Lilja et al. 2000). Also, empirical studies aimed at finding out how different types of pharmacy customer think can help to overcome the cognitive gap. In the same way, studies of pharmacy staff, their ideas and their communication patterns can help us to understand the system and so overcome the obstacles to mutual understanding. In pharmacy, there is a professional movement called ‘pharmaceutical care’ which corresponds to this perspective. The pharmacist has to acquire a better understanding of their customers’ social and personal situation to be able to provide the most suitable advice (McDonough 1996, Rossing et al. 2001, Chapter 9). In another professional movement, the concept ‘concordance’ is used as a principle to guide health professionals in their communication with patients. The health professional tries to understand the patient’s situation, their values and perspectives, and to encourage the patient to be active in the communication process (Britten et al. 2004, Chapter 14). In a similar way the concept ‘empathy’ is often used to express the need for health professionals to spend more energy to achieve understanding of the patient’s experiences and perspectives (Lilja et al. 2000). Historically, health professionals have been regarded as spectators and patients as actors. However, we think it could be of great value to apply the actor–spectator model both ways. A health professional can be a spectator, but also an actor and when this latter perspective is applied the patient plays the role of the spectator. This means that the customer has to understand the pharmacy staff and the advice they give. To understand the pharmacy staff, the customer has to make assumptions regarding the cognitive processes of the staff (Franzen et al. 1996). However, the assumptions of the customer might not always be right. This means that their interpretations can be based on misunderstandings. Even here two-way directed communication can decrease the risk of misunderstandings. The actor–spectator paradox equally applies to communication researchers. They often take the role of a spectator. However, a researcher can also be regarded as an actor, e.g., when a researcher is criticized by another researcher who takes the role of a spectator. This means that researchers have to be aware of their own roles and perspectives, that the observed actors have different perspectives towards the researcher and that the research situation can influence both the researcher and the actors (Harr´e 1981: 154).

1.9 Decision-making processes in the drug system The drug system in a country can be described in terms of the decision-making processes taking place in the system (for a general discussion about decision-making in organizations see Furnham 2005: 525–564). Descriptions of each of these processes should include information on the following: 1. The situation in which the decision-making process takes place. This is often called the ‘context’ and might have a strong effect on the decision-making process. Within the meaning of context we can include the national culture and the organizational culture (Furnham 2005: 608–653 and the contextual factors discussed above). For example, the

1.9 DECISION-MAKING PROCESSES IN THE DRUG SYSTEM

27

existence of ‘corruption’ might vary both between countries and between organizations within a national culture (Furnham 2005: 609–610). There is also a strong variation between organizations as to what extent they might be open for changes. Of course, there are a great number of factors which determine how easy it is to change an organization’s structure and internal processes (Furnham 2005: 679–685). A characteristic feature of medical decision-making seems to be time considerations. In some situations it is better to wait whereas in others it is important to make rapid decisions (e.g., Sexton et al. 2006: 17). 2. The decision-makers, what motivates them, their links with other decision-makers, their backgrounds as well as their experiences. Today politicians are important decision-makers in the drug sector (Lilja 1987 and the discussion above about interest groups). Their goals might shift as new political parties become dominant or new political issues are given priorities (Puig-Junoy 2004). Also, it is possible to identify a number of different decision-making styles (Furnham 2005: 531–534). For example, the ‘expert style’ means that the decision-maker can make their decisions more or less independently of others, e.g., select their own criteria. The ‘adviser style’ means that the decision-maker just gives advice to a group, which then make the final decision. 3. The type of information the decision-makers are using. This should include details of where they got their data and how this data was used as a basis for decision-making. The data used is not just the cognitions and emotions which the individual has in their internal memory. The individual might also search for external information, especially from their social network. For example, it is well known that both in prescribing and in OTC drug selections, social networks have a strong impact on the decisions taken (Chapters 14 and 15). 4. The part played by those seeking to influence the decision-makers, e.g., a drug firm wanting to influence a physician’s prescribing. Also, patient organizations often argue for reimbursement for drugs needed to treat ‘their’ disease. 5. The criteria used by the decision-makers when deciding. It seems that ‘scientific’ perspectives often are used to legitimate a drug policy decision, e.g., a drug reimbursement decision. However, observers often find more subjective and more value oriented criteria behind these ‘scientific’ perspectives compared with the information from the decisionmakers themselves (Vuorenkoski et al. 2003, Wirtz, Cribb and Barber 2005). The reason for this is that scientific perspectives are much less open to public debate and are much less likely to result in the formation of opposition groups than explicit value oriented criteria. 6. Decision-makers tend to focus upon a few different criteria. For example, in selecting a drug preparation the curative effects anticipated, the side effects and drug costs are often determinant factors, both in prescribing and for the general public when they select an OTC preparation. In research about how drug preparation selections are made, the Theory of Reasoned Action (the TRA model) is often used (e.g., Furnham 2005: 233–239). In this model, a decision-maker’s attitude to a preparation is assumed to be a multiplicative combination of the individual’s expectation of the degree to which the preparation will lead to the fulfilment of each criterion and the importance the individual gives to each criterion. The total attitude is derived by adding all these multiplicative

28

CH 1 INTRODUCTION

combinations for the criteria used. It is assumed that the decision-maker will select the preparation to which they are most positively inclined. 7. The feedback the decision-maker gets and how they use that information. Decisionmakers generalize from their experience without considering that their experience might be regarded as one of several possible outcomes, i.e., decision-makers do not normally operate with ‘confidence intervals’ in their estimations (Furnham 2005: 266–269). This means that patients who have had a drug side effect rate this probability much higher than patients who have not had that experience (Chapter 15). It is up to the researcher to decide which individuals or groups are to be thought of as decision-makers. For example, in analyzing prescribing, health professionals are often viewed as decision-makers. However, the prescribing process might also be seen from the patient’s point of view. In this book we shall discuss this with particular reference to the problem of compliance (Chapters 14 and 15). In most repetitive decision-making processes it is quite easy to identify the decisionmakers and the factors they take into account in their decision-making. However, nonrepetitive decision-making processes often involve a number of interest groups and can be spread over a considerable time. For example, the decision-making process which led to the nationalization of the Swedish pharmacies began at the close of the nineteenth century and was not completed until 1970, when the decision was taken in the Swedish Parliament to introduce nationalization. In this process, new technology (drug production was transferred to industry), an accident (the Thalidomide catastrophe) and the actions taken by the interested groups involved (especially the pharmacy owners and the Social Democratic Party) were very influential (Lilja 1987). Another complex decision-making process was when there was a change in ownership regulations for the Icelandic pharmacies during the 1990s (Morgall and Almarsd´ottir 1999). Repetitive decisions are often taken by individuals alone, while non-repetitive and strategic decisions often are made by a group of individuals. Complex and frequently disguised processes make it much more difficult to analyze non-repetitive rather than repetitive decisions. This is one of the reasons why so few publications have dealt with the non-repetitive decision-making processes of the drug sector. However, decision-makers might also try to avoid public transparency by preventing criticism and lobbying by different interest groups. However, from a democratic point of view, it is much more ethical if the decision-making process could be made as transparent as possible so that the values and the criteria used in the process could debated openly (Vurenkoski et al. 2003). A rational decision-making process is often identified as an ideal and normally requires that the following list of demands have been satisfied: 1. Identification of the situation and its demands in terms of the goals which have to be achieved. 2. Identification of the decision-criteria which are believed to lead to goal achievement. 3. Identification of the options which are available. 4. Identification of how well each option can be expected to fulfil the decision criteria.

1.10 HOW ATTITUDES AND BELIEFS CHANGE – THE BALANCE MODEL

29

5. The selection of an optimal or satisfactory option. 6. Collection of feedback information for evaluation and for future decisions. In practice it is difficult to find examples of entirely rational decision-making processes (Furnham 2005: 534–549). One reason is that information is associated with costs in terms of time and money. This means that the decision-maker often has to stop when they find a ‘satisfactory’ solution. Also, different interest groups might differ in their assessments of ‘rationality’. Empirical studies of non-repetitive decision-making processes indicate that the rational decision-making model does not describe how, in practice, decisions are made. For example, there may be no clear legitimate decision-maker but there may be two or more groups which have different opinions of their roles. Each may use different definitions, frameworks and strategies to convince the other groups that they are the legitimate decision-makers. They may also seek allies to strengthen their position (Lilja 1987). For example, government agencies in a specific country can have different goals and these goals can conflict, e.g., industrial goals vs. health goals (Lofgren and de Boer 2004). In practice the decision criteria may change over time influenced by new experiences and new information from the environment. This is in contrast to the ‘ideal’ rational decision-making process, where the criteria were assumed to be stable (Cyert and March l963). Also, a great number of different aspects can be taken into account depending on the type of decision to be taken. The effects of the decision on the relationships in the system can also be taken into account. Decisionmakers are inclined to produce decisions which are ‘politically’ defensible (Martin et al. 2003, Vuorenkoski et al. 2004, Wirtz, Cribb and Barber 2005). However, it is not unusual for decision-makers to become excited about the benefits of new technology, which, in turn, can affect the decisions taken (Wirtz, Cribb and Barber 2005). The so-called ‘garbage can model’ has been suggested as an alternative to the rational model, illustrating how decision-making is conducted in complex organizations. According to the garbage can model, public attention and other situational factors can have a strong impact on the decisions taken. Decision-makers have opinions and ideas, but they are not accepted until a suitable situation occurs (March et al. l976). The Thalidomide catastrophe can be seen as such a situation which permitted a number of new options to draw attention and to be introduced into the drug system. In such a critical situation many reforms were made which could not have been introduced under normal circumstances (Chapter 2). ‘Rational decision making’ might also be examined in terms of the rationality of the end product of a decision-making process. For example, are the drugs prescribed or used effective and associated with a low risk of side effects? This issue will be examined in Chapter 14, where prescribing behaviour will be discussed.

1.10 How attitudes and beliefs change – the balance model To understand the dynamics of a national pharmaceutical system we have to understand to what extent different actors have similar attitudes, beliefs and expectations towards important aspects of the system. We also have to be aware how the actors change their attitudes, beliefs and expectations over time. The balance model might help us to understand such dynamic processes.

30

CH 1 INTRODUCTION D +

+ A

B

Figure 1.4 Before the adoption of a new attitude by A

Attitudes can be defined to include all types of emotionally loaded concepts, like values, decision criteria, priorities, attitudes to classes of objects and attitudes towards single objects. Beliefs are here defined to include all the assumptions made by a person or a group about relations between factors. These beliefs may be based upon direct observations, upon acceptance of information from other persons or upon inferences from beliefs already held. A person, in forming an opinion of a new drug, probably uses all of these strategies. Before taking a new drug they use information and draw inferences from what they know. However, after they have taken the drug they may also rely upon their direct experiences of it. As discussed above in association with social constructionism, an attitude cannot be regarded as isolated from the beliefs of an individual or group. The attitudes and the beliefs form more complex constructs, which might be called discourses (see above). The balance theory is used to explain how a new attitude is developed (Newcomb, Turner and Converse l965: 115–153). Figure 1.4 shows the situation before an attitude is developed. Person A is the subject whom we want to study. They have a good friend, B. Their friendship is indicated by the positive sign between A and B. Let us further assume that B has taken medication and benefited, i.e., liked the drug. Let us assume that A caught a cold and asked B for advice. B will probably tell him that they have tried drug D and it has helped him. We can expect that A will develop a positive attitude towards the drug, as indicated in Figure 1.5. Figure 1.6 illustrates the alternative outcome if B’s attitude to the drug was negative. In this case we can expect A to develop a similar attitude towards the drug. Good friends want to like and dislike the same objects.

D

+

A

+

+

B

Figure 1.5 After the adoption of a positive attitude by A

1.10 HOW ATTITUDES AND BELIEFS CHANGE – THE BALANCE MODEL

31

D –

A

–

+

B

Figure 1.6 After the adoption of a negative attitude by A

There may be situations when friends find that they have independently developed different attitudes (positive or negative). This is not an unusual situation in real life. One of them may then change their attitude so they both think the same. However, it is often easier for the two to decide that their attitudes reflect different situations, e.g., they have had different diseases or may have had different reactions to the two drugs. This differentiation may make it easier for them to accept the dissimilarities in their opinions. For example, this is the perspective of GPs who often try to adapt their prescribing to the individual patient. However, the experts seem to have a different perspective where the ‘best choice’ follows on from the results of clinical trials (Armstrong 2002, and the discussion of medical evidence in Chapter 2). The balance theory has been illustrated by simple examples. Reality is often more complex. There are usually more than two people and more than one object involved. Person A may listen to opinions other than those held by B. They may also base their decisions on information other than the attitudes of those around them. They may, for example, find that the drug has what seems to them an unpleasant taste. Most basic beliefs and attitudes are established in childhood. One example is the general attitude towards drugs that a member of the public has. This attitude varies from positive to negative in a specific population. In general, it is very difficult to influence these attitudes by a brief communication. However, everyone changes their attitudes gradually as a result of their own experiences and from external information. The stability of general attitudes can be regarded as an effect of the many relationships these attitudes have on the individual’s many other attitudes and beliefs. It can be very difficult to change an attitude which is related to many other attitudes or beliefs. These may have to be altered simultaneously in order to achieve the ‘desired’ attitudinal change, seen from the perspective of an information sender (Newcomb, Turner and Converse l965: 118) Cultural codes for conduct – norms – can be regarded as a type of attitude. Such norms restrict most behaviour in a society to actions which are regarded as ‘approved’ by the culture. The approved action may vary between countries and over time in a single country. For example, in the drug sector, norms of prescribing can vary between countries and over time in a single country (Chapter 14). In social psychology, a lot of research has been undertaken with the aim of understanding how norms are established. Twenty years ago most researchers believed that norms were set by a passive process and the group had norms which the individual had to follow (this might be called the majority influence model, Paicheler 1988 and Lilja et al. 1997: 62–65). Today, most social psychology researchers believe that the individual constructs ‘their norms’ when deciding to which group they belong. The individual separates the ‘ingroup norms’, i.e., the norms of the group to which they think they belong and which they

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try to follow, and the ‘out-group norms’, i.e., the norms of other groups to which they do not belong and which they do not accept. This is what might be expected according to the social identity model (Terry et al. 1999). For example, an individual who identifies himself as a believer of traditional medicines will find it much easier to accept messages from other people they know believe in traditional medicines. They will be more sceptical of messages from people who regard themselves as being critical of traditional medicines. If beliefs and attitudes to drugs are influenced by the opinions of relatives and friends, it then becomes important to study in greater detail these social networks. However, we still have only a limited knowledge of the social networks the general public uses when falling sick. From the study of other networks we can conclude that networks are different in different parts of a country. People living in a traditional rural community have quite a different network from those in an urban area, because the networks reflect their information needs, which often differ considerably (Davidson 1983 and Chapter 15).

1.11 Summary In this chapter a number of different themes have been discussed. First, economic development was considered, based on three different models – modernization theories, dependency models and social group models. Each of these models can help us to understand the great variation in economic development we find in the world today. System analysis was recommended as a tool for model building of social systems. The central concepts were ‘system’ and ‘the environment of the system’. A system was defined as a set of components which are mutually dependent. This meant that almost everything could be regarded as a system. The ‘environment’ was defined to include all factors which influence the system, but are not to any significant extent influenced by it. It was argued that the efficiency of any system could be increased by considering its environment, when deciding the organization of the system. The actors of the drug system were then described. Their relative power was found to vary between countries because of organizational, economic, technological and historical factors. In system analysis, evaluations are important. Was the expected positive result of the intervention achieved (an outcome analysis)? How were the results achieved (a process analysis)? Was this the optimal organization of the intervention? If possible, a combination of an outcome and process analysis might give a valuable information base for the development of better programmes in the future. In any evaluation the goals and the evaluation dimensions have to be specified before starting the data collection stage. In social constructionism the analysis focuses on ‘the system of thoughts, expectations and feelings towards a problem’ as seen by a group of individuals. A social constructionist study might be directed either towards a group of patients or towards a group of health professionals. If the health professionals know the social constructs of a group of patients with a specific medical disorder it is much easier to provide the information the patients need and want. We might also expect the information effects might be more significant if the social constructs are known by the information sender, in comparison to a situation in which these constructs are not known by the sender. The actor–spectator model was presented. According to this model an observer uses ‘personality’ as a way of explaining the behaviour of an actor. But the actor himself explains their behaviour in terms of the situational factors they are facing. These differences

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in perspective help us to understand why observers and actors live in different cognitive ‘worlds’. However, when communicating, it is necessary for health professionals and patients to overcome, as far as possible, any barriers and to achieve at least a partial and shared understanding of the patient’s problem. Analysis of the decision-making processes was seen as central to a deeper understanding of the drug system. A distinction was made between repetitive and non-repetitive decisionmaking processes. The balance model, how attitudes and beliefs were supposed to be changed, was presented. It was noted that it is very difficult to change an attitude which is related to many other attitudes or beliefs. Also, it is much easier to change a specific attitude than a general attitude.

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Stekelenburg, J., Jager, B.E., Kolk, P.R., Vesten, E.H.M.N., van der Kwaaak, A. and Wolffers, I.N., Health care seeking behaviour and utilisation of traditional healers in Kalabo, Zambia. Health Policy, 2005, 71: 67–81. Svobodny, P., Hnilicov´a, H., Janeckov´a, H., Kr´ısov´a, E., et al., Continuity and discontinuity of health care in the Czech lands during two centuries (1800–2000). Hygiea Internationalis – An in interdisciplinary journal for the history of Public Health, 2004, 4(1): 82–106. Szreter, S., Health, economic, state and society in modern Britain: the long-run perspective . Hygiea Internationalis – An interdisciplinary journal for the history of Public Health, 2004, 4(1):205–226. Tan, M.L., The meanings of medicines: examples from the Phillipines. In Etkin, N.L. and Tan, M.L. (eds.), Medicines: Meanings and Contexts. Amsterdam: HAIN, 1994: 69–81. Terry, D.J., Hogg, M.A. and White, K.M., The theory of planned behaviour: self-identity, social identity and group norms. Br. J. Social Psychology, 1999, 38:225–244. Traulsen, J.M. and Almarsdottir, A.B., Pharmaceutical policy and lay public. Pharm. World Sci., 2005, 27: 273–277. Umeh, J.C., Freeman, R.A., Garner, D.D. and Blevins, D.E., Attitudes of Nigerian physicians toward a National Health Service. Soc. Sci. Med., 1986, 23:701–708. Vuorenkoski, L., Toiviainen, H. and Hemminki, E., Drug reimbursement in Finland – a case of explicit prioritising in special categories. Health Policy, 2003, 66: 169–177. Wagner, W. and Hayes, N., Everyday Discourse and Common Sense. The Theory of Social Representations. Hampshire and New York: Palgrave, MacMillan, 2005. Walker, M.J., Dirty Medicine – Science, Big Business and the Assaults on Natural Health Care. London: Slingshot Publications, 1994 Wang, H., Social change and its potential impacts on Chinese population health. Hygiea Internationalis – An in interdisciplinary journal for the history of Public Health, 2004, 4(1): 109–141. Washer, P. and Jofe, H., The hospital “superbug”: social representations of MRSA. Soc. Sci. Med., 2006, 63: 2141–2152. Wirtz, V., Cribb, A. and Barber, N., Reimbursement decisions in health policy-extending our understanding of the elements of decision-making. Health Policy, 2005, 73: 330–338.

2 Historical perspective of drug research and diffusion

This chapter deals with the history of drugs from 1500 AD to the present day. Its aim is to provide a historical and sociological perspective of how new drugs were developed and adopted during this period of time. The description has a European and North American bias. This is because there are only a few publications which have focused on the history of medicine and medical care outside Europe and North America. The history of drugs is analyzed by dividing the selected time span into six separate stages. Of course this division oversimplifies the historical processes, but it is hoped that this will make the social structure of each stage clearer to the reader.

2.1 The period of folk medicine In all parts of the world people used the herbs and the plants available to them. This means that we find a great variation between countries and cultures in the medicines used and the indications for their use. Also, drugs often complemented one another and were used in combination with other treatment methods. We might here make a distinction between the treatments used in the family and the treatments which required a specialist, a healer or a shaman.

2.2 The merchant period (1500 AD to the end of the eighteenth century) During this period each drug often had a wide range of uses. Rich patients took many different medicaments, frequently more than 20 drugs daily, when they had a serious illness (Haggard 1946: 350–351). Each of these drugs could include numerous ingredients. For Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

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example, the popular drug theriac contained some 37 to 67 different ingredients (Haggard 1946: 353). The main active ingredient, which might explain its effects and its popularity, was opium (Berman 1970: 12). However, such intensive drug treatment could only be afforded by the very rich. Poor patients probably took only a few drugs. The most popular drugs at the beginning of the merchant period varied considerably depending on how long they had been used as drugs and from where they originated. A significant number first appeared in the periods of high culture in Greece, Rome and Arabia. Many of the most valued were imported from Asia, e.g., pepper, aloe, camphor and opium. Geographical discoveries led to the introduction of new drugs into Europe. Tobacco, tea and coffee are examples and they were all marketed initially for treatment purposes (Inglis 1975). However, healthy people also started to use them for pleasure and as a result their status changed from drugs to being a part of the ordinary diet. Other drugs kept their medicinal characteristics for a long period of time. For example, guaiac and sarsaparilla were brought to Europe from South America and used in the treatment of syphilis during the sixteenth century. Cinchona (which has quinine as the active ingredient) was imported in 1632 from Peru and became a general remedy against fever (Haggard 1946: 37, Issekutz 1971: 45, Honigsbaum 2001). Drug ‘research’ was also performed. People with different educational backgrounds came up with new drug compositions. A new formulation was first marketed by the inventor and there seems to have been a fairly strong association between research and marketing. A successful and dramatic (life-saving) treatment resulting from the use of a drug on a famous patient could lead quickly to the drug becoming well known. In general it was assumed that it was the drug which had caused the recovery of the person and, accordingly, it was concluded to be of great medical value. When a drug treatment failed neither the inventor nor the prescriber informed the general public. Most of what can be described as drug research probably took place in the European royal courts (Haggard 1946: 53, 123). Universities were seldom involved in empirical studies to discover new drugs because research and education in the universities were based on the premise that the classical medical writers and their views on medicine were the only legitimate base for evaluating drugs. By the beginning of the merchant period ‘experience’ was already accepted as a foundation for the evaluation of drugs. However, this concept had a different meaning from today’s. Experience meant the prescribing traditions developed over time. Reports of clinical experiments were seldom published. The first report of a clinical experiment is from the seventeenth century by Par´e. He was a barber who started his career in the medical service of the army. At this time gunshot wounds, according to traditional thinking, were best handled by hot oils. Par´e also thought this way initially. However, on one occasion he ran out of oil and had to resort to other remedies. He then compared the results from the two different treatments he used. His observations indicated that patients who had had the replacement treatment suffered less and recovered in a shorter period of time (Haggard 1946: 40). In the eighteenth century, minor experiments involving new drug preparations were probably undertaken more often than we now think. For example, in the UK, a former librarian, Edward Stone, tested the effects of willow bark on patients in his neighbourhood suffering from ague (now known as malaria) over a period of five years. The bark significantly reduced the symptoms of malaria, mainly the high fever. Stone thought he had found a proven remedy for malaria. Today the effects of the willow bark on fever are attributed to the salicylic acid content of the bark (Jefferies, 2005: 25–34).

2.2 THE MERCHANT PERIOD (1500 AD TO THE END OF THE EIGHTEENTH CENTURY)

41

In eighteenth century Europe data referring to treatment results was collected more systematically when vaccines were being developed than ever before. ‘Inoculation’ had been introduced in the 1720s by the wife of the former British ambassador to Turkey, who had observed the practice of infecting minor wounds with pus taken from smallpox sores in order to prevent smallpox infection. The inoculated person developed a mild form of smallpox, but acquired protection against any further infection. The introduction of inoculation in Britain (and in the US where it was begun a short time later) was strongly opposed, but this did not hinder the spread of the practice and, indeed, probably contributed to more careful observations and descriptions of the treatment and the results than might otherwise have occurred. One problem with inoculation was that an inoculated person could cause an epidemic of smallpox. In order for inoculation to be effective almost everyone in the community had to be treated (Haggard 1946: 231–242). This was one of the reasons why vaccination had replaced inoculation by the end of the eighteenth century. Based on a folk tradition in his home village that dairy maids who had contracted cowpox could not get smallpox, Edward Jenner introduced vaccination against smallpox in 1793. The vaccine contains the ‘live’ vaccinia virus, a virus related to smallpox. This can be compared with inoculation when the ‘real’ smallpox virus is used. However, even vaccination aroused considerable opposition which, in combination with the fact that it was a preventive measure requiring specially trained vaccinators, meant that it took almost a century for the practice to become accepted (Haggard 1946: 239 and Dowling 1977: 4) A rather sophisticated experiment was reported by Withering in 1785. He described the results of 163 patients treated with digitalis and included information about those cases where the treatment had failed (Berman 1970: 4–5, Ackerknecht 1970: 56–57). However, control groups were not used in these early therapeutic experiments. Animal drug tests were first performed in the seventeenth century, but such experiments gave only limited information about the medical value of the drugs because tests of this kind took place only occasionally and even then just on single animals (Ackerknecht 1970: 55). The few reports of animal experiments had almost no impact on drug prescribing and drug use in practice. If the effects of a new drug could be ‘explained’ by prevailing medical views, then the drug had a fair chance of being accepted for general use. Otherwise, the likelihood of it being used was considerably lower. The ‘humoral theory’ held a dominant position among the medical profession at the beginning of the merchant period. According to this theory, health was a state in which the body fluids were in balance. Sickness was caused by a change in the relative volume of the body fluids. The aim of any treatment was to get the body fluids back to the right proportions. Since drugs like laxatives and emetics were in line with such reasoning this explains their wide acceptance by physicians. The humoral theory had been much criticized at the beginning of the merchant period by Paracelsus (1493–1541), who also decried the poly-therapy treatments used at that time. Instead, he argued that each disease had an optimal remedy. He considered that empirical studies observing the effects of drugs could be used to find these remedies. Paracelsus’ own beliefs governed his search for new drugs. For example, he accepted the traditional idea that God had given signs to help people find the optimal drug for a disease. The external appearance of a drug could be just such a sign thus leading to the conclusion that, for example, yellow root could be used for the treatment of jaundice. Paracelsus is perhaps most well known because he introduced and recommended the use of inorganic substances like salts of mercury, gold and antimony as drugs. The recommended

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dosages were often high enough to cause acute poisoning. However, if the disease was serious, as often was the case, the side effects were disregarded (Haggard 1946: 362–366, Dann 1975: 39). The dominant medical thinking in the seventeenth and eighteenth centuries belonged to the ‘iatrochemistry school’, whose founder was Jan Baptist von Helmont (1577–1644). According to this school, diseases were caused by imbalances of acidic and alkaline substances in the body. This led to two classes of diseases – those which caused an excess of acid and those which caused an excess of alkaline substances. For drugs to be effective they had to counteract these excesses. For example, acids were used to treat diseases which were assumed to be caused by an excess of alkaline substances. During the merchant period there were also other popular medical beliefs influencing research and the diffusion of drugs which cannot be classified as belonging to any specific ‘school’. For example, it was generally believed that only substances which had a taste and a smell could be of significant medical value (Ackerknecht 1970: 57). The medical opinions described above are those found in written sources. This means that they were the views accepted among the upper classes in society. We do not, in fact, know much about the drug use of other social groups. However, it seems that the poorer members of society relied on folk medicine based on easily available raw drug materials, such as locally found treatments. In some European countries, as in Sweden, the churches, in association with Sunday services, were an important source of ‘independent’ drug information in the eighteenth and the first half of the ninteenth centuries (Clark Nelson 1986). Also, in the Nordic European countries at about the same time, the medical authorities wrote official pamphlets and official medical textbooks for the educated part of the population to facilitate the handling of common medical conditions when no doctor was available. Of course the absence of immediate medical support was often the case in the lowly populated Nordic lands (Clark Nelson 1986). Oral communication was the most common method of spreading information about drugs during the merchant period. However, from the late eighteenth century onward we can find throughout Europe journal advertisements for what have been called ‘patent medicines’. Of course in countries like the UK such advertisements were more common because of the many newspapers then published there (Turner 1965, Neve 1987, Quetel 1992: 66–93). However, the concept ‘patent medicine’ is a discourse which has had different meanings in different historical periods. Another problem is that the concept was given a strong negative connotation by the medical profession during the nineteenth century, something which remains with us still today. It is in practice very difficult to separate the medical treatments of the orthodox medical profession (who later became legitimate ‘physicians’) from those of alternative medical practitioners in the seventeenth and the eighteenth centuries. This is because the two groups often used preparations with similar contents and published similar pamphlets in which their own medicine was said to give excellent therapeutic results (Porter 1987). However, conflict between the two was often intense. For the consumer, the alternative practitioners offered a convenient service. However, the orthodox medical profession denounced the activities of alternative medical practitioners as low quality and highly priced (Neve 1987). Among the alternative practitioners we can at this time include the druggist who often sold his preparations without any prescription (Loudon 1987). It was not just specialist druggists who sold ‘patent medicines’, but also booksellers and printers in the UK until the 1820s (Loudon 1987).

2.2 THE MERCHANT PERIOD (1500 AD TO THE END OF THE EIGHTEENTH CENTURY)

43

Those who practised medicine in the UK at the end of the eighteenth century without any formal medical education argued that they based their practice on empirical knowledge, i.e., what worked in practice. They maintained that the orthodox medical practitioners used theories unsupported by empirical facts. The alternative practitioners said that alternative treatments were a type of patient ‘self-help’ and rejected the authoritarian medicalization of social life in which the orthodox medical practitioners believed. Thus, alternative medicine had at this time an anti-elitist bias (Neve 1987). Of course this line of reasoning was opposed by the university trained physicians. However, in the eighteenth century, the authority of the university trained physicians was much weaker than it was eventually to become (Porter 1987). At the end of the eighteenth and the beginning of the nineteenth century, the conflict between the alternative practitioners and orthodox medical professionals altered. Complete philosophies of alternative medicine were developed, e.g., homeopathic medicine, Thompsonian herbal medicine (Neve 1987, Loudon 1987, Brown 1987). In the UK the medical practitioners raged constantly against ‘the evils of quackery’ (Loudon 1987). There was a social division in this quarrel. The alternative practitioners and the druggists seem to have focused on the poorer parts of the UK population. It was those who were well off who frequented the orthodox medical men for their treatments (Loudon 1987). In Europe the medical professions introduced standard education and stringent examinations during the nineteenth century. Together with the appearance of professional bodies, these changes strengthened the power of the medical professions (Loudon 1987). In Europe the medical professionals opposed the sale of uncontrolled patent medicines during the nineteenth century and at the beginning of the twentieth century. For example, the professionals attacked the advertising of medicines (Morner and Thunberg 1904, Brown 1987). However, it is important to remember that conflicts between orthodox medicine and the alternative medicine philosophies differed between countries depending on cultural, economic and political factors. Most publications about this dispute have concentrated entirely on what went on in the UK and the US. We know considerably less about developments in other European countries and next-to-nothing about what was taking place in the pharmaceutical systems outside Europe. For example, in Northern Europe the conflict between orthodox and alternative medicine did not surface until the very end of the nineteenth century, far later than in the UK. Publications could also contribute to the wider acceptance of new drugs. From the seventeenth century onwards drugs which were officially accepted by national medical authorities were often included in an official drug handbook (usually called a ‘pharmacopoeia’, Dann 1975: 55–64). The introduction of pharmacopoeias contributed to a rationalization of drug therapy. Firstly, to compile such a publication it was necessary to gather together a group of specialists who discussed and formulated arguments about why they supported a specific drug or not. Secondly, in the pharmacopoeias the composition of each drug was formulated in detail, thus leading to the standardization of drug therapies. Accordingly, it became much easier to observe the therapeutic effects of a specific drug than was the case earlier, when its composition varied. Thirdly, drug production could be transferred from the physicians to the pharmacies, thus giving physicians more time to observe therapeutic effects. Also, unofficial handbooks and commercial pamphlets provided more information about new drugs. Often the inventor kept the exact composition a business secret to assure monopoly rights. Sometimes governments bought these secrets from the inventors and

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made the composition public in order to encourage more widespread use of the supposedly effective drug. Most of the new drugs were expensive and their use was restricted to the upper classes. On occasion, lists of inexpensive drugs, presumed to be effective, were published by national governments in the form of ‘Pharmacopoeia Pauperum’ (similar to the essential drug lists found today in many countries).

2.3 The chemical period (the nineteenth century) Medical thinking changed considerably during the nineteenth century. In the early 1800s ‘grand’ theories, according to which all diseases were explained by a single medical model, were still held. This meant it was necessary to formulate the model in a very abstract way, making it extremely difficult to test it empirically. ‘Ad hoc’ explanations could always be put forward to support the model. During the nineteenth century, however, a more mechanistic approach became widely accepted. The human body was thought of as a machine and diseases as technical failures of the machine. According to this thinking, all diseases could not be explained by the same common factors and each disease had to be treated separately. The disease-causing mechanism could be found by analyzing in detail what happens in the human body. This resulted in anatomy, pathology and physiology becoming important disciplines in the search for these disease mechanisms. In 1804, Friedrich Serturner extracted morphine from opium. This became an important model for drug research during the chemical period. A number of chemicals were purified during the first half of the century from natural sources, e.g., strychnine, quinine, caffeine, nicotine, atropine, codeine, papaverine. This enabled patients to be given more precise dosages, resulting in enhanced medical benefits. It has been argued that this early innovative period was partly a result of the Napoleonic Wars at the beginning of the nineteenth century. The British Royal Navy blockaded France and French researchers were encouraged to find new drugs for malaria because the blockade resulted in a shortage of cinchona bark, then the common treatment for malaria (Jeffreys 2005: 37–38). In the US, Smith, Kline and French became a significant drug company during the American Civil War, when the demand for drugs and medical utilities exploded (Healy 1997: 17–18). The importance of wars in ‘promoting’ drug production and research, particularly the First and Second World Wars, will be noted later. The introduction of anaesthetics is described fully in medical history and illustrates how a new group of drugs was developed in this century. Although traditionally both alcohol and opium had been used, in most operations no anaesthetic whatsoever was employed. At the beginning of the nineteenth century nitrous oxide gas was first used in dentistry. However, it occasionally caused deaths, which explains why it fell out of use (Haggard 1946: 103–101). In 1846, ether was introduced in the US and in the following year chloroform in Scotland. The fact that both drugs were launched at the same time was more than a coincidence. It is a well-known fact that, once a new drug for a specific condition is introduced, a similar chemical for the same condition is often produced by someone else who has been working in the same area as the original discoverer. These new anaesthetics were marketed by the researchers via professional lectures and pamphlets. However, both drugs (ether in the US and chloroform in the UK) aroused opposition in the church and parts of the medical profession. Those opposed argued that anaesthetics

2.3 THE CHEMICAL PERIOD (THE NINETEENTH CENTURY)

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caused intoxication and unconsciousness in the same way as alcohol. However, the general public accepted them, especially after it became known that Queen Victoria had agreed to the use of chloroform (Haggard 1946: 103–123). Once there was this public acceptance, all opposition disappeared. Later, in 1879, the first local anaesthetic, cocaine, was introduced. In 1905, the German drug firm Hoechst was able to replace the expensive cocaine by the first synthetic local anaesthetic, novocain. A small German drug industry had been established by the eighteenth century in the university town of Halle. The firm there marketed, using commercial pamphlets, ready-made drugs based on secret compositions (Kaiser 1984). In the nineteenth century, many German firms began the industrial production of drugs, having previously been engaged in retail pharmacy or the dye industry (Schadewaldt 1965). During most of the chemical period, German drug companies did not have research and development (R&D) departments of the type one sees today. The products were developed chemically and tested pharmacologically in German universities. If promising therapeutic effects were observed, then a drug company established production of the new synthesized chemical. It was not until the end of the nineteenth century that the first research department was established in a drug company (Cowen 1970: 75–60). In 1890 the German company Bayer set up a research laboratory in which the lab was divided into two sections – a pharmaceutical group (which came up with ideas for new drugs) and a pharmacology group (which tested the preparations). This new organizational structure became very successful. Acetyl salicylic acid (ASA) was found to lead to less stomach problems than the salicylic acid preparation previously used in the treatment of rheumatism (Jeffreys, 2005: 66–74). Starting in 1899, ASA or aspirin became the most widely used drug in the world within 15 years (Jeffreys 2005: 77–96). A number of synthetic drug substances were introduced by the German drug industry during the nineteenth century, e.g., chlorohydrate (first synthesized in 1832, but not used for therapeutic purposes until 30 years later, Issekutz 1971: 71), salicylic acid (introduced in therapy in 1875 but first synthesized in 1838, Issekutz 1971: 50) and phenazon (introduced in 1884, Issekutz 1971: 53). Drug companies now sought to manufacture substances which had the same therapeutic effects as natural substances, but which were cheaper to produce. For example, much of their effort was spent on the search for medical equivalents to the expensive drug, quinine (the price of quinine did not fall until new cinchona plantations were established in Java in the 1870s, Weatherall 1986). However, the synthesis of homatropin from atropine (1880) and codeine from morphine (1886) indicated that it would be possible to achieve new therapeutic effects by chemical synthesis. From that time on, the drug companies concentrated on dicovering drugs for diseases against which there was then no effective treatment (Cowen 1970: 74). A new chemical compound was often tested on a few rabbits to see if it had harmful effects or not. If the drug was tolerated by the rabbits it was assumed that humans could also safely take the drug. Pain-relieving drugs, which were popular at that time, could be tried out on healthy volunteers, perhaps the researchers themselves. However, drugs which were intended for use in the treatment of a specific disease had to be tested directly on a number of patients who had the disease. No sophisticated statistical methods were used in assessing the effects of medication. Mostly, a satisfactory percentage of cured patients was noted. A well-known physician would be asked by a drug company to publish his experiences with a new drug in his clinic.

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These descriptions were often formulated in general terms and seldom included statistical data other than the percentage of the treated patients cured. Even if comparisons between treatments were undertaken, this did not normally change prescribing habits. For example, it had been observed in 1835 that bleeding, a popular remedy then, had little or no effect on the course of pneumonia. Despite this, medical textbooks continued to recommend this treatment right up to the twentieth century (Dowling 1972). The use of alkaloids as drugs became popular in this period. Being highly poisonous substances, purity was of great importance to achieve optimal medical benefits. The cost of setting-up its own purification equipment was often too high for a pharmacy to bear. This made it inevitable that the production of these chemicals was transferred to the drug industry (Cowen 1970: 74). The production of ready-made drugs was then undertaken by the pharmacies using these purified raw drug materials. The majority of drugs were sold in Europe to the general public without being prescribed. Customers usually asked for well-known compositions, which were produced in large quantities and stored in the pharmacies. In serious cases physicians were contacted if available. This often resulted in one individually prescribed drug for a specific patient. The pharmacies produced each of these drugs to order (so called ex tempore preparations). Drug consumption was probably much more uneven than it is today in Europe. The number of drugs consumed per year was probably many times higher among the upper urban classes than among the poor rural classes (similar to the case in many developing countries today). An example of a popular OTC drug in Europe and North America from the mid-nineteenth century onward was cod liver oil. It was used for many different medical conditions and also for ‘general weakness’. It was also supposed to provide resistance to serious medical conditions such as tuberculosis. It has been found that 20 per cent of all patients in London hospitals were prescribed this preparation in the middle of the nineteenth century (Crellin 2004: 47–50). From the 1920s, this preparation was supported by a new argument in advertisements. Now the vitamin content (especially vitamin D) was given as the main reason to take cod liver oil. However, it is interesting to note that today, 100 years on, it is the content of essential fatty acids which help the functions of the body cells and are supposed to prevent cardiovascular medical problems. In countries outside Europe and North America there were few pharmacies. The merchants selling drugs probably varied. In the big towns there may have been pharmacies similar to those found in Europe. The colonial rulers were supported with medicines and health care facilities similar to those to which they were accustomed in Europe. However, the vast majority took mainly herbal drugs sold by local shops. From the middle of the nineteenth century, new information techniques changed the way in which people learned about new drugs. Advertisements were introduced soon after national newspapers with large readerships appeared. It became possible for a drug company to reach a large market with the outlay of only a limited sum of money. These advertisements often exaggerated the medical effects of the drugs being promoted. In the US the number of ‘patent drugs’ had increased considerably by the end of the first half of the nineteenth century. This rise in the number of patent drugs reflected the increase in the number of newspapers in which the drugs were advertised (Healy 1997: 16). A similar trend is also to be found in Europe in the same period. The mortality rates for the most common diseases were not affected by the drugs introduced during the chemical period. However, the increased knowledge of pathology,

2.4 THE ANIMAL TESTING PERIOD (FROM 1900 TO THE END OF THE 1930s)

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physiology and bacteriology made it possible to diagnose and determine the mechanisms involved in the spread of the most common diseases among the population. Preventive reforms, such as improvements in sanitation and nutrition and the isolation of bacterial carriers, could be more effectively introduced and evaluated. The mortality rates fell as a result (Dowling 1977: 20–21).

2.4 The animal testing period (from 1900 to the end of the 1930s) Animals were occasionally used during the nineteenth century to screen potential chemicals for the most favourable therapeutic effect. However, it was felt that there was no real need for animal tests. After the discovery of bacteria by Pasteur in 1875 there was an extensive search for drugs with antibacterial effects and it was believed that in vitro tests were sufficient to indicate what happened to the drug in the body. The German researcher, Paul Ehrlich, was one of the first to use animals in a systematic way to discover the antibacterial activities of different chemicals. He assumed that animal tests would be better than in vitro tests in indicating the pharmacological effects of drugs in the human body. Ehrlich administered different drug chemicals to syphilis-infected mice, rats and rabbits and then observed the results of the treatment. The 606th chemical to be tested was found to be effective and was later called salvarsan. The first report of patients treated with salvarsan was published in 1910. It later became a frequently used remedy in the treatment of syphilis. The key to the success of the research seems to have been the fact that Ehrlich was able to base his search on a technique developed earlier. This technique enabled Ehrlich to transfer the disease-causing syphilis bacteria to laboratory animals, which could be used in the tests instead of real patients (Foster 1970). During the First World War, the subsidiaries of German pharmaceutical companies were seized and confiscated by the US government for strategic and military reasons. The knowledge contained within these firms was then sold to US pharmaceutical drug companies, which strengthened their commercial position after the war (Noble 1977: 6, Healy 1997: 20). Similar seizures and confiscations occurred in the Second World War, when a lot of research data from German drug companies was transferred to the drug companies of the Allies. In the 1910s and 1920s the drug industry continued to search for other chemotherapeutic drugs, but without the same success (Dowling 1977: 106). Drugs with antibacterial activity were often found to be too toxic for human use. The range between therapeutic and toxic dosages was too narrow. However, a few urinary antiseptics and antimalaria drugs became available during these years (Foster 1970, Dowling 1977: 105). Vaccination (active immunization) and serum therapy (passive immunization) were developed and used against a number of important infectious diseases from the turn of the century until the end of the 1930s. Vaccination could be given as a preventive measure, whilst those already affected could be given serum therapy. Serums against diphtheria, tetanus, meningococcal meningitis, scarlet fever and pneumonia were developed. However, serum therapy never became widely accepted because of the side effects (allergic reactions), the variable therapeutic results, the high treatment costs, the difficulties involved in administering the regimens and the absence of reliable clinical studies (Dowling 1972 and 1977: 36–54).

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The use of animals became the standard method of searching for medical benefits. In the search for treatments for infectious diseases, laboratory animals were inoculated. The general rule was that the infection should be strong enough to kill all the animals in the untreated control group. A chemical which was supposed to be effective against the disease was given to some of the animals and a chemical which was already in clinical use to the others. The mortality rates and the reasons for the deaths could then be compared. This method was used by Domagk in research leading to the discovery of the first sulfa drug (the findings were published in 1935). Domagk is said to have been interested in these types of substances because one of the German drug companies had an oversupply of sulfa chemicals. Isolated animal organs were introduced into drug research at the end of the nineteenth century, but did not become popular until after the end of the First World War (Wade 1986). This made it possible to study specific pharmacological effects. In addition, the study of isolated organs permitted the measurement of the effects in quantitative terms. This became important in research leading to the production of hormones for therapeutic use. The production process was based on the purification of animal organs and not on chemical synthesis. The purified hormones had to be tested on isolated animal organs because their activities varied considerably depending on the specific purification process. From a therapeutic point of view, insulin was perhaps the most important of the new hormones discovered. In 1922 it was used for the first time in treating diabetes (Murray 1969). Most vitamins were isolated and released on the market in the period between the two World Wars. The specific effects of each vitamin were studied by feeding animals a diet which did not contain the specific vitamin under investigation (Weatherall 1987). The use of control groups in clinical trials had been introduced in the 1830s (Ackerknecht 1970: 57). However, a matching technique was applied in a clinical trial for the first time in 1924. The original sample of tuberculosis patients was divided into two groups, taking into consideration the severity of the disease. One of the patients in each pair who had the same degree of severity of the disease was given an intravenous injection of a supposedly effective gold salt and the other an injection of distilled water. The study indicated that the injections of the gold salts were ineffective in the treatment of tuberculosis (Dowling 1977: 77). However, randomized drug trials did not appear until after the Second World War (for a historical description of how the clinical trials developed see Healy 1997: 79–95). The US and UK held leading positions in the introduction of scientific clinical trials even though the drugs had first been studied in German laboratories. This may be explained by the fact that university hospitals with clinical research departments were first introduced in the US and UK, thus making it easier to undertake studies involving a high number of patients. In Germany, clinical researchers only had access to the few patients they treated themselves. Cooperation between pure scientists and clinical researchers also seems to have been more common in the US and UK than in Germany at that time (Dowling 1977: 120). A number of non-profit making medical research laboratories were established during the early decades of the twentieth century in the US and UK, to develop and evaluate vaccination and serum treatment programmes. These laboratories had a staff of chemists, bacteriologists and clinicians. Effective interdisciplinary networks were established for the first time on a rather large scale. This partly contributed to the leading position these countries attained after the Second World War. The laboratories were not isolated, but cooperated with the drug industry and hospitals, thus making them even more efficient (Dowling 1972 and Swann 1985).

2.5 THE DRUG INNOVATION PERIOD (FROM 1940 TO 1964)

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New legislation banning the marketing of secret drugs was introduced in many countries during this period. The laws also included rather specific drug quality norms. The norms were technical in nature reflecting experiences in Great Britain and France during the nineteenth century (Stieb 1970: 23–24). Many of the technical quality norms were included in national pharmacopoeias and plans were made to revise the norms every decade (Whittet 1970: 28 and Sonnedecker 1970: 97). The first tablet machine was invented in 1843. However, it was not until the beginning of the twentieth century that technology became sophisticated enough to gain general acceptance among drug producers and users. At the beginning of the twentieth century, some important institutional changes in the medical system occurred in the UK. During the nineteenth century, so-called ‘friendly societies’ had been started in the UK. These voluntary organizations offered health insurance and health care to professional groups or local areas. However, to get a system which had a wider population basis, including all those employed, a National Health Insurance Act was introduced in 1911. A number of factors contributed to the introduction of this reform. At the beginning of the twentieth century Britain was in a period of economic depression, with large scale unemployment, poverty and social unrest. Also, Britain’s defeat in the Boer War had led to the view that a more successful future for the country required a more active state, i.e., the laissez faire principle in social matters had to be abandoned. After the Liberal Party victory in the 1906 election, a massive reform programme was introduced (Abraham, 1995: 46). The new legislation of 1911 stopped the sales of medicines by physicians, which was widespread. After successful lobbing by the Pharmaceutical Society, community pharmacies were contracted to deliver, under contracted prices, medicines to insured patients in open health care (Andersson 2005). In 1948 the system was changed into the National Health Service (NHS) and that covered the entire population (Andersson 2005). The NHS system can be regarded as the prototype for health insurance systems introduced throughout Europe after the Second World War. In many countries, the period between the two World Wars saw the transfer of production of ready-made drugs from pharmacies to the drug industry. After the Second World War drugs often bought or prescribed for patients came in the form of industrially produced packages under a trade name.

2.5 The drug innovation period (from 1940 to 1964) A great number of medically valuable drugs were launched in the period 1940–1964. A number of factors may explain why so many appeared at just this time. Firstly, there were scientific and organizational reasons. Secondly, drug research was no longer restricted to Germany. Thirdly, as a result of the war considerable resources were allocated by national governments to drug research. For example, although the therapeutic potential of penicillin had been discovered in England in the late 1930s, the research was transferred by the Allies to Canada and the US, since scientific resources were considered inadequate in Britain during the war (Rose and Rose 1970: 63). Penicillin was the first of the drugs discovered during the innovation period and can also be seen as a symbol of that time. Medically it became an enormous success. The mortality rate was reduced drastically because of this drug alone. This success and similar successes of the sulfa drugs launched in the 1940s contributed to a state of therapeutic enthusiasm

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among professionals and laymen. For example, it has been calculated that the fatality rate for pneumonia in a typical hospital fell from 31 per cent at the beginning of the century, when no specific treatment was available, to 17 per cent (when serum therapy was applied), to 12 per cent (when sulfonamides were used) and to 5 per cent as the result of penicillin (Dowling 1972). Introduction of the new technology appeared to solve most of the important health problems facing European countries. So many other medically important drugs were developed in this period: antibiotics, psychotropics (Healy 1997: 143–169, Valenstein 1998: 20–57), antihistamines, cytostatic drugs and oral contraceptives (De Haen 1972). Each of these drug groups had its own specific channels of invention based on better general pharmacological knowledge about the dosage levels and the pharmacological effects than during previous periods. Germany lost the Second World War during this period and the country was subsequently occupied by the Allied forces. Data about the drug research carried out by German companies during the war was collected by experts from the US and UK. This material was published and was of great significance for those engaged in drug research. For the first (and perhaps the last) time all the files of the large drug companies were made available to their competitors. Drug companies were able to use this data to speed up their research processes. Each drug company now marketed its own ready-made drugs on a worldwide basis. The big multinational drug companies established their own subsidiaries in foreign countries. The US acquired a leading position in drug research and exporting, when measured, for example, in terms of the number of new drug chemicals marketed by each country, a position achieved through considerable spending on research. Many drug companies developed chemical modifications of commercially successful drugs. Such modifications were called ‘me-too drugs’ and contributed to a significant decrease in the life span of new drugs, which was now measured at around five to ten years. In Europe many of the new drugs became prescription-only medicines. This was a result of a debate in the British Parliament and the subsequent 1947 Penicillin Act. This regulation replaced the wartime restrictions in existence because of limited supplies of penicillin. The risk of resistance and other side effects was regarded as too high to allow a general sale of penicillin and other antibiotics. The other new drugs were put in the same class of prescription-only drugs (Crellin, 2004: 208). However, there was a great variation between countries as to which were prescription drugs. The change of classification of a drug to prescription only also meant alterations in the way it was marketed. Drug companies could now concentrate on influencing the prescription habits of individual physicians. In Europe and North America, drug representatives were used to promote new drugs by calling upon physicians. Advertisements and mail information were combined with the new media. However, physicians were more influenced by the opinions of their colleagues (Coleman, Katz and Menzel 1966, Chapter 14). Rather than being used cautiously, the new antibiotics and chemotherapeutics were employed excessively from the start. They were liberally prescribed for various conditions for which their medicinal value had never been established (Dowling 1972). As a result, many resistant strains of bacteria developed. A significant proportion of patients with infections, who had previously been treated successfully with standard antibiotics, could no longer have that treatment repeated a decade later (Dowling 1977: 112, 117, 140, 167). A number of antibiotics had to be restricted to cases where standard therapy failed because of the development of resistant bacteria. Furthermore, patients had to be carefully encouraged to complete an entire course of treatment.

2.6 THE POST-THALIDOMIDE PERIOD (1965 TO PRESENT)

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The consumption of drugs increased considerably, not only because of the introduction of new, medically important drugs, but also because of the establishment of new medical care services and national insurance systems in Europe and North America. The National Health Service in Britain became a prototype for similar systems introduced in other European countries (Chapter 4). Then, in 1961, the Thalidomide catastrophe occurred (Sjostrom and Nilsson 1972, Stephens and Brynner 2001). About 10 000 children were born severely handicapped because their mothers had taken a sedative drug, Thalidomide, during pregnancy. The general public was shocked and demanded reforms to prevent this from ever happening again. The Thalidomide tragedy was not the first big drug accident. However, earlier instances had often been restricted to one or a few countries. Further, the public in high per capita income countries was now much better educated and less hesitant about articulating its criticism of professional and government drug control. Political groups responded by reforming national control organizations. Many of the reforms put into effect after the Thalidomide accident had been discussed among professional groups for a long time, but it had been argued by more conservative elements that there was no real need for such changes. Many interest groups (industrial, professional and political) had had enough clout to block change and the pressure groups, demanding reform, lacked the influence and power to bring about alterations. Thalidomide changed all that. Now, suddenly, the status quo was no longer acceptable.

2.6 The post-Thalidomide period (1965 to present) A number of structural reforms affecting research and drug distribution were introduced progressively after the Thalidomide accident. Not all of these reforms were the direct consequence of government decision-making. The public and professional discussions which followed the tragedy also contributed to structural changes. The most easily recognized of these changes in the drug sector were:

r Countries which had no system of drug registration, i.e., government control of each drug before marketing, introduced such systems (Chapter 4).

r Systems for collecting data from physicians’ reports of side effects of drugs were introduced in most countries (Chapter 3).

r Toxicological tests on animals became a requirement prior to registration (previously animals had been mainly used in the search for therapeutic effects) (Chapter 5).

r The double-blind clinical experiment was introduced as the ideal methodology for clin-

ical trials. A new drug had to be compared with a placebo to find out if the drug was pharmacologically effective at all (Chapter 3). A company that wanted to introduce a new drug was required to employ such a method if this was practically and financially possible. Thus, the number of such clinical trials increased considerably, beginning in the 1970s. The results of the most important experiments were published. For the first time it was possible to evaluate a treatment on the basis of accurate observations of the results without regard to how the treatment was supposed to affect the disease.

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r Systems to control research plans for clinical trials were introduced. In general, national

boards of health were given powers to stop unethical or unscientific clinical trials (Chapter 5).

r Hospital drug formulary committees were established in many countries. Each committee recommended a list of drugs that should normally be used in the hospital (Chapter 14).

r Many drugs remained prescription only. In the US there had been, in the late 1950s,

a strong political movement to make most drugs non-prescription. If the Thalidomide catastrophe had not happened, such a reform might have been introduced in the US and many other countries (Healy 1997: 27).

Some of the reforms were introduced without formal legal changes, others required such alterations. It has to be remembered that there was considerable variation between countries in the specific organizational changes they made (Bruun 1982). The research strategies applied by drug companies changed in the 1970s. Screening methodology – a great number of chemicals tested on animals to search for therapeutic effects – was replaced by more theoretical approaches. New chemicals were synthesized to suit specific body receptors. More of the research resources were spent on finding receptor mechanisms and relatively less on chemical synthesis. The percentage of the researchers with a background in the biological sciences increased while the percentage of researchers with backgrounds in chemistry decreased. The number of new drug chemicals introduced annually dropped from the beginning of the 1960s. Several factors can explain this noted decrease in the number of new drugs introduced each year. The reforms introduced after the Thalidomide catastrophe lessened the risks of side effects, but resulted in an increase in the costs and time of each research project. Many drug companies reacted by concentrating their research on fewer projects and by spending more money on each project. By concentrating on a few projects the drugs developed could be of more significant medical value than their predecessors. Such drugs could achieve rapid international acceptance without massive investment in commercial information (Chapter 11). This means that the tendency for drug companies to concentrate on a few projects was probably more a consequence of the international marketing strategy they now employ than a result of the reforms introduced after Thalidomide. The costs of R&D in the drug sector all over the world have increased tremendously since the Second World War. This is also the case in individual countries,which have drug companies that develop new chemical substances for international marketing (Chapter 5). The way drug marketing is conducted has changed in the post-Thalidomide period (Chapters 11 and 12). Companies now plan their marketing activities when setting up an R&D project. Projects are designed to fit into the cognitive frameworks of the medical experts who act as national and international opinion leaders within a specific drug group. Often drug companies cooperate with such opinion leaders at the R&D stage. This can be a very effective strategy for a drug company. The introduction of the same beta-blocker in the Netherlands in the 1970s by two drug companies, one Swedish, the other Swiss, illustrates this point well. The companies had a research agreement leading to the introduction of two different drug preparations on the Dutch market on the same day. The preparations had the same chemical content and exactly the same price and were supported by the same clinical documentation. However, in spite of the product similarities the Swedish company achieved

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a 75 per cent share of the total sales. The way the Swedish company planned its research may explain its commercial success. It had cooperated at the research stage with researchers in universities and hospitals. These research partners were also important opinion leaders. The Swiss drug company had had a more closed organization, which allowed few people, apart from the company’s own personnel, to come into contact with the research project. The Swiss company chose to rely on an expensive sales campaign to convince general practitioners to prescribe their preparation. The Swedish company instead used the established professional network which they had developed during the research stage to pass on information. This latter approach was found to be much more efficient (Bodewitz 1986). In Europe and North America, from the 1970s, a number of previously prescription-only drugs became over-the-counter medicines (OTC drugs, i.e., they could be sold without a prescription). The criteria used were that the medicines were well studied and well established, with a good safety record and were approved for use in minor self-limiting conditions for OTC therapy. For example, this happened with ibuprofen preparations and dilute hydrocortisone ointments (Branstad et al. 1994). There was a number of reasons for this change (Crellin, 2004: 218–220):

r It

was a way for health insurance organizations to cut their costs, because the OTC medicines were not reimbursed.

r Drug

companies saw this as an opportunity to increase their market and their sales volumes.

r There was a ‘new consumerism’ among the general public. It was up to everybody to look

after themselves and take care of their own less serious medical conditions. The increased availability made self-treatment with OTC drugs more convenient for the individual. The OTC drugs did not require a prescription.

r As a result of the Kefauver–Harris Amendments in the US in 1962, the US medicine

control agency, the FDA, emphasized the importance of controlling both the safety and efficacy of prescription-only and OTC drugs. This resulted in the public having increased faith in registered OTC drugs. This view that both classes of drugs have to be controlled spread to other countries too, leading to an increase in the public’s trust in OTC preparations.

Some countries, such as the UK, introduced ‘P-medicines’ instead of making a drug OTC medication. This meant that the drug could be bought without a prescription, but could only be sold under the supervision of a pharmacist. In practice, P-medicines have had a much lower sales volume than OTC drugs (Crellin 2004: 220). In order to control the marketing of drugs in developing countries, the WHO established ‘the essential drugs and vaccine programme’ to encourage developing countries to restrict the number of different drugs available in the public sector. This strategy was primarily aimed at reducing the drug costs for the state and the inhabitants and thus made it possible to offer drugs to rural areas which had no effective modern drugs available (Chapter 4). International organizations helped developing countries to buy drugs by tender. This meant a number of companies were invited to provide quotations for a drug which was to be imported. Countries then selected the lowest bid of acceptable quality. They were also

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encouraged to set up domestic production facilities for drugs based on imported raw materials (Chapter 6). The problem of research into tropical diseases was also recognized. National and international programmes were established to perform such research because, from a drug company’s point of view, these activities could not be regarded as commercially profitable. However, the problem has not been solved by these new programmes because it has been calculated that only about one per cent of the new drugs developed as a result of drug research is intended for the tropical and infectious diseases found in the poor countries (Chapter 5). There is today an active national and international debate about patent laws for medicines. The international patent convention agreed in 1883 (The Paris Convention) that it was possible to apply for a patent in another country within a year from the first application day. The rich industrial countries had had longer patent periods and stricter laws than poor countries. In general, the proposed product has to be ‘new’, has to be an ‘invention’ and it must be possible to produce it industrially. The patent is a limited term of monopoly granted in exchange for the inventor making a full disclosure of their invention in order to stimulate further research. However, it is no surprise that countries have different interpretations when it comes to deciding if an application fulfils these criteria. In the 1980s, international patent discussions and negotiations became quite intense. Given that the mandatory testing and approval steps for a new medicine usually take 8–10 years, there is a case for restoration of the period within which an inventor can recoup their investment, often around $500m. From the mid-1990s these negotiations took place in the WTO (World Trade Organization). The rich countries, which had a strong pharmaceutical industry, wanted international patents with a 20 year patent period. However, to compensate the ‘least developed countries’, some exceptions to international drug patent laws were granted. In practice this means that a country which wants an exception from the patent law first has to negotiate with the patent holder on a commercial basis. If an agreement cannot be reached a country might then be granted a ‘forced production license’ against the will of the patent holder. But the patent holder has, according to the so-called ‘Trips’ agreement of 1994, to be given reasonable financial compensation. (Interested readers can find further information on the website www.wto.org.) However, in a situation of national need, a poorly developed country has the right to be granted forced production licenses when the country is threatened by serious epidemics of HIV, TB or malaria (according to a decision by the WTO in 2001). For example, South Africa has issued such forced production licenses for the production of the first generation of HIV medicines, but not for the most recently developed HIV medicines. Nevertheless, the Trips agreement means that all WTO countries have to recognize international patent regulations for drug products for 20 years from the date of the patent application in all circumstances other than in the aforementioned ‘national need situation’. Because of the new agreement, India, which is heavily involved in drug production, changed its patent laws in 2005. However, a global problem is that many poor countries have no drug production facilities, so are unable to make use of the exception rule in the Trips agreement. It is to be hoped that in the future it might be possible to include exceptions for those countries so that forced license products can be imported from other countries. Of course, all countries are free to manufacture medicines where the patent has expired, usually after about 10 years on the market. In the 1970s, a new health professional movement appeared. This movement is often called ‘evidence-based medicine’ (EBM) and can be seen as a reaction to the tradition that professional opinions not based on empirical data should be allowed to guide the choice

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of medical treatment and therapeutic recommendations. Instead randomized controlled clinical trials ought to be the main criterion for determining treatment and therapeutic recommendations (Schlesselman 2005). Data from these trials should be spread through formalized tools such as audits, clinical guidelines and protocols. Evidence-based medicine gave a new meaning to ‘medical knowledge’ with the aim of improving the standards of care (Armstrong 2002). However, in practice, drug prescribing is still based to a large extent on the individual prescriber’s experiences and the prescriber’s assessment of the patient’s needs (Armstrong 2002 and Chapter 14). Also, in organizational drug selection, e.g. drug reimbursement decisions, criteria other than the results of clinical trials are being considered, e.g., in drug committees where price and assumptions about the reaction of the prescribers have to be taken into account when recommending a drug (Martin et al. 2003, Jenkings and Narber 2004). However, public information and transparency is important. The health care professionals and the general public have to understand the decisions and the processes behind the decisions taken (Mitton 2006). Without such transparency there is a risk that EBM obscures important values and paradigms which are implicit in the decision-making process. There is too a risk that the values and paradigms held by the medical experts’ financial sponsors might have a strong impact on the decisions taken without these being acknowledged as present (Goldenberg 2006). For example, the decision on which clinical trials are undertaken is very influenced by drug companies in cooperation with medical experts. There is a trend that drug companies develop psychotropic drugs to treat new identified psychological-psychiatric conditions. When a significant symptomreducing property of a new drug has been noted, a new ‘diagnosis’ might be introduced and, hopefully, from the drug company’s standpoint, be accepted by the medical experts. It seems that international medical professional groups accept such a new diagnosis if it is supported by clinical trial data. Based on such data, GPs are then encouraged to prescribe the new drug for the new medical condition (Healy 1997: 184–199). However, in the psychiatry field, there is an interesting debate about what system of diagnoses should be used. It has been argued that the ‘consensus diagnosis’ mostly used in psychiatry might not be the most effective diagnostic system. For example, psychiatric conditions that might be classified by different sets of symptoms can be treated by a specific chemical agent (Ban 2006). The central principles of evidence-based medicine have been questioned both from a medical and from a social science perspective. From a medical perspective, outcomes from clinical trials can provide evidence that a drug is effective (or not) in reducing some symptoms or medical conditions. However, clinical trials do not provide data on how these effects are achieved. What is needed here is a combination of outcome and process evaluations (Healy 1997: 108 and Chapter 1). Also, drug clinical trials do not give information about the psychological, sociological and genetic factors which lead to the development of a medical condition. For example, our knowledge is seriously limited about the factors which lead to what is called ‘depression’ (Healy 1997: 175–179 and Section 1.7). According to its critics EBM tends to exclude the social context when analyzing medical conditions (Filc 2004). The use of an EBM perspective based on clinical trials data can lead to the exclusion of social factors which may have a strong influence on recovery. So a narrow EBM perspective might lead to the ‘medicalization’ of human problems, i.e., the problems being described solely in medical terms rather than with reference to social terms, including social reforms. From a social scientist’s perspective, it is often stressed that ‘evidence’ is a far from clear concept. There is no single body of evidence, but rather competing bodies of evidence to

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support many different positions (Ferlie et al. 2001). It seems that EBM is not infrequently used as a symbolic professional ritual (Barry 2006). Another problem with EBM is that this perspective does not focus upon values. Often the EBM perspective is supposed to mean that a decision can be taken on medical ‘facts’ alone instead of also taking into account values and goals (see discussion in Section 1.9).

2.7 Future perspectives Predicting future developments in almost every sphere of life and work always has a certain degree of uncertainty to it. Having said that, within the pharmaceutical world of drug research there do appear to be some ‘sure things’. For example, the money and resources spent on drug research seems certain to continue to increase. More companies will engage in drug R&D. The research directed at developing new chemicals may also be undertaken by more companies, but it will still only be done by a small proportion of all the drug companies in the world. Companies trying to synthesize new chemicals will probably be able to acquire a hitherto unachievable biological understanding of the receptor mechanisms before a specific new chemical can be developed. We can also expect that more resources will be spent on pharmacokinetic studies on humans and clinical trials before a drug is marketed. The number of clinical trials can be expected to continue to increase. Clinical experiments which are now valid strategies of study will be complemented by other types of information aimed at achieving a deeper understanding of how drugs affect the patients treated. We can expect more data on how different patient sub-groups are affected by drugs (Chapter 3). Computer information systems will probably become a dominant medium for disseminating information about drugs. These systems will be used, not only by prescribers and other professionals, but also by the general public who will demand and be offered detailed data about the drugs they are taking. The information systems will include summaries of the most important clinical studies undertaken. However, most prescribers will not have enough time to read all the data. To help them, web systems will include recommendations on which preparation to select for a specific diagnosis or for a specified set of symptoms. Advice from national and international experts over the internet will be a very significant source of information for both professionals and lay people (Gray et al. 2005). However, what remains important is that judgments are based on empirical studies which are available to all interested parties, thus making it possible for a person with enough motivation to form an independent opinion on the value of a new drug. Hopefully, the values which underpin these studies will be made transparent, to facilitate public and professional debates regarding the medical conditions and their treatments.

2.8 Summary The history of drugs was analyzed by dividing the period from 1500 AD to the present day into six separate stages: the merchant period (1500–1799), the chemical period (1800– 1899), the animal testing period (1900–1939), the drug innovation period (1940–1964), the post-Thalidomide period (1965 to present) and a future perspective.

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For each stage a description was given of how new drugs were developed, controlled, diffused and used. This description concentrated on the social and organizational aspects influencing the research and diffusion of drugs. Technical, social and organizational changes were regarded as the crucial reasons why one stage led on to the next. The Thalidomide accident in 1961 led to many important changes. In most countries drug control was made more stringent and drug companies had to show, by data from clinical trials, that the drug was safe and effective for the medical condition it was treating. Also, the control of side effects was now regarded as far more important by both professional groups and the general public. The increased availability of clinical trial data led to the growth of evidence-based medicine (EBM), i.e., the selection of treatments supported by positive clinical trial data. However, critics of EBM say that relying solely on clinical trial data was not enough when deciding on a therapy. The decision-maker has to consider how the treatment is supposed to lead to a positive outcome. Also, a better understanding of all the factors which lead to a specific medical condition is necessary so we can also prevent or if necessary handle the condition by non-pharmacological means.

References Abraham, J., Science, Politics and the Pharmaceutical Industry – Controversy and Bias in Drug Rregulation. London: UCL Press, 1995. Ackerknecht, E.H., A short survey of drug therapy prior to 1900. In Blake, J.B. (ed.), Safeguarding the Public. Baltimore: John Hopkins Press, 1970: 51–58. Andersson, S., Community pharmacy and the rise of welfare in Great Britain in 1900 to 1986. In People and Places – 37th International Congress for the History of Pharmacy, Leicester: British Society for the History of Pharmacy, June 2005: 21–28. Armstrong, D., Clinical autonomy, individual and collective: the problem of changing the doctors’ behaviour. Soc. Sci. Med., 2002, 55: 17711–1777. Ban, T.A., Academic psychiatry and the pharmaceutical industry. Prog. NeuroPsychopharmacol. Biolog Psych., 2006, 30: 429–441. Barry, C.A., The role of evidence in alternative medicine: contrasting biomedical and anthropological approaches. Soc. Sci. Med. 2006, 62: 2646–2657. Berman, A., Drug control in nineteenth-century France: antecedents and directions. In Blake, J.B. (ed.), Safeguarding the Public. Baltimore: John Hopkins Press, 1970: 3–14. Bodewitz, H., The strange case of metoprolol: one agent-two drugs. Paper presented at the 4th European Workshop of Social Pharmacy, Stockholm 8–10 Sept. 1986. Branstad, J.-O., Kamil. I., Lilja. J. and Hamilton, D., When topical hydrocortisone became an OTC drug in Sweden – A study of the users and their information sources. Soc. Sci. Med., 1994, 39: 1647–1737. Brown, P.S., Social context and medical theory in the demarcation of nineteenth-century boundaries. In Bynum, W.F. and Porter, R. (eds.), Medical Fringe and Medical Orthodoxy 1750– 1850. London, Sydney, Wolfeboro, New Hampshire: Croom Helm, 1987:216–231. Bruun, K. (ed.) Controlling Psychotropic Drugs; The Nordic Experience. London: Croom Helm, 1983. Clark Nelson, M., The year the children died: a study of the diphtheria epidemic in R˚ane˚a parish, Sweden 1863–1865. In Rogers, J. (ed.), Death: The Public and Private Spheres. Uppsala: Uppsala University, Department of History 1986: 53–75.

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Coleman, J.S., Katz, E. and Menzel, H., Medical Innovation, A Diffusion Study. Indiapolis: Bobbs Merill, 1966. Cowen, D.L., The role of pharmaceutical industry. In Blake, J.B. (ed.), Safeguarding the Public. Baltimore: John Hopkins Press 1970: 72–82. Crellin, J.K., A Social History of Medicines in the Twentieth Century – To be Taken Three Times Daily. New York, London, Oxford: Pharmaceutical Products Press, 2004. Dann, G.E., Einfuhrung in die Pharmaziegeschichte. Wissenschaftliche Verlagsgesellschaft, 1975. De Haen, P., Golden years of drug introduction 1941 to 1970. New York State J. Med., 1972, 72: 253–258. Dowling, H.F., Prostration and foundation: management of pneumonia before antibiotics. JAMA, 1972, 220: 1341–1345. Dowling, H.F., Fighting Infection. Cambridge: Harvard University Press, 1977. Ferlie, E., Gabbay, J., Fitzgerald, L., Locock, L. et al., Evidence-based medicine and organisational change: an overview of some recent qualitative research. In Ashburner, L. (ed.), Organisational Behaviour and Organisational Studies in Health Care. New York: Palgrave, 2001: 18–42. Filc, D., The medical text: between biomedicine and hegemony. Soc. Sci. Med., 2004, 59: 1275– 1285. Foster, W.D., A History of Medical Bacteriology and Immunology. London: Heinemann Medical Books, 1970. Goldenberg, M.J., On evidence and evidence-based medicine: lessons from the philosophy of science. Soc. Sci. Med., 2006, 62: 2621–2632. Gray, N.J., Klein, J.D., Noyce, P.R., Sesselberg, T.S. and Cantrill, J.A., Health informationseeking behaviour in adolescence: the place of internet. Soc. Sci. Med., 2005, 60: 1467–1478. Haggard, H.W., Devils, Drugs and Doctors. New York: Pocket Books, 1946. Healy, D., The Antidepressant Era. Cambridge, MA and London: Harvard University Press, 1997. Honingsbaum, M., The Fever Trial – In Search of the Cure for Malaria. London: Pan Books. 2001. Inglis, B., The Forbidden Game. London: Coronet Books, 1975. Issekutz, B., Die Geschichte der Arzneimittelforschung, Budapest: Akademia Kiado, 1971. Jeffreys, D., The Remarkable Story of a Wonder Drug – Aspirin. London: Blomsbury, paperback edition, 2005. Jenkings, K.N. and Narber, N., What constitutes evidence in hospital new drug decision making? Soc. Sci. Med., 2004, 58: 1757–1766. Kaiser, W., 275 Jahre Hallesche Medikamentenexpedition. Z. Ges. lnn. Med., 1984, 39: 125–33, 1984. Loudon, I.,‘The vile race of quacks with which this country is infested’. In Bynum, W.F. and Porter, R. (eds.), Medical Fringe and Medical Orthodoxy 1750–1850. London, Sydney, Wolfeboro, New Hampshire: Croom Helm, 1987: 106–128. Noble, D.F., America by Design. Oxford: Oxford University Press, 1977. Martin, D.K., Hollenberg, D., MacRae, S., Madden, S. and Singer, P., Priority setting in a hospital drug formulary: a qualitative case study and evaluation. Health Policy, 2003, 66: 295–503. Mitton, C.R., McMahon, M., Morgan, S. and Gibson, J., Centralized drug review processes: are they fair? Soc. Sci. Med., 2006, 63: 200–211. Morner, C.T.H. and Thunberg, T., ˚Atg¨arder mot bedr¨agliga l¨akemedels spridning (Eng. Measures to Handle the Diffusion of Deceitful Drugs. Uppsala: Akademiska boktryckeriet, 1904. Murray, I., The search for insulin. Scot. Med. J., 1969, 14: 286.

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Neve, M., Orthodoxy and fringe: medicine in late Georgian Bristol. In Bynum, W.F. and Porter, R. (eds.), Medical Fringe and Medical Orthodoxy 1750–1850. London, Sydney, Wolfeboro, New Hampshire: Croom Helm, 1987: 40–55. Porter, R., ‘I think ye both quacks’: The controversy between Dr Theodor Myersbach and Dr John Coakley Lettsom. In Bynum, W.F. and Porter, R. (eds.), Medical Fringe and Medical Orthodoxy 1750–1850. London, Sydney, Wolfeboro, New Hampshire: Croom Helm, 1987: 56–78. Quetel, C., The History of Syphilis. Baltimore, Maryland, John Hopkins University Press, 1992. Rose, H. and Rose, S.P.R., Science and Society. London: Penguin 1970. Schadewalt, H., Die Anfange der pharmazeutischen Industrie in Deutschland. Munch. Med. Woschenschrift, 1965, 36: 1716–1722. Schlesselman, L.S., Incorporation of evidence-based medicine into daily practice. Medscape Pharmacist, 2005, 6 (1), www.medscape.com/viewarticle/496652. Sjostrom, H. and Nilsson, R., Thalidomide and the Power of the Drug Companies. London: Penguin, 1972. Sonnedecker, G., Kremers’ and Urdangs’ History of Pharmacy. Philadelphia: Lippincott, 1976. Stephens, T. and Brynner, R., Dark Remedy – The Impact of Thalidomide and its Revival as Vital Medicine. Cambridge, MA.: Pereus Publications, 2001. Stieb, E.W., Drug control in Britain 1850–1914. In Blake, I.B. (ed.), Safeguarding the Public. Baltimore: John Hopkins Press, 1970: 15–26. Swann, I. P., Arthur Tatum, Park-Davies, and the discovery of mapharsen as an antisyphilitic agent. J. Hist. Med. and Allied Sciences, 1985, 40: 167–187. Turner, E.S., The Shocking History of Advertising. Middlesex: Penguin Books, 1965. Valenstein, E.S., Blaming the Brain – The Truth about Drugs and Mental Health. New York, London, Toronto, Sydney, Singapore: The Free Press, 1998. Wade, D.L., Digoxin 1785–1985. J. Clin. Hosp. Pharm., 1986, 11: 3–9. Weatherall, M., Science and the discovery of drugs. Pharm. J., 1987, (5): 26–28. Whittet, T.D., Drug control in Britain: from World War I to the Medicines Bill of 1968. In Blake, I.B. (ed.), Safeguarding the Public. Baltimore: John Hopkins Press, 1970.

3 National drug policies

There are essentially two different approaches open to those planning a national drug policy. When we discuss ‘drug policies’, the discussion might include a separate consideration of each of these approaches or they might be looked at together. One way of planning is to steer and manage the system in order to improve things and to achieve better results. An analogy is that of driving along a road. The driver starts off, knows where he wants to get to, but does not have a road-by-road route planned and so is constantly adapting and responding to new situations. Most countries in the world tend to use this ‘marginal approach’. The other approach sees the manager deciding which goals he wishes to achieve. But, continuing with the car analogy, this time the trip is carefully planned with a map to ensure each road is known before starting out. The driver not only knows his destination, but precisely how to get there. There are several countries which plan their drug policies this way although they are in the minority worldwide. Here the national government formulates a national drug plan with a number of strategies to reach the desired goals, e.g., the drug plan in Laos (Tomson et al. 2005), the Cuban drug policy (Thrupp 1984). A recent initiative by the Cuban Ministry of Health (MINSAP), a national pharmacoepidemiology network in collaboration with the pharmaceutical industry, has resulted in a set of indicators for drug use which might result in more rational drug use in the country (Diog`ene et al. 2003) In general, drug policies are formulated at a national level. However, there is now more and more cooperation between countries in the formulation of their policies. The drug policies of the European nations are one example. Here a common set of criteria for drug registration has been developed. There is also now a single system of registration for drugs established throughout the European Union (Official Journal of the European Community, 2004), which will support a single market without barriers and is based on a single authorisation. At least two considerations can influence the formulation of national drug sector goals: 1. An evaluation of the drug sector cannot be done without a formal set of goals (Chapter 1). If one cannot evaluate the system, it is then impossible to say if the sector satisfies the national needs for which it has been established and been given resources.

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2. Without a set of goals it is not possible to test whether new ideas and ways will improve a situation. If goals are not established, discussions about different approaches to determine the success (or not) of the policy will, at the very least, become confused. The goals in the drug sector have to be based on national cultural values. They have to be in accordance with the aims of both of the industrial sector and of the health care groups and in line with the main political and economic principles dominant in the country. However, any discussion in this chapter will be in general terms and applicable to all countries. The priorities in the goals set will, of course, vary between countries depending on financial, organizational and cultural factors. In specific decisions, conflicts between goals can occur. However, the issues in such situations will not be discussed in this chapter, but will be postponed to later in the book, when each of the components of the drug system is examined in more detail. The national goals of the drug sector can be separated into two groups: 1. Organizational demands: i. Efficient organization of drug support (see also Chapter 4) ii. Efficient organization of drug research (Chapter 5) iii. Efficient organization of drug production (Chapter 6) iv. Efficient organization of drug distribution (Chapters 8 and 9) v. An efficient system for drug consumption (Chapter 10) vi. A satisfactory system of drug information. (Chapter 16) 2. Value judgments determining the choice of drugs: i. Choice of drugs with high therapeutic powers ii. Choice of drugs with low side effects iii. Low drug costs.

3.1 Efficient organization of drug support To achieve this goal drugs and raw materials for the drugs must be available in the country. This involves some intermediary goals:

r Appropriate drugs should be chosen on a national level according to their documented medical value and their prices, as well as according to the cultural norms existing in the country (Chapter 4).

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r Procedures for resource allocation should be established to ensure national drug production and drug imports. This process includes forecasting the country’s drug consumption.

r An efficient organization for importing raw materials for the production of ready-made drugs must be set up.

r An efficient system for the importation of ready-made drugs should be set up. According to the terminology used, an efficient organization of drug support should guarantee the desired level of drug availability at the national level, whilst an efficient organization of drug distribution should ensure the desired level of accessibility at the local level. The ways countries have solved the problem of creating an efficient drug support organization vary considerably. However, international organizations, such as the WHO, have recommended that countries should make sure that they put sufficient resources and efforts into planning drug support. There are still no well-developed techniques for measuring the degree to which a country has succeeded in organizing an efficient national drug support system. Perhaps such a technique can never be developed because the evaluation of any organization for drug support will be dependent on the specific national values held, thus making it necessary to develop national systems for measuring the efficiency of countries’ drug support systems. However, the drugs and the raw materials imported should be available at as low a cost ‘as possible’ and still be of ‘acceptable quality’ (this will be discussed further in Chapters 4 and 7). For a small or middle size country without educated and experienced staff and necessary resources, this probably requires international support (e.g., Brouselle and Champagne 2004, Norris et al. 2007).

3.2 Efficient organization of drug research In most countries the general public expects that better drugs will be developed as time passes. The production of better drugs is seen as part of an increasing demand on the national health care system to address the health problems the nation is facing. Better drugs may mean developing new chemical entities to combat diseases for which there are currently no effective therapies. Of course the most dramatic example of a better drug is one which is effective against a disease which kills hundreds of young children every year. However, most research and development activities (R&D) are not of such a heroic type. R&D can involve using an old drug in a new therapeutic situation. It can also mean an old drug being used more selectively to achieve the desired therapeutic and financial goals. By using drugs in more appropriate therapeutic situations, side effects and interactions with other drugs can be avoided and better therapeutic results achieved. Drug development can also mean the discovery of a more effective dosage form or new instructions regarding the drug dosage. It can also mean identifying a less costly method of production resulting in lower prices so that, for example, a drug earlier restricted to special clinics is made available all over the country (drug research will be discussed in more detail in Chapter 5).

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It is important that the most frequently used drugs in a country are continually being re-evaluated. Data referring to their therapeutic effects are of immeasurable assistance in decision-making at all levels of the health care system. This means that work with drug monitoring and clinical trials has to be included in drug R&D. In all countries there is a need for drug research. The ambitions of a developing country may be restricted to keeping records of therapeutic effects. Often these countries have a short supply of doctors and pharmacists. However, step-by-step more R&D activities are being undertaken. These countries often do not have health professionals with a formal research education. However, having such experience is not a necessary requirement for R&D. Professionals with a basic education can make important contributions and suggest well-grounded recommendations to solve the health problems a country is facing if they are motivated and are given the necessary equipment and information. R&D in a developing country can start by perhaps a rather simple analysis of the factors which influence the therapeutic effects of a drug. Later, this activity can be developed into bigger projects and involve cooperation with a significant number of professionals. In many of the countries in Latin America, Asia and Africa, traditional drugs are popular and often used in health care. Governments and national universities in those countries could be much more active in their efforts to rationalize and support the use of traditional medicine. For example, the most effective dosage which does not result in any adverse effects could be standardized and recommended via the mass media (Akerele 1987). Traditional drugs are often inexpensive and easily available. The general public is well inclined to them because their use is based on the local culture. To take a traditional drug has a meaning different from taking a synthetic drug. For example, in the Cusco district in Peru, Inca drugs are very popular. These are the first drugs people take when they feel unwell. When taking a traditional drug they feel connected to traditional life and generations before them. Such connections can be much more important for them than for those living in more industrial countries (based on personal interviews in Cusco, by one of the authors, JL). More technically advanced countries with a tradition of drug research can try to produce new therapies by chemical analysis of the traditional drugs used in the country. By producing these drugs in large quantities it can be possible to standardize the manufacturing process, a necessary requirement for the effective and safe clinical use of drugs. Determining the clinical value of these drugs can be done by clinical trials. It is also of great value to find out which of the chemical ingredients is the main factor in producing the desired therapeutic benefits of a traditional drug. In countries with a tradition of drug research over several years, independent work to find new chemicals for diseases for which there is, as yet, no effective therapy can lead to successful results (Chapter 5). The efficiency of a country’s R&D activities has often been measured by calculating the cost of drug R&D against the number of new drugs developed. However, this only includes one type of drug research, i.e., the R&D activities aimed at finding new chemicals. Because this type of research does not take place in many countries, R&D efficiency has to be measured in other ways. It might be assessed by the number of clinical drug trials of acceptable quality undertaken, complemented by other measures of research activities. It has to be remembered that the use of better drugs is far from the only method of reducing the mortality and morbidity in a country. As has been discussed by McKeown and others, the reduction of mortality in infectious diseases which occurred in ninteenth century Europe was probably more the consequence of improved hygiene than the availability of

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new treatment methods. McKeown argues that the same could be true today. The infectious diseases which now are the major killers in developing countries could be attacked more effectively by reforms in hygiene and nutrition. In industrialized countries, where circulatory and cancer disorders are the most frequent reasons for mortality, it is other aspects of living and nutrition which require change in order to reduce the death rates among the middle-aged in the population (McKeown 1976). The McKeown thesis has been challenged by others in the field of sociomedical science, but the concepts described here, which lie at the heart of the McKeown thesis, account in large measure for its continuing resonance in the field of public health (Colgrove 2002).

3.3 Efficient organization of drug production In any evaluation of the effectiveness of drug production facilities, the production costs in monetary terms can be used as an indicator. However, care has to be taken with financial accounting to ensure that all relevant costs are included. This means that not only outof-pocket (direct) costs, but also indirect costs, like an industry building paid for by the government, but hired to the company at no charge, must not be omitted. Allowances for deductions also have to be made to ensure production in the long run. Low prices indicate an efficient production organization, when comparing production plants, provided the units being compared have and maintain the same production quality level (drug production will be discussed in more detail in Chapter 6). There is an international trend towards more domestically produced drugs. In most countries there are efforts to develop or increase the production of drugs which have a high local consumption rate. However, in a few countries there is almost no drug production. Developing nations which are dependent on imports of ready-made drugs can make considerable foreign currency savings by establishing their own drug production facilities, if a large enough market is available and production can be made efficient (Chapters 6 and 7). The reason is that many raw materials for drug production can be bought rather cheaply on the world market. With fairly simple technology it then becomes possible to produce ready-made drugs in the form of tablets, capsules, infusions and injections. However, a small developing country may have trouble in starting production lines and assessing acceptable quality without help (Chapter 6). Encouraging drug exports can be a lucrative national strategy in that it keeps drug prices down at home through large-scale production for the foreign market. However, when exporting a drug it is necessary both to have a high level of production quality and also a well-developed and appropriate marketing organization in the country to which the export is directed. Also, legal barriers can hinder the registration of the new drug in a country that is a promising export market for drugs. To avoid some of these problems it may be better for the exporting country to negotiate a common drug production policy with a number of countries in the same region. However, from the experiences of such ventures, successful cooperation is very much dependent on mutual political trust and understanding between the countries involved, and a stable political climate (Chapter 6). Drug companies can be divided into two groups – those which focus on the effective production of drugs which no longer are covered by patent laws (generic drug companies), and those whose emphasis is on R&D and the export of patented drugs (research-oriented

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drug companies). The first group of companies sells its drugs at rather low prices, whereas the second group of companies sets higher prices for its products (Chapter 7) as a result of the differing levels of R&D investment. When determining production quality norms national factors must be taken into account (Chapter 6). In general, the health authorities in developing countries have to accept relatively low quality in order to keep drug costs down, but the quality must still be good enough to ensure that the drug can be used safely. In contrast, rich industrialized countries can set higher quality norms, which can lead to increased production costs and prices. If the same strict norms were applied in a poor developing country it would result in considerably higher drug prices and the likelihood of much more frequent shortages of drugs at rural health centres, something which would not occur if a low, but acceptable quality norm was in operation. This means that each country has to determine its own norms of drug quality which are medically and financially acceptable. International organizations like the WHO can act as regulators in the sense that they can suggest worldwide standards which can be used as a yardstick when a nation decides on its own norms. However, acceptable quality norms underpin safety and, in the final analysis, safety and the prevention of adverse effects must be assured.

3.4 Efficient organization of drug distribution The efficiency of a distribution system can be measured by studying the costs of the distribution of an ordered drug from the manufacturer to the patient. However, in most cases such a system cannot be assessed because the distribution service is not priced in this way. An alternative way of measuring productivity is by calculating the number of packages handled in relation to the number of staff working in the distribution system (calculated as full-time workers). However, in developing countries it may be better to measure the efficiency in terms of the number of different drugs available at the local level, given the specific resources allocated to the drug distribution system. This is because in these countries it is difficult to obtain data to calculate the productivity in terms of the costs of distributing one drug package. The distribution network often incorporates types of services other than transportation. Information handling and statistical analyses take place at the stores and these activities require sufficient staff if they are to be successful. In many low and middle per capita income countries, e.g., in African countries, there is both a private and a public drug distribution system. In the private system, the drugs are bought from private pharmacies and patients have to pay the full price. In the public distribution system, patients get their drugs from government institutions and the prices which patients have to pay are often lower (how much lower they are varies between countries, Gelders et al. 2006 and Chapter 7). In general, the private and the public drug sectors tend to have different import organizations (Chapter 8). In the public sector, drugs are often bought by tender which results in much lower prices than if they were purchased by prices fixed by the drug companies (Chapter 7). However, not all countries have public distribution systems for patients. For example, in Latin American lands the public sector often means distribution to the military forces, the police and the public hospitals, e.g., in Peru (Accion Internationales por La Salud 1987: 70), not to the general public. Most patients in the Latin American countries have to buy their drugs from private pharmacies. However, in many of these nations there is an ‘insurance

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sector’ which has its own clinics and drug distribution units. Only those who can afford to pay the insurance fees – and that means those in regular employment, which is about 10 to 20 per cent of the population – are allowed to visit these clinics and special pharmacies. This means that it is the rich parts of the populace who join the insurance programmes. The majority of the population has to buy their drugs from private pharmacies and pay the full cost because they cannot afford the insurance programmes. These different views on a public distribution system can result in national political conflicts. Bolivia is an example of a country where a public drug distribution system inspired by the WHO essential drugs programme was introduced in 1981, based on tenders and publicly owned pharmacies. However, this resulted in a serious disagreement with the drug companies and their political supporters who wanted an open economy with no import restrictions. The Bolivian public distribution system was mainly directed at the 28 per cent of the population associated with the health insurance system. These people were in employment and were able to pay regular fees to the health insurance organization. A change to a more right wing national government resulted in the ending of the programme in 1985, despite the fact that it had proved to be efficient. However, one of the problems was that the prices might have been set too low to get a stable financial base. Another problem was the way in which the system was introduced. It met with immediate opposition from the medical and pharmacy professions, something that continued and contributed to its eventual demise (Accion International por la Salud, 1987: 81–85). The experiences from Bolivia show that any public distribution system has to be politically supported to be sustainable. However, many of the rich countries, e.g., the European countries, have national or widespread personal health insurance schemes in which drugs are included. This means that patients there can visit a private pharmacy to pick up their prescription drugs, but because the country has a national health insurance scheme they do not need to pay the full price for the drug. Patients either pay a nominal sum or if they are old, unemployed, have a permanent disability etc. they receive their medication free. For those who pay a nominal amount, however, this sum varies between countries, even inside Europe (Abraham and Lewis 2000 and Chapter 4). The demand for drugs in the public distribution system of a developing country is likely to be much higher than the supply. This is because patients do not pay the full price for the drugs and governments cannot afford to satisfy the total demand for the drugs. Another problem is that drugs imported or domestically produced can remain in large urban hospitals. Inadequate transport facilities are one, but not the only reason for the shortage of drugs in rural areas in developing countries. Frequently the distribution is planned as a linked process from a central medical store to regional depots and from there to district levels (Figure 3.1). These regional and district depots are often placed near hospitals which have managers with considerable power to influence the distribution process at regional and district level. This can lead to the hospitals being given priority over rural health institutions, which may not even have the most basic drugs because the supply is insufficient to satisfy the national demand (Chapters 4 and 9). Theft, corruption and unsuitable storage of drugs during transportation can result in significant reductions in the total national drug supply in developing countries. Better systems of storage control can mean a reduction in losses. Improved training for managers can further help to alleviate this situation (Chapter 9). To summarize, there is a great gap between the efficiency of the drug distribution systems of developing countries when compared with those in industrialized lands. This ought not to be a surprise to the reader. Economic

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Imports

Central medical store

Central hospitals

Regional drug depots

Regional hospitals

District drug depots

Health centres and health posts

Figure 3.1 A standard drug distribution system in the government (public) sector of a developing country.

development can be interpreted as the ability to organize in an efficient way on the national level. Corruption and thefts in economic distribution systems are an indication of poor economic development. In many countries, one type of organization handles the wholesale distribution (often called ‘wholesalers’, Chapter 8) and another organization handles the distribution to the drug consumers (mainly called ‘pharmacies’, Chapter 9). The exact tasks of each of these organizations vary from one country to the next. However, in recent decades there has been an international trend that has seen the wholesaler focusing on the distribution of the drugs, while the information role is taken over by the drug companies, the health authorities, the health care institutions and the pharmacies. Vaccination offers an effective way of reducing the levels of infectious diseases, which affect large parts of the population in many developing countries. However, the distribution of vaccines requires special arrangements. It is necessary to build a ‘cold chain of storage’ because vaccines, in general, do not remain stable in the heat. Refrigeration is required from the production facility, during transportation to and throughout the country and all the way to delivery to the health care facilities which the public attends and where the injections are given (De Quadros, Carrasco and Oliv´e. 1994).

3.5 An efficient system for drug consumption The system for drug consumption can be divided into five levels in a decision-making hierarchy, in which decisions at the top can often be seen as restrictive by those at the lower levels: 1. The national choice of drugs (see Section 4.5 about drug registration and therapeutic substitution) 2. The regional and organizational choice of drugs (see Section 4.9 on essential drug policy) 3. The choice of drugs at the clinical unit level (Chapter 14)

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4. The prescribers’ choice of drugs (Chapter 14) 5. The role of the patient (Section 9.1 and Chapter 15). What happens at each level varies considerably between countries and this is why the levels are being discussed together here. The overall function of the drug system in each country is to ensure that patients receive the correct medication, according to the cultural and financial factors operating in their own country. These factors, of course, may vary significantly. For example, in countries which have a national health insurance scheme, many people will first visit a physician to get their drugs prescribed. This allows them to get the drug at low or no cost. However, in countries where there is no national health insurance and no public distribution of drugs for patients in open health care, e.g., many Latin American countries, people tend to go straight to a pharmacy and buy the drug over the counter. In this way they can avoid the time and costs of visiting a physician (Chapter 9). Many countries which have public distribution of drugs also have an essential drugs policy aimed at ensuring that everybody can afford vital drugs (Chapter 4). Drug control today is often defined so as to include a number of mechanisms which ensure that the total drug system works in a way which meets the approval of both political and professional bodies. An important aspect of drug control is that it can influence the way drugs are used in order to optimize their medical effects within the cultural and financial restrictions operating in each country (Chapter 13). However, as yet, we have no easily applied measure to judge the effectiveness of the drug consumption system in a country and often the system’s efficiency is determined by analyzing its shortcomings. Each country will have to develop its own yardsticks to measure efficiency reflecting its cultural and financial situation. However, to detect and overcome a lack of efficiency and quality requires an open debate in which political bodies, professional organizations and citizen groups can interact.

3.6 A satisfactory system of drug information A distinction can be made between commercial and non-commercial drug information. In many countries, commercial information is extensively available and can have a strong influence both on the prescribers’ choice of drugs and the public’s selection of non-prescription drugs (Chapters 10, 11 and 14). Non-commercial drug information can be made available from many different agents. The sources most often used by the prescribers and the public vary between countries, reflecting the different organizations operating in each country (Chapters 14, 15 and 16). A set of drug information demands can be summarized by the following points. The degree to which they are met can be seen as a measure of the efficiency of the national information system. They apply to both professional groups and the general public: 1. Information should be readily available, both in regard to its physical availability and to its ease of understanding (Lilja, Larsson and Hamilton. 1996: 91–164, 225–302).

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2. Information should be relevant in that it must be suited to the perceived needs of the receivers. 3. Information should be reliable in that it must fulfil the scientific criterion of accuracy. 4. Information should influence the receiver’s behaviour in ways which are ethically acceptable in the country. This means that the receiver should not only be informed of what to do, but also of the facts, which can motivate his behaviour. 5. Information should be produced and disseminated in ways which keep costs down. In the future we can expect the public to demand more details about the drugs they are prescribed and about the drugs they buy for self-medication. Also, professional groups will want the same type of data. Internet and other computer systems can be used to keep this information up-to-date and to transfer it to the users – both professionals and the general public.

3.7 Choice of drugs with high therapeutic powers To determine the therapeutic capabilities of a drug may seem not to be a particularly difficult task. However, in practice it is far from easy. What is meant by sickness and health has to be determined precisely. For example, to define ‘flu’ we must decide which symptoms are necessary requirements of the condition enabling us to classify someone as having flu. Often definitions used in earlier research are applied in later studies to make comparisons easy. However, researchers with different frames of reference may use different definitions. Further, there are two entirely different ways of looking at ‘curing’. Firstly, we can measure the deviance from a healthy state using a number of variables, e.g., diagnostic tests. This is the way most health professionals look at curing. When the variable values go back to within ‘normal’ limits, the patient will be regarded as ‘cured’. The other way to look at curing is to see the deviance from the patient’s perspective. When a person feels that he cannot go to work he may regard himself as sick. When the symptoms he recognizes do not bother him any more he may regard himself as healthy. In the English language this is called a period of ‘illness’ which has to separated from a ‘disease’ as determined by a health professional (Helman 1985, the discussion about social constructivism in Section 1.7, the discussion about diagnostic settings in Section 14.6 and self-medication in Chapter 15). It is not certain that the perceptions of the patient follow the pattern identified by his physician (see the actor–spectator paradox discussed in Section 1.8). Their differing views influence the patient–physician relationship and also the way the health professional informs the patient. For example, a person may feel sick without this being classified as a medical disease needing treatment. Perhaps the patient will be regarded as having a psychosomatic disorder by the physician, who is forced to make a formal diagnosis. Alternatively, a patient may feel better and recognize himself as healthy while he still is suffering from an illness according to the medical tests he has undergone. In this situation the patient may decide to stop the treatment he is undergoing, treatment which is necessary to ensure a rapid and full recovery (see Sections 15.5 and 1.7).

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The patient’s point of view regarding his condition can be influenced by a great number of factors, such as his physiological baseline symptoms, his cognitions and feelings (his discourses, see Chapter 1) and his socio-environmental situation including the social support given by his family (Chapter 15). Scientific clinical studies can be classified into two broad groups: 1. Experimental clinical studies. In these the patient population is allocated to one or more treatment groups and one control group by a random process. Some authors call these ‘controlled clinical trials’ (or randomized clinical trials, RCTs). As described in Chapter 2, the intensive use of clinical trials in drug research, drug development and drug control is to large extent a consequence of the Thalidomide catastrophe (see Healy 1997: 79–95 for a historical description of how the clinical trial method was developed). 2. Non-experimental clinical studies. In these studies, the treatment results are analyzed over time and the treatment group is compared with a control group. However, the important point is that a defined patient population has not been allocated by a random process to treatment and control groups. In this class of studies we find cohort studies and case-control studies (e.g., Strom 1989, Hartzema, Porta and Tilson. 1991: 124–128). In an RCT study, the evaluator firstly defines his patient population and sample. Often the population is a number of consecutive patients in a clinic with a set of clearly defined conditions, e.g., they satisfy several diagnostic tests. From this population, two or more samples are taken at random. For example, every second patient drawn at random is given therapy A while the others are given therapy B. The double-blind technique means that neither the patients nor the health care personnel involved can identify which therapy a specific patient is receiving. In this way many variables can be controlled. Normally, patients expect more from the newest drugs being used and, thus, their expectations can influence their conditions. But the double-blind technique prevents such influences coming into play since both groups of patients will have similar expectations. Often a placebo, an inactive drug, is used as one of the drugs in a clinical experiment, the patient being unaware that the drug he is receiving is a placebo. However, for ethical reasons this practice is frowned upon as soon as the efficacy has been proved with confidence. It is regarded as improper to give a placebo to a patient when it is expected that an active drug could result in considerable positive medical effects. This issue has been frequently discussed in studies looking at the treatment for AIDS (Healy 1997: 104–105). It is not always possible to use the double-blind technique. For example, it cannot be used in diet therapy because such therapy cannot be disguised in the same way as drug therapy since the patients must see the food they eat. In such cases, we have to rely on other methods. Experimental and non-experimental clinical studies have their own advantages and disadvantages. Experimental studies can, in theory, be expected to generate more accurate results than non-experimental studies, since the samples in the experiments are drawn from one single population, thus reducing the risk of population factors influencing the differences noted between the treatment and control groups. However, in practice a number of factors reduce the advantage of experimental studies (Holme Hansen et al. 1987, Dean 2004): 1. In practice, a drug can be prescribed for patients with entirely different conditions from those involved in clinical experiments to determine the relative efficacy of the drug.

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One reason for this is that clinical experiments often take place in university or central hospitals, and the choice of patients may be based on a number of diagnostic tests not available in an average health care facility. In clinical experiments, patients with more than one disease are also seldom included but, in practice, patients can frequently be suffering from many different diseases at the same time. Also, contextual factors influence therapeutic outcomes which are not detected in a pure experimental design (Section 1.4). For example, nutrition and hygiene can have a strong effect on therapeutic outcomes in the treatment of chronic conditions (Shin et al. 2004). 2. In some instances, it is not possible to allocate patients according to the experiment plan. Some patients will demand one of the therapies specifically and are not willing to be randomly allocated to a treatment (Healy 1997: 104–105). According to the ethical codes used, e.g., the Helsinki Declaration elaborated by the World Health Assembly, participation in clinical trials must be voluntary, and so such patients have to be excluded from the study. 3. The size of the population may, in an experimental study, not be large enough to give accurate figures of infrequent therapeutic results. For example, the incidence of side effects cannot be assessed until a large number of patients have used the drug. The risks of habituation and misuse cannot, in general, be calculated before a large number of patients have been treated over long periods. We then have to rely upon non-experimental designs. 4. The cure rates (percentage of patients cured) is often much lower in practice than those noted in clinical experiments. The reason is that patients in practice do not comply in the same high proportion as they do when they know that they are participating in an experiment. For example, from clinical trials, a cure rate of 90 per cent can be expected by using chemotherapy against tuberculosis. However, in developing countries a cure rate of less than 50 per cent is frequently found in practice (Henderson 1984). Also, in the calculation of these rates there may be an overestimate of the real cure rates. To include only those patients who can be analyzed both before and after the drug treatment might give a higher cure rate than a calculation which starts from all the ‘intended to treat patients’ and then calculates the percentage of this group which were ‘cured’. The reason why ‘intended to treat’ calculations result in lower cure rates is because a number of patients stop taking the drug during a full treatment period because of side effects or a lack of motivation. This is particularly so with antidepressives where the ‘intended to treat’ cure rates are much lower than the cure rates based on those patients who were measured both before and after a full treatment period (US Department of Health and Human Services, 1993). These factors make it necessary to complement the results from clinical experiments with results from non-experimental studies to give an accurate evaluation of a drug. Until recently, registration of new drugs has been based on experimental results only (Holme Hansen et al. 1987). This is the reason why there is such a great need for evaluation of the therapies used in medical practice (so called post-marketing surveillance). Studies are needed of the medical and social effects of these treatments. Results can be recorded even if all the patients in the clinic are given the same drugs. These results may still be of great

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value for they can be compared with corresponding figures from other clinics which are using other treatment procedures. Findings which reveal considerable differences may be explained by dissimilarities in the therapeutic capabilities of the treatments used or by differences in the patient populations in the clinics under comparison. To determine which explanation is the more likely, a clinical experiment can be undertaken. In the discussion so far, the therapeutic efficacy of a drug has been regarded as a variable indicating either that the patient has recovered or that he is still sick. In practice, however, the therapeutic effects of a drug operate at more than these two levels. Most courses of treatment result in patients with different recovery rates and in many of those cases it is not possible to compare directly the recovery rates for different treatments. We have to incorporate the degree of recovery into a combined measurement of therapeutic capability. To construct such a measure we are required to make a judgment, indicating the importance which should be given to full recovery as opposed to partial recovery or even damage to health during the treatment period. This is largely a value judgment (Gibson 1976: 82–155). The following table indicates two therapies with different therapeutic capabilities in terms of the percentage of patients cured and the percentage of those whose state of health deteriorated: Drug

Cured

Same level of sickness

More sick

A

60 %

30 %

10 %

B

70 %

10 %

20 %

As indicated in the table, drug B increases the probability of a cure, but is also more likely to lead to a further deterioration in the patient’s condition. The drug preference of a decisionmaker depends on his aversion to risks. Because of the lack of details, it also depends, of course, on what is meant by the terms, ‘cure’ and ‘more sick’. Hence research clinical trials always evaluate improvement in specific symptoms or indicators of underlying disease alongside the incidence of adverse effects. The value problem means that, from an ethical point of view, patients ought to be informed about the anticipated effects of any drug prescribed, any optional treatments available and should be given the opportunity to influence the selection of treatment. In the terminology used in the US this is called ‘informed consent’ (Lilja et al. 1996: 149–155). The ultimate drug selection decision can then be taken by the prescriber and the patient in cooperation. However, for such a procedure to be effective, highly motivated health care professionals are required, as new demands are put upon the professional’s time. A value judgment is also involved when deciding if a symptom needs to be treated or not. Of course, there are clear cases, such as pneumonia, when almost nobody would deny the value of antibiotics. However, there are also conditions like menopausal symptoms which can be regarded as a ‘medical condition’ requiring treatment or perhaps seen as a normal part of the ageing process in women (Coney 1992, Palmlund in press). The same problem of value judgments applies to many less severe psychiatric conditions such as mild depression (Lilja et al. 2002). Another problem of relying solely on clinical trials data has been discussed by the critics of the evidence-based medicine movement (EBM see Section 2.6). Which clinical trials are used for a new drug are determined by the drug company, in cooperation with medical

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experts. In the field of psychotropics, we have already noted a widening of therapeutic indications brought about by the introduction of clinical trials to measure outcomes by new outcome scales, including new items which assess psychological-psychiatric problems not included in the standard psychological-psychiatric outcome scales. This can be seen as an effort by drug companies to find new and widening indications for new psychotropic drugs. If significant symptom-reducing properties in a new drug are found by using such new scales, a new ‘diagnosis’, will have been made, provided it is recognized and accepted by the medical experts and government medical assessors. Based on the clinical trial data, GPs are then encouraged to prescribe the new drugs for the new indication (Healy 1997: 184–199). Over recent decades there has been a professional debate as to what extent the drug clinical trials financed by drug companies are biased – i.e. have low validity. To test the validity of trials financed by drug companies, they ought to be compared with trials financed by non-profit sources. However, such studies are difficult to undertake because there are so few trials financed by non-profit sources, although most of such studies published show some bias from industry sponsored research (Barden et al. 2006). Stronger drug company bias has been established when comparing company sponsored and non-profit sponsored metaanalyses (British Medical Journal On Line First for November 16, 2007). This might be an argument for more non-profit sponsored meta-analyses, e.g., undertaken by universities. Evaluation of treatments can also include the patients’ reports of their own experiences about both their health and also the social effects of the therapy. However, the attitudes of patients have to be analyzed with caution, for they can reflect more the aspirations of the patients than the actual benefits from the treatment they received. Bioavailability (bioequivalence) studies can be used to compare chemically similar drugs. In these studies what is measured is how quickly the active ingredient of the drug passes into the blood. The real therapeutic effects are assumed to be determined by the bioavailability measured. To summarize, we can say that bioavailability studies are a convenient and rather inexpensive method of comparing therapeutically well-known drugs with the same active ingredient. There can be cases where the effects differ between two drugs with the same bioavailability. However, for generic drugs which have been used for a long time such deviances can be expected to be already known. This means that, in most cases, bioavailability studies can guarantee a similarity in clinical effects between generic drugs when compared (see the discussion about generic prescribing and generic substitution in Chapter 4). Results from clinical studies provide important data for assessing whether a treatment is suitable for a specific disorder. However, traditionally the results of clinical studies usually were kept secret by the drug companies and the national registration authorities. However, today it seems that the most important clinical trails have been published and are available and accessible for health professionals and the general public. The Cochrane system provides an easily available summary of evaluations of many important and heavily used drugs and also contains recommendations (the interested reader can visit the Cochrane website www. cochrane.org). Countries vary in regard to the public’s ‘aspiration level’ for the national medical system. In places like the US, a patient can buy medical services to the extent of ‘maximizing’ the probability of recovery, even if the medical utility of the last unit of money spent is almost zero. In countries where the medical service is reimbursed, patients are given a ‘satisfactory’ level of medical service, as defined by the health profession, before the

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medical utility reaches zero level. In the public sector of a developing country the medical service offered has to come to an end at an even earlier level because of limited resources.

3.8 Choice of drugs with few side effects Side effects are often defined as the unintentional results of a treatment. By another terminology, the effort to study unwanted drug effects is often called ‘pharmacovigilance of adverse effects’ (Hudson 2004: 219). In most countries, drug laws include a paragraph stating that the side effects of drugs should be acceptable in relation to their intended therapeutic effects. For example, more severe side effects may be more accepted in the treatment of cancer than in the treatment of minor illnesses. The most significant type of adverse effect is, of course, the risk of mortality. Drugs resulting in a number of deaths are almost always denied registration. The same applies to drugs which have shown severe non-reversible side effects. The Thalidomide tragedy in 1961 when over 10 000 children were born with serious physical defects drew attention to this problem (Sjostrom and Nilsson 1972). This catastrophe almost certainly acted as a cue factor. A change in public values was probably the underlying reason that explains why the Thalidomide affair led to huge structural reforms in most countries. The judgment of experts was now questioned and new organizations were set up to prevent a similar disaster from happening again (Chapter 2). When measuring the adverse effects of a drug there is the possibility that the risk of side effects is often independent of the disease for which the drug is prescribed. The risk may be dependent on other factors, such as the age of the patient. Indeed the likelihood of side effects is higher for elderly patients and those suffering from liver or kidney problems (which also occur more frequently among the elderly), hence there is a requirement to study some patients who are very old and others with hepatic or renal impairment. The number of patients in clinical studies is normally limited to allow for all types of comparison with other treatments being surveyed. In fact when planning clinical studies the number of patients is determined by the aims of the investigation. More patients are required if the studies are undertaken to find differences in the side effects of the drugs than if they are intended to detect dissimilarities in the therapeutic capabilities of the drugs. To detect side effects which occur after a long period of time is often very difficult. One well-known example is the serious side effects on the grown-up daughters of women who had taken diethylstilbestrol during pregnancy ten to 20 years previously (Direcks et al. 1986). After a number of serious side effects have been detected in one or in a number of countries then a debate often starts as to whether the drug industry, the government, the researchers and the medical practitioners have done all they could to avoid this happening (Pearce 1992). It is possible to measure the incidence of side effects in practice without using clinical trials (because the medical condition does not need to be kept under control). Following the Thalidomide case, a system of adverse reaction reports from physicians was introduced in most industrial countries (Waller, 2006). Physicians were encouraged to report serious adverse reactions (ADRs) through spontaneous reporting (Wiholm and Olsson 1989). However, only a small portion of all eligible doctors do this. British data suggests that underreporting may be as high as 98 per cent (Fletcher, 1991). For example, in one study

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in the UK only 16 per cent of physicians were found to have ever submitted such a report, (Daly 1987). Even in the case of serious and unlabelled reactions, reports may only be filed for one in 4600 cases (Moride et al. 1997). Another example is that Health Canada received just over 10 000 ADR reports, with pharmacists as the primary source among those who identified themselves (Lexchin 2006). To encourage more physicians to do this, adverse reaction centres have been established to motivate physicians to report side effects. This has been combined with making the forms easier to complete and by undertaking information campaigns to improve this situation (Daly 1987). A recent study in the UK showed that 89 per cent of GPs and 59 per cent of hospital physicians would use the reporting system for an adverse event they observed (MHRA & IPSOS MORI, 2006). A recent publication by the British Medical Association (BMA) entitled Reporting Adverse Drug Reactions: A Guide for Healthcare Professionals is a comprehensive training source for ADR reporting. Pharmacists have developed a key responsibility to report ADRs. In the UK, there has been a dramatic increase in the ADR reporting via the Yellow Card Scheme since 1997, when hospital pharmacists became recognised contributors to such a scheme (Macintyre, Cuthbert and Moulsdale 2004). To study adverse reactions more carefully, some health care institutions have been allocated extra resources to undertake special studies, e.g., by intensive monitoring (Pedroni 1984, Lawson and Beard 1989). This is probably better than simply relying on reports by prescribers, because only a small percentage of doctors are likely to notify health authorities of side effects, and spontaneous ADR reporting is unlikely to identify all important unrecognised drug safety hazards (Waller, 2006). Another problem is that it can require significant skill to recognize a side effect from other symptoms displayed by a patient. Side effects similar to symptoms of sickness can be especially difficult to detect (Melville 1983). Also, spontaneous reports are not always taken seriously by public drug control. For example, reports by physicians based on experiences from patients who had used Halcion were, to large extent, disregarded because it was believed at that time that clinical trial data indicated that the drug was not associated with significant side effects. In reality, it was later found that the drug company had not given detailed and reliable information about the results from clinical trials which had been set up to test the side-effects (Abraham 2002). Consumer reporting is a more recent phenomenon, could give us information about their concerns and should not be ignored (Edwards, 2000). However, the value of consumer reporting is as yet unclear (Waller, 2006). Often more than one type of side effect can occur and this leads to the value problem. In such instances, different types of side effects have to be combined into the index discussed previously concerning therapeutic capability. Nevertheless, the challenge of communicating such medicines safety and benefit-risk information to clinicians, other healthcare professionals and patients remains. This is an area which needs to be considerably improved (Edwards, 2000). The individual patient also has to be informed of the relative risks of the treatment they choose as opposed to risks involved in alternative therapies for their condition and has to be allowed to influence the therapy selected (this is often called ‘informed consent’, Lilja et al. 1996: 149–156). The system for compensation if a patient gets a serious side effect varies between countries because countries have different legal systems to handle compensation claims. In the US there is a strict liability system meaning that a drug company has to compensate a patient for side effects, even if they were unknown to the company at the marketing stage. However, in other countries, e.g., those in Europe, a patient has to prove

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that the drug company was negligent for it to be forced to make financial compensation to a patient. However, to facilitate patients receiving compensation, there are insurance systems in a number of European countries. The drug companies pay annual fees to an insurance company, which will award patients compensation if they can prove that they have suffered from drug side effects. In such a system patients do not need to sue the drug company to get compensation.

3.9 Low drug costs Drug costs can be regarded as a monetary measure of the amount of resources allocated to therapy. It is, however, only one element of total treatment costs. We need to control drug costs to create money for other health related activities including resources for health promotion. The issue of the cost of drugs is, of course, particularly important in developing countries. Separate analyses can be done for total drug costs and also for the part of the drug costs met by patients. Drug costs are generally defined to include only the direct costs (eventually including the drug handling costs in the clinic). This means that the costs resulting from treating side effects are not included under this heading. In long-term treatment programmes, drug costs are often measured by the cost per day. In more short-term programmes, the drug cost is often estimated by the total drug costs for a period of treatment. Both measurements can be used when comparing treatment programmes from different clinics.

3.10 How to develop and implement a national policy At the Alma Ata Conference in 1978 organized by WHO, it was recommended that member states ‘formulate national policies and regulations with respect to import, local production, sale and distribution of drugs so as to ensure that essential drugs are available at the various levels of primary health care at the lowest feasible cost’ (WHO 1978). This was directed particularly at developing countries. To formulate a national drug policy is, to a great extent, a political matter. This means that if the political groups are not interested in the development of such policies they will not take place. However, health professional groups can initiate and drive through such plans, but the problem in many developing countries, which most need such initiatives, is that there may be no such influential professional organizations. In such countries, consumer groups could contribute to the process to develop national drug policies, which in turn may stimulate professional discussion. National drug policies also have to be implemented. This can create great difficulties. Firstly, there is a risk that the drug policy is of more formal than practical value. It may have been developed by civil servants to meet national or international demands to have a national drug plan. In reality, political groups might not be interested in introducing reforms to redistribute health care resources to favour the poorer parts of the population (Bossert 1979). Under these circumstances problems can be anticipated in implementing such a plan. Secondly, the plan can be unrealistic in that there are not sufficient resources available to bring

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it to fruition. Thirdly, interest groups can try to hinder the implementation of the plan for political reasons. This means that changes in policies and priorities have to be undertaken. The decision makers have to undertake negotiations with the concerned groups to find solutions which are regarded as acceptable and fair from the different interest groups’ perspectives.

3.11 Summary In this chapter nine drug sector goals were described: 1. Efficient organization of drug support 2. Efficient organization of drug research 3. Efficient organization of drug production 4. Efficient organization of drug distribution 5. An efficient system for drug consumption 6. A satisfactory system of drug information 7. Choice of drugs with high therapeutic powers 8. Choice of drugs with low side effects 9. Low drug costs. These goals have not been identified with any specific country. They are general enough to apply everywhere. However, the way countries measure their achievements can be expected to vary as well as the priority given to each goal.

References Abraham, J., Transnational industrial power, the medical profession and the regulatory state: adverse drug reactions and the crisis over the safety of Halcion in the Netherlands and the UK. Soc. Sci. Med., 2002, 55: 1671–1690. Abraham, J. and Lewis, G., Regulation Medicines in Europe – Competition, Expertise and Public Health. London, New York: Routledge, 2000. Accion International por La Salud. Medicamentos – Los casos de Bolivia, Brasil, Chile y Peru. Chimbote Peru: Accion International por La Salud, 1987. Akerele, O., The best of worlds: bringing traditional medicine up to date. Soc. Sci. Med., 1987, 24: 177–181. Barden, J., Derry, S., McQuy, H.J. and Moore, A., Bias from industry trial funding? A framework a suggested approach and negative results. Pain, 2006, 121: 207–218. Bossert, T., Health policies in Africa and Latin America: adopting the primary care approach. Soc. Sci. Med., 1979, 13: 65–68. Brouselle, A. and Champagne, F., How was UNAID drug access initiative implemented in Chile? Soc. Sci. Med., 2004, 27: 295–308.

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Colgrove, J., The McKeown thesis: a historical controversy and its enduring influence. Am. J. Pub. Health., 2002, 92(5): 725–729. Coney S. The exploitation of fear: hormone therapy replacement therapy and the menopausal woman. In Davis, P. (ed.), For Health or for Profit? – Medicine, the Pharmaceutical Industry and the State in New Zeeland. Oxford: Oxford University Press, 1992: 179–207 Daly, M.J., The influence of new adverse reporting forms. Br. J. Pharm. Pract., June 1987: 206–210. Dean, K., The role of methods in maintaining orthodox beliefs in health research. Soc. Sci. Med., 2004, 58: 675–685. De Quadros, C.A., Carrasco, P. and Oliv´e, J-M., The desired field performance characteristics of new improved vaccines in the developing world. Int. J. Technol. Assess. Health Care, 1994, 10: 65–70. Diog`ene, E., P´erez, P.J., Figueras, A., Furones, J.A. et al., The Cuban experience in focusing pharmaceuticals policy to health population needs: initial results of the National Pharmacoepidemiology Network (1996-2001), Pharmacoepidemiol. Drug. Saf., 2003, 12: 405–407. Direcks, A. et al. The crime continues. In McDonnell, K. (ed.), Adverse Effects, Women and the Pharmaceutical Industry. IOCU, 1986: 41–49. Edwards, I.R., Spontaneous ADR reporting and drug safety signal induction in perspective. To honour Professor Jens Schou. Pharmacol Toxicol. 2000, 86(Suppl. I): 16–19. Fletcher, A., Spontaneous adverse drug reaction reporting vs event monitoring: a comparison. J. R. Soc. Med., 1991, 84: 341–344. Gelders, S. Ewen, M., Noguchi, N. and Laing, R., Price, availability and affordability – an international comparison of chronic disease medicines. Report presented at a WHO planning meeting in Cairo December 2005, Geneva: WHO, HAI, 2006. Gibson, J.T., Medication, Law and Behaviour. London: John Wiley & Sons, Ltd, 1976. Hartzema, A.G., Porta, M.S. and Tilson, H.H., Pharmacoepidemiology – An Introduction. Cincinnati: Harvey Whitney Books, 1991. Healy, D., The Antidepressant Era. Cambridge, MA and London: Harvard University Press., 1997. Helman, C.G., Communication in medical care. The role of the patient and practitioner explanatory models. Soc. Sci Med., 1985, 20: 923–931. Henderson, M.A., Tuberculosis in a developing country: Experiences of the TB Service at BMH, Dharan. J. R. Army Med. Corps, 1984, 130: 22–30. Holme Hansen, E.H. et al., Clinical trials: towards a different model. J. Pharm. Clin., 1987, 6:67–74. Hudson, S. Hospital pharmacies. In Mossialos, E., Mrazek, M. and Walley, T., Regulating Pharmaceuticals in Europe: Striving for Efficiency, Equity and Quality. London: Open University Press and WHO, 2004: 213–226, web-site: www.euro.who.int/document/E83015.pdf. Lawson, D.H. and Beard, K., Intensive hospital-based monitoring. In Strom, B.L. (ed.), Pharmacoepidemiology. New York: Churchill Livingstone, 1989: 135–148. Lexchin, J., Is there still a role for spontaneous reporting of adverse drug reactions? CMAJ, 2006, 174(2): 191–192. Lilja, J., Larsson, S. and Hamilton, D., Drug Communication – How Cognitive Science Can Help the Health Professionals. Kuopio: Kuopio University, 1996. Lilja, J., Larsson, S., Hamilton, D. and Bauer, M., Ethical values in the treatment of depression and anxiety. In Salek, S. and Elgar, A. (eds.), Pharmaceutical Ethics. Chichester: John Wiley & Sons, Ltd, 2002: 137–160. Macintyre, J., Cuthbert, M. and Moulsdale, H., How pharmacists report adverse drug reactions at the Edinburgh Cancer Centre. Pharmaceut J., 2004, 273: 227–229.

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McKeown, T., The Role of the Medicine. Dream, Mirage or Nemesis. London: Nuffield, 1976. Melville, A., Cured to Death. London: New English Library, 1983. MHRS & IPSOS MORI, Risks and Benefits of Medicines and Medical Devices – Perceptions, Communication and Regulation, May/June 2006. (http://www.mhra.gov.uk/home/idcplg ) Moride, Y., Haramburu, F., Requejo, A.A. and B´egaud, B., Under-reporting of adverse drug reactions in general practice. Br. J. Clin. Pharmacol., 1997, 43: 177–181. Norris, P., Dos Santos, P.B., Woods, D. and Tobata, W., Delivering medicines in a challenging environment: the pharmaceutical sector in East Timor (a descriptive study). Pharm. Pract., 2007, 5: 145–150. Pearce, N., Adverse reactions: the Fenoterol saga. . In Davis, P. (ed.) For Health or for Profit? – Medicine, the Pharmaceutical Industry and the State in New Zealand. Oxford: Oxford University Press, 1992: 75–97. Pedroni, G., Drugs and adverse reactions: an economic view of a medical problem. Soc. Sci. Med., 1984, 18: 173–182. Shin, S., Furin, J., Bayona, J., Mate, K., Kim, J.Y. and Farmer, P., Community-based treatment of multidrug-resistant tuberculosis in Lima, Peru: 7 years experiences. Soc. Sci. Med., 2004, 59: 1529–1539. Sjostrom, H and Nilsson, R., Thalidomide and the Power of Drug Companies. London: Penguin Books, 1972. Strom, B,L., Study designs available for pharmacoepidemiology studies. In Strom, B.L. (ed.), Pharmacoepidemiology. New York: Churchill Livingstone, 1989: 13–26. Thrupp, L.A., Technology an planning in the third world pharmaceutical sector: the Cuban and Carribean community approach. Int. J. Health Practice, 1984, 14: 189–216. Tomson, G., Paphassarang, C. J¨onsson, K. Houamboun, K. Akkhavong, K. and Wahlstr¨om, R., Decision-makers and the usefulness of research evidence in policy implementation – a case study from Lao PDR. Soc. Sci. Med., 2005, 61: 1291–1299. US Department of Health and Human Services. Depression in Primary Care: Vol. 2, Treatment of Major Depression. Rockville Maryland: US Department of Health and Human Services, 1993. Waller, P.C., Making the most of spontaneous adverse drug reaction reporting. Basic Clin Pharmacol Toxicol., 2006, 98: 320–323. WHO, Report of the International Conference on Primary Health Care. Geneva: WHO, 1978. Wiholm, B.-E. and Olsson, S., Spontanous reporting outside the United States. In Strom, B.L. (ed.), Pharmacoepidemiology, New York: Churchill Livingstone, 1989: 119–134.

4 Planning the drug support

In this chapter drug policies are discussed. A drug policy can be defined as a strategy aimed at achieving two or more of the sector goals described in Chapter 3. If a policy is aimed at only one of the sector goals it is more appropriately classified as, for example, a ‘production policy’ or a ‘distribution policy’. These policies will be described in later chapters when each of these areas is discussed. Seven drug ‘policy dimensions’ are described. For each of these dimensions, a country can select different specific policies to take into account financial, cultural and organizational factors. Countries choose different policies, and different groups within a country favour different policies. Because of space, only the most frequently employed, one could almost say the most popular, policies are considered.

4.1 Patent and exclusivity policies A patent grants its holder a sales monopoly for as long as the patent is valid, in exchange for public disclosure of the invention. Patent laws can be viewed on a scale from granting no privileges at all to patent holders to giving patent holders a sales monopoly for a long time. National patent laws determine the details of this scale. The first patent statute is said to have been introduced in Venice in the fifteenth century. However, it was not until the end of the nineteenth century that patent laws and patents became popular as a national political strategy for industrialization in what are now advanced industrialized countries. When the large drug companies established their own R&D departments at the beginning of the twentieth century, the number of drug patents increased considerably (Reckie 1975: 25). In some industrial countries, e.g., Germany, UK, the percentage of patents granted for chemicals increased considerably during the innovation period (Chapter 2, Schneider 1965: 147, Reckie 1975: 6). An important feature of patent laws is that they apply, not only to drugs and raw drug materials, but to all products. However, in some countries there has been legislation which Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

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did not allow drug patents, but permitted patents for other goods. For example, in Italy a law of 1854 forbade all drug patents, a situation which was not changed until the 1970s when drug patents were introduced in Italy for the first time. Another example is Latin America where drug patents today are only given for much shorter periods than found in Europe and North America. For a country which can produce drugs, but which is not capable of extensive drug research, it is an advantage to have weak patent laws because this makes it possible for production to start there after quite a short patent period or indeed after no patent period at all (Vaitsos 1972, Lall and Bibile 1978: 315–316). However, for countries which have advanced drug production and drug research facilities, it is very beneficial to have strong patents. In these circumstances drug companies can have a monopoly on a new drug for a long time. The US and the UK are examples of countries with traditionally strong patent laws. However, as was mentioned in Chapter 2, there are now negotiations in the WTO to harmonize patent legislation internationally. It is expected that, as a result of these talks, most countries will make their patent laws more protective. For example, India in 2005 introduced strong product laws for drugs (Washington Times-United Press International, Jan 11, 2005). Before 1984, patents in the US were granted for a 17 year period (now 20 years), dating from the day of the patent application (UN 1979). In 1984, the Drug Price Competition and Patent Term Restoration Act was enacted (Waxman–Hatch amendment). One aim was to increase both competition and duplicative clinical trials. From this date, a ‘second generic drug producer (the second after the original preparation) did not need to prove safety and efficacy by clinical trials. The new preparation could be registered if it had the same ‘therapeutic equivalence as the original preparation. However, it had to contain the same amount of the active drug in the same dosage form and be given by the same route of administration (Holovac 2004). This reform was starting point for the ‘generic revolution’ we now see in many countries. However, there are several restrictions to being registered as a generic drug (see discussion below). However, the Waxman–Hatch amendment also included reforms to encourage research for new innovative drugs by allowing ‘exclusivity periods’ (a type of monopoly given by the FDA, the US drug control agency). The exclusivity periods are important when original patent period has elapsed. First, an innovative drug can get a maximum of five years of exclusivity to compensate for patent time lost due to the drug review process. This type of exclusivity is only given to drugs which have never before been approved for use in the US. A number of other exclusivity periods might also be granted. A drug company might be given exclusivity for orphan drugs (drugs for conditions for which no previous treatment are available and the disease affects a minor part of the population) (Holovac 2004) The basis for the so called ‘Watchman–Hatch exclusivity periods’ is the information about patent status regarding a new drug that the applicant has to give the FDA when applying for registration. An older drug might be given a three year exclusivity period if the company can show that new clinical studies have been undertaken e.g., for a new drug form. Paediatric drugs might also be given a special form of exclusivity. The first generic drug might be given an 180 day exclusivity period (Holovac 2004). When a new drug application (NDA) is submitted to the FDA, it must contain information about issued US patents which are relevant to the drug applicant (a similar procedure is

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not found in any other country, to our knowledge). The patent information is collected and published in ‘The Orange Book’. Also, companies selling drugs which are already on the market have to provide patent information to the FDA which will be included in the Orange Book. A generic manufacturer must make a patent certification for each patent listed in the Orange Book. The manufacturer has to show that there is no relevant patent which might hinder the launching of the new generic drug. However, the company which sells the original preparation has a 30 day period to send in a new patent application – and in this way hinder the generic manufacturer’s launch of the generic drug. To complicate things even more, the generic applicant might argue that the patents are invalid and might be given a tentative approval by FDA until the patent issues are resolved (Holovac 2004, Mrazek and Frank 2004, Gross et al. 2005). Some countries have had special laws which made it possible for their governments to grant compulsory licences to companies which wanted to set up production and to import in the case of unused patents. For example, Canada and the UK introduced compulsory licensing for domestically used processes in 1923 (UN 1979: 31). However, this strategy not been used in these industrialized countries for many years. A special case is the license agreements negotiated within the WTO. In 2001, as a part of the Trips agreement, the WTO made it possible for the least developed drug producing countries to bypass a patent in their own country by issuing a compulsory licence when facing an epidemic, such as HIV, TB or malaria (Chapter 2 and New Scientist, 29 August, 2003). Supporters of strong patent legislation, like representatives of big multinational drug companies, argue that (Cooper 1966: 153-67): 1. Patents encourage new inventions by facilitating the financing of R&D activities because the patent holder is guaranteed a sales monopoly. 2. Patents facilitate investments in new production methods by diminishing the risks for the patent holder. 3. Patents lead to the diffusion of technological information. As patent applications are available for public scrutiny, other inventors can use the information in their research. However, opponents of strong drug patent laws argue that (Steele 1962 and 1964, Walker 1971: 51–53): 1. Strong patents can lead to monopolies and high prices. 2. Strong patents can hinder the industrialization process in low or middle per capita income countries where the patents are held by big industrial companies based in technologically advanced countries. These companies may not be interested in using the patents in domestic production in less industrialized countries. 3. The value of the technical information disclosed can be limited. This is often the case in developing countries where few groups, if any, have the necessary knowledge and facilities to make use of the technical information revealed in the patent application.

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4.2 Trade name policy vs. generic name policy Trade names and generic names can also be regarded as aspects of drug policies. It is possible to distinguish between four types of drug names: 1. A trade name indicating a market name given to the product by the seller. Most countries have trade name laws giving the registered owner exclusive right to use the trade name in marketing. 2. An international non-proprietary name (INN-name). In such cases an international agency decides upon international names which cannot be used as trade names later. However, one of the problems with the INN-names is that they can be too long to be used by prescribers and consumers. 3. A chemical name. There is also an international agency which decides upon chemical names. These names are based on the chemical structure of the substance and give an exact description of the compound. A reader can understand the chemical structure from the language used without previous knowledge of the compound. The problem with chemical names is their length, which often makes them unsuitable for use in prescribing and in drug information where details have to be provided quickly and accurately. 4. A generic name. Today many countries encourage generic prescribing or generic substitution. To make communication and prescribing easy national generic names might be developed. Often the national generic names are based on the INN-names and the generic names used in other countries. Long INN-names can be shortened and difficult INN-names can be made simpler. Generic names are encouraged by the WHO as part of the essential drug policy which it advocates (details are discussed later in this chapter). However, the term ‘a generic drug’ can have different meanings to different authors and might be given different definitions in national drug laws. Some authors and drug laws say that a generic drug is a drug sold by a generic name (see point 4 above). Other define ‘generic drugs’ to include both branded drugs (which are sold under a trade name) and drugs sold under a generic name, if the drugs have the same chemical ingredient and have lost their patent protection (so called ‘branded generics’). A third definition includes both branded and non-branded preparations, but excludes the original preparation (which was produced earlier under patent protection, Geitona et al. 2006). Which of these definitions a writer selects is usually determined by the traditions in the author’s home country and the aims of the study. In countries which have a tradition of generic prescribing (the drug there being prescribed by generic names) many drugs are sold under their generic name, e.g., the UK, the US. In these countries a ‘generic drug’often means a drug sold under a generic name. However, in countries where there is not a tradition of generic prescribing, few drugs are sold under their generic name, e.g., the Nordic European countries. In these lands writers often define ‘generic drugs’ to include both generic and branded drugs with the same chemical ingredients. Trademark laws were first introduced in Europe during the ninteenth century. A person could apply for a ‘name monopoly’ giving them monopoly rights to use that name in

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the marketing of a product. In many countries pharmacists tried to exclude drugs from trademark legislation. For example, in Sweden most pharmacists did not recognize drug trade names in the late nineteenth century, despite the fact that Sweden had a trademark law in operation at that time. If a customer asked for a drug preparation by a trade name, many pharmacists handed over drug preparations with similar contents which had been produced in their own pharmacies. This practice, generic substitution, was questioned in the courts at the turn of the century. The Swedish pharmacy owners lost the argument in the High Court in 1903 and from this time onward were required to dispense the industrially produced drug preparation if a customer asked for it by its trade name. However, today Sweden, as do the other Northern Europe countries, has a system of generic substitution (see discussion later in this chapter). Since the beginning of the twentieth century there has been a considerable professional debate as to what extent the different generic products have the same medical properties. The evidence-based medicine movement (EBM) at the end of the twentieth century held to the view that generic drug differences have to be measured by scientific methods (Chapter 2). Because generic drugs often are ‘old’ drugs, the professional knowledge of the pharmacological processes leading to the treatment effects are often rather well known. This means that it is possible to extrapolate the medical effects based on ‘bioavailability’ and ‘bioequivalence’ data, i.e. the concentration of the active ingredient in the relevant parts of the human body. In general, the concentration of the active substance in the blood is often used to determine the degree of bioequivalence to similar drugs (Schneeweiss 2007, and the discussion about therapeutic effects in Section 3.7). A generic drug (meaning that it is not an original drug preparation) is usually cheaper than the originator’s price, often by about 20 per cent. In a country with a combination of a drug reimbursement and a generic substitution system, new generic drugs are likely to account for about 50 per cent of sales one year after the original producer has lost their patent rights and the generic drugs have been marketed (Mrazek and Frank 2004).

4.3 Generic and therapeutic substitution Generic substitution means that a patient is allowed to be given a substitute preparation, a cheaper generic, if the physician has prescribed an expensive drug. In general, only substitutions between drugs having the same active chemical ingredient are allowed in countries which permit this practice. Today generic substitution is very popular in many places. For example, in Canada, 40 per cent of the prescribed drug preparations are dispensed generically (Lexchin 2004). In the UK this percentage today is almost 60 per cent (Anderson 2005). But in the southern parts of Europe generic substitution is not such a widespread practice (Vall´es et al. 2003). Therapeutic substitution can be regarded as an extension of generic substitution. The drug user might change from a prescribed drug to a cheaper drug among those drugs in the same therapeutic class (e.g. class of beta-blockers). In such situations, all drugs need not have the same generic ingredients. What are being compared here are drugs which have equivalent effects upon the body. We see generic and therapeutic substitution as different practices within a drug reimbursement system, designed to keep drug costs low for insurance organisations and for patients (Schneeweiss 2007). The driver for substitution is an economic one.

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The expansion in generic substitution reflects the fact that more generic drugs are available. A very important reason for the increase in the number of generic drugs is the 1984 Hatch–Waxman reform in the US. This legislation allowed drug companies to register nonpatented drugs in a much simpler way than before. Based on bioequivalence data, a generic drug company can register a well known drug, i.e., one that has been registered previously by another producer following satisfactory evidence from clinical trials. The generic producer has to show that the active ingredient is taken up in the human body in a similar way to the original preparation (bioequivalence). For these drugs no additional clinical trial evidence is required for registration (Gross et al. 2005, Schneeweiss 2007). Many countries have incorporated similar reforms into their drug laws. These changes in administrative praxis reduce considerably the company costs of registering generic drugs (Corstjens 1991: 108). The availability of bioequivalence data seems to be a necessary condition for a generic substitution system to function properly. For example, in Greece, generic companies are not required to show bioequivalence data, which make it almost impossible to compare the quality of similar drugs. As a result, the generics part of the total medicine market is about 10 per cent (Geitona et al. 2006). Generic and therapeutic substitution is an important way for governments to encourage price competition in countries with national social insurance and drug reimbursement systems, e.g., most European countries. Most patients select a cheaper drug simply because it costs less. As a result of generic substitution, price competition will increase because sellers want to achieve significant market shares by setting low prices. Also, the cost of the reimbursement system will diminish because of the lower drug prices. However, generic substitution laws will have less importance in countries, e.g., in Latin America, where most drugs are bought without a prescription. It has to be remembered that a generic and therapeutic substitution law is just one component in the system which determines the degree of price competition in the national pharmaceutical sector. To increase price competition effectively, the prescribing, the distribution and the marketing systems have to be organized in way that promotes price competition (Mrazek and Frank 2004) The popularity of generic and therapeutic substitution reforms can be seen in the increase in sales of generic drugs in countries where generic substitution laws have been introduced (Mrazek and Frank 2004). Of course, the fact that the patents on a lot of valuable drugs have expired is another explanation for the increase in generic sales. Also, new ‘generic companies’ have been established, offering high quality generic drugs at low prices (Chapter 7). However, in many countries in the world there is weak competition and few generic companies focus on the sales of non-patented drugs. In these places, the social value of generic substitution laws is less. There might also be weak competition at the retail level, i.e., among pharmacies. In such cases mark-up controls have to be introduced by governments to reap the benefits of generic substitution (Gelders et al. 2006: 58). The introduction of a generic substitution law requires national authorities to list drugs which are of the same quality. Of course, this means that generic producers have to give data showing that the drugs are of the same quality as the original preparation. These classifications should be based on results from bioavailability/bioequivalence studies (see discussion above). The detailed regulation of a generic and therapeutic system varies somewhat between countries. For example, in Hungary a system was introduced in which the prices were set

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according to the price per DDD. The insurance organization expected the prescribers and the drug users to select the drug with the lowest price per DDD. If any drug has a higher price per DDD than the reference daily price, the product was granted only 90 per cent of reimbursement of the reference daily price. At the same time the percentage reimbursed increased for some of the drugs. As a result physicians started to prescribe higher doses so the total costs went up (Kal´o et al. 2007). In many countries, before generic substitution was introduced there was strong opposition to such a reform from the big drug companies. On the other hand, many experts argued in its favour. The drug firms maintained that generic drugs were inferior compared with the original preparations while the supporters of reform asserted that the legislation required that the drug quality be evaluated and that competition between drug companies should be encouraged. However, it is beyond the scope of this book to describe this debate in detail. Interested readers are referred to Steele (1962) and Walker (1971). It seems that today this debate is a thing of the past because most countries with a drug reimbursement scheme have introduced generic substitution laws. Also, in most countries which have introduced generic substitution, patients and prescribers have rated it a success (Heikkil¨a et al. 2007). The health insurance system and patients alike have made savings on what they spend on drugs (e.g., Andersson et al. 2007).

4.4 Generic prescribing Generic prescribing means that the prescriber uses a generic name when they prescribe a drug. In professional education, generic names are nearly always used. In countries like the UK it seems to have been a long tradition among physicians to prescribe by generic names. In many other countries this is not the case because in drug marketing, the trade names are emphasized and prescribers then think and talk in trade names. However, in hospital drug formularies the drugs recommended are often described by their generic names and in developing countries with an essential drug policy, drugs are referred to by their generic names. Those with a positive attitude to generic prescribing argue that the introduction of compulsory generic prescribing can result in a 10 to 30 per cent saving in terms of costs (Hogerzeil 1984: 27). Also, this can give a better understanding of the medical effects of the drugs among health professionals and the general public, because these groups are likely to start thinking in terms of the medical properties of the chemical content of the drug instead of associating the properties with a trade name (Lall and Bibile 1978: 316–21, Melrose 1982). However, the substitution laws now in operation in countries with large prescription sales make reforms in favour of generic prescribing very unlikely. The savings in terms of costs seem already to have been achieved by the introduction of drug substitution. At least, this applies to countries which have a national health insurance system. However, in countries which do not have such a system generic prescribing seems less likely to come about because of strong political opposition from the drug industry and professional groups. It seems that drug substitution was easily introduced in many countries because such a reform was encouraged by the health insurance organizations and the lack of government funds which made financial-saving measures necessary.

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4.5 Drug registration Drug registration can also be regarded as a drug policy. The aim of drug registration is to control the market by allowing only the sale of preparations of pre-determined quality, safety and efficacy. A drug firm has to apply for registration before a new preparation can be sold. The first drug registration rules were introduced during the Napoleonic period in France. The reason was to address the problem associated with ‘secret medicines’, i.e., the content of the drugs was revealed to neither the consumers nor the prescribers by the manufacturers, and the drugs were just sold under a market name. However, this control did not spread to other countries and lasted only a short period of time. In the early decades of the twenieth century, a number of European countries introduced registration procedures. In the 1920s, Spain, Austria and Norway were among those first to initiate such regulations. Before an industrially produced drug was allowed to be sold, the drug firm had to apply for a market authorization. The pharmacy owners supported these reforms because commercial campaigns were supposed to be controlled. They hoped that this would be a way of stopping the transfer of drug production from the pharmacies to the drug companies. However, the drug registration reforms did not have this result and drug production was taken over by the drug manufacturers (Chapter 2). Even when there were drug registration laws, before the Second World War, the medical documentation necessary for the registration varied considerably between countries. However, after the Thalidomide tragedy in 1961 national drug registration demands became more restrictive and internationally more homogeneous. Many countries which did not have a drug registration system introduced legislation as a result of the Thalidomide catastrophe (Chapter 2). In the drug registration process, the drug control agency has to weigh the positive medical effects against the safety risks. However, in the decision to register a new vaccine, this might be difficult because of the uncertainties involved. This is because clinical trials often vary in design, in vaccination schedules and in case definitions (Blume and Zanders 2006). The decision – to accept or dismiss an application for registration – is normally taken by a national body set up by the government and representing the various professional groups involved. However, we now see new organizations where a number of countries have established a common registration system. The EMEA (European Medicines Agency) organization in London, which registers drugs for the entire EU market is one example (www.emea.eu.int , Abraham and Lewis 2000, Garattini and Bertele 2004,). However, each EU country can also register a drug for its own national market, but if sales are then intended in any other member state an EU authorization is required. National registration is mostly restricted to national non-prescription drugs. However, the commercial attraction and advantages of the EMEA system to the EU are obvious, in that a new drug with significant medical potential can thus get registered for the entire EU market at once and on a uniform basis. Even if drug registration can be regarded as part of a drug policy, this does not mean that all countries consciously use it as a way to achieve their goals. It seems that in most countries, the process of drug registration is influenced more by historical factors than by consciously made decisions. In many countries the drug registration process does not require the volume of documentation necessary in the EU and the US.

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Most registration bodies have the following options when deciding if a new drug should be registered: 1. To allow marketing as a non-prescription drug with restrictions regarding the medical conditions permitted to be mentioned in the marketing. 2. To allow marketing as a prescription-only drug with restrictions regarding the medical conditions permitted to be mentioned in the marketing. 3. Not to allow marketing. Registration bodies often use different decision criteria in determining whether or not to register drugs and can be quite restrictive regarding the medical conditions permitted to be mentioned in marketing (Bruun 1983: 109–l32). In the past, developing countries have proved less restrictive than industrial countries (Silverman, Lee and Lydecker 1982), however recently the tendency has been to follow the lead of the exporting country or another developed market. To take a drug out of the market because of safety risks might take the form of a long decision-making process, which may vary considerably from one country to another (Abraham and Davies 2005). For example, in the Halcion case, a number of prescribers noted serious events among patients in UK and the Netherlands. However, these allegations were opposed by the drug company. The preparation was a commercial success for the drug company in the 1970s. However, in the intense professional debate about the safety risks, it was found that one important double-blind clinical study, involving 30 normal prisoners who took the drug and 16 who took placebo, had not been properly reported by the company. Significantly more of those who used the drug got paranoiac symptoms. The UK Licensing Authority withdrew the drug from the market. The company appealed to the UK High Court, where it was decided that the UK Licensing Authority had a right to stop the registration of drug. The Halcion case indicates that different professional experts might come up with different opinions regarding the safety risk involved in drug use, and big drug companies have significant resources to advocate for their view over a very long decision-making process (Abraham 2002). In Europe, parallel imports between the EU countries are allowed for registered drugs. This means that a wholesaler might buy the drug in one country where the price is low and sell it another country where the price is high. The wholesaler might do this without permission of the firm which has registered the drugs in both countries. However, the drug must be registered in both countries and have the same ingredients and drug qualities as specified in the original registration documents. The reason why parallel imports are allowed in EU countries is that a central rule in the EU is that goods, workers and capital should have a freedom of movement between the EU countries (e.g., Norris 1998). It seems that parallel imports have had a significant price reducing affect on European drug sectors (Ganslandt and Maskus 2004). With the existence of parallel importing, drug companies have to consider the impact of this practice, so they have varied their drug prices in Europe less than they did before this reform. In the US, there is at present a political debate regarding a similar parallel import reform which would make it legal to import registered drugs from Canada (Rost 2006). In many countries, e.g., the US, drug control agencies might allow a drug which is not registered to be used by an individual patient who is in need of that specific drug, provided the medication is not associated with safety risks (Tsien and Pahl 2005).

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4.6 Drug reimbursement policies/national health insurance systems Drug reimbursement means that the patient does not have to pay the full price of a drug because a health organization pays part of it. However, in some countries which do not have national insurance systems, groups of poor patients do get their drugs at a lower price than other patient groups. Such a system is similar to the drug reimbursement system. However, if a system with differential prices is used, the price differential between the ‘lower price’ and the full price may well be paid by the government. When this happens we could refer to it as a drug reimbursement system and the government could be regarded as having set up a health insurance organization for poor patients. In many European countries there is no reimbursement for OTC drugs even when prescribed by a physician. In the Nordic countries free provision of medicines under social security schemes dates far back. The 1799 edition of Pharmacopoeia Pauperum detailed the list of drugs to be provided free to the poor of Denmark (about 10 per cent of the national population at this time). Concurrently, a system akin to a company health service operated in the city of Konigsberg in Prussia which entitled employed workers to free supplies of medicines (Bruun 1983: 219). However, national health insurance became widespread following legislation in the UK in 1946, which medically insured the entire population including full drug reimbursement (Lindsay 1962, Anderson 2005). The introduction of the National Health Service (NHS) scheme led to a significant increase in prescribing and in government costs for prescription drugs. So began a search for strategies to reduce the increase in drug costs without restricting the availability of drug use for medical conditions where they were needed. The aim was to find measures to reduce the risk of ‘prescription abuse‘. For example, the UK government and the British Medical Association supported the use of unbranded drugs (generics) to temper the steep rise in drug costs (Anderson 2005). The NHS scheme in the UK inspired many other European countries to introduce a national health insurance system and drug reimbursements. Today we find drug reimbursement systems in most lands which have national health insurance as in the EU countries. Usually a patient has to make a part-payment when buying a prescription drug in a private pharmacy. However, the details of the drug reimbursement systems within the EU do still vary considerably from country to country (McGuire, Drummond and Rutten 2004). In other places, such as the US, there is no national health insurance system, but drug reimbursements can be provided by private insurance systems or special insurance systems for the elderly and the poor, e.g., Medicare, Medicaid. In Canada the drug insurance system varies between provinces. Most of the insurance plans are private, but there are also public ones (Kapur and Basy 2004) However, in many countries the percentage of people insured is low and those covered by drug reimbursement is even lower. This is the situation in most Latin America countries. When designing a drug reimbursement scheme, most system operators tend to apply the following criteria: 1. The scheme should compensate patients financially. 2. The scheme should encourage medically effective treatments.

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3. The scheme should encourage savings in prescribing. For example, drug substitution is often encouraged. 4. The scheme has to be assessed as fair by the general population. A scheme which leads to a drastic redistribution from elderly patients to the young will not be accepted (McGuire, Drummond and Rutten 2004). 5. In some countries industrial policy goals are considered when deciding upon a scheme (Permanand and Altenstetter 2004). The practices of drug reimbursement organizations and their coverage vary considerably. However, the schemes can be classified in the following ways:

r The population covered: The schemes might apply to all citizens or some special groups,

e.g., children, the elderly. However, it can be difficult to have different categories dependent on patient age in the schemes. For example, it has been noted that in Spain people wanting to get their drugs, but wishing to pay as little as possible, sometimes use an elderly relative as a ‘substitute patient’ (Puig-Joney 2004).

r The drugs included: Most regulators want to exclude drugs of questionable value. r The diseases included: Most regulators want to include drugs for the most serious medical

illnesses, but exclude those for minor medical conditions. In this way the costs for the scheme can be reduced. For example, in many countries non-essential ‘lifestyle’ drugs are not included in reimbursement schemes (Walley 2004).

r The requirements regarding the medical condition to get a drug reimbursed. In some coun-

tries, e.g., Holland, the insurance organization requires that some conditions be fulfilled to get a drug prescribed. This means that a diagnosis is not enough to get reimbursement for the drug. For example, reimbursement might be restricted to some patient groups, a professional guideline has to be followed for the treatment, prescribing is restricted to specialists only (Niezen et al. 2007).

r The degree of benefits to the insured depending on the drug group: Drugs for serious

conditions do not cost the patient as much as medication for less serious conditions. This is a way of rationing the available economic resources. In a few qualitative studies the processes for classification of the drugs into reimbursement groups have been analyzed. It seems that the attitudes of the high-ranking staff in the social insurance organization have a strong impact on which drugs are accorded a high reimbursement percentage. Also, patient organizations lobby for ‘their’ drugs. However, to ensure objectivity, decisions are usually taken on the basis of scientific data and perspectives (Vuorenkoski, Toiviainen and Hemminki 2003, Wirtz, Cribb and Barber 2005). However, in many countries, e.g., Spain, political groups have more influence on the reimbursement decisions. Here, shifts in political opinion can lead to inconsistent reimbursement decisions (Puig-Junoy 2004). Once a decision is taken it is difficult to change the classification because moves to reclassify often lead to renewed opposition (Vuorenkoski, Toiviainen and Hemminki 2003).

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r The degree of benefits depending on the price of the drug compared with other drugs in the same drug group. An expensive drug might be associated with a higher percentage of the cost being paid by the patient. This is often called ‘reference pricing’ (Mrazek and Frank 2004). A generic substitution policy as discussed above operates in many countries with a national health insurance system which includes reimbursement for drugs.

r The financial sources used. Often patients make a copayment, i.e., the patient pays a part

of the price (Thomson and Mossialos 2004). However, in a country which has a national insurance scheme and a national reimbursement system, it is possible to transfer financial resources from the rich to the poorer parts of the population. However, in countries where a number of different insurance systems operate for different patient groups, such resource transfers are of minor importance. In such places, special insurance systems for the poor and the elderly have to be set up and be subsidized by the government (as in the Medicaid and Medicare in the US).

The percentage covered by a drug reimbursement scheme varies from the entire population, as in the UK and the Nordic countries, to more limited programmes operating elsewhere, which only cover a minority of the population. The number of drugs involved also differs considerably between countries. Some countries, like The UK, have a ‘black’ (restrictive) list of those drugs not included in the reimbursement scheme. Other countries, like New Zealand, have a list of the drugs which can be prescribed within the scheme (‘white list’). When drawing up these lists, both medical and financial criteria are employed. So-called ‘diagnostic drifts’ are often observed when a drug reimbursement scheme is applied. This means that a doctor may be inclined to modify their diagnosis so as to justify prescribing a reimbursable medicine. There can be a shift from partly reimbursed drugs to fully reimbursed drugs (McGuire, Drummond and Rutten 2004). In India, NGOs have organized voluntary community health schemes targeted at the poorer members of society. Most of these schemes, in effect, buy a health service from private institutions. The premium which a family has to pay is dependent on the family income. On average, the premium per year of a family of five is equivalent to an adult weekly wage. In general, there is a maximum limit for the health costs the insurance organization has to pay. Most of the programme seems to include drugs, but excludes treatment costs for chronic diseases. To get an insurance system such as the Indian one to work, it is necessary to rely on the ‘trust’ in the system by the population. It seems that the Indian system gets that trust from the population. However, the system is still under development as only three per cent of the population is covered by any form of insurance (Devadasan et al. 2006). Even in very poor countries, e.g., Ethiopia, a large part of the population is not covered by any health insurance, but seems willing to pay a low premium for health insurance (Asfaw and Von Braun 2004). In the analysis of the effects of different reimbursement schemes, it is not just the design of the reimbursement system and the degree of reimbursement which are of interest. The effects of a new reimbursement scheme are to a large extent determined by the culture (both among prescribers and patients), national traditions and the economic factors operating in the country. This means that it is not possible to extrapolate the effects from one country to the next. Each system has to be planned according to the national culture and how the new scheme will be received by drug producers, drug distributors (including

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pharmacies), physicians, patients and those who will pay for the drugs (Puig-Junoy 2004, Wirtz, Cribb and Barber 2005, Mitton et al. 2006, and the discussion of process evaluations in Section 1.4).

4.7 The public and private drug sectors of developing countries In most developing countries the drug system is divided into two parts, a private and a public drug sector. These two sectors normally have separate distribution systems. Different rules govern each of them. The percentage of total drug consumption delivered through the public drug system varies considerably between countries. The private sector has its origins in private physicians and pharmacies and was established in administrative centres before national independence and used by the urban upper classes who have the money to buy the highly priced drugs offered. It is uncertain from where the private pharmacy owners originate, but it is likely that they were already engaged in commercial activities. This business orientation of the early years probably still influences the practice of the private sector units today. The public health care sector is to be found in hospitals and clinics established in the administrative centres governed and paid for by the colonial administrations. During the colonial years these clinics and hospitals served mainly European groups. Later, other groups also gained access to the services, one way for the colonial administration to get higher productivity from those natives employed in farming and to get support from the local populace (Itavyar 1987). However, the clinics were housed in administrative centres which put them out of reach of most people living in distant rural areas. The medical personnel were often recruited from Europe, leading to the establishment of health care systems similar to those found in Europe (Freund 1986). It has to be remembered that what is meant by the ‘public sector’ varies between countries. Throughout Africa the public sector means the ‘public distribution sector’. In the rural areas of these countries, drugs are distributed from national centralized medical stores to government health centres and health posts, e.g., in Tanzania (Munishi 1991 and Figure 3.1). However, in Latin America the ‘public sector’ has another meaning. Here the drugs for patients in open health care are not supplied via the public sector. Instead patients have to go to private pharmacies even if a drug was prescribed in a public hospital. In Latin America the concept of the public sector refers to the supply of drugs to the military, the police and to the in-house patients at public hospitals and clinics. In Asian countries, e.g., India, the public sector is small and often provides inadequate and low-quality health care. There are few public health clinics, the hospitals are overcrowded and suffer from a lack of adequate manpower, drugs and equipment. To overcome such problems, NGOs develop community health insurance schemes to ease the burden on the poor (e.g., Devadasan et al. 2006). The public drug supply sector (we are focusing here on many African countries) is often organized in a hierarchical system with many levels when a less rigidly structured organization would be more appropriate and result in more reliable information being available for the decision-makers. New organizational techniques like the use of multidisciplinary supervisory or evaluation committees are seldom employed. Informal payments, corruption

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and stealing can be a great problem in the public drug sector of a developing country. In practice it is not easy to change such a system because it has been there for a long period of time. One solution might be to make these payments ‘official’. Then the public sector could get more resources, e.g., to buy more drugs. However, health workers often regard these informal payments as part of their wages and do not want this practice to stop (Falkingham 2004, Ensor 2004). Also, it is frequently difficult to recruit personnel in African countries to the public sector because of the higher wages in the private sector there or in other countries. Furthermore, lack of communication and misunderstandings of rules and responsibilities can result in inefficiency (Low 1982). Transportation problems common to many African countries are another reason for drug shortages. Drugs can accumulate at the central medical storage facility because of poor transportation (Chapters 8 and 9). However, this is not so in all developing countries. Many developing countries seem to be too optimistic about the funds they can raise for drugs in the public (government) drug distribution sector. Often drugs are available free of charge in the public sector leading to drug shortages and to a distrust of modern health care and of the government’s ability to bring in reforms (Johnston 1980, Freund 1986, Munishi 1991, Jitta, Reynolds Whyte and Nshakira 2003, Gelders et al. 2006). Alternatively, a government can introduce part payments for those who can pay, covering at least the direct costs of the drugs, thus avoiding frequent drug shortages (Cross et al. 1986, Wang’Ombe and Mwabu 1987: 628). However, from a political perspective this can be very difficult, because such a reform is likely to be strongly opposed by factions in the country. Because of the frequent shortages of drugs and the low quality of service in the public health sector, people may distrust this sector (e.g., Streefland 2005). However, there are countries in which the public sector seems to maintain an acceptably high standard (Russell 2005). To increase the trust of the population, one strategy is to involve clients and local communities in the operation of the public health care institutions (Streefland 2005). In the public sector drugs are often bought by tender. This means that a government agent decides how much of a specific medicine is needed for a year, e.g., the number of tablets of a specific type. The firms are asked to send in their offer. The cheapest firm is, in general, selected to deliver a specific drug for the specified period (see the discussion about essential drugs later in this chapter and in Chapters 7 and 8). It might seem to be easy to implement new rules and set up new organizations in the public drug sector. However, the legitimate right of a government to introduce changes in the public sector is often restricted by strong pressure groups. An example of the problems associated with the establishment of a public drug sector is that of Bolivia described in Chapter 3. There a public drug sector, based on tenders and the selection of essential drugs, existed in the period 1981–1985. However, with the coming of a right wing national government, the public drug sector was closed (Accion Internacional por la Salud, 1987: 73–81). During recent decades, some countries have changed their entire health care system from one mainly financed by government funds to one largely reliant on private insurance systems. China is one example of such a development (Wang 2004). A similar change has been noted in the former Soviet Union republics. These countries have witnessed, since the collapse of the Soviet Union, a considerable drop in per capita income, living standards and in the amount of resources going into health care. Many of the former government institutions became private, as did most of the previously government owned pharmacies (Falkingham 2004). In these countries there is only a weak private health sector because health care has traditionally been seen as the responsibility of the government.

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This means that most people now rely upon self-medication (Falkingham 2004). However, things are probably changing for the better. More details of the developments here are needed. The direct costs of a medical consultation and of a drug are very much lower in the public sector than in the private sector, making these public services much more affordable by the poorer parts of the population in developing countries (based on data from El Salvador, Lewis, Ekeland and Traa-Valerezo 2004). However, those who can afford it in the urban areas still seem to prefer private health services because of the better service provided (Lewis, Ekeland and Traa-Valerezo 2004). The private drug supply sector is often regulated by drug laws originating in the European country of which the country was a colony. These laws are seldom suited to the problems facing developing countries. The old laws are rarely updated because no national interest group has sufficient power to change them. Because most of the influential groups in these countries are well aware of the shortcomings of the existing laws they are not enforced. Even if a drug preparation is prescription only there are sometimes no controls to enforce this, although prescriptions are required at a pharmacy. Pharmacy owners engage in the sale of prescription only drugs directly to the public – without prescriptions – because of the profits to be made and for customer convenience. In practice, the pharmacy owner may in fact need that income to support their family so, for them , such sales are not a choice but a necessity (Ferguson 1988). In many low- and middle-income countries, we also find an informal private drug sector. It can be traders or local nurses who sell drugs in food markets or at bus stations. They are not officially recognized and their activities are not regulated by the national health laws. Of course, the advice given in the informal sector can be questioned from a medical point of view. However, the drugs they offer are cheap and easily available for poor people in a developing country (Van der Geest 1988). A major risk is that there is no guard against them being adulterated, expired or counterfeit. In many countries, health staff in the public sector prescribe drugs which patients cannot get from the public distribution system, because the drug is not available at the local level. In such cases a patient, if they can afford it, might go to the private sectors to buy the prescribed drug (Maiga et al. 2003). In many developing countries, information concerning the use and side effects of prescribed drugs is often scarce, both in the public and the private sector. This is because the knowledge level of staff and the type of service given to patients are often similar in both the public and the private sectors of the same country (Maiga et al. 2003). Also, the price levels in the two sectors are usually connected. If a specific drug is available in the public sector, the price of the same drug in the private sector tends to be low. However, if a drug is not available in the public sector, the chances are that the price is rather high in the private sector (Maiga et al. 2003). It has to be remembered that developing countries are far from a homogenous group. They vary considerably in terms of per capita income, traditions, cultures, educational systems etc.

4.8 The primary health care policy Drugs alone cannot solve the health problems of a developing country. Development of a health care system which offers only therapeutic treatments consisting of drugs will be ineffective in the long term. There is a high risk that patients who have recovered

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from an infectious disease will become re-infected. Preventive programmes emphasizing improvements in hygiene, nutrition and housing are vital to improve the health of a nation (McKeown 1979). However, many developing countries still concentrate a significant part of their health service resources and efforts on hospitals which are not accessible to the majority of the population in rural areas and urban slums. Primary health care (PHC) was recognized in the 1940s and 1950s as a health policy particularly suited to developing countries. Details of what is meant by PHC were not established at once, but have gradually emerged through time. A PHC policy can now be defined in terms of six criteria. Not all authors agree on these criteria, but the list below can be regarded as a summary of those which constitute a PHC policy (Phillips 1986, Bender and Pikin 1987): 1. The target group of any PHC policy is the total population of a country. In comparison with policies prior to PHC this means a far more egalitarian approach. The health of the rural, and not just the urban, population is seen as vital to the success of national health programmes. 2. When adopting a PHC policy, the relationship between health, the socio-economic characteristics of the population and decision-making at various levels is acknowledged as crucial to the success of the PHC programme. 3. A PHC policy acknowledges that the prevention of disease is the main long-term solution to the health problems facing a country. 4. A PHC policy stresses the need to search for appropriate technologies for health promotion. This means that technology must be adapted to the financial and educational levels of the population and to the cultural setting. 5. A PHC policy means that the general public is encouraged to participate in health planning at the local level. This community support can take the form of recruiting volunteers to assist health care workers (Shin et al. 2004). If the volunteers live in the same village as the patients, they might help the health workers to translate professional medical information into the everyday language used by the local people (see the discussion about social constructionism in Section 1.7). However, to get community support, it is necessary to remunerate fairly those who work within the system (Uzochukwu, Akpala and Onwujekwe 2004). 6. A PHC policy seeks the establishment of small neighbourhood units, locally manned, all over the country. PHC policies have mushroomed throughout the world partly because of the support of strong international agencies like the WHO. This diffusion has also been facilitated by the ease with which the PHC concept can be adapted to different cultural and organizational settings (Bender and Pitkin l987). However, the ideas could not have taken root had not the policies appealed to influential groups in the countries concerned. For example, groups striving for liberation from colonial ties often introduced PHC policies both for

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egalitarian–ideological reasons and as a way of getting support from the man-in-the-street (Itavyar 1987). PHC policies have been criticized because of their implicit assumption that improvements in developing countries can be brought about by social policy independent of general increases in income (Cumper 1985: 35 and the discussion about development theories in Section 1.1). PHC policies have also been opposed because, despite these initiatives and the fine, official rhetoric in support, the economic and political elite has maintained its power as, when implementing a PHC policy, no real effort is made to ensure that it is applied to the whole population (Stebbins 1986). It seems that the content of the PHC policy reflects the welfare paradigm we find in rich countries, e.g., those in Europe. In Latin America there is a wide variation according to family incomes. The countries there have, for the most part, had short periods of democracy, weak governments and difficulties in collecting money for public health care by taxes. In the political scene in Latin American countries, the private and competitive structures seem to be dominant in comparison to the European PHC paradigm, where it is believed that health care can be financed by taxes or patient charges (e.g., Accion Internacional por la Salud, 1987, Lloyd-Sherlock 2005). In Africa, where so many countries have implemented a PHC policy, it is probably easier to accept a PHC paradigm because there are fewer groups in the population which have strong vested interests in keeping a private and competitive health care sector. We could say that there is not much by way of a realistic alternative to a PHC strategy in Africa. In some countries, e.g., Nepal, special programmes have been set up to prevent and treat a specific medical condition. In Nepal there is a TB programme, which incorporates planning for a decentralized organization. This has meant that the authority, resources and the responsibilities were transferred to local public authorities. However, the TB drugs are bought for the whole country. With such a decentralized organization it is hoped that corruption can be diminished and that the programme will get the local support necessary to achieve successful results. However, a problem with such a specialized programme is that it is difficult to integrate the programme with the rest of the health care system (Renne 2006). Also, a decentralized programme runs the risk of operating with insufficient technological and administrative capacity at the local level. A special Nepalese problem is the political uncertainties in the country. There is no doubt that setting up a programme for a special medical condition has its pros and cons (Newell et al. 2005). In Latin America the fragmentation of the health care system continues and might even accelerate over time because of the economic depression (Lloyd-Sherlock 2005). In what might be called ‘the health care system’, drug costs take up a significant part of the total health care costs (35 per cent in Argentina compared with 20 per cent, which is the WHO recommended figure). This reflects the fact that many people go directly to pharmacies instead of visiting a medical clinic. Patients can buy most drugs from pharmacies and do not need to spend time or money in a medical clinic. If OTC treatment does not help the patient, they might then visit a medical clinic (Chapter 15). In Argentina, as most other Latin American countries, about 40 per cent of the population is not protected by health insurance. Those with regular work might join an insurance fund and pay monthly charges. Then, if they have to go to the fund’s medical facilities subsequently, they can get drugs almost free from the fund’s pharmacy outlets. But for those who cannot afford to join an insurance scheme, all the costs of any drugs they need have to come out of their own

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pockets. This can be very difficult if the patient is unemployed or lives on a low income (Lloyd Sherlock 2005). Any PHC policy implies that the availability of drugs should be given priority. In economic terms, the cost of the drugs available from and used by a rural health care unit in a developing country may be up to 50 per cent of the total operational costs for the unit (Wang’Ombe and Mwabu 1987: 626). This is not a direct consequence of the PHC characteristics listed above, but follows indirectly from historical and cultural factors. The reason is that the poorer groups in many countries demand therapeutic medicines, especially drugs, much more than preventive medicine. When a PHC unit is established in such a place, the first thing that people who previously have had no medical services want are therapeutic medicines. The majority of the rural population will not trust a medical care system which fails to cure sick patients and they will not visit PHC units offering no drugs (Freund 1986). This is the background for the development of the essential drugs policy, which will be discussed in the next section. One possible strategy to ensure the availability of drugs is to encourage the use of herbal drugs for milder medical conditions. A community-oriented approach can be introduced to train health workers in the use of herbal drugs and to promote herbal drugs in the information they give their patients (Le Grand, Sri-Ngernyuang and Streefland 1993 and Section 6.3.1 about using local raw materials in drug production). It has to be noted that a PHC policy might mean different things depending on how the care is organized. For example, there might be differences between PHCs run by federal or local government (Renne 2006).We can distinguish between three different organizational principles: 1. Countries which aim to have a common system for all inhabitants, in which they pay low fees for health care and low part-payments for drugs. The Nordic countries, with their national insurance organization covering the entire population, can be regarded as an example, e.g., Vuorenkoski, Toiviainen and Hemminki 2003. However, a unified national health insurance system requires rather sound state finances, which, in practice, mean a government system where enough taxes and charges can be collected. The great advantage of a national health insurance system is that it is possible to make resource transfers between different population groups, i.e., from the rich to the poor. This requires that the inhabitants in the country accept such transfers, which, in turn, means that egalitarian ideals must exist in the country. 2. Countries which have different systems for delivering health care and prescription drugs for the different parts of the population depending on the patients’ ability to pay. For the rich there are often private health insurance systems or they might rely upon private clinics at which they pay a fee for health care each time they make a visit. However, poorer patients are, in general, forced to visit special clinics where there are no fees (so called ‘free clinics’). France, the US and most of the Latin American countries fall into this class. A problem here is that free clinics may offer a lower quality of care and the patients who visit the clinics can feel intimidated by the health workers there (Parizot, Chauvin and Paugam 2005, Lloyd-Sherlock 2005). Many public free clinics are overcrowded (Russell 2005). However, there are free clinics which do offer a service of high quality in a number of semi-developed countries (Russell 2005).

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3. Countries which have different systems of health care for different parts of the country. For example, in Africa, many countries have public health care systems with low fees and low part-payments for rural areas. However, in the urban parts the rich might use private health care (with a fee for the service provided) and the poor might visit ‘free clinics’. It is not easy to classify every country into one of these three groups. For example, in Canada there is no universal coverage of drug costs, but there is, in general, for other health care costs. There are different insurance systems for different population groups. Also, there are regional differences in the insurance systems (Kapur and Basy 2005). It seems that it is much easier for a country to accept a PHC policy in ‘theory’ than to implement it in practice, because of the constraints under which the policy operates (Bossert 1979, Bennell 1982, Norris et al. 2007): 1. Medical education in low or middle per-capita income countries often involves training physicians in ways that are biased towards the therapies and medicines found in rich countries. 2. Medical education facilities are often located in the capital city rather than in rural areas, which leads to a bias in services towards the urban upper class. 3. Medical and pharmacy education is built upon the premise that it should be accepted as internationally equivalent to European and North American degrees, thus making the education partly irrelevant to the needs of developing countries. 4. There need to be storage facilities and equipment for drug handling in PHC units for them to function properly. The staff have to have skills for handling the equipment properly. For example, computers cannot be installed without training periods. In the planning of PHC policies there is now a trend towards decentralization (e.g., LloydSherlock 2005). This means regional and local units being given more power to adapt their strategies to the local variations. An ideological argument for decentralization is that civil servants placed at a local level find it easier to understand the discourses used by the public and the local health care workers. However, by introducing decentralization there is a risk that geographical differences will occur. Such risks are probably higher if decentralization is founded on neo-liberal principles. The necessary controls on the regional and local units might then be forgotten (Lloyd-Sherlock 2005).

4.9 The essential drugs (ED) policy An ED policy can be defined as an effort by a health care organization to reduce the number of different drugs available in the organization. To do this, the procurement unit has to prepare a national list of essential drugs with an indication of the annual volume of sales of each medication. The drug producers are asked to submit tenders for the supply of these

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drugs. The procurement unit selects the cheapest tender for drugs with acceptable quality (Chapter 7). Inspired by the system of drug support in socialist countries and by the formulary systems used in hospitals, a national drug list was developed in Sri Lanka in the late 1950s. At first it was only intended for the public sector. However, from 1963 onward it became a guideline also for the private sector. So, a central purchasing organization for both the public and private sectors was established in 1971 and with it a tender system for the purchase of the drugs. A similar system was also introduced in Bangladesh at the beginning of the 1970s (Lall and Bibile 1978, Kanjii et al. 1992, Chowdhury 1995 and Section 7.6.3 in which price control by tenders is discussed). The beneficial aspects of these reforms led to the introduction of a WHO programme – Essential Drugs and Vaccine Programme (EDV) – in the late 1970s. A group of experts produced a list of about 220 essential drugs. Developing countries were encouraged to draw up their own lists according to their own medical needs. In deciding upon drugs, they were asked to take into account both medical and financial criteria (WHO 1977, WHO 1985). The medical criteria included relative efficacy, safety, bioavailability, pharmacokinetic properties, stability under local conditions and availability of satisfactory scientific data. Fixed combinations were recommended only in cases where they provided a proven medical advantage over single compounds. The financial criteria included price, availability and the possibility of local manufacture (Hogerzeil l984: 13). The financial criteria also implied that topical preparations, mixtures and injections should be avoided in favour of tablets, which are much cheaper to produce locally (Hogerzeil 1984: 44, Jitta, Reynolds Whyte and Nshakira 2003, Kotwall 2005). However, the detailed goals of the ED programmes introduced in individual countries vary (e.g., Munishi 1991). The ED policy was supported by international agencies like UNICEF and the WHO. In the beginning, UNICEF and the WHO also negotiated the price of essential drugs acting as an agent for a number of developing countries. This kind of backup played a big part in the success of the ED policy (Gelders et al. 2006). The WHO recommended that the essential drugs be named generically and should be made available to the whole population. In the terminology used in this book this means that in 1977 the WHO was already in favour of a combination of an essential drug policy, a generic drug policy and a drug reimbursement policy, together with other organizational and medical recommendations. In fact, this has resulted in confusion over what is meant by ‘an essential drug policy’ (Ratanawijitrasin, Soumerai and Weerasuriya 2001). In any evaluation, these variations in ED programmes have to be noted. It is not possible to focus on the outputs (the results) of the programmes alone. Instead the evaluator has to include in their evaluation both output and process data. Each country has to select an ED programme which is suited to its culture, traditions and financial situation (see Section 1.4). Reductions in the number of different drugs used are supposed to lead to numerous benefits (WHO 1984): 1. More of the country’s population can receive high quality health care by reducing the drug cost per treatment.

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2. Drug information among health care personnel and the general public can be improved. In turn this can lead to positive medical results with increased drug quality and more rational drug use. The first of these benefits can be detailed by describing the resource changes which can follow after introducing an ED strategy. However, not all authors favouring ED policies want all of these changes to occur. The list below is a summary of the changes which have been mentioned by at least one author, e.g., Adikwu and Osundu 1991: 1. The transfer of resources from the upper urban classes to the poorer rural classes. 2. The transfer of resources from the private to the public drug sector. 3. The transfer of resources from the treatment of minor diseases to serious infections common among the poor. 4. The transfer of resources from commercial information to drug production and raw drug materials. 5. The transfer of resources from other areas to primary health care. This list indicates that the aims of ED policies are numerous and have complex relationships with other reforms. Reducing the number of drugs available by itself is a much less effective strategy than if such a move were combined with other reforms in the area of education and in the distribution of independent information. To be effective, an ED policy requires a complementary health information system in which health professionals can learn to handle drugs in a rational way (Adikwu and Osundu 1991). Also, an effective ED policy requires an adequate number of health care facilities and health professionals. This, alas, is far from always the case (Adikwu and Osundu 1991). In practice, many countries have set up separate lists for public hospitals and public clinics (Hogerzeil 1984: 47). The information used in the processes leading to essential lists probably varies. However, the WHO list, scientific data, inquiries at hospitals and clinics and suggestions after a test period have often been used in practice (Hogerzeil 1984: 56–59, 74–76). The lists have been used, not only to detail which drugs should be used at the different levels of public health care, but also to serve as the basis for planning local drug production and drug imports. Most essential drugs policies have concerned the public (government) drug sector. However, in a few countries, the ED policy has included the private sector, e.g., Bangladesh (Melrose 1982), Nigeria (Adikwu and Osundu 1991). Even if an ED policy is introduced, the drug shortage problem in the public healthcare system may not go away, e.g., Munishi 1991. People who can afford it can take a prescription issued in a public health facility to a private pharmacy to get their medication. The percentage of patients doing this could be significant. In a study in Mali it was found that 80 per cent of prescriptions in private pharmacies originated in the public health care sector. Also, the patients may not just accept the prescription offered – they might request a different type of drug, often a brand-name drug, from the public health care sector. This can lead to prescriptions in the public health care sector similar to those found in private care (Maiga

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et al. 2003). Commercial information will always still be available and can lead to a public demand for similar, but expensive brand name drugs (Maiga et al. 2003). However, in other countries, the ED policy has been shown to be a much more effective way of improving drug availability (Otoom et al. 2002, Gelders et al. 2006). The most frequent criticism of ED policies is that they may cause conflict with PHC policies because an ED policy can over-emphasize the importance of the drug sector in relation to preventive measures like nutritional reforms and water projects, which promote health care over the long term. Today many African countries have introduced fees for prescriptions, e.g., the Bamako initiative or ‘revolving loans’, (Adikwu and Osundu 1991, Maiga et al. 2003). This means that a patient has to pay for part of both the drug and the health care costs. This fee has been introduced to overcome the drug shortage problem discussed above. The risk is that people and local governments might conclude that there are insufficient funds for other essential health initiatives e.g., water projects, when people have paid for medical visits and medicines. During the 1970s, the multinational drug industry opposed ED policies (Chowdhury 1995). However, the International Federation of Pharmaceutical Manufacturers Asociations (IFPMA) lacked the power to stop the spread and acceptance of this new approach. So the drug industry had to accept the ED strategy as a legitimate way for governments to increase the efficiency of their public drug sectors (Taylor 1986). However, an ED programme may not always be accepted by the population. Bolivia is an example where, in 1981, inspired by the WHO essential drugs programme (the so called ENASME programme, mentioned in Chapter 3), a public drug distribution system was introduced based on tenders and publicly owned pharmacies. However, this resulted in a serious conflict with the drug companies and their political supporters, who wanted an open economy with no import restrictions. A change in the national government to a more right wing policy resulted in the programme being shut down in 1985, despite the fact that it had proved quite efficient and successful. However, one of its problems was that the prices probably had been set too low to establish a stable financial base. Another problem was the way in which the system was introduced. No attempt was made at the start to win the support of the medical and pharmacy professions and their continued opposition contributed to its closure (Accion International por la Salud, 1987: 81–85).

4.10 Summary Nine policy dimensions were discussed in this chapter. A patent allows its holder a sales monopoly for the length of the patent in exchange for sharing their invention. The supporters of strong patent laws argue that this facilitates R&D and industrialization. Among the opponents of strong drug patents are the developing countries, which see patents both preventing new local firms from entering the market and also hindering industrialization. Generic prescribing is defined as prescribing under a generic name. Generic substitution is, on the other hand, defined as the act of a consumer asking a pharmacist to substitute a trade-name prescribed drug with a less expensive equivalent. Drug companies selling under a trade name oppose generic prescribing and drug substitution and argue that chemical drug equivalents are in effect not therapeutically equivalent. Those in favour of generic prescribing assert that quality differences have seldom been

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found to cause serious problems, while generic prescribing can lead to considerable cost savings. However, today drug substitution laws have been introduced in many countries. There are a number of explanations for this trend. More generic drugs are now available because important drugs have lost their patent protection. Also, health insurance organizations have encouraged the introduction of substitution laws because of savings in terms of drug costs. Today most countries have a system of drug registration in the sense that a government body, representing various professional groups, checks the quality, safety and efficacy of each manufactured drug before marketing is allowed. Drug reimbursement means that the patient does not need to pay the full costs of a prescribed drug. This policy became popular after its introduction in Britain in 1946. However, it is mainly restricted to countries which have a national insurance system or a private insurance system covering a significant part of the population. There is a dichotomy in the way most drug systems have been implemented in low and middle per capita income countries, in that these nations have both a public and a private sector. In African countries public sector drugs are offered free or at a nominal price whereas in the private sector the patient has to pay the full cost of the drug. However, drug shortages are frequent in the public drug sector because of inefficiency and budgetary restrictions. This often leads to distrust of the public sector. However, in Latin America ‘the public sector’ has another meaning. There it refers to the distribution of drugs to the military, the police or to in-house patients at government hospitals. In Latin America there is very seldom a channel for the distribution of drugs at low prices from the government distribution system. Instead people have to go to private pharmacies to get their drugs if they do not have personal insurance which includes prescribed drugs. The Primary Health Care policy (PHC) was introduced in developing countries after the Second World War. It acknowledged that the target group for health care was the total population and it led to the establishment of small PHC units, locally manned. An essential drugs policy (ED) can be defined as an effort by a health care organization to reduce the number of different drugs available, and the purchase of essential drugs by tender on the international market. Also, essential drug programmes contain information programmes, which enable health professionals and the general public to learn how to use drugs in a more rational way. These programmes have often led to financial savings and improved therapeutic knowledge resulting in increased drug quality and more rational drug use. The essential drug policy is strongly supported by the WHO. However, there is a considerable risk that part-payments by patients are set too low, resulting in drug shortages in the public distribution system.

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Schneeweiss, S., Reference drug programs: effectiveness and policy implications. Health Policy, 2007, 81: 17–28. Schneider, E.-D., Absatzpolitik pharmazeutischer Industriuntemehmen.Berlin, Heidelberg, NY: Springer-Verlag, 1965. Shin, S., Furin, J., Bayona, J., Mate, K., Kim, J.Y. and Farmer, P., Community-based treatment of multi-drug-resistant tuberculosis in Lima, Peru: seven years experiences. Soc. Sci. Med., 2004, 59: 1529–1539. Silverman, D.M., Lee, P.R. and Lydecker, M., Prescription to Death. Berkeley, CA: University of California Press, 1982. Stebbins, K.R., Curative medicine, preventive medicine and health status: the influence of politics on health status in a rural Mexican village. Soc. Sci. Med., 1986, 23: 139–148. Steele, H., Monopoly and competition in the ethical drugs market. J. Law Ec., 1962, 5: 131– 163. Steele, H., Patent restrictions and price competition in the ethical drugs industry. J. Ind. Ec., 1964, 12: 198–223. Streefland, P., Public health care under pressure in sub-Saharan Africa. Health Policy, 2005, 71: 375–382. Taylor, D., The pharmaceutical industry and health in the Third World. Soc. Sci. Med., 1986, 22: 1141–1149. Thomson, S. and Mossialos, E., Influencing the demand for drugs through cost sharing. In Mossialos, E., Mrazek, M. and Walley, T. (eds.), Regulating Pharmaceuticals in Europe: Striving For Efficiency, Equity and Quality. London: Open University Press and WHO, 2004: 227–244, web-site: www.euro.who.int/document/E83015.pdf. Tsien, A.Y. and Pahl, P.E., Food and administration modernization act. In Berry, I.R. (ed.), The Pharmaceutical Regulatory Process. New York: Marcel Dekker, 2005: 165–239. UN, Transnational Corporations and the Pharmaceutical Industry. New York: UN, 1979. Uzochukwu, B.S., Akpala, C.O. and Onwujekwe, O.E., How do health workers and community members perceive and practice community participation in the Bamako Initiative in Nigeria? A case study of Oji River local government area. Soc. Sci. Med., 2004, 59: 157–162. Vaitsos, C., Patents revisited: their function in developing countries. J. Dev. Studies, 1979, 9: 71–97. Vall´es, J.-A., Barreiro, M., Cereza, G., Ferro, J.J., et al. A prospective multicenter study of the effect of patient education on acceptability of generic prescribing in general practice. Health Policy, 2003, 65: 269–275 Van der Geest, S., Articulation of formal and informal medicine distribution in South Cameroon. In Van der Geest, S. and Whyte, S.R. (eds.), The Context of Medicines in Developing Countries – Studies in Pharmaceutical Anthropology. Amsterdam: Het Spinhuis, 1988: 131–148. Vuorenkoski, L., Toiviainen, H. and Hemminki, E., Drug reimbursement in Finland – a case for explicit prioritising in special categories. Soc. Sci. Med., 2003, 66: 169–177. Walker, H.D., Market Power and Price Levels in the Ethical Drug Industry. London: Indiana University Press, 1971. Walley, T., Should we pay for lifestyle drugs? In Mossialos, E., Mrazek, M. and Walley, T. (eds.), Regulating Pharmaceuticals in Europe: Striving For Efficiency, Equity and Quality. London: Open University Press and WHO, 2004: 297–306, web-site: www.euro.who.int/document/E83015.pdf. Wang, H., Social change and its potential impacts on Chinese population health. Hygiea Internationalis, 2004, 4 (1): 109–136.

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Wang’Ombe, J.K. and Mwabu, G.M., Economics of essential drugs scheme: the perspective of the developing countries. Soc. Sci. Med., 1987, 25: 625–630. WHO, The Selection of Essential Drugs. Technical Report Series 615, Geneva: WHO, 1977. WHO, Procedure for Evaluation of an Action Programme on Essential Drugs. Geneva: WHO, 1984. WHO, The Use of Essential Drugs. Technical Report Series 722. Geneva: WHO, 1985. Wirtz, V. Cribb, A. and Barber, N., Reimbursement decisions in health policy-extending our understanding of the elements of decision-making. Health Policy, 2005, 73: 330–338.

5 Drug research

In this chapter we look at drug research from a sociological perspective concentrating on the organizational and administrative aspects of research in drug companies. The more strategic decisions are discussed, followed by a consideration of the organizational and administrative aspects of the decision-making process in drug companies. It is possible to make a distinction between traditional drug companies, which have been in the drug market for a long period, and ‘biotech firms’ involved in drug research. One characteristic of the latter group is that they build their research on special modern scientific technology. For example, they might base their research on gene research. Another characteristic of biotech firms is that, initially, the focus is on research and only later on drug production and drug marketing. Some of them abstain from being active in the production and marketing functions; instead they make alliances with traditional drug companies that then take care of the production and marketing of any drugs that come out from the research. It has been noted that the research productivity of biotech firms is high compared with the traditional drug companies. This means that more and more new drugs (NCE, new chemical entities) are being developed by biotech companies. It is expected that the biotech firms will develop about 50 per cent of the total number of NCEs in a few years (Drews 2003). However, for an individual biotech firm, the prospects are not so good because the ‘mortality’ of new biotech companies is high. This because they do not have the capital. resources for long-term drug research projects. However, some of them will be bought by traditional drug companies if the research looks promising. Drug research today is undertaken in research networks. A network can include as many as ten different research groups (this is discussed further later on in the chapter). Some of the groups in a network are private companies (full scale companies or companies focusing on one part of the drug research process, so-called contract research organizations, CROs, Angell 2004: 29) and others are financed by national governments or by independent national funding agencies. Among the US multinational drug companies (MNDs) there was a great increase in the number of for-profit run CROs in the medicine sector during the 1990s (Henry and Lexchin 2002). To understand drug research we have to look at the entire research network with which a drug company is involved. Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

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In recent years, empirical data has indicated that alliances between a number of companies have a better chance of commercial success than companies which try to launch their new drugs independently, Such alliances seem to be very important for commercial success at the last stage of research – i.e. when a potential new drug is undergoing large-scale clinical trials (Danzon, Nicholson and Sousa Pereira 2005) Some governments spend considerable amounts of money on R&D (research and development) in the medical and biological sciences. This is particularly true of the United States, with the United Kingdom next on that list (Department of Health, Association of the British Pharmaceutical Industry 2002: 23). The US and UK dominance in drug research is also evident in the distribution of the leading 75 new medicines 1996–2001 (Department of Health, Association of the British Pharmaceutical Industry 2002: 5). In terms of R&D spending in the pharmaceutical industry, Japan is also a significant ‘player’, but is way behind the US, where drug companies account for almost 50 per cent of the global pharmaceutical industry R&D budget (Department of Health, Association of the British Pharmaceutical Industry 2002: 5).

5.1 Drug company strategies The R&D strategy employed by a drug company is very much influenced by the marketing strategy the company uses (Corstjens 1961: 18–21). These strategies can be classified under five headings, which are discussed in this chapter. The strategy which demands the most intensive research is mentioned first.

Drug companies focusing on research to find new chemical substances intended for the international market Most of the 100 biggest drug companies in the world undertake research to find new chemical drug entities. However, there are probably more than 1000 CRO research firms doing similar research. The aim of their research is to develop drugs with a higher medicinal value than those currently used in the treatment of a disease. If a company develops such a drug, it will be introduced and be marketed forcefully worldwide under patent production. Such a commercially successful drug is likely to be regarded as a ‘golden egg’ for the drug company. However, drug companies can also come up with new drug chemicals which can be used for the same medical conditions as an already existing commercially successful drug. Such medications are called ‘me-too’ drugs. The therapeutic value of these me-too drugs is only marginally greater than those already on the market (see www.fda.gov/cder/rdmt/pstable.htm for an analysis of the US approved new drugs in the period 1990–2004 and Angell 2004: 74–93). The me-too preparations have little chance of being a significant international success. The same companies are often active in a specific research area over long periods of time. This means that companies seldom change their area of research, but rather they come up with ‘new generations’ of drugs, with somewhat better therapeutic effects or lower side-effects (see www.fda.gov/cder/rdmt/pstable.htm). The company which first markets a new generation drug gains a tremendous competitive advantage. The reason is that prescribers and OTC buyers often start using a ‘new generation’ of a drug they have used

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before if they think that the new generation has a higher medical value (Chapters 7, 11 and 14). The drug companies in this group always use trade names in their marketing. They also try to sell a new drug in as many national markets as possible, to get the maximum financial return on the money they have invested in R&D (Chapter 11). MNDs might buy a significant part of the shares in minor drug companies to get promising new innovative drugs which a minor company has developed. For example, Pharmacia was bought by Pfizer in 2002 by offering the Pharmacia share holders 40 per cent more than the current share price (Rost 2006). In general, these new chemicals are first marketed as prescription-only drugs for a specific medical condition. This is because drug registration authorities use a cautious strategy and initially restrict a new drug to prescription-only sales and the condition has to be suitable for self-medication.

Drug companies concentrating on efficient drug chemical production (bulk production) In drug production there is a clear separation between the production of drug chemicals and the production of ready-made drugs from these chemicals (Chapter 6). Some drug companies focus on the production of drug chemicals. They are often large-scale enterprises which have been operating for a long time with advantages in terms of scale and learning. In the production of ready-made drugs from drug chemicals, the financial benefits of scale and learning are much less evident (Chapter 6). Companies in some countries employ this strategy more frequently than their counterparts in other lands. Exact figures are not available, but the US, the UK, Germany, France, Hungary, Brazil, Mexico and India are all examples of countries which produce large quantities of drug chemicals. In a multinational drug company (MND), most production of this kind used to be centralized in the company’s home country. However, increasingly MNDs are moving their production base to an industrialized country other than its home. Setting up independent production units of this nature has not been without its difficulties, since the technology used in the production of intermediates and chemicals is controlled by international MNDs (Gereffi 1983). A drug company which produces drug chemicals efficiently has to undertake regular research to ensure its production process is successful and kept up-to-date. In the production of standard chemicals, companies, in general, cannot always keep their research results secret by patent, but they do try to keep their know-how to themselves to prevent competitors from achieving any unfair advantage.

Companies concentrating on the marketing of non-patented ready-made drugs (generic production) There are probably about 100 000 drug companies operating in the world producing readymade pharmaceuticals based on chemicals bought from other companies (these companies are usually called ‘generic companies’). In India alone there are about 24,000 drug manufacturers (The Washington Times-United Press International, 11 January 2005). In China there are about 5000 pharmaceutical factories (Qiang 2005). Also, the big MNDs now often have specific subsidiaries focusing on generic production. Tablet machines have made

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production on a small-scale fairly efficient. Also, small-scale production of infusions and ampoules can be done efficiently if environmental circumstances permit. However, small companies may have much more difficulty in overcoming the disadvantages in drug marketing which exist in most countries (Chapter 11). Consequently companies of this type usually choose to offer a considerably lower price than the original manufacturer in order to gain a larger market share (Chapter 9) Almost all countries in the world try to establish the production of ready-made drugs based on drug chemicals. A developing country can make foreign currency savings from such activities. It is estimated that it can make foreign currency savings of 30 to 70 per cent by importing raw materials instead of drugs in their final form (Lilja 1983). Another reason for establishing pharmaceutical home-production facilities is that this can provide a model on which the technology for other production areas can be established.

Drug companies concentrating on the marketing of drugs for self-medication Governments are beset by financial problems and have to face the fact that the number of health care personnel in their countries cannot be increased despite growing demands on the health care services. Many industrialized countries with national health insurance systems and large costs for prescription drugs have been encouraging self-care and self-medication. Drugs formerly listed as prescription only have been declared as ‘non-prescription drugs’ if it is thought that the public can use them safely (Branstad et al. 1994, Bond et al. 2004). Many of the big drug companies have formed subsidiaries and have become active in this sector of the drug market. This has meant that the subsidiaries have had to develop new products and initiate new commercial activities since their market is now the general public directly (Chapter 11).

Drug companies concentrating on the sales of herbal medicines The volume of herbal medicines produced and used varies from country to country. Tradition, in part, offers an explanation. Those lands with a heavy use of herbal drugs tend to have a long history of it. Germany is one European example of this. However, countries with no national health insurance system and low sales of prescribed medicines often have high production figures and sales of herbal medicines. In Asian and Latin American countries, we find many of the indigenous companies focusing on this sector of the drug market.

5.2 Factors which determine the resources a drug company spends on R&D There are a number of factors which can influence the amount of money a drug company spends on R&D. Today there is no easy estimate of how much drug companies spend on R&D, because a significant part of these activities take place outside the drug company.

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This means that R&D can occur in the teams comprising the companies’ ‘research network’ (see discussion above). Another part of the R&D might take place in companies focusing on research only (the so called CROs, mentioned above). The relationship between this type of research company and the main drug company is regulated by a contract detailing what the research company does and when the results are to be delivered to the main company. This new organization of R&D is in line with the general trend found in companies today of ‘out-sourcing’ activities. The costs of developing a new chemical entity (NCE) have been increasing (at about seven per cent per year above general inflation). It has been calculated that the average costs for the development of a NCE is about 800 million US dollars. This figure comes from a survey of a sample of MNDs in the year 2000 (Di Masi, Hansen and Grabowski 2003). A more recent publication by the Association of the British Pharmaceutical Industry (ABPI) reports that developing a new medicine takes, on average, ten to twelve years and costs more than £550 (1 billion US dollars). More than 50 per cent of the costs are today associated with clinical research (DiMasi, Hansen and Grabowski 2003). Data regarding the percentage of the drug research costs of private and public funds are not available on a global level. However, it has been estimated that the percentage paid by private institutions has increased during the last decades as a result of the stronger patent and exclusivity laws introduced in many countries, and the restricted public funds available (Mather 2005). The most important groups of factors which influence the R&D spending are the following: 1. The marketing strategy used. As has already been mentioned, the company’s marketing strategy influences the level and type of research undertaken. To develop new drug chemicals for international marketing, a considerable amount of research is required. Companies, as in other industrial sectors, normally compete to be the first to market a new drug generation (Foster 1986). Companies marketing their products later will have difficulties convincing prescribers and OTC users to switch to a similar drug with almost the same medicinal value, unless the follow-up has recognizable advantages which are attractive to patients and prescribers. In some cases (e.g. H2-blockers, ranitidine), the second one outsold the first. This kind of competitive race encourages a drug company to invest in its research projects and continue to be dynamic. 2. The size of the company. Small drug companies try to avoid competition by carefully selecting a research area where no big company is involved (Corstjens 1991: 31). Under such circumstances it is possible for even a small company to perform advanced drug research. Bigger companies tend to choose research areas whose market potential is large, thus leaving those areas with fewer patients to smaller companies. On a worldwide basis, however, those areas can still be large enough to justify advanced research. In comparison with other industrial sectors, drug R&D does, in general, not lead to projects which require new expensive production facilities. This makes drug R&D an attractive strategy for middle-size companies as well. 3. The possibilities of cooperation with university departments. The quality of drug research a company does is, to a large extent, determined by the pharmaceutical and medical knowledge at its disposal, including details of new research methods and theoretical

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models explaining pharmacological mechanisms. Small companies, by cooperating with university departments, can acquire such knowledge and begin work in areas where otherwise there would be no possibility of them undertaking efficient research. Cooperation can also drastically reduce R&D costs and speed up the R&D process compared with a situation where the company has to do all the research itself (Ostholm 1995, Quire 2005). For example, many of the new valuable drugs which the US MNDs market are the result of basic research which has taken place in research institutions owned by the US government (Angell 2004: 22–26, 56–73). Usually the contribution of the institution can be recognized by a royalty payable by the drug company. It seems that the frequency and extent to which drug companies cooperate with university departments varies between countries. Tradition may explain these differences (Kneller 2003). Also, it is likely that small countries have advantages in establishing cooperation between organizations and disciplines, in that professional people in these lands often know each other personally prior to any such links being considered. Sweden can be regarded as one example of a small country which has developed a system of cooperation between drug companies and university departments and become very successful in drug research (Ostholm 1995, Sundling 2003). However, now both of the big Swedish drug companies have been taken over by MNDs based in the UK and the US. 4. Financial opportunities, Financial factors dependent on the environment can influence how much a drug company can afford to spend on research. For example, drug companies in the Third World seldom have resources to undertake more than limited drug research. Drug company representatives often mention that the cost to develop a new drug is in the region of over $500M. However, such figures are usually aimed at the development of a completely new chemical entity and represent additional costs of failures in development. Also, in most countries the R&D costs are tax deductible, which make the real costs much lower than the outlay of the R&D company on research (Angell 2004: 37–51). Most drug companies can raise money for drug research by selling drugs already on the market. Often a few commercially successful drugs are responsible for the main share of a drug company’s total revenues. When a new drug turns out to be a golden egg this is very beneficial financially and normally leads to increased R&D spending. Since the Second World War drug companies in the US and Europe have been profitable in comparison with other branches of industry (Chapter 7). Their R&D spending has increased accordingly (OECD 1980). Still, there seems to be only a weak correlation between drug company profits and the percentage of their revenue spent on R&D. This is because often companies with decreasing profits decide to increase their investment in R&D to try to get new drugs on the market. Today R&D activities in the pharmaceutical industry have become more integrated with government financial planning than previously. National governments can take a financial interest in a company that might better serve their national interest and by allocating money to university research in areas of unmet medical need. 5. Rules of thumb. In practice drug companies often use simple rules of thumb in determining their annual research budget. Frequently they decide to devote the same amount

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of their budget to R&D in the coming year as they have done over the previous twelve months. However, there is a tendency for drug companies to allocate more of their revenues to R&D and to compare their expenditure on R&D with other companies’ spending in the same field. Increased research by one company can result in similar expansion by its competitors, because it is vitally important to be first to launch a new drug generation. Drug companies which try to develop new chemicals for the international market often spend 20 per cent of their total budget on R&D. However, to make direct percentage comparisons between drug companies can be misleading, because some have diversified into markets other than the drug sector.

5.3 The selection of research areas by a drug company Each drug company selects a limited number of research areas. As has been mentioned, drug companies often undertake research in the same areas over long periods of time (Corstjens 1991: 25–33).There are a number of reasons for this. Firstly, it takes time to establish an efficient R&D organization, because researchers must acquire an in-depth knowledge of biological mechanisms before successful new chemicals can be generated. Secondly, a network of cooperating groups has to be established. As has been said, such a network can consist of up to ten groups with separate responsibilities. For example, one group may be searching for the receptors at which the drug is supposed to act; another may be responsible for developing a new chemical; a third may clinically test potential drugs and so on. Also, groups from other companies or special research companies can be included in a research network. In general, a separate network is established for each area in which the company is doing research. In selecting research areas and marketing, a company will consider both ‘market growth’ and ‘product growth’. By market growth is meant the growth in sales of all the products in a therapeutic group, broadly defined, e.g., cardiovascular drugs, antibiotics. With product growth we mean the ‘the relative market share’, i.e., the market share in comparison to the leading company in the therapeutic group (Corstjens 1991: 27). It is beneficial to be in a market which is increasing at a fast rate, but it is also good for the company to have a high market share and to be the leader in a drug group which is not increasing at such a fast speed. For a drug company it can be optimal to combine these approaches. Some drug research projects can be placed in growing markets whereas other projects can be in more slow-growing markets in which the company can gain a strong position (Corstjens 1991: 35). Companies differ in how they organize their R&D departments. Traditionally these departments were divided into units according to the university disciplines of the researchers. This has meant that chemists, pharmacologists and toxicologists were put into separate units. Nowadays few drug companies organize their R&D in this way because it has been found that this can hinder effective cooperation between researchers from different disciplines. Data has also indicated that the most important medical discoveries have been made following multidisciplinary interactions (Comroe 1977). Accordingly, people from different disciplines, but working within the same research area, are now often placed in

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the same unit. For example, researchers studying sedative drugs are in one group, those developing respiratory drugs are in another. Many companies, however, do have matrix organizations, allowing disciplinary groups to operate together with a division according to research areas. The R&D activities are not evenly spread among the drug groups. Some research areas are more researched than others. We can determine the major research areas by looking at the number of drug research projects in the big companies to see how R&D activities are distributed globally. During 2003–2004, about 400 new cancer drug projects was undertaken. This was the group with the most projects. Neurological and psychiatric drugs were next in terms of the number of research projects. Third in line were drugs for inflammatory conditions (if we exclude HIV/AIDS drugs from this category). The fourth group was cardiovascular drugs and the fifth HIV/AIDS drugs (Hutunen 2006: 6, data from Pharmaceutical Research and Manufacturers of America, Medicines in Development 2003/2004). Most MNDs stay in a research area for decades. However, a company might not remain long in a research area if it does not succeed in developing new profitable products. In such cases the company is likely decide to leave that research area. One example is Ciba-Geigy, which developed a number of valuable psychotropic products during the 1960s and 1970s. However, this company decided to leave this research area at the end of the 1970s (Healy 1997: 141). Drug research is not restricted to MNDs and CROs. For example, it is worth noting that there is now a group of ‘innovative generic companies’. These are companies which produce generics, but have begun R&D activities to search for novel modifications and formulations of patent-free drugs. Also, this tendency to spend more on R&D can be found among a number of the big generic producers. The research is not always aimed at modifying patent-free drugs. It can be to develop new original molecules too.

5.4 The research process Today most drug companies use project groups. This means a multidisciplinary committee is set up when a decision is taken to start a new project. The group remains in existence until a drug has been marketed or a decision has been made to end the project. The project group is headed by a project leader who is responsible for reporting to research and company leaders (Ostholm 1995). For administrative and practical reasons, each project has to go through a number of stages. The division into stages is influenced by the methods used in the research. However, the introduction of national bodies for drug registration has also contributed to the development of a common framework detailing the division of the drug research process. For example, drug companies are required to apply for permission from a government control board before a clinical trial on a group of patients can take place. Also, registration bodies usually list a number of conditions which have to be satisfied before such permission is given. A drug company can undertake R&D to produce new chemicals, to identify new areas of treatment for an already marketed drug, to develop a new preparation of a previously known chemical or to market a new preparation already being sold by another company.

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However, only the first of these aims can be called ‘a full research process’ and is the basis for the division of the research process into the stages mentioned here. For pedagogical reasons, the stages are often shown as following one another sequentially. However, a company can undertake a number of the stages at the same time in order to speed up the R&D process. At each stage the company leaders can decide to end the project for financial or technical reasons. As mentioned above, drug companies normally form alliances with other companies and university units. At each stage different types are normally formed. The following stages are among those most often mentioned in the professional literature (e.g., Schacter 2006): 1. Idea generation. 2. Market research. 3. Project evaluation. 4. The testing of new compounds for biological activity in animals. 5. Testing for acute toxic effects in animals. 6. Testing for middle and long-term toxic effects in a number of animal species. 7. Testing for carcinogenic effects. 8. Testing for teratogenic effects. 9. Testing on healthy human subjects (Phase I studies). 10. Clinical trials on a limited number of patients (Phase II studies) – proof of concept. 11. Full scale clinical trials (Phase III studies). 12. The development of the drug preparation for human dosing. 13. The development of an efficient drug production process. 14. Application for registration. 15. Detailed market planning. 16. Marketing. 17. Clinical studies after marketing (Phase IV studies). There has been a lively professional debate on the origins of ideas leading to new drugs. The few published empirical studies on this topic indicate that ideas come from both external and internal sources in the drug companies. However, most important medical innovations of late have been ideas from external sources like universities or from interactions between company and university researchers (Angell 2004: 52–73). Clinical studies after marketing (Phase IV studies) have become more and more popular. The aim of these studies is to determine the value of the drug for the existing indications and for new indications. However, it has been argued that some of these studies are of limited medical value and are undertaken for marketing purposes (Angell 2004: 161). The new indications studied are often those offering longer-term benefits that could not be evaluated

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in the initial programme. It is well known that those who started to prescribe a drug during a clinical trial are likely to continue to prescribe the drug after the clinical study has ended (Chapter 11).

5.5 The project decision A project decision might be defined as ‘a decision taken by the company leaders to set up a new research project and to allocate specific resources to it’. Once this decision is made, a project group is formed and a project leader is appointed. Already, at this stage, drug companies have to consider all aspects of the drug preparation. The decision-makers have to make preliminary decisions regarding the characteristics of the medical condition, on how to approach the health care systems in the main countries in which the drug will be marketed, and on the analysis of the qualities of existing similar products available in these national markets. The research project has to come up with a product which is better than existing drugs and which has the qualities of an ‘ideal product’ as perceived by health care professionals, drug control agencies and patients (Corstjens 1991: 63–89). For this purpose ‘positioning’ is used as a research tool to identify both the characteristics of existing products presently on the market and the ‘empty’ places in which a new project could satisfy a medical need. A ‘position map’ can then be drawn following interviews with experts, prescribers and patients. The research leaders decide which ideas should be further investigated by setting up feasibility studies. These studies will result in a written document which includes the suggested aim of the project, the technical difficulties which are to be expected, the anticipated resource requirements and also an opinion of the medical and commercial value of the drugs which may emerge from the project. The decision on whether to go ahead with a project will be based on this type of data. Drug companies vary in the specific criteria they use in the selection of projects, but the following four criteria are often used: 1. A clear medical need must exist for the intended product. The criteria are likely to include a minimum market level, measured on a global scale. 2. A clear research hypothesis must exist. Some companies interpret this criterion in such a way that they only agree to projects in which the receptor mechanisms of a drug are well known. 3. The company must have the capabilities and resources to carry out the project both inside the company and in terms of the network of research teams required. These capabilities have to be assessed relative to those of other drug companies working in the same area. 4. The project must be expected to lead to profitable products. At an early stage in all projects some consideration is given to estimating the income the project can be expected to generate, and these calculations are refined as the development proceeds with continuous reassessment of the viability of the project. In general, the companies engaged in the international marketing of new prescription drugs will set their discovery targets with the

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intention of securing new inventions that qualify for patented status in target areas where there is a worthwhile market value. In practice this criterion means that these will be the diseases of the rich industrial countries, because it is they who have sufficient resources to pay for the often long-term and costly research process. The diseases exclusive to the poor developing countries would not generate the kind of return to pay for such research. When considering the market’s ability to pay for a new product, a company also assesses whether it can get the new drug included in the reimbursement schemes of those countries which have national health insurance. In such places it is not the individual’s ability to pay which is important, but the decision-makers’ willingness to include the new drug in the reimbursement schemes which is the crucial factor. For example, a new drug for treating children with a serious medical condition has a high probability of being included in a reimbursement scheme. Whether a research project is regarded as valuable or not depends on the existing basis of knowledge in the research areas. For example, the so called neurotransmitter theory – that neurochemicals, transmitter substances, transfer the neural impulses in the synapses – made it possible for a great number of new and valuable drugs to be developed at several drug companies in the 1970–1990 period (Healy 1997: 143–169). Under some circumstances an orphan drug project might be accepted (an orphan drug is one of great value from society’s point of view, but is not commercially profitable from the company’s perspective). However, the drug company must then find sources for financing the project other than by the sale of the drug on the market. National governments and international organizations can provide financial support for orphan drug research, or governments might give long exclusivity rights after marketing (Mrazek and Mossialos 2003, Garattini and Bertele 2004: 83). For example, there is a need for orphan drug research aimed at developing drugs for rare genetic conditions affecting small numbers of patients. Some governments, e.g., the US, have special tax deductions for companies which decide to set up an orphan drug research project (Angell 2004: 45, Chapter 4). A similar principle may sometimes be applied to those diseases which are ‘orphan’ in the developed world, but prevalent in developing countries (e.g. tropical diseases), in order to support the international aid efforts. To increase the resources spent on tropical diseases there might be joint collaborations between pharmaceutical companies, private funds, international organizations (e.g., WHO) and national governments (e.g., Nwaka 2005, Gutteridge 2006). The evaluation of a research idea can also be influenced by the risk factors attached to it. Drug companies, in general, want to have a balance between high- and low-risk projects. If a company already has a large number of high-risk projects in progress, we can expect that low-risk projects will be favoured before further high-risk ones. Some drug companies apply formal rules in quantifying the value of potential projects. Others use more informal approaches in their evaluation process, e.g., the opinions of professional personnel. Here conflicts can occur. For example, the researchers can want projects of high scientific value, whereas the company leaders insist on less risky projects which can generate profitable products within a shorter time (Kornhauser 1962). Today, in the evaluation of the market, a drug company has to consider the individual genetic variations found in the population. It is clear that individuals with a specified disease respond differently to a specific drug in terms of efficacy and toxicity. In the future we can expect more research which will take that into consideration. Different drugs can be used for the disease sub-types (Pirmohamed and Lewis 2004)

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5.6 The research administration after a project has been accepted After it has been decided to start an R&D project, a plan is formulated including a definition of the project’s goals, the main techniques to be used and a rough prediction of the time and resources required. The details are normally based on data from a feasibility study. The project leader is responsible for reporting major changes in the project to the original plan, e.g., when a technical problem leads to a delay. When a project is set up it is decided which research groups should be involved and which tasks each group should undertake. Many of the research groups can be outside the company, e.g., in universities, in other companies. In this way networks are formed (see discussion above). If the drug is aimed at GPs, a reference group of physicians in general practice can form part of the network. In some projects patient groups can also be included in the network (Caron-Flinterman, Broerse and Bunders 2005). Most drug companies also have routines for the continuous evaluation of their research projects. Once or twice a year the project leaders are asked to describe their progress in relation to the project plans. The research reports go to the research and company leaders and can result in a decision either to allocate more resources or to abort the project. In a drug company, there can be quite different opinions among the company leaders whether a research project should be stopped, changed or continued. One reason for this is that all projects compete for the company’s financial resources (Ostholm 1995: 54–60, 131, 171–172). There can also be internal conflicts between research leaders and the economists with responsibility for marketing. For example, this is often the case when the researchers are trying to develop a new drug for a new market that has not yet been identified and exploited (Ostholm 1995: 135), and difficult decisions have to be made when side effects are reported during the animal testing stage or the clinical trial stage (Ostholm 1995: 137–138, 182–184). In the evaluation of a research project, contacts with international researchers outside the firm or other drug companies can help the research leaders to make the most appropriate decisions (e.g., Ostholm 1995: 114–116, 137). For example, in the research process, it is very important to find researchers who will help the company to identify suitable animal experimental methods which can make easier the selection from those potential substances which might be expected to be clinically useful (Ostholm 1995: 131). Among other things, the decisions taken are dependent on the scientific background of the research leaders. For example, in Germany, chemists have dominated in research and management. In contrast, in Swedish companies, it is pharmacologists who have had the stronger position in research and management (Ostlund 1995: 67, 101–110). Also, the decisions taken depend on the competitive situation. As has already been mentioned it is important for a drug company to be the first to market a new generation of a drug. If this is impossible with the resources available, more resources can be allocated to try to produce a winning product. If more resources are unlikely to help, the company leaders may well decide to end the project. Alternatively, the company leaders can market the new chemical for a medical condition not yet covered by a similar previously released drug. The ‘mortality’ of a drug research project varies over the total research period. The mortality is also dependent on the research area. In some research areas it is higher than in others. However, when a drug project is developed in an alliance with a number of

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companies, the probability of mortality tends to be lower than if the research is done within a single company (Danzon, Nicholson and Sousa Pereira 2005). At first, a drug company often decides to test the drug for one condition only. This can shorten the time before the marketing stage is reached and result in financial savings. After the drug has been registered, then the company can test the drug for other illnesses as well. This means that there are likely to be more uses for a drug as it evolves. Increasingly companies have been taking a more pro-active role in extending indications as part life-cycle management. As part of this programme, the search for previously undetected side effects continues. A few companies have systems for making detailed predictions for planned projects in terms of time and costs. The value of such systems is questioned by most companies, because the information realized often is not worth the resources spent. For a researcher, it can be difficult to accept the decision to end his project. One reason is that researchers have been socialized into the research community in university settings where they are often allowed to continue projects for as long as they want. However, to avoid frustration among researchers, company leaders frequently allow them to sum up their findings and eventually to publish their results before being transferred to full-time work on other projects. To do effective research it is necessary for drug companies to develop ‘strong personal ties’ among the researchers in the research groups. This because research is a very complex activity and requires that people can test their ideas in an open debate within the research group. The culture in research groups ought to be process oriented and to some extent disregard the long-term company goals (Davenport and Peitch 2005). The drug company has to decide where to locate the drug research. Often drug companies have their main research plant in the home country and near a science oriented university. This will facilitate close contact with university researchers. However, clinical trials might be set up independently of the site of the basic research. When deciding where to locate clinical trials, the following factors might be considered (Keinonen et al. 2003, Maiti and Raghavendra 2007): 1. Availability of physicians who might lead high quality clinical research 2. How easy it is to recruit and retain patients for the clinical trial 3. The availability of hospitals or other health care institutions where the studies can be undertaken. Here bureaucracy might be considered. Companies tend to avoid long waiting times. The bureaucracy might occur at the institution level, a higher political level or at local ethics committees. 4. Historical factors – places where social networks have already been developed 5. Economical factors – the cost to the company of undertaking the clinical trials 6. The expected impact when the study is published. Some countries are known for high qualitative research, which might lead to a high degree of acceptance in the medial community.

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5.7 Research productivity A number of measures have been suggested for analyzing the research productivity of a drug company over a specified period of time (for a general discussion of this issue see Department of Health, Association of the British Pharmaceutical Industry 2002). The most frequently mentioned are: 1. The number of patents in relation to the resources spent. 2. The number of new drugs released on the market in relation to the resources spent. 3. The number of drugs leading to commercially successful products in relation to the resources spent. 4. The number of drugs with significant medical value released into the market in relation to the resources spent. 5. The therapeutic effects achieved by the drugs marketed in relation to the resources spent. However, those assessing productivity can select different measures of analysis. To some extent this explains why different conclusions are often drawn. For example, some drug representatives argue that the pharmaceutical industry releases a significant number of important new drugs each year. Their critics, on the other hand, maintain that only a few of these drugs are of any significant medical value and most of these are based on university research (e.g., Angell 2004). In a few studies, the productivity of drug companies has been analyzed in more detail. However, from these studies we can conclude that it is very difficult to collect accurate information and to compare the research productivity of drug companies operating in different countries. For example, items 4 and 5 on the above list would seem to provide the most significant figures. However, the figures for item 4 have been found to differ because the experts’ views on what constitutes ‘significant medical value’ are seldom the same. In general, countries have different traditions and experts tend to follow their own country’s practices. Similarly, item 5 creates a problem because it might be impossible to get sufficiently precise information on both the therapeutic effects in a large sample of patients and details of the resources spent. It is, for example, far from easy to separate the health effects achieved by using a new drug from the health effects resulting from changes in the organization of medical care. It has been argued that the lack of new NCEs coming from big drug companies is the result of the high priority among these companies to find ‘blockbusters’ (i.e., drugs which will generate sales in excess of one billion US dollars at peak sales) (Drews 2003). This might not be a fruitful strategy because what drug will become a blockbuster cannot easily be predicted. From a historical perspective, most drugs which later became blockbusters were not expected to at the time the research project started (Drews 2003). The biotech companies (regarded as a special industrial sector) might have a high productivity, in spite of the sector’s limited resource base. For example, these firms might build their research on new technologies, such as gene technology, which may result in real new drug discoveries.

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Disregarding the marketing aspects in the first stage of research might be an advantage in the long term (Drews 2003). However, focusing on technology, as the biotech companies do, might be much more risky strategy for an individual company than the strategies applied among traditional drug companies. The latter type of company in general use a number of risk reducing strategies to keep the revenues at a stable and rather high level. For example, traditional drug companies tend to invest much more to find new applications for existing drugs than 20 years ago (Schmid and Smithe 2004). Another risk reducing strategy might be integration of the marketing and research functions in the drug company. By increasing contacts between these functions, many mistakes might be avoided and thus facilitate the introduction of the new drug into the market (Becker and Lillemark 2006). A variety of factors influence the research productivity of a national drug industry (Department of Health, Association of the British Pharmaceutical Industry, 2002, Sundling 2003, Kneller 2003, Danzon, Nicholson and Sousa Pereira 2005): 1. The amount and quality of university research (both basic and clinical research). 2. The tradition of research. 3. The system for recruitment of researchers. 4. The frequency and extent of contacts between researchers inside and outside the industry. 5. The facilities and materials available. 6. The organization of medical care in the country and its level of development. 7. Capital supply. 8. The extent to which the drug control processes and labour market regulations encourage drug research. 9. The research alliances the drug company fosters with other companies and universities. 10. The research areas upon which the drug companies decide to focus. It is generally accepted that a country’s research productivity is affected considerably by work going on in its universities. Drug companies perform applied research on their own, but to conduct basic research they must draw on a much wider knowledge base. To be able to communicate and cooperate with an advanced university research unit can give a drug company a significant competitive edge (Ostholm 1995: 43–48, 115–120). It is a great advantage if a drug company can work with leading international researchers. Often key researchers set up their own networks of not more than ten people. They keep in contact with each other by phone or by internet and continually exchange information about research results. Other researchers active in the area, but outside the network have to wait for details of work to appear in scientific journals. Publications can appear as much as

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a year after the news of the work was available in the network and by that time the network has moved on to new interests and activities. To become a member of a leading network, a researcher has to contribute information important to those already in the network. Networks are often kept small in size to facilitate communications. Not many drug companies are in the position to have their own personnel in leading networks. Instead companies rely on university researchers within such networks. The recruitment of suitable researchers is of the utmost importance to drug companies involved in R&D. Often they are recruited from university departments and spend most of their active professional lives with the same company. Many measures have been suggested to motivate researchers, not only to work hard, but also to increase their creativity. For example, informing researchers about the company’s goals can be of benefit. Allowing researchers as a group to decide the research methods to be used can also increase their motivation and creativity. Another way to encourage creativity is to give researchers the opportunity to spend a part of their working time on ‘their own research’. It is also important that research leaders consider all ideas suggested by the company’s researchers. However, it seems that a researcher almost always has to ‘sell’ his idea to the research leaders to have it accepted. The productivity varies among the drug research areas (Danzon, Nicholson and Sousa Pereira 2005). For example, it seems that the risks associated in traditional research in the field of antibiotics is high and the probability of commercial success is low. This is the reason why drug companies tend to avoid such research. Still, there is an international need for new antibiotics because resistant strains have developed during treatment by old antibiotics (Overbye and Barrett 2006). The factor which most influences productivity might vary depending on the stage of the research. For example, alliances between drug companies (including alliances with biotech firms) tend to be a very important factor for commercial success at the stage where large clinical studies are undertaken (Danzon, Nicholson and Sousa Pereira 2005). Governments have an interest in maintaining the productivity and creativity of the pharmaceutical industry. For example, the European Commission has set up an organizational framework to measure the performance of the pharmaceutical industry and to make recommendations regarding how to change the regulatory structures (licensing, pricing and reimbursement) to improve performance (Hancher 2004).

5.8 Ethical concerns in drug research After the Thalidomide catastrophe in 1961, ethical questions about drug research became all important. One consequence was that drug control agencies and patients had to be fully informed about the risks and the aims of all clinical studies in which patients participated. Patients in most countries in the world now have to sign a document confirming their consent to their participation in a study that has been explained appropriately to them. However, details among the most poor countries regarding to which extent this is done is not empirically studied. In most countries where clinical studies are undertaken, a project plan for the intended study has to be provided to the national drug control agency before a clinical study can proceed. In the project plan, the aims and the process by which the patients are informed

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have to be described, e.g., the EU rules concerning clinical drug studies (Abraham and Lewis 2000 and Chapter 13). And the patients have to be properly informed about the research and have to be given the right to abstain from participation (so-called informed consent, Lilja, Larsson and Hamilton 1996: 149–156). However, informing patients about the scientific methods used in clinical drug studies is not a simple task. Different cultural groups will have different discourses which can affect their willingness to participate in drug research (Barata et al., 2006). However, to participate in drug research patients require that they trust the researchers and the research organization (Barata et al., 2006). More studies are, in fact, needed to understand how patients interpret the information they get during clinical drug studies. Clinical trials have to follow ethical codes for human research. This means that patients have to be informed about risks and have to be carefully monitored for possible side effects. In a developing country this can be difficult to do because many patients in these countries are unaware of what is meant by a clinical trial. They can think that they are receiving standard treatment (Molyneux, Peshu and Marsh 2004). For example, in tests of contraceptives drugs, companies have been criticized for trying new methods in countries where there is weak monitoring of possible side effects (Coney 1992). From a global perspective, one problem is that drug research focuses on those diseases most prevalent in rich countries. Of the 1556 new drug products launched between 1975 and 2004, only 1.3 per cent or 21 of these products were developed to treat tropical diseases or TB (Chirac and Torrele 2006). This distribution reflects the low incomes in the countries which have these diseases. For a multinational company active in the drug sector, it is nearly always more profitable to select a research project which is aimed at treating diseases common to rich countries. There is a need for governments and international organizations, in cooperation with the pharmaceutical industry, to find financial resources to make it possible to seek treatments for diseases which are, at present, insufficiently attractive to profit-making companies to make them embark on research projects in these areas (see section above about orphan drug research).

5.9 Summary Five drug company research strategies were described. Each strategy put a special emphasis on the type and amount of R&D to be undertaken by a drug company. The most extensive work has to be done by those firms doing research in developing new chemicals to be marketed internationally. Other companies concentrate on efficient drug chemical production and use a different type of research strategy. Companies whose main activities are centred upon marketing non-patented ready-made drugs do not need to undertake advanced R&D, but have to rely upon price competition. The fourth type of company is involved in the marketing of self-medications and the fifth focuses on the development and sale of industrially produced herbal drug preparations. Many factors influence the amount of resources a drug company spends on R&D. However, in practice, many companies use simple rules of thumb, like devoting the same percentage of revenue to R&D as they did during the previous twelve months. Drug companies seldom change their research areas because it takes time to establish the network of cooperating groups necessary to perform effective research. The research

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process can be divided into 17 stages and the company leaders can decide to end a project at any of these stages. The decision to begin a new project is called ‘the project decision’ and is of vital importance to a research company. To guide the company a set of specific criteria is listed which include the requirement that a clear medical need must exist for the intended product and that research hypotheses should exist. After the first clinical trials, more formal financial calculations are necessary to guarantee that the firm will make acceptable profits from the project.

References Abraham, J. and Lewis, G., Regulation Medicines in Europe – Competition, Expertise and Public Health. London, New York: Routledge, 2000. Angell, M., The Truth About the Drug Companies. New York: Random House, 2004. Barata, P.C., Gucciardi, E., Ahmad, F. and Stewart, D.E., Cross-cultural perspectives on research participation and informed consent. Soc. Sci. Med., 2006, 62: 479–490. Becker, M.C. and Lillemark, M., Marketing/R&D integrations in the pharmaceutical industry. Res. Policy, 2006, 35: 105–120. Bond, C.M., Orru, M.P., Leder, J.M. and Bouvy, M., The over-the counter pharmaceutical market. In Mossialos, E., Mrazek, M. and Walley, T. (eds.), Regulating Pharmaceuticals in Europe: Striving For Efficiency, Equity and Quality. London: Open University Press and WHO, 2004: 260–278, web-site: www.euro.who.int/document/E83015.pdf. Branstad, J.-O., Kamil, I., Lilja, J. and Sj¨oblom, S., When topical hydrocortisone became an OTC drug in Sweden – study of the users and their information sources. Soc. Sci. Med., 1994, 39: 207–212. Caron-Flinterman, J.F., Broerse, J.E.W. and Bunders, J.F.G., The experiential knowledge of patients: a new resource for biomedical research? Soc. Sci. Med., 2005, 60: 2575– 2584. Chirac, P. and Torrele, E., www.thelancet.com 2006, 267 (May 13). Comroe, I.H., Retrospectoscope - Insight in Medical Discovery. California: Von Gehr Press, 1977. Coney, S., A living laboratory: The New Zealand connection in the marketing of DepoProvera. In Davis, P. (ed.), For Health or for Profit? – Medicine, the Pharmaceutical Industry and the State in New Zealand. Oxford: Oxford University Press, 1992: 119–143. Corstjens, M., Marketing Strategy in the Pharmaceutical Industry. London, New York, Tokyo, Melbourne, Madras: Chapman & Hall, 1991. Danzon, P.M., Nicholson, S. and Sousa Pereira, N., Productivity in pharmaceuticalbiotechnology R&D: the role of experience and alliances. J. Health Ec., 2005, 24: 317–339. Davenport, T.H. and Peitch, M.C., Human aspects of the management of drug discovery knowledge. Drug Disc. Today: Technol., 2005, 2(3): 205–209. DiMasi, J.A., Hansen, R.W. and Grabowski, H.G., The price of innovation: new estimates of drug development costs. J. Health Economics, 2003, 22: 151–185. Department of Health, Association of the British Pharmaceutical Industry, Pharmaceutical Industry Competitiveness Task Force, London: PICTF, 2002. Drews, J., Strategic trends in the drug industry. Drug Disc. Today, 2003, 8(9): 411–420. Foster, R.N., Innovation – The Attackers Advantage. London: Pan Books, 1987.

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Garattini, S. and Bertele, V., The role of EMEA in regulating pharmaceutical products. In Mossialos, E., Mrazek, M. and Walley, T. (eds.), Regulating Pharmaceuticals in Europe: Striving For Efficiency, Equity and Quality. London: Open University Press and WHO, 2004: 80–96, web-site: www.euro.who.int/document/E83015.pdf. Gereffi, G., The Pharmaceutical Industry and Dependency in the Third World. Princeton: Princeton University Press, 1983 Gutteridge, W.E., TDR collaboration with the pharmaceutical industry. Trans. Royal Soc. Trop. Med. Hygiene, 2006, 100S: S21–S25. Hancher, L., The European Community dimension: coordinating divergence. In Mossialos, E., Mrazek, M. and Walley, T. (eds.) Regulating Pharmaceuticals in Europe: Striving For Efficiency, Equity and Quality. London: Open University Press and WHO, 2004: 55–79, web-site: www.euro.who.int/document/E83015.pdf. Healy, D., The Antidepressant Era. Cambridge, MA and London: Harvard University Press., 1997. Henry, D. and Lexchin, J., The pharmaceutical industry as a medicines provider. Lancet, 2002, 360: 1590–1595. Hutunen, J., L¨aa¨ kehoidon ja l¨aa¨ kehuollon tulevaisuuden n¨akem¨at (English: Drug Treatment and Drug Procurement in a Future Perspective). Helsinki: L¨aa¨ ketietokeskus, 2006. Keinonen, T., Ker¨anen, T., Klaukka, T., Saano, V., Ylitalo, P. and Enlund, H., Pharmaceutical industry’s barrier and preferences to conduct clinical drug trials in Finland: a qualitative study. Eur. J. Pharmaceut. Sci., 2003, 20: 35–42. Kneller, R., Autarkic drug discovery in Japanese pharmaceutical companies: insights into national differences in industrial innovation. Res. Policy, 2003, 32: 1805–1827. Kornhauser, W., Scientists in Industry. California: University of California Press, 1962. Lilja, J., Indigenous and multinational drug companies. Soc. Sci. Med., 1983, 17: 1171– 1180. Lilja, J., Larsson, S. and Hamilton, D., Drug Communications – How Cognitive Science Can Help the Health Professionals. Kuopio: Kuopio University 1996. Maiti, R. and Raghavendra, M., Clinical trials in India. Pharmacol. Res., 2007, 56: 1–10. Mather, C., The pipeline and the porcupine: alternate metaphors of the physician-industry relationship. Soc. Sci. Med., 2005, 60: 1323–1334. Molyneux, C.S., Peshu, N. and Marsh, K., Understanding informed consent in a low-income setting: three case studies from Kenyan coast. Soc. Sci. Med., 2004, 59: 2547–2559. Mrazek, M.F. and Mossialos, E., Stimulating pharmaceutical research and development for neglected diseases. Health Policy, 2003, 64: 75–88. Nwaka, S., Drug discovery and beyond: the role of public–private partnerships in improving access to new malaria medicines. Trans. Royal Soc. Trop. Med. Hygiene, 2005, 99S, S20– S29. OECD, Technical Change and Economic Policy, The Pharmaceutical Industry. Paris: OECD, 1980. Ostholm, I., Drug Discovery – A Pharmacist’s Story. Stockholm: Swedish Pharmaceutical Press, 1995. Overbye, K.M. and Barrett, J.F., Antibiotics: where did we go wrong? Drug Disc. Today, 2005, 10: 45–52. Pirmohamed, M. and Lewis, G., The implications of pharmaco-genetics and pharmaco-genomics for drug development and health care. In Mossialos, E., Mrazek, M. and Walley, T. (eds.), Regulating Pharmaceuticals in Europe: Striving For Efficiency, Equity and Quality. London: Open University Press and WHO, 2004: 279–296, web-site: www.euro.who.int/document/ E83015.pdf.

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Qiang, S., A survey of medicine prices, availability and affordability and price components in Sahndong province, China. Unpublished manuscript, 2005. Quire, V., From evidence to market. Alfred Spink’s 1953 survey of new fields for pharmaceutical research, and the origins of ICI’s cardiovascular program. In Berridge, V. and Loughlin, K. (eds.), Medicine Markets and Mass Media: Producing Health in the Twentieth Century. London, New York: Routledge, Taylor and Francis Group, 2005:146–171. Rost, P., The Whistleblower: Confessions From Health Care Hitman. New York: Soft Skull Press, 2006. Schacter, B., The New Medicines – How Drugs Are Created, Approved, Marketed and Sold. Westport, CT and London: Praeger. 2006. Schmid, E.F. and Smithe, D.A., Is pharmaceutical R&D just a game of chance or can strategy make a difference? Drug Disc. Today, 2004, 9(1): 18–25.

6 Drug production

6.1 Background Drug production can be divided into five stages: 1. Production of chemical intermediates 2. Production of active substances (raw drug materials) 3. Production of drugs in their final dosage forms (ready-made drugs) 4. Packaging 5. Quality control of the product. A drug company can engage in all these stages or only in some of them. As has already been mentioned, when describing drug company strategies, some companies concentrate on the first stages while others centre their activities on the latter steps. Also, there are companies which are not involved in drug production at all. It could be that a drug company does R&D for another company or that it ‘out-sources’ production to another company. For example, it is common for drug companies which market generic drugs in Europe not to produce the drugs themselves. Instead they buy these products from companies which are specialists in effective and high quality ready-made drug production. This means that the concept of ‘a drug company’ is not as homogeneous as it was 20 years ago. For the production of intermediates and raw materials, quite sophisticated technology can be required. Economies of scale can also exist at all stages of the production process. To ensure success a high production capacity can be necessary. At the packaging stage, only simple equipment and basic knowledge, available in most countries, is needed. Today efficient technology for stage 3, the production of the final drug forms, e.g., tablets, capsules, infusion solutions, ampoules for injection, is present in most countries. It is estimated that a developing country can make foreign currency savings of between 30 and 70 per cent by importing raw materials instead of drugs in their final form Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

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(Lilja 1983). However, for a country with no ready-made drug production facilities, those figures are probably of more theoretical than practical significance because there are several obstacles to be overcome before efficient production can be established. The market also has to be large enough to keep production costs at a low level. Further, the costs of setting up the production plant have to be considered when calculating the savings in terms of foreign currency by establishing home-based drug production. Factors other than foreign currency savings can play a part when a government is thinking of establishing indigenous drug production units. The technology used in drug production can be similar to that used in other areas, e.g., the food processing industry, and can be extended to these areas. Also, industrialization can be regarded as one way of solving the unemployment problem and can lead to improvements in the standard of living over a long period. A production line is defined as ‘the system of production, including both the number of operations and the order in which they are undertaken, of a specific drug product in a specific plant’. This definition refers to both pure production and quality operations. The drug product may be a ready-made drug or a raw drug material. A production network includes all environmental factors which influence how efficient the production of specific goods will be (including the production costs and the quality of the end product). For example, suppliers of raw materials have a great influence on the level of efficiency in the production of ready-made drugs. If a supplier changes his production methods this can lead to a different quality of raw drug material. This, in turn, can create problems (higher costs or poorer quality of the end products) for the ready-made drug producer because his production line may have been geared to the quality of the earlier material. Producers of ready-made drugs try to avoid such difficulties by establishing good communication links with the raw materials’ supplier so that they are informed of likely changes in the quality of the raw material. To establish such links takes time and explains why few ready-made producers change their suppliers. One way for a drug company to avoid the risk of ever being without raw materials of acceptable quality is to make a formal agreement with the supplier, e.g., in the form a licensing contract. Ready-made drug producers in developing countries tend to be less loyal to their suppliers, the reason being that they give a higher priority to a low price for the raw materials. Another reason can be that they have less complex production lines which are easier to adapt to changes in raw material quality. However, suppliers can also hesitate to establish long-term agreements with companies in these countries because of their weak financial positions. Production costs are defined as ‘the average cost per unit of production (per package or kilo of chemicals of specified quality) according to a specific annual volume of production’. The reason for including the production volume in the definition is because costs vary considerably depending on the volume produced. The relationship between production costs and the volume of production assuming a specific production line is indicated in Figure 6.1. As can be seen from Figure 6.1, production costs can fall when there is an increase in the volume of production. The reason is that the overhead costs, e.g., those incurred in setting up the plant, buying the equipment and training the personnel, which in total may be quite considerable, are spread over more units. However, when production rises steeply the average costs can also increase because the equipment is often not best suited to higher production levels. The cost of production varies depending on the drug being produced and who is producing it. For example, production costs in India can be expected to be lower than those in European countries because of the lower wage level in India, assuming that the same equipment

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Production costs per unit

Volume of production

Figure 6.1 Production costs in relation to volume of production

and methods of production are used in both places. However, the production costs in the pharmaceutical industry tend to rise because of the increased complexity and chemical structures of the drugs (Bergman 2006: 35). In a developing country like Kenya, the production costs can be rather high because of the many difficulties in production, leading to low utilization of capacity. For example, in one study of 18 firms in Kenya, the mean capacity utilization was found to be as low as 32 per cent (Wang’ombe and Mwabu 1987). Companies can face different cost functions in relation to size because of variations in methods of production. Small companies may use other techniques of production in order to achieve low production costs. Also, companies in developing countries might use labourintensive plant designs to make use of low labour costs compared to more industrialized countries (see the discussion about the selection of suitable technology later in this chapter). Traditionally, the MNDs have tried to keep as much of their production in the mother countries. However, national regulations might require that they set up production where they intend to sell their products (as in India before the liberalization in 1991, Bergman 2006: 29). In some markets, e.g., India, there is a trend towards the MNDs outsourcing their production to domestic firms when the domestic production quality is of high quality (Bergman 2006: 35). Knowledge is an important factor affecting production costs. Figure 6.2 indicates the production costs of a drug before and after acquiring the knowledge and experience from producing the product. Following the acquisition of the necessary experience, improved production methods can be introduced. The upper line shows the costs before acquiring the necessary knowledge and the lower line indicates production costs after that acquisition. As can be seen, experience is expected to reduce production costs at all levels. However, in practice, lessons can be learned at various stages: each production stage can be made more efficient; the link between each stage be made smoother; the product quality and yields can be increased; the technology changed and so on. Drug production is not just about costs. A very important focus in drug production is the safety aspects. Historically, a number of mistakes in drug production have resulted in serious disasters (Braithwaite 1984: 110–158). For example, the sulfanilamide tragedy of 1937 resulted in the introduction of a new drug law in the US – the Food, Drug and Cosmetic Act – which ensured that new drugs had to be registered before marketing, that

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Production costs per unit

Volume of production

Figure 6.2 Production costs before and after learning

inspections were introduced etc. (Swann 2005: 17–21). The drug sulfanilamide was widely in use in the 1930s. However, a US producer decided to produce it in liquid form and dissolved the chemical in diethylene glycol. The solvent transformed into alcalic acid which caused damage to the patients’ kidneys. This accident resulted in 107 documented deaths (Braithwaite 1984: 113). The risk of similar accidents in the more developed countries is much less today because of stricter drug controls and better educated staff in the drug companies, but as recently as 2006 there was a similar incident in Panama. Before marketing, drugs have to be registered and during that process the ingredients and their toxicity are checked (Chapter 13). Also, the drug regulatory agencies require that each drug company has an independent internal quality control unit which controls all safety aspects in drug research and drug production. In this chapter, the decision-making process is seen as a system consisting of a number of decision points. At each of these points one specific type of decision has to be made. Of course, this is an over-simplification of reality where a decision-maker normally has an on-going drug production system which they want to improve. The decision-making process under such circumstances might be better described as a series of minor changes in the production system rather than a procedure involving all the stages under investigation here. However, if a decision-maker (a government, a non-profit organization or a private owner) decides to set up a production unit in a new place the following six issues will have to be addressed: 1. Which drug(s) to produce 2. The organization of production lines 3. The principles of technical assistance 4. Where to locate the plant 5. The determination of production quantities 6. Export decisions.

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6.2 Variations between countries Some countries tend to dominate world drug production. However, the statistics are not too reliable. Nevertheless, it is evident from the official international statistics that the US, Japan, France, the UK, Germany and Switzerland are the large producers (Department of Health, Association of the British Pharmaceutical Industry 2002: 58). India, China and Russia and Brazil are also in this category. Prior to 1947 India had few firms and a small production capacity. However, in 1947 it gained its independence from the UK and within twelve months the new Indian government had decided that the pharmaceutical industry was of importance and so invested considerably in it. Two state-owned firms got technological support from the WHO, UNICEF and the Soviet Union. Many of these technological innovations spread to the new private pharmaceutical companies established later. These domestic firms were encouraged to link up with foreign firms financially and commercially. India was attractive to foreign firms because of its large market and the increasing demand for drugs. In 1970, the Indian government introduced a new patent law with a five year patent period, the main objective being to encourage domestic firms. At the same time, a price control system was put into operation. In 1978 a new drug policy was introduced in India. One of its aims was to encourage the domestic production of drugs from as basic a stage as possible. Other aims were to improve the technology capacity in the industry and to provide pharmaceuticals to consumers at affordable prices. These reforms meant that production in the drug industry in India more than doubled during the 1970s. However, the government noted that there was considerable obsolete technology in the national industry (not just pharmaceuticals) because of the country’s highly protected market. Accordingly, the decision was taken in 1991 to liberate the economy. Many entry barriers were eliminated (for both domestic and foreign firms). Publicly owned firms that had enjoyed a production monopoly for certain drugs now faced competition from private enterprise. India joined the TRIP agreement and at the start of the twenty-first century a further change in policy took place to ensure the country fell in with TRIP’s requirements, including that of a longer patent period. The result of all this is that the Indian pharmaceutical industry today is very successful. The liberation of the economy came at point of time when the domestic industry was strong enough to handle competition from the MNDs. The Indian drug firms could learn from the foreign firms with which they competed in the Indian drug market (this might be called a ‘spillover effect’ from the foreign drug investment). For example, the domestic firms’ share of the home market increased from 20 per cent in 1970 to 76 per cent in 2000. Some domestic firms export most of their production. The Indian pharmaceutical industry has not just increased its production of ready-made drugs, but also been successful in the production of drug raw materials, i.e., bulk production (Bergman 2006: 25–39, 48–55). Until now most of the production in India has been in the form of generic drugs. However, the country’s drug industry is today investing in R&D and developing new innovative drugs. At the same time, its drug companies are becoming more internationally oriented and are taking over generic production firms outside India, e.g., in Europe. Cuba, Mexico and Egypt serve as other examples of countries formerly dependent on the importation of drugs in their final forms, but which now produce their own medicines. With the exception of Cuba, they are all examples of places with big domestic markets which

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have given them an advantage in developing a drug industry. There has also been a long tradition there of setting up new drug companies. Twenty years ago, many European countries had government owned production units for vaccine production. The situation is now different and most vaccine producers tend to be commercial privately owned companies. The vaccine industry is now concentrated in the hands of big MNDs, which sell the vaccines on the global drug market. This has had an effect on vaccine prices, which have tended to increase. However, it is not easy to compare vaccine prices over time because the product quality has changed to more acellular vaccines, which tend to be associated with better tolerance. Also, the previous vaccine prices may not have covered all the production costs (Blume and Zanders 2006).

6.3 The decision regarding which drug(s) to produce As a general rule of thumb, it is better to manufacture more than just one drug in a drug production plant. This is because investment in equipment and personnel is far more worthwhile when used in more than one production line. In fact, the extra costs (the marginal costs) of producing a second drug product will be considerably less than the establishment of a new separate plant for a second product. This is why almost all drug manufacturers make more than one product (in economics this is sometimes called the ‘economics of scope’). The decision-maker has to determine which products should be produced in his plant. The factors influencing this decision can be classified into two broad groups: 1. Production considerations 2. Marketing considerations.

Production considerations There are a number of production factors which have to be considered when deciding which drugs should be produced in a plant: the accessibility of raw drug materials in the country, technological factors, service requirements and cost factors.

Accessibility of raw drug materials Many authors recommend that developing countries rely upon raw materials of natural origin already available in their land. This can result, not only in financial savings, but also in benefits to domestic industries because more local people become involved. The production of cough syrups can be taken as an example. Such production can often be undertaken using ingredients mentioned in the country’s traditional pharmacopoeia. The necessary clinical investigations would have to be carried out in parallel with the production development

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process (Akarele 1987). This is in line with the trend in many countries towards a search for an integration of traditional and modern medicine. However, there are no papers giving detailed figures of the cost-effectiveness of this strategy in comparison to drug production based upon chemicals. For example, when considering antibiotics it is probably better to buy the raw materials from outside if there is no antibiotic fermentation plant in the country. The reason is that non-patented drug chemicals are often sold at low prices, because of the strong international competition and the reduced costs of transportation. There are a number of different strategies available to developing countries to stimulate the use of drugs based on traditional medicines (Pedersen and Baruffati 1985, Van Esterik 1988): 1. The country can use a biochemical approach. This involves a research strategy aimed at identifying the chemical ingredients which lead to the curative effects of a drug. Then these ingredients can be isolated and used to develop new drug preparations. A biochemical approach requires both considerable financial resources and advanced technological facilities. 2. The country might use a ‘folk approach’. This strategy builds on a sound knowledge of how traditional drugs are used by the public. With this knowledge, the health authorities can encourage the use of traditional approaches in medical situations where this seems appropriate. One reason that not many countries have opted to go down this road has been ‘scientifism’, i.e., a very strong belief that modern science can go a long way to solving all our medical problems (Pedersen and Baruffati 1985). However, a community-oriented approach in which the use of herbal drugs is encouraged for minor medical problems might be positively embraced by the public in many countries (Le Grand, Sri-Ngernyuang and Streefland 1993). 3. A country might also stimulate the commercialization of traditional drugs. One example is the ‘jamu drugs’ found in South East Asia. There, small companies produce traditional jamu drugs in newly packaged drugs forms (liquids, pills, ointments and powders). Of course this strategy is associated with a number of risks, e.g., effective quality control can be difficult to achieve because of the large number of producers (Van Esterik 1988). In some countries, the traditional products are sold in special stores in which you can buy both manufactured herbal drugs and natural herbs, e.g., in South Africa (Cocks and Møller 2002). Many drug companies in Latin America seem to have selected this approach, with their herbal drugs sold both in regular pharmacies and in other shops. However, little has been written on this practice and most information is anecdotal. The risks of using such products from a system without adequate control needs to be recognized. Sufficient raw material support is a necessity for efficient drug production. This is often a big difficulty in developing countries because they do not have adequate funds of foreign currency, which often results in stoppages in drug production. This can partly be because of a lack of coordination between the Ministries of Finance, Industry and Health.

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Technological factors Countries can be classified into one of five groups which indicate the drug manufacturing processes and the technological facilities they possess (Wangombe and Mwabu 1987): 1. No pharmaceutical industry in any form 2. Repacking and packaging; production of packaging materials 3. Formulation of tablets, capsules, syrups, and ointments from bulk drugs, production of plant extracts and some organic and inorganic intermediates 4. Formulation of parenterals, biologicals, immunologicals, single-step synthetic drugs and fine organic intermediates 5. Multi-step synthetic drugs, fermentation products, e.g., antibiotics. A country which is in one group can safely make drug production decisions which reflect the levels of technology it possesses. However, when a country wants to ‘progress’ from one group to the next, i.e., invest in new technological processes, the decision-maker has to plan carefully for the extra services required (Hogerzeil 1985: 28). For a producer, it is an advantage if they can manufacture a number of products based on a common technology because the same equipment and personnel can then be used. It can also be an advantage to choose a number of products based on the same input (raw materials or intermediates) and then apply similar production technologies. Among the production considerations which must be taken into account is the influence of production networks. For example, if the plant is to become a subsidiary of an MND, the specific knowledge of production processes possessed by the parent company will have a strong influence on the drugs to be produced. The new plant can manufacture the same drugs produced on other plants owned by the company and can base its production of ready-made drugs on raw materials from the MND’s own bulk production (Burstall, Dunning and Lake 1981: 142). However, to have such close cooperation with an MND has its risks. The MND might keep the rights to decide about drug prices and export decisions. The MND might also take a large part of the profits and transfer them to other countries as a part of the license agreement. The transfer of drug production technology from one country to another is now much better than 20 years ago. At that time, it was believed that only big drug companies had the technological competence to efficiently set up and run drug production units. However, now there is a ‘market’ for industrial drug plants. Specialized firms offer ready-made drug production units to anybody who can pay. Such firms might also help in running the plants in efficient ways. In general, these specialized firms are independent firms, not connected to any of the big MNDs. It is up to the producer to select appropriate production technology. What that is depends, among other things, on the amounts which will be produced, the service available for the machinery (often a big restriction in a developing country), financial resources available (more advanced machinery is more expensive) and the availability of trained manpower.

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In general, higher productivity can be achieved by a more automatic process where the machinery does most of the operations compared with a product line in which most of the operations are done manually. Of course, the selection of production technology is also affected by the required product quality. Often higher quality is achieved by more advanced technology. In some cases wages affect the technology used. In developing countries, wages are low, which can mean that more manual based technology is being used. In general, the global pharmaceutical industry has been stuck in the past and hesitant to broadly embrace innovation in pharmaceutical manufacturing. Effective use of the most current pharmaceutical science and engineering principles and knowledge throughout the life cycle of a product can improve the efficiency of both manufacturing and regulatory processes. The recent FDA initiative, Process Analytical Technology (PAT), is designed as a framework for innovative pharmaceutical development, manufacturing and quality assurance, in recognizing the need to eliminate the hesitancy to innovate (Food and Drug Administration, 2004). However, it is necessary to wait for an evaluation of the reform before we might form a valid judgement regarding the effects of this and similar reforms.

Service requirements The choice of which drugs to produce has to be based on those services which can be delivered easily within the company, within the country and also on what can be imported easily (from other companies). The costs of imported services are often higher than those available within the firm or within the country. When calculating costs for services it is necessary to include, not only the direct costs of the services, but also the indirect costs, e.g., waiting time. A production breakdown in a plant in a developing country can result in considerable additional costs if servicing has to come from Europe or the US. It may even take months to get foreign exchange from the Minister of Finance before the spare parts and the service can be ordered. The complexity of production and the associated servicing requirements vary considerably between drug products. This complexity can be ‘measured’ on a continuum from very simple production to very advanced high technology fermentation processes, based on genetic engineering, which can only be undertaken by a few companies in the world.

Cost factors It is important for a generic producer to manufacture drugs which can be produced efficiently, so the price and the quality can be competitive. This means that the production quality and production costs have to be little different from imported drugs. If costs are much higher then it is usually better for the producer to import the drug instead of producing it. For developing countries it can be difficult achieving the same quality and keeping the costs low. As has already been mentioned many factors can keep production costs high in these countries. In reality it will not be as simple as choosing between production and importation, based on a comparison between the production costs and the price of importing the drug. Why not? Firstly, the production costs reflect only the value of the resources in terms of national

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money, whereas the imported drugs have to be paid for in foreign currency. In many places foreign currency cannot be bought at the ‘official price’ especially in developing countries, which often have more or less continuous payment deficits. In practice, the company may not get foreign currency for its intended purchases. This means that the official exchange rates do not reflect the real terms of trade. Secondly, national governments can want drug production, not only because of the expected foreign currency savings, but also because of the long-term industrialization effects of such production. This is why many developing countries are prepared to have drugs locally produced even if they are as much as 25 per cent more expensive than imported ones (Hogerzeil 1985: 28).

Marketing considerations Marketing considerations include various factors which can influence the decision about the drugs to be produced. The type of ownership and the goals of the owners will have a large influence on the markets for which the plant is producing. Geographically, the plant will certainly start to produce for the home market and then, if production capacity and the prices in the export markets allow, the company may start exporting some of its products. However, the national drug market can be divided into sectors according to distribution channels. In many developing countries, e.g., in African countries, there is both a private sector (where the patients have to pay the full price of the drug) and a public sector (where the patients get the drugs without cost or for only a marginal fee) (Chapter 4). In such a situation, government pharmaceutical plants tend to concentrate on the public sector, whereas private drug companies manufacture for the private sector. However, although companies concentrate on one of the two sectors, they also often try to sell to both. Their success in doing this is usually dependent on the specific factors operating in the country and the drug prices the company offers. In Latin America the situation is different. There, for political reasons, it has not been possible to set up government drug production units. Also, there is no ‘public drug distribution’ channel, as in the African countries. Private pharmacies sell both OTC and prescription drugs to customers. The drugs are imported or produced by minor private drug companies which exist in these countries. If a plant is dependent upon the local market, the drugs it produces are determined by the disease patterns in the country. For example, in developing countries where infectious diseases are prevalent, many drug companies concentrate on the production, not only of antibiotic drugs, but also of less essential drugs which are in high demand, e.g., vitamins, tonics. However, today, in many developing countries the drugs produced are heavily influenced by essential drug lists (Chapter 4). Private companies producing essential drugs can get favours or can be forced to produce essential drugs. A government-owned company in a country which has a national list of essential drugs is normally instructed to produce drugs from this list. The decision regarding which drugs should be included on the essential drugs list can, in practice, be made at the same time as the decision as to which drugs should be produced in the government plants. This is because national production plans are taken into account when drawing up essential drug lists. Drugs which can be locally produced are preferred over similar drugs which have to be imported (Hogerzeil 1985: 13).

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In essential drug lists and for home production, tablets are often preferred to injections containing the same chemical. The advantages of tablets can be summarized as follows: 1. Tablets can be produced at low cost and in large quantities. 2. Tablets can provide precise dosages (if the patients take them). 3. Tablets are often durable for extended periods of storage. 4. Tablets are convenient for most patients to take. There can be a bit of a problem in convincing patients and health care personnel that tablets can produce the same medical effects, but at a lower cost. In many countries people think of injections as much more effective than tablets (Ferguson 1981, Jitta, Reynolds Whyte and Nshakira 2003, Kotwall 2005). However, projects have been and are taking place with the aim of convincing health care staff and patients of the benefits of tablets as opposed to injections (Hutin 2005). It may be uneconomic to set up a production line for a drug which is sold only in small quantities in a country. In such a situation the decision-makers will have to consider whether they can export sufficient quantities of the drug to achieve acceptable production levels and associated production costs. This is not a big problem if the plant is a subsidiary of a MND because a MND usually has suitable distribution channels available. It is more difficult for a national government to establish cooperation with other governments. To achieve this, it can be necessary for a cooperative programme to be set up with two or more different governments. However, most of these inter-governmental projects have been far from successful because the mutual trust necessary in such a venture has not been present. For a company to survive in the long run, it is necessary to set its drug price high enough to cover the direct production costs in order to obtain revenues to offset the overhead costs.

6.4 The organization of production lines There are three main goals in drug production which apply to both non-profit and profitmaking companies: 1. To achieve the planned level of production in terms of the assortment of drugs and production volumes 2. To achieve acceptable drug quality 3. To achieve acceptable production costs. A drug production unit can fail to reach one or more of these aims. Such failures can then lead the decision-makers to mobilize their resources to resolve the problems and to achieve their desired aims. Under some circumstances, especially if the target quality cannot be reached, the decision may be taken to stop production entirely for a period, in order to correct the failure. Such a decision may be arrived at within the production organization for internal reasons or may result from external influences, e.g., a recommendation from

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the national drug control body. However, a production process can achieve its goals as a result of improvements. Such improvements can come from many different sources, e.g., new equipment, changes in production, a restructuring of the organization or educational innovations. A production line consists of a series of many operations. For example, to produce an ordinary tablet more than 100 different operations can be required. However, these operations can be as simple as the following two examples:

r Pour bottles of chemicals x and y into a mixer machine. r Start the machine and let it run for 10 minutes. Of course, an operation can be much more difficult and complex and require considerably more skill and knowledge than these examples. However, what is important is that all operations can be analyzed in terms of physical relationships between workers and pieces of equipment (Heath and Luff 2000). Drug production operations can be divided into three types depending upon the aim of the operation: 1. Pure production operations 2. Quality assurance operations 3. Service operations. To set up a production line, specific service operations are required. Other service operations have to be available if production problems occur. A third type of service operation has to be undertaken at intervals, e.g., daily machine service, machine service after x hours in operation, a service after a batch has been produced. A characteristic of drug production is that many pure production and quality operations are combined during the production process. In many other industrial sectors quality operations are only undertaken at the last stages of production. But in drug production quality operations take place before, during and after pure production operations. In drug production, the operations are associated with specific instructions detailing how the workers must behave in order to achieve the production goals. For each operation the detailed behavioural demands vary depending on the equipment being used, the risks involved and the educational background of the personnel. It is regarded as a matter of professional judgment as to whether the detailed behavioural requirements of each operation are defined. Of course, the risk of mistakes is much less if these plans are formulated in written policies instead of only being kept in the memories of the production and quality managers. With regard to the skills required for the operations, these vary considerably. Some operations can be undertaken after just a brief initiation period. On the other hand, operations like handling a tablet-coating machine can take years to learn before an acceptable level of performance is reached. Most drug production lines are planned as ‘batch production’ . This means that a number of drugs are produced with the same equipment, but in a sequential pattern. Firstly, one drug is produced in an ‘economic’ quantity (a batch). Then, the equipment is cleaned and service operations are undertaken to prepare for a new production line. The most economic

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quantity of production – the batch – is often set at the maximum amount which can be produced by the equipment. For example, the volume of the mixer can restrict the amount which can be produced in the same batch. A plant used for the batch production of different drugs is often called a multipurpose plant.When establishing a new plant in a developing country this is the kind of plant that is normally built. Drugs which are in high demand can be produced more frequently than those for which there is less demand. However, a drug which has a short shelf life can, because of the risk of deterioration, be produced more often than others, but in smaller quantities. There is a trend in industrial countries to set up specialized production units for the manufacture of specific drugs. The following factors explain this trend:

r The risk of cross-contamination can be avoided by using a specialized production unit. This is of great importance when producing antibiotics or hormone preparations.

r Economies

of scale and learning can be achieved more easily in a specialized drug

plant.

r Production of some raw materials can require special equipment which cannot be modified without high cost to the production of other drugs. Fermentation plants for the production of antibiotics in bulk serve as one example of this. Plants for the production of vaccines and sera are also technologically different from plants producing ordinary ready-made drugs.

r The drug quality can be better in a specialized plant. r The average unit costs can be less in a specialized plant. However, specialized units often require larger production quantities to achieve these low costs advantages.

6.5 Production of drug raw materials The establishment of a bulk production unit (a unit which produces the drug chemicals in large containers) can often involve substantial investment in plant and equipment. Because of economies of scale and of professional ‘know-how’, most bulk production is centralized in the home countries of the MNDs. The United States, Germany, Switzerland, Hungary and India are big exporters of drugs in bulk (Burstall, Dunning and Lake 1981: 141). The production of synthetic raw drug materials can be divided into a number of stages of synthesis. The exact number of stages and the technology necessary at each stage vary according to the substances involved. Knowledge obviously plays a very important role in the production of drug chemicals. For example, in fermentation plants the introduction of new strains and optimizing techniques can regularly increase the yields. Economies of scale mean that a producer of large amounts of a product can achieve advantages that a producer on a smaller scale cannot. These advantages can be of different kinds. For example, the large producer may get his basic intermediates at a lower price. He may use more efficient technology and so on. When discussing drug production it is

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often assumed that there are significant economies of scale in the production of raw drug materials, but not in the production of the final drug forms. The reality is probably more complex. At some steps in a production process there can be significant economies of scale, but at others there are no such savings. However, production technology can also change over time. For example, new findings in biotechnology can alter the economies of scale in the production of chemicals. This can favour middle-sized companies which have close ties with biotechnological research. To avoid huge investments and scale economies, a small bulk producer may decide to cooperate with other bulk producers. Networks can be established. One company may provide intermediates for other companies for some of the stages in the production process and get the material back for the final production stages. Alternatively, a bulk producer may begin the production using intermediates produced by another company. Bulk producers can specialize in some types of synthesis or in some types of operation.

6.6 Drug quality Drug quality is an issue frequently discussed in pharmaceutical publications. Here we can only make a few remarks about quality assurance. It is strongly recommended that there are separate managers for production and quality control. Production managers tend to concentrate on production levels and costs and show less concern for quality and the risk aspects in production. This makes it necessary to set up an ‘independent’ internal quality control department and appoint a quality manager. The manager and the department must plan and control production to achieve as high a product quality as possible (taking into account the resources available) and to diminish any risks associated with the production process. The quality manager is responsible for stopping production if health hazards are detected and must also cooperate with national drug authorities to develop the quality assurance system in the company. The quality system, good manufacturing practice (GMP), is most often analyzed by dividing it into separate control areas. The most important of these are: 1. Planning and control of how personnel are selected, trained, motivated and supervized 2. Planning and control of production premises 3. Planning and control of equipment and sanitation 4. Planning and control of starting materials 5. Planning and control of manufacturing operations 6. Planning and control of labelling and packaging 7. Planning and control of end products 8. Planning and control of the end products stored in the factory.

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In all these areas there are international, national and company norms governing quality assurance. However, quality cannot just be regarded as a set of pre-planned rules. Maintaining a high level of quality depends, to a large extent, on regular communication about quality between the production staff and the quality controllers. These meetings are often described as those of the ‘quality group’. In the group, any problems and risks relating to the quality of the drugs being produced are raised and discussed, and solutions considered and evaluated. Personnel selection and education have a considerable influence on production quality and risks. This is often a big problem in a developing country with no history of drug production. Even if blue-collar workers learn most of the skills, without formal educational training these skills take a long time to master. During this time, production can be much lower than planned and risks with the quality of the product can be taken. Accordingly, it is recommended that sufficient time be allowed for the training of personnel before fullscale production begins. It is, of course, essential that all production personnel understand written instructions. It is also very important during the training period to stress personal responsibility for the tasks assigned. For each piece of equipment there are instructions detailing how it should be handled. For each product there is a Master Formula Record including instructions on how a specific drug should be produced. A Master Formula Record should include the following instructions: 1. The name of the product, a description of the dosage form and its strength 2. A complete list of ingredients designated by whole names and codes sufficiently specific to indicate any special characteristics 3. The quantity by weight or volume of each ingredient 4. The standards or specifications for each item used in the product 5. An appropriate statement concerning any calculated excess of an ingredient 6. Appropriate statements of theoretical yield at various stages 7. Manufacturing and control instructions, specifications, precautions and special notations to be followed 8. A detailed description of the closures, containers, labelling, packaging, and other materials used for the final product. For each batch a Batch Production Record is kept containing the dates, specific code or identification numbers of each ingredient used, weights or measures of components used in the course of processing, results of in-process control testing and the endorsement of the individual performing and supervizing each step of operation. Whether everyone keeps such detailed records, however, is open to question. We would guess that developing countries have more difficulty in complying with these demands, because this system is based on the production traditions of industrialized countries.

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However, it is possible to have a similar record system in a simpler form in a developing country. The basis for the formulation of raw material and end product requirements can be found in publications like national pharmacopoeias. However, all drug companies do not subscribe to the same quality norms. In a developing country the same quality norms often cannot be applied as in an industrialized country if the drugs are to be produced cheaply enough so that they are available throughout the country. This does not mean that drug producers in developing countries should take quality risks. Instead, each country has to decide norms regarding purity, relative to its own financial standing. It may be very expensive to raise the purity of ingredients to levels which are only marginally better than previously and, in effect, therapeutically similar. The quality of the end products should be checked before distribution to wholesalers and should be within predetermined specifications. However, the equipment for analyzing end products varies considerably between drug companies. Big companies in industrial countries often have technically sophisticated machinery while smaller companies in the Third World usually have to rely upon much simpler equipment for analysis. This does not mean that small drug companies cannot produce ready-made drugs efficiently, for even simple equipment can be sufficient to guarantee an acceptable drug quality. Indeed, simple equipment for chemical analysis can work much better in the environmental conditions found in developing countries. Both in-process and end product analysis give important information when evaluating drug product quality. All results outwith safety parameters should, of course, be reported to managers who must determine the reasons for any such figures.

6.7 Principles of technical assistance support A company with no experience in drug production can use consultancy services. However, those who do this are faced with a number of problems. Firstly, the decision-maker may not have enough knowledge to evaluate the service available. A representative from an MND might act as a ‘consultant’. However, such an agreement might include a contractual attachment to the drug production unit of an MND for a long period of time and the MND might impose restrictions in the form of a license agreement. This could include agreements about royalty payments and clauses specifying where the company has to buy its raw materials (perhaps from the MND at a high price), paragraphs restricting its exports to areas decided upon by the MND and a requirement that the company provide the MND with full information about product developments. However, the situation is better today. As mentioned above, there are firms specializing in drug production services and they often operate independently of any drug production and sales of their own. International organizations can offer aid in the form of servicing and can arrange for financial support for drug production projects. Most of these organizations want a cooperative contract in which the distribution of tasks is divided between the aid-givers and the aid-receivers. A buyer of technological services is in a much better negotiating position if they have the same basic knowledge about the production process as the technology service companies. A buyer with such knowledge can decide to purchase a number of more restricted service projects, which are easier to supervise and control, rather than buying the total

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technology. By buying restricted service projects the seller may be in a position to insist upon control of the production and the marketing of the drugs, once full production is underway. It is important to remember that a production line is not a number of pieces of equipment, but a large number of operations where man–machine relationships are involved. In many of these operations learning is an integral part. Production will not reach its full capacity during the first year even if there are few breakdowns. There will probably also be quality problems during the early years and production costs are likely to be high during this period. India is an interesting example in which the domestic firms can get labour training and organizational ideas from the MNDs on the national market. Because of the labour turnover, such resources can flow from the MNDs to the domestic firms (Bergman 2006: 49). However, it has to be noted that domestic firms in India have a rather high level of technology already and so are able to apply this knowledge in their own facilities. When small or medium firms want to export some of their products they could have difficulties. For example, they might not have the market capacity and the products might not be of acceptable quality in the countries to which they want to export. In such cases they might be more or less forced to cooperate with MNDs (Bergman 2006: 52–53).

6.8 The decision where to locate the plant For an MND it is usually most profitable to have one production unit for each of its drugs and to send its products to the markets where they are sold. However, national laws and regulations can force MNDs to locate production units in more than one country. Of course, other factors also have to be taken into account when deciding upon the site of a new plant. Plans have to be made to recruit employees with the necessary skills. Low staff costs are an advantage in the production of non-patented standard drugs and can influence location decisions (Burstall, Dunning and Lake 1981: 142). For companies concentrating on research and the international export of patented drugs these factors are of much less importance because they do not compete by price but by the therapeutic advantages of their drugs. Environmental factors also have to be considered. In Africa, plants have been located in places with dry, cool conditions in order to make drug production easier. The decision where to locate a raw materials plant has to be analyzed more carefully than the decision where to build a plant for ready-made production. In determining where a raw materials plant should be, it is very important to consider the factors relating to a reliable production network. Such a plant has to be in a place where it is possible to find outlets for the chemical by-products (Burstall, Dunning and Lake l981: 142) and hazardous waste. Of course, it is also vital to have raw material plants in places with good transportation facilities for the input and output of goods. There is trend among MNDs to outsource their drug production. For example, in India a number of the MNDs operating in the Indian market outsource their drug production to domestic firms while the MNDs still help the domestic production units to keep international standards (Bergman 2006: 45). However, the opportunity to grow as a contract manufacturer is limited because the most important decisions are made by the MND headquarters (Bergman 2006: 35).

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6.9 Determination of production quantities In market economy countries, most drug firms are privately owned and make their production choices and determine their production quantities independently of governments. However, a government has a number of ways of influencing the decisions made by drug companies operating in its country. The drug registration process makes it possible for a government to prevent the sale of dangerous and therapeutically inferior drugs and to influence the quality level of the drugs. Governments can also affect the production quantities by informing prescribers and patients of restrictions on the medical conditions for which a drug can be given. Professional organizations can also undertake such activities. In some companies, the shareholders are native-born while in others the owners are foreign investors. Whether most drug companies are owned by foreign investors depends upon where the company is located. In the US, for example, most of the production is done by indigenous companies, whereas in developing countries most drug companies are owned by foreigners. In countries where the majority of drug companies are owned by foreigners, it can be more difficult for the national government to influence their policies (Lilja 1983). To gain national control of the drug companies, many developing countries have introduced legal rules concerning the maximum foreign share of company equity. MNDs normally have a central system for deciding on the quantities to be manufactured by their production units.

6.10 Export decisions Most pharmaceutical companies regard exporting as an important strategy for growth (Burstall, Dunning and Lake 1981: 67). The amount of drugs exported is not just a matter of production levels, but to a large extent is dependent on a successful marketing organization in the country to which the drugs are to be exported. Foreign firms, unused to a country, can have great difficulty in achieving satisfactory sales levels without building up a significant marketing organization. Here, big companies almost certainly have a considerable advantage in that they spend more on sales representatives than smaller companies (Chapter 11). For a company exporting a standard drug, the profits are not high because the price has to be lower than the drugs already available in the importing country. The reason is that prescribers and the general public have conservative prescribing habits. Even when a new drug with a somewhat lower price comes on the market, physicians continue to prescribe the more expensive but earlier-introduced drug. However, many countries which have a national health and drug reimbursement system use a drug substitution system. This means that there is an inducement for patients to choose a cheaper generic drug, if available, instead of the original branded product. In this way competition has increased in many of those countries during the last decade (see the discussion about generic substitution in Section 4.3) However, a company offering a drug with a significant medical advantage can set its price at a much higher level and still have large sales (Chapters 7 and 11). In a country with production facilities for indigenous drug consumption, production can be expanded to meet the demands of both the home and export markets. Sweden can be taken as an example. Here drug production outside pharmacies was first allowed in 1914 and shortly thereafter the first private drug companies were established. During the period

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up to the Second World War, the Swedish drug companies sold most of their products on the home market. Indeed the majority of the drugs produced were chemical synonyms for products (what are now called ‘generics’) originally made by companies in Germany, the country from which Sweden imported most of its drugs at that time. The blockade during that war resulted in a drop in foreign imports and a subsequent growth in the production capacity of the Swedish drug industry. In this 1939–1945 period, a number of substances were developed as a result of cooperation between universities and the drug companies and some of these drugs, e.g., dextran, lidocaine, became the basis for Swedish export activities as soon as the fighting ended. The profits made from these products show how advantageous cooperation between universities and drug companies can be. Research and development of new drug substances provided the basis for international exports. Such research activities were facilitated by an increase in government medical education and a considerable growth in public health care, beginning in the 1950s (Ostholm 1995). However, now the biggest Swedish research-based drug companies have been merged with other MNDs overseas. However, as mentioned above, small and medium sized pharmaceutical companies might have difficulties in starting to export the ready-made drugs they have produced or the drug raw materials. Barriers might exist both in terms of quality of the products (do the products reach enough high standards?) and in terms of marketing knowledge (how should the products be marketed?). As mentioned in Chapters 11, 14 and 15 the companies already operating in foreign markets have a very strong advantage because of the brand loyalty of prescribers and patients. So it might be necessary for small and medium sized companies to cooperate with MNDs prior to starting to export. For bigger firms it is much easier to acquire the necessary knowledge and skills to start exporting (the big drug firms in India are good examples, Bergman 2006: 37, 52).

6.11 Summary Drug production can be divided into five stages: production of intermediates; production of active substances from the intermediates; production of ready-made drugs from the active substances; packaging; and control of the end products. Some companies concentrate on the first stages while others centre their activities on the later. Currency savings and industrialization benefits outside the pharmaceutical sector are reasons for setting up a drug production plant in a developing country. Production costs are defined as the average cost per unit of production according to the specific annual volume of production and can vary between drug companies for the same drug. Production and marketing considerations influence the decision as to which drug to produce. The three goals of drug production are: the achievement of planned production quantities; acceptable drug quality; and acceptable production costs. A production line can consist of more than 100 different operations. Some of these are pure production operations, while others are quality assurance operations. However, servicing operations are also needed in order to set up a production line and/or to achieve the production goals.

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A multipurpose plant is often used in the production of ready-made drugs from chemicals. However, there is a trend towards companies setting up specialized production units. Production of drug substances can normally require a much larger scale of production than that for ready-made drugs. Knowledge and experience can also play a more vital role in the production of drug substances. Each drug company needs to have a quality control department responsible for the planning and control of the quality aspects of production. The selection of personnel and their education are of vital importance in keeping quality at a high level. Proper labelling and record keeping are also of utmost importance.

References Akarele, O., The best of both worlds: bringing traditional medicine up to date. Soc. Sci. Med., 1987, 24: 177–181. Bergman, A., FDI and Spillover Effects in the Indian Pharmaceutical Industry. Lund: University of Lund, Department of Economics, 2006 (Master Thesis). Blume, S. and Zanders, M., Vaccine independence, local competences and globalisation: lessons from history of pertussis vaccines. Soc. Sci. Med., 2006, 63: 1825–1835. Braithwaite, J., Corporate Crime in the Pharmaceutical Industry. London, Boston, Melbourne and Henley: Routledge and Kegan Paul, 1984. Burstall, M.L., Dunning, J. and Lake, A., Multinational Enterprises, Governments and Technology – The Pharmaceutical Industry. Paris: OECD, 1981. Cocks, M. and Møller, V., Use of indigenous and indigenized medicines to enhance personal well-being: a South African case study. Soc. Sci. Med., 2002, 54: 387–397. Department of Health, Association of the British Pharmaceutical Industry, Pharmaceutical Industry Competitiveness Task Force, London: PICTF, 2002 Ferguson, A.E., Commercial pharmaceutical medicine and medicalisation: a case study from El Salvador. Cult. Med. Psychiatr., 1981, 5: 105–134. Food and Drug Administration, Guide for Industry PAT – A Framework for Innovative Pharmaceutical Development, Manufacturing and Quality Assurance. 2004. http://www.fda.gov/cder/guidance/6419fnl.pdf Heath, C. and Luff, P., Technology in Action. Cambridge: Cambridge University Press, 2000. Hogerzeil, H.V., Standardised Supply of Essential Drugs in Ghana. Utrecht: University of Utrecht, 1985. Hutin, Y., Recent progress towards the safe an appropriate use of injections worldwide. Rational Use, 2005, 34: 6–7. Jitta, J. Whyte, S.R.and Nshakira, N., The availability of drugs: what does it mean in Ugandan primary care. Health Policy, 2003, 65: 167–179. Kotwall, A., Innovation and safety of medical technology: a review of the literature on injection practices. Soc. Sci. Med., 2005, 60: 1133–1147. Le Grand, A., Sri-Ngernyuang, L. and Streefland, P.H., Enhancing appropriate drug use: the contribution of herbal medicine promotion. A case in rural Thailand. Soc. Sci. Med., 1993, 36: 1023–1035. Lilja, J.M., Multinational and indigenous drug companies. Soc. Sci. Med., 1983, 17: 1171–1180. Ostholm, I., Drug Discovery – A Pharmacists Story. Stockholm: Swedish Pharmaceutical Press, 1995. Pedersen, D. and Baruffati, V., Health and traditional medicine cultures in Latin America and the Carribean. Soc. Sci. Med., 1985, 21: 5–12.

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Swann, J.P., Pharmaceutical regulation before and after the Food, Drug and Cosmetic Act. In Berry, I.R. (ed.), The Pharmaceutical Regulation Process. New York, Marcel Dekker, 2005: 1–46. Van Esterik, P., To strengthen and refresh: herbal therapy in South East Asia. Soc. Sci. Med., 1988, 27: 751–759 Wang’ombe, I.K. and Mwabu, G.M., Economics of essential drugs scheme: the perspectives of the developing countries. Soc. Sci. Med., 1987, 25: 625–230.

7 Drug prices, cost controls and profits in the drug industry

This chapter is concerned with prices and profits and is divided into the following sections: price setting of raw drug materials; price setting of ready-made drugs; price setting of patented drugs; price setting of non-patented drugs; price competition; price controls and the profits of drug companies. A market can be defined as potential sellers and buyers of products which satisfy a specific need. In the drug sector this means products which satisfy medical needs, as determined by medical experts, prescribers or the general public. According to this definition, the drug sector consists of about 100 different markets for ready made-drugs and the same number of markets for raw drug materials. However, we can distinguish between harmonized markets (e.g. ICH regions), where all drugs have about the same quality, and non-harmonized markets, where the products cannot be regarded as being the same quality (or having the same therapeutic results). In the latter case, the patient or prescriber may have to be cautious in selecting various imports.

7.1 Price setting of raw drug materials Economic theory can be of help in the analysis of price changes in raw drug materials. Theoretically the price of a product is determined by the relationship between the supply and demand functions operating in a market. The demand function indicates the amount of the chemical substance which will be sought at different prices. The slope of the demand function for most drug products is assumed to be a steep line from a high level on the left to a low level on the right as shown in Figure 7.1. This means that the level of demand for a raw material can be expected to increase to some extent when the price decreases. The reason is that producers of ready-made drugs want more of the raw material when its price goes down. Of course, the slope of the demand function varies between different Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

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The demand function

The supply function

The market price

Quantity

Figure 7.1 How prices are set in a market according to economic theory

raw drug materials depending, among other things, on the number of non-drug uses the raw material has. Raw materials used only in drug production are likely to have a steeper demand function than raw materials which have a wider area of application. The reason is that the potential for substituting other raw materials is less in ready-made drug production than in the production of other consumer chemicals. The supply function indicates the amounts which will be produced at different prices. When the price goes up, more will be produced. The market price will be where the demand and supply functions intersect. At this price all demand will be satisfied and all supply will be bought (Figure 7.1). The market price will fluctuate as a result of changes in supply and demand. Figures 7.2 and 7.3 illustrate the effects on price of an increase in demand. In the long run, we can expect

Old demand

New demand

Long-term supply

Old price

New price

Figure 7.2 Long-term price after an increase in demand

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Old demand

153

New demand Short-term supply

Figure 7.3 Short-term price after an increase in demand

the new market price to be at the intersection of the new demand function and the long-term supply function. However, in the short run, the price increase may be much higher because it takes time for suppliers to improve their production capacity. There will be an unsatisfied demand, which will force the price up (Figure 7.3). In practice, producers of chemicals often decide to increase their production capacity when prices are high (perhaps as a result of an increase in demand). Quite often this can lead to over-supply and to low prices (Foster 1987: 174). Producers of drug chemicals are sensitive to cost increases for intermediates because they can account for up to 50 per cent or more of the total costs for the chemical producer (Narayana 1984: 17). If the production costs increase, we can expect producers with old equipment associated with high costs to stop production leading to higher chemical prices in the long run. However, in the short term we can find prices stabilizing because no single producer is strong enough to risk losing market shares through having higher prices than their competitors. When there is only one major company among all those producing a raw drug material, we can expect this company to be the first to raise its price (the so-called ‘price leader’). To summarize, prices of raw materials often fluctuate, reflecting changes in supply and demand. Ready-made drug prices tend to be much more stable, even if the price of the main ingredient changes. This is because producers of ready-made drugs often use the same suppliers regardless of minor price fluctuations in raw materials. The reason is that changing a supplier can lead to increased costs for the ready-made drug producers and/or a risk of lower quality in the end product (Chapter 6). There is also a trend among raw drug material producers towards building stable relationships with their customers. There appear to be no empirical studies of the prices of raw drug materials. However, it seems that raw materials can be classified into two groups, ones which can be bought cheaply and others which can only be obtained at high prices. Penicillin and other standard non-patent drug chemicals are examples of the first group. New medically advanced drug chemicals which are produced by only a few firms often fall into the second group of highly priced raw drug materials. Entry barriers in the form of production complexities or patents can be reasons for the low number of producers in the raw drug material market. The price of new drug products will reflect the recovery of the investment in discovery.

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7.2 Price setting of ready-made drugs How the demand changes as price alters is reflected financially by the price elasticity (the relative change in demand for a relative change in price). Price elasticity:

dm/m pm/p

m = demand in quantity p = price dm = a change in demand pm = a change in price

The price elasticity of ready-made drugs including the same chemical ingredient with respect to generic competition has been estimated to be for the US: –0.57; for Germany: –0.34 and the UK: –0.25 (Danzon and Chao 2000). This means that a generic seller who sets a 10 per cent lower generic price, which the other generic competitors follow, will generate about a 6 per cent increase in demand for this generic group in the US, but less in both Germany and the UK (we assume all the products are the same quality). This means that generic competition will not just lower the prices, but will also increase the demand in the generic group. However, the increase in demand is very much dependent on the perceived cost-effectiveness of the substance, in comparison to other similar substances available. If it is a medically very effective drug, its demand will increase much more following a price reduction compared with a situation where the substance reduced in price is of minor medical value. The price elasticity varies between countries because of structural factors, e.g., national regulations, the stability of the prescribing/buying habits. Also, within a country there may be significant variations in the populations. One strategy in this type of research is to find differences in drug use between those who were reimbursed for the drug and those who do not have insurance and were not reimbursed. This means that those who have reimbursement get their drugs at a lower price than those without reimbursement. For non-psychotropic drugs in Canada, it has been found that those who are reimbursed have a significantly higher useage than those who do not have any reimbursement. This applies for both low and high drug users of these drugs. However, for the high users of psychotropic drugs, there does not seems to be any price sensitivity (inelastic demand). Whether there is drug reimbursement or not does not affect the high users of psychotropics. They seem to buy their drugs without considering what they have to pay. However, among the low users of psychotropics, drug reimbursement tends to lead to higher use (Sarma, Basu and Gupta 2007). In any discussion about ready-made drug prices it is necessary to analyze how patents influence the price-setting of drugs. The first time a chemical appears as a ready-made drug, it is normally in the form of a patented drug. The patent gives the seller a sales monopoly

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during the finite lifetime of the patent in exchange for disclosure. This monopoly might be longer because of the exclusivity rights given by the drug registration authorities (Chapter 4). However, competitors might still market chemicals which treat similar conditions to the original preparations, so called ‘me-too’ drugs (Chapter 5). When the patent expires, more competitors will appear, because now firms can produce and sell drugs with the same active ingredients as the original drug. These new drugs are likely to be referred to as ‘generic drugs’ (here meant to include both branded and non-branded generics, see discussion in Chapter 4). In general, these new drugs will be offered at prices lower than those of the original drug. The reason is that prescribers and members of the public have brand loyalties which lead them to prescribe and buy the original preparation. Newcomers have to offer their drugs at lower prices because this is usually their main argument in persuading prescribers and the general public to switch over to the new preparations. The generic drugs are often sold at a price 10 to 20 per cent lower than that of the original drug, reflecting that the generic manufacturer has not had the same investment as the original manufacturer. In countries where there is a national insurance scheme and a drug reimbursement system, the sales of prescription drugs will then rather rapidly shift from the original product to the generic drugs if generic substitutions are allowed. This is so in most of these countries (Chapter 4). The seller of the original preparation then has to lower its price to counteract this shift in sales (Lexchin 2004). However, the decrease in price after introduction of generic preparations appears to vary between countries. In some places, e.g., Denmark, the prices of the generics tend to fall more rapidly in comparison with other lands, e.g., the UK (Bergius, Torvinen and Hahl 2006). It is not known in detail what causes is this variation. However, it might be seen as an indication of the variation in the competitive situations. A number of factors influence the price level of a drug market in a specific country, the most important of which are listed below:

r Whether or not the drug is covered by a patent or other exclusivity rights r Production

costs and the supply functions of the producers. This, of course, reflects production technology

r Sales and transportation costs r The number of producers and sellers r Price-setting strategies employed by the drug companies and the profit norms they apply r Whether there is price control in the country and how this control is organized (Bruun l983: 202– 217). There seems to be an international trend towards countries with an indigenous drug industry avoiding setting too low prices for the drugs produced in their countries. The aim is to maintain a viable industry (Lofgren and de Boer 2004).

r The drug reimbursement systems. In some countries with national insurances a combination of generic substitutions and ‘reference prices’ is used (Puig-Junoy 2004). This means that if a drug costs above a specified limit set by the insurance agency, then the customer has to pay the extra. Exactly how the limit is set varies, but the principle is that it

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is determined by the price of the cheapest of the generic drugs. If the patient wants a more expensive drug they have to pay both the part-payment for the cheapest drug and an extra charge to compensate for the higher price of the selected drug (Ghislandi, Krulichova and Garattini 2005, Puig-Junoy 2004).

r The demand function (see Figure 7.1). This reflects the willingness of the buyers to buy the product at different prices. The steepness of the curve of this function depends on how important the drug is to the buyer and the ease that the buyer would have in switching to other products. If it is an important drug and it is difficult to switch to other producers, the demand function is nearly always steep and the price high. However, all patients and prescribers do not have the same price sensitivity, i.e., they do not have the same demand function. Poor patients have a higher price sensitivity than rich patients. This means that poor patients stop buying a drug if the price or the part-payment is too high (Reuveni et al. 2002).

r The competitive situation. A country where there is limited competition can have high drug prices if it is a market economy and naturally drug companies want big profits. However, the competitive situation also includes cultural factors both among sellers and buyers. In some countries, the sellers might be unwilling to get into price competition and there might be a large enough group in the population who prefer the more expensive drug, even if the cheaper version has the same ingredients (Lexchin 2004). However, in other countries, with an active media and/or an active government favourable to generic substitution, the customers will be informed that the generic drugs have the same effects as the original product. There it will be regarded as ‘irrational’ behaviour to buy a more expensive drug. The Nordic European countries are good examples of places with such an attitude.

r The

size of the drug market. Prices can be expected to be higher in small markets (Cooper 1975: 20).

7.3 Price setting of patented drugs For patented drugs, the production costs correspond to about 30 per cent to 40 per cent of the price (Kaufer 1976: 39, Grebmer et al. 1983, Braithwaite 1984: 161). However, even lower percentages have been reported for some drugs (HMSO 1973). The rest of the price goes on so-called ‘overhead costs’ and profits. The exact drug price and the part of the price going to overhead costs and profits can vary between the drugs which the company sells and also between countries for a specific preparation. For the drug company, the way this division is done does not matter, so long as the total revenue is enough to cover all the overheads. (Of course, in each country the price has to be high enough to cover the production and marketing costs.) For a drug company, it is better to set rather a high price in the country where the drug will first be marketed (which is often the home country of the firm) because that first price can become the upper limit for the price in other lands. This is because price controllers, in general, compare the prices of a drug in the different countries where it is sold. Price controllers can be expected to accept only a similar price or one lower than that in other lands (see discussion below).

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Drug firms tend to set a price according to the competitive situation in each country. This means that, in general, there will be substantial variations in the price of new patent drugs even in neighbouring countries, e.g., in Europe (Martikainen, Kivi and Linnosmaa 2005). Where there is practically no competition, the price set for a new drug with very obvious medical benefits will be high, whereas in countries where there is keen competition because similar products are available, a lower price will be necessary (Reckie 1977 and 1978). This is one of the reasons why the price of the same drug varies between countries (Jacoby et al. 1971). For a drug firm this policy will be more profitable than having the same price in all countries. We can expect a drug firm, when deciding on the price of a new drug, to consider, not only similar medication already on the market, but also the expected behaviour of potential competitors. A very high price can encourage competitors to pursue the search for similar drugs. It may be better for a drug firm to set a somewhat lower price to reach the long-term profit optimum (Grebmer et al. 1983). However, drug firms apply different price setting strategies. It is common to distinguish between ‘skimming’ and ‘penetration’ price settings. If a firm applies a skimming strategy, it concentrates on getting high profits over a rather short period by setting a high price. This, however, leads to the appearance of competitors. A firm opting for a penetration strategy sets a lower price resulting in smaller short-term profits, but this will generate much higher long-term profits if competition can be avoided. The introduction by Roche of both Librium and Valium provides examples of such a penetration strategy (Weston 1977: 85). A drug firm will also consider the expected reactions from national price controllers who in turn may be influenced by political factors and public opinion. For example, a pressure group representing patients with a common serious illness may force the price controllers to accept a high price even though further negotiations would achieve a lower price. Why? This allows the drug to become immediately available to those requiring it. There is a trend among drug companies to argue for high prices by stressing the potential health care savings from a new drug. Such a drug can make it possible to transfer patients from hospitals to ambulatory care settings, leading to considerable cost reductions. However, most new drugs do not have such effects because the diseases they treat are already handled in ambulatory care. It is well known that many MNDs use a transfer-pricing strategy. This means that they let their internal prices (between their units in different countries) differ from the market prices operating outside the company. By the use of transfer-pricing, profits can be transferred, for example, from a developing country to an industrialized country with a low taxation level. This is done by putting high internal prices on the raw materials sent to the MND’s subsidiary in the developing country (Lall 1973, Braithwaite 1984: 284–288).

7.4 Price setting of non-patented drugs (generic drugs) For non-patented drugs, the production costs associated with specific products may be around 50 to 60 per cent of the producer’s price. This means that the percentage allocated to overhead costs and profits is much lower than for patented drugs. The reason is the relatively low R&D investment needed for non-patented drugs.

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The low amount spent on overheads can be expected to result in small price variations among those companies which sell drugs with the same ingredients. However, the drug producers can have different production costs and for this reason can offer different prices. We can expect the producers never to live with a price which does not cover the direct production costs. In the long run, a producer will not continue producing unless they are making enough profit to cover their overheads including an acceptable return on their capital (what is meant by ‘acceptable’ profits varies between countries and among producers). A number of big drug companies combine a research-oriented company strategy with a generic strategy. These means that they are both doing research for developing new patent drugs and marketing generic drugs at rather low prices. The company might sell both a rather high priced drug with the original trade name and a lower price brand with another trade name, each having the same chemical content. This twin strategy can be profitable, because the generic markets are so important today that they cannot be ignored. A big drug company can keep the production costs for its generic drugs low because the extra costs for producing these can be marginal if the company already has a drug production plant in operation. Drug producers in developing countries can have rather high production costs because of low rates of capacity utilization. Rates of 30 per cent of full production capacity are not unusual in these countries. Many of them also have problems keeping their production quality at an acceptable level (Chapter 6). This means that they often have difficulties in exporting drugs which frequently cannot compete in price and quality with those produced by companies in other countries. A seller introducing a chemical synonym (a generic) to a national market has to offer a price lower than that of the existing drug with the same ingredients. This is because a lower price can be the main argument to get prescribers and the public to switch to the new brand (Lilja 1985). However, generic production has become more profitable now than 20 years ago because of the substitution laws introduced in many countries which have national health insurance and drug reimbursement systems (Chapter 6). Through such reforms many of these countries encourage the introduction of generic drugs and generic competition (Mrazek and Frank 2004).

7.5 Price competition Price competition can be defined in terms of specific market behaviour in a homogeneous market (as previously defined). Price competition exists when a number of firms are selling the same product (or a similar product satisfying the same medical need) and when one company which has unused capacity believes it can increase its market share by lowering its price. (We assume that the company is profit-making). However, such a definition is not very useful for practical purposes because it does not indicate clearly if price competition exists in the market. Operationally it is better to measure the degree of price competition in a homogeneous drug market by the market share a competitor has achieved three years after the introduction of a drug 10 per cent cheaper than a competitor’s which satisfies the same medical need. This means that in ‘a perfect competition’ as defined by economists, i.e., one where there is full information, there are many producers in the market. In such a theoretical situation, the price competition is 100 per cent, meaning that a seller offering a 10 per cent reduction on a drug will take over the market. However, the definition suggested

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is of more theoretical than practical use in the drug sector. This is because the company selling the original brand will lower its price to keep acceptable sales. In general, the original brand or the brand supported by the most commercial activities, i.e., the most ‘well known’, might be preferred by the buyers. These drugs might be perceived as having higher quality and be more therapeutically beneficial than drugs from other companies. Also, the colour and drug form is interpreted as an indicator of the therapeutic effects and can influence which brand to select (Cosminsky 1994). However, the existence of such perceptions tend to vary between countries, depending on the information available. Governments and professional groups might use bioavailability data to indicate that the quality differences are more imagined than real (Chapter 4). The degree of price competition varies between drug markets and countries. In a country with national health insurance and generic substitution, competition can be fierce in markets not covered by patents, i.e., the generic markets (Chapter 4). However, in the same country at the same time we can find drug markets with low price competition because the drugs are protected by patents. We know less about the price competition in the OTC markets and in countries which have no national health insurance system. Elderly people and people with low incomes can be expected to be more price sensitive than people with higher incomes (Thomson and Mossialos 2004: 237). This means that there is a bigger market for cheap OTC drugs and for cheap prescription drugs in countries without a national health insurance system. In a poor country, price will be an important criterion for people with low incomes who buy OTC drugs. However, we might, in the same places, find expensive brands which are supported by heavy marketing and sold at rather high prices. The latter type of non-prescription drug is aimed mainly at that part of the population which has enough money to afford an expensive brand (Cosminsky 1994). We can expect strong price competition in generic hospital markets, i.e., the drugs bought by hospitals. This is because there, the formulary committees combined with tender purchasing often use low price as an important criterion in the drug selection process (see discussion about price control later in this chapter). In the generic sector, there is a trend towards increased price competition because a number of new drug companies have recently been set up with the intention of selling inexpensive generic drugs of high medical quality. Twenty years ago, many experts believed that production technology was so demanding that only a few companies in highly industrialized countries could produce such drugs. The barriers for the technology transfers were probably lower than expected. Also, many drugs of significant medical value have lost their patent protection making generic production more profitable. Many companies now make drugs of what seem to be ‘acceptable quality’. Of course ‘acceptable quality’ should not be based solely on the perceived quality of the drug, but also on the evidence of bioavailability/bioequivalence studies (Chapter 4) In Europe, there is a special system in operation which minimizes the differences in drug prices. This system has improved price competition there and is called ‘parallel imports’. The system is based on the EU principle to establish common EU markets in which goods, people, services and capital are free to move between the EU countries. For drugs this means that a wholesaler can buy a drug in one country ,where the price is low, and sell it in another EU country, where the price is high. In this way the wholesaler can make a profit. A wholesaler need not hold the original registration of the drug in the markets in which they operate. But they should get a ‘parallel’ registration to conduct their operations. However,

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this registration will have to be for the same drug in the two markets and the drug has to be registered in both countries. In practice, there is only a low volume of drug preparations sold by the parallel registration allowances. Still, the system affects the pricing decisions of the drug companies. The drug companies cannot operate with huge price differences between the EU countries because of the risk that they will lose sales in the ‘high price’ country as result of parallel imports (Hancher 2004, Abraham and Lewis 2000). Between 2002 and 2005, the WHO (World Health Organization) in cooperation with HAI (Health Action International) undertook drug price comparisons in 30 low and middle income countries. The price noted for each drug was the ‘price’ that a patient in each of the countries had to pay. The majority of the drugs studied were on the WHO model list of essential medicines. When the public sector prescribed medicines free or at a low price to patients, the medicines were often found not to be available because of insufficient public finance. The price level measured as the price to the patient was much lower in the public distribution channels than the corresponding prices in the private distribution channels (for details about the two distribution channels see Chapters 3 and 4). In the private channels, in general, drugs were often available because the private drug sellers set prices which covered all their costs (Gelders et al. 2006: Executive summary and Gelders et al. 2006: Chapter 7). One of the findings of the WHO–HAI study was that there is, among the countries surveyed, a considerable international price variation in drugs with the same active component within both the private and the public sectors (Gelders et al. 2006). There was also a significant variation among countries in terms of the number of days ‘an average worker in the country had to work’ to buy one month’s worth of treatment.

7.6 Cost controls A cost control agency can be defined as an organization which has a strong influence on the drug costs of a bigger organization, a patient population or a country. Of course, the goals and roles of the price control agencies vary considerably in an international context. This means that cost control can be combined with other roles in the same agency. A country may have more than one drug cost control agency, e.g., there might be one for the public drug sector and another for the private sector. Here, we do not define drug substitution system operators as price control agencies. This is because they do not negotiate drug prices. However, one of the consequences of having a drug substitution system could be lower drug prices. Drug control agencies have the same goal. However, the processes of these price-reducing systems are quite different. Cost control agencies can be classified into three groups: 1. Cost control agencies which do not negotiate on drug prices 2. Agencies which negotiate with drug companies about drug prices and accept ‘reasonable’ quotations 3. Agencies which negotiate about drug prices and only accept the cheapest (or a number of the cheapest) drug(s) fulfilling a specific medical need.

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Cost control agencies which do not negotiate on drug prices A cost control agency of this type focuses on cost-conscious prescribing and drug use. Already by 1927 the British government had introduced rules for the prescription of drugs for national health insurance patients. Only those drugs thought to be effective could be prescribed (Abraham 1995: 50–51). In the US and Switzerland, drug companies are free to set the price of newly launched medicines as they wish. In the other European countries, almost all in the EU, there is at least some price control (Department of Health, Association of the British Pharmaceutical Industry, 2002: 4).

Agencies which negotiate with drug companies about drug prices and accept ‘reasonable’ quotations In this group are the government price control agencies of many European countries. Canada, also, has price control of this type for patented and brand name drugs, but no price control at all for generic drugs. This control seems to have affected drug prices there because they are about half to two-thirds of what they are in the US (Angell 2004: 220). Cost control agencies in this category face different problems from those in the third group because they accept all drugs with a ‘reasonable’ price. However, the price control process and the definition of ‘reasonable price’ vary between agencies of the second type. The following data can be used to determine ‘the fair price’ for a drug: 1. The production and marketing costs for the individual drug. 2. The profits of the drug company. 3. The price of the drug in other countries (Martikainen, Kivi and Linnosmaa.2005). 4. The medical and health value of the drug in financial terms (Martikainen, Kivi and Linnosmaa 2005). 5. The degree to which the price determined upon will affect national goals regarding drug production and the national drug industry. However, price control processes are probably also influenced by historical factors. The different price control processes in the Nordic countries can be seen as having been affected by such factors (Bruun 1983: 202–217). The rules inside a national health insurance system and other insurance systems can also affect the price (Chapter 4). It is very difficult for a price control agency to keep the price of a new drug of significant medical value low. The drug company can simply refuse to market its product in the country. One way for the price control agency to be successful in getting the price it wants can be to rely upon price data from other countries. Most agencies do not agree to prices higher than those in other countries, but the agency is in a weak negotiating position in trying to get the price lowered when the drug is highly regarded medically. Often the only ‘weapon’

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the agency has is to continue negotiating in the knowledge that the company is very keen to get the drug registered and marketed as soon as possible (Mrazek and Frank 2004). For a price control agency to just accept the ex-factory prices of the country of origin usually results in high drug prices (Merkur and Mossialos 2007). In countries with a small home-based drug industry, e.g., Norway, relatively firm price controls can be expected (Bruun 1983). Lower prices will mean less foreign currency leaving the country. However, even strong price controls may not succeed in keeping drug prices low (in comparison with other countries) if the value of the national currency is high against the currencies of other lands. In such a situation, although the price of a drug remains the same within the country, there will, in fact, have been an increase in its price in relation to its cost in other countries. Accordingly, it is easier to keep prices down (in relation to other countries) if the value of the national currency is stable or falling. Companies will then have to renegotiate their prices and it may be possible to refuse full compensation for the currency changes. In Latin America, the drug importers have a stronger position in drug price negotiations. One explanation for this is the cultural and political traditions there, which are different from European countries. In Europe, governments have a much stronger power base and political opinions are much more stable than in Latin America. This makes it possible for a European price control agency to take strong critical attitude to suggestions from drug importers. A European agency assumes that it will be backed up by its government.

Agencies which negotiate about drug prices and only accept the cheapest (or a number of the cheapest) drug(s) fulfilling a specific medical need As a method for price control in public drug sectors, this type of agency became popular after the Kefauver hearings in the US, when it was revealed that the US Veterans Administration purchased drugs for about a third of the price paid by ‘ordinary’ pharmacies in the US (Kaufer 1976). Procurement organizations responsible for the support of the public sector in developing countries often use a price control system of this type (see the ED list policy in Chapter 4 and the discussion below). Most hospitals around the world have their own purchasing departments, which also seem to handle drug procurement in this way. The most important task of cost control agencies of this type is to negotiate drug prices via tenders. Drug companies are invited to submit details of their proposals according to the specifications provided by the procurement agency. The specification document includes the type of drugs required, the quantities sought and the quality demanded. The companies interested in having their tenders accepted are likely to be asked to enclose samples of their drugs when submitting their offers. The agency checks the quality, seeks information from other bodies etc. Then, the agency can, if so minded, accept the lowest offer which has an ‘acceptable quality’. To keep prices down, an agency can invite submissions via public advertisements. Alternatively, the procurement agency can restrict the bidding to a limited number of drug companies in order to cut down on the administrative work. In general, it seems that governments are fairly effective in obtaining prices similar to international reference prices when procuring for their own supply systems (Gelders et al. 2006: Executive summary)

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Most agencies select the firm which has submitted the lowest offer with the predetermined level of product quality. However, the company’s ability to keep to delivery times can also be included as one of the decision-making criteria. Some agencies only accept bids from companies which produce the drug themselves. The reason for this criterion is that the producer is more likely to be capable of ensuring quality than a company acting as a broker. Some agencies, like procurement agencies in developing countries, prefer national sources if available. Other agencies may not bother, but rely upon direct comparisons of price and quality. The drug prices achieved by a tender competition will depend upon a number of factors:

r The level and quality of the information available at the price control agency. r The decision criteria applied. Products of lower quality can be bought at lower prices. r The quantities to be bought. Bigger quantities will lead to lower prices. r The packaging requirements. Smaller packages and special labelling requirements lead to higher prices.

r Delivery times. Delivery times which suit the producer can result in lower prices. r The system for payment and the buyer’s financial reputation. An agency which is known to have occasional financial difficulties may have to pay in advance or may have to pay a higher price than an agency with a better reputation. The popularity of the tender strategy among developing countries is at least partly due to the positive experiences of Sri Lanka in the 1960s and 1970s (Lall and Bibile 1978). Based on the data in the WHO–HAI study, we now are fairly knowledgeable about drug prices in a number of low and middle income countries (Gelders et al. 2006). It is not known which companies win most tenders. However, generally speaking, producers from Europe and the US do not seem to be particularly successful in tendering because their production costs are too high (UNCTAD 1982: 23). Among other countries, India seems to be a ‘winner’ here. Also, raw drug materials can be purchased via tenders. However, if the decision-making criteria, when applied, lead to frequent changes of supplier, this can cause problems of quality and production costs for a ready-made drug producer. For this reason these producers try to establish long-term relationships with a few chemical producers who are known for their consistency in producing chemicals of acceptable quality (Chapter 6).

7.7 The prices a patient has to pay in the public sector in countries which have a public distribution system In many low and middle income countries, there are both a private distribution system (drugs distributed from private outlets, at rather high prices) and a public distribution system (in which drugs are distributed from public health care organizations, at lower prices than in

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the private distribution system). However, one problem is that drugs are often not available in the public distribution system because of a lack of public finance (Gelders et al. 2004). In Latin America, the system is different because in most countries there are no public drug distribution systems. People buy their drugs from private pharmacies and pay the full price, even if the prescription was written by a physician working in the public sector. Also, in places which have national health insurance, e.g., most European countries, it is not possible to make the private–public distinction. The drugs in the insurance system (reimbursed drugs) are sold from private pharmacies, but a part of the drug costs is paid by the insurance organization (Chapter 4). There is considerable international discussion on how the price of drugs should be determined in the public distribution systems found in low and middle income countries. In some countries, the patients have to pay much more than the procurement price (the price the government agency pays when the drug is bought) (Chapter 8, Qiang 2005; Gelders et al. 2006). In other countries, the price a patient has to pay is just a nominal fee. In the latter case there is a great risk that the units in the distribution system will be out of stock because of financial shortages, i.e., not enough money will be available to make it possible to buy all the drugs needed. However, in those countries with high charges for drugs in the public sector, there is a risk that those who need the drug most cannot afford it. As a general rule, it seems the mark-up (the percentage increase in retail level price compared with procurement price) varies between countries. Also, within a big country, e.g., China, there is considerable variation (Qiang 2005).

7.8 Drug prices at private pharmacies in developing countries As mentioned, many developing countries have both public and private drugs sectors. In the private sector the customers pay a higher price than in the public sector. One of the reasons for this is that drugs are bought by tender in the public sector, but in the private sector there are no price control strategies. Most private sector pharmacies buy directly from private wholesalers at the price they are quoted. In general, this results in great price variations between private pharmacies in a developing country. For example, in Laos a ten-fold price difference was found for the same drug among the private pharmacies (Stenson et al. 2001).

7.9 The profits of drug companies In the 1950s in the UK, drug companies had a much higher return after tax, in comparison with other industries. The profits of the drug companies had become of interest because of the introduction of the NHS in 1948, which caused a considerable increase in drug costs and government spending. This finding resulted in conflict between the UK government and the UK drug companies. However, insisting on lower prices was not regarded as a suitable strategy to achieve a significant reduction in the profits of these companies. This was because many UK drug companies were owned by foreign capital and a reduction in prices (and in profits) would lead, it was thought, to the location of the drug production

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units being moved – from the UK to the US. This was something most definitely not wanted by British politicians. Also, a significant reduction in the prices of innovative drugs would lead to a similar drop in the prices of these same drugs in other countries to which they were exported. So, should national drug prices be lowered, it was expected that this would lead to loss in export income for the UK companies (Anderson 2005). The price control agency had to take all these things into account and to adopt a strategy which minimized the risks of these things happening. The profits of drug companies vary considerably. However, the profits of MNDs are likely to be much higher than those found in other manufacturing industries, reflecting the high degree of risk and investment in new drug discovery (reliable details of the profits of non-MNDs are unavailable). In the UK, drug company profits were 50 per cent higher than those of other industries at the beginning of the 1980s (West 1985). Very high returns on investments have been noted in the US both in the 1980s (Corstjens 1991: 94) and today (according to Forbes 500-Global statistics, pharmaceutical business was the second most profitable industry in 2005, with a return on assets of 10.5 per cent that year). The percentage profits were the same for 2006, giving pharmaceuticals a fourth place in the ranking of the most profitable industries. This data is based on the 500 biggest companies in the world. Those high profits have remained stable over time in relation to other industries (Dowling 1971: 108, HMSO 1967: 38, HMS Office 1973: 47, Silverman and Lee 1974: 29–30, 331, Lall 1974, Braithwaite 1984: 160, Corstjens 1991: 94). This means that ‘the barriers to entry’ are considerable for potential companies aiming to establish a strong foothold in the pharmaceutical industry. It is the R&D and marketing demands which explain these high entry barriers. However, profitability is much lower in markets for generics (Corstjens 1991: 97, and the discussion above in this chapter). From a drug industry perspective, the accounted profit levels do not reflect the real profit level in the drug industry. It seems that there are two main reasons why the real profit level is somewhat lower than the accounted profit levels (Skrepneck 2004): 1. The accounted capital in the drug companies is much lower than the real capital because a lot of the capital resources of the companies are not shown in the accounting system. So, if the capital is higher, the level of return will be lower than shown in the public account balances. 2. The accounted profit level does not consider the risks involved. Our belief is that this high level of accounted profits in the drug industry will remain constant for some considerable time. The reason is that most governments today look at the profit levels of their drug industry carefully. The home-based drug industry will be guaranteed an acceptable profit level. The protection offered by patents and exclusivity rights has increased in recent decades (Chapter 6) keeping pace with the much-extended development times (8–10 years) required for testing a new potential medicine after it has been discovered in the laboratory. Governments can also put more money into basic research to compensate companies for an eventual fall in their profit levels resulting from increased competition. A recent survey of the American general public asking their views about: pharmaceutical companies and rising healthcare costs; prescription drugs and overall medical costs; beliefs about prescription drug costs; are prescription drugs worth the cost?; government

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regulation of drug prices; and government negotiating with drug companies, called for more government regulation of the drug industry (Health Poll Report, 2005). The public concerns about prescription drug prices and drug company profits translate into support for many proposals to control drug costs. For example, in 2005, almost two-thirds (65 per cent) of the public called for more government regulation of prescription drug prices and 70 per cent of these people (or 46 per cent of all adults) continue to support more regulation of prices, even if it leads to less research and development of new drugs (Health Poll Report, 2005).

7.10 Summary A drug market is defined as the potential sellers and buyers of drugs which satisfy a specific medical need. This means that the drug sector consists of about 100 different markets for ready-made drugs and the same number of markets for raw drug materials. Economic theory can be of help in analyzing the price changes of raw drug materials. Theoretically the market price is determined by the relationship between the supply and demand functions operating in the market. An increase in demand can be expected to lead to an increase in price, especially over a short period of time. There are a great number of factors which determine the price levels of a ready-made drug market in a specific country: cost, demand and competition. Most new drugs are first marketed under patent coverage since it is this convention that incentivizes successful drug discovery. The marketing company can fix a high price if the drug has obvious medical benefits and no similar drug is available. However, if similar drugs are already available, the company has to set a lower price. A company introducing a new non-patented preparation based on an already marketed drug chemical has to price it considerably lower than similar drugs. This is because prescribers and the general public are brand-loyal and continue to use proven preparations. But a lower price may persuade them to switch to a new preparation. With a non-patented medicine there are minor discovery overheads or similar investment risks. Whether or not a price competitor is successful in achieving a substantial market share depends to a large extent on national factors. For example, in a country with national health insurance and a system of generic substitution in operation we can expect considerable price competition in the generic market. In countries with neither a national health insurance system nor a public drug distribution sector, most drugs are sold non-prescription. This is the situation in Latin America and many other countries. People with low incomes ask for cheap OTC drugs. Of course there are still many people who cannot afford these drugs in spite of low prices. Drug price levels vary between countries. Some countries are known to have high drug prices while others have a tradition of low prices. Drug cost control agencies can be classified into three groups: those which do not negotiate about drug prices, those which negotiate and accept a ‘reasonable’ price, and those which negotiate and accept only the cheapest drug fulfilling a specific medical need. The innovative drug industry (including most of the MNDs) is known to make higher profits than other manufacturing industry, although there is high risk, and the last 20 years

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has seen much merger and takeover activity. These profits of late have been quite stable. The generic industry is much less profitable, but is of lower risk.

References Abraham, J., Science, Politics and the Pharmaceutical Industry – Controversy and Bias in Drug Regulation. London: UCL Press, 1995. Abraham, J. and Lewis, G., Regulation Medicines in Europe – Competition, Expertise and Public Health. London, New York: Routledge, 2000. Anderson, S., Drug regulation and the welfare state. Government, the pharmaceutical industry and the health professions in Great Britain, 1940–80. In Berridge, V. and Loughlin, K. (eds.), Medicine, the Market and Mass Media: Producing Health in the Twentieth Century. London, New York: Routledge, Taylor and Francis Group, 2005: 192–217. Angell, M., The Truth About the Drug Companies. New York: Random House, 2004 Bergius, S., Torvinen, S. and Hahl, J., Prices of generic drugs in Finland vs. Europe, poster presented in Farmasian P¨aiv¨at, Helsinki, 17–19 Nov. 2006, data from GlaxoSmithKline. Braithwaite, J., Corporate Crime in the Pharmaceutical Industry. London, Boston, Melbourne and Henley: Routledge and Kegan Paul, 1984. Bruun, K. (ed.), Controlling Psychotropic Drugs – The Nordic Experience. London: Croom Helm, 1983. Cooper, M.H., European Pharmaceutical Prices 1964–74. London: Croom Helm, 1975. Corstjens, M., Marketing Strategy in the Pharmaceutical Industry. London, New York, Tokyo, Melbourne, Madras: Chapman & Hall, 1991. Cosminsky, S., All roads lead to the pharmacy: Use of pharmaceuticals on a Guatemalan plantation. In Etkin, N.L. and Tan, M.L. (eds.), Medicines: Meanings and Contexts. Amsterdam: HAIN, 1994: 103–122. Danzon, P.M. and Chao, L.-W., Cross-national price differences for pharmaceuticals: how large and why? J. Health Economics, 2000, 19: 159–195. Department of Health, Association of the British Pharmaceutical Industry, Pharmaceutical Industry Competitiveness Task Force. London, 2002. Dowling, H.F., Medicines for Man. New York: Harvard University Press, 1971. Foster, R.N., Innovation – The Attackers Advantage. London: Pan Books, 1987. Gelders, S., Ewen, M., Noguchi, N. and Laing, R., Price, availability and affordability – an international comparison of chronic disease medicines. Report presented at a WHO planning meeting in Cairo December 2005, WHO, HAI, 2006. Ghislandi, S., Krulichova, I. and Garattini, L., Pharmaceutical policy in Italy: towards a structural change? Health Policy, 2005, 72: 53–63. Hancher, L., The European Community dimension: coordination divergence. In Mossialos, E., Mrazek, M. and Walley, T. (eds.), Regulating Pharmaceuticals in Europe: Striving For Efficiency, Equity and Quality. London: Open University Press and WHO, 2004: 55–79, web-site: www.euro.who.int/document/E83015.pdf. Health Poll Report. Views on Prescription Drugs and the Pharmaceutical Industry. 2005. http://www.kff.org/healthpollreport/feb 2005/index.cfm HMSO, Report of the Enquiry into the Relationship of the Pharmaceutical Industry with the National Health Service. London: HMSO, 1967. HMSO, Chlordiazepoxide and Diazepam. London: HMSO, The Monopolies Commission, 1973.

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Jacoby, E.M. et al., Domestic and foreign prescription drug prices. Social Sec. Bull., 1971, 9: 15–21. Kaufer, E. Die ekonomik der pharmazeutischen industrie. Baden-Baden: Nomos, 1976. Lall, S., Transfer-pricing by multinational firms. Oxford. Bull. Econ. Stat., 1973, 35:173–179. Lall, S., The international pharmaceutical industry and less developed countries with special reference to India. Oxford. Bull. Ec. Stat., 1974: 143–172. Lall, S. and Bibile, S., The political economy of controlling transnationals: the pharmaceutical industry in Sri Lanka. Int. J. Health Serv., 1978, 8: 299–327. Lexchin, J., The effect of generic competition on the price of brand-name drugs. Health Policy, 2004, 68: 47–54. Lilja, J., Price differences between different brands of multi-source drugs in Sweden. J. Soc. Adm .Pharm., 1985, 3: 1–9. Lofgren, H. and de Boer, R., Pharmaceuticals in Australia: developments in regulation and governance. Soc. Sci. Med., 2004, 58: 2397–2407. Martikainen, J., Kivi, I. and Linnosmaa, I., European prices of newly launched reimbursable pharmaceuticals – a pilot study. Health Policy, 2005, 74: 235–246. Martin, D.K., Hollenberg, D., MacRae, S., Madden, S. and Singer, P., Priority setting in a hospital drug formulary: a qualitative case study and evaluation. Health Policy, 2003, 66: 295–503. Mrazek, M. and Frank, R., The off-patent pharmaceutical market. In Mossialos, E., Mrasek, M. and Walley, T. (eds.) Regulating Pharmaceuticals in Europe: Striving For Efficiency, Equity and Quality. London: Open University Press and WHO, 2004: 245–259, web-site: www.euro.who.int/document/E83015.pdf. Merkur, S. and Mossialos, E., A pricing policy towards the sourcing of cheaper drugs in Cyprus. Health Policy, 2007, 81: 368–375. Narayana, P.L., The Indian Pharmaceutical Industry. New Delhi: National Council of Applied Economic Research, 1984. Puig-Junoy, J., Incentive and pharmaceutical reimbursement reforms in Spain. Health Policy, 2004, 67: 149–165. Qiang, S. A survey of medicine prices, availability and affordability and price components in Sahndong province, China. Unpublished manuscript, 2005. Reckie, W.D., Pricing New Pharmaceutical Products. London: Croom Helm, 1977 Reckie, W.D., Price and quality competition in the US drug industry. J. Ind. Ec., 1978, 26: 223–237. Reuveni, H., Sheizaf, B., Elhayany, A., Sherf, M. et al. The effect of drug co-payment policy on the purchase of prescription drugs for children with infections in the community. Health Policy, 2002, 62: 1–13. Sarma, S., Basu. K. and Gupta, A., The influence of prescription drug insurance on psychotropic and non-psychotropic drug utilization in Canada. Soc. Sci. Med., 2007, 65: 2553–2565. Skrepnek, G.H., Accounting versus economic base rates of return: Implications for profitability measures in the pharmaceutical industry. Clin. Therapeu., 2004, 26: 155–174. Silverman, M. and Lee, P.R., Pills, Profits and Politics. California: University of California Press, 1974. Stenson, B., Syhakhang, L., Eriksson, B. and Tomson, G., Real world pharmacy: assessing the quality of private pharmacy practice in the Lao People’s Democratic Republic. Soc. Sci. Med., 2001, 52: 393–404. Thomson, S. and Mossialos, E. Influencing demand for drugs through cost sharing. In Mossialos, E., Mrazek, M. and Walley, T. (eds.), Regulating Pharmaceuticals in Europe: Striving for Efficiency, Equity and Quality. London: Open Univ. Press and WHO, 2004: 227-244, website: www.euro.who.int/document/E83015.pdf.

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UNCTAD, Technological policies in the pharmaceutical sector in Costa Rica. UNCTAD/1T/37, 1982. Von Grebmer, K. et al., Drug Therapy and its Price. Montreal: Medicepea, 1983. West, P., Should governments try to get drug bills down? In Harrison, A. et al. (eds.), Health Care UK. London: Policy Journals, UPFA, 1985: 51–58. Weston, I.F., Pricing in the pharmaceutical industry. In Chien, I., (ed.), Issues in Pharmaceutical Economics. Toronto: Lexington Books, 1977: 71–95.

8 Drug wholesaling and procurement

The wholesale function can be defined as the collection of goods from producers and the distribution of these goods to the retailers (the pharmacys and health care units in our case). This means that importation is seen as part of the wholesale function. In todays world, wholesalers are everywhere and in China there has been a great increase in the number of wholesalers over the past decade and it is estimated that there are now about 34 000 (Dong et al. 1999, Qiang 2005). It is difficult to know how many wholesaling companies there are worldwide, but an informed guess would put the figure around the 200 000 mark. Most of these companies are relatively small and the generally found in low and middle income countries. The smaller wholesalers usually deliver and import a limited assortment of drug preparations. However, in the rich, industrialized countries, we find the big international wholesalers who have become even bigger in recent decades because of mergers between wholesaling companies, examples of this can be seen in Europe. In terms of structure, wholesalers can be organized in different ways. Vertical integration means that a wholesaler owns a number of community pharmacies (forward integration) or undertakes drug production (backward integration). Boots in the UK (Alliance Boots since 2006) is an example of an extensively integrated pharmaceutical organization, which undertakes drug production, wholesaling and operates a large network of community pharmacies (Taylor, Mrazek and Mossialos 2004). In Europe, there is a trend towards vertical integration which means that the wholesalers are taking over pharmacies, e.g., Boots. However, it is also possible for a retailer to achieve vertical integration, for example, when a number of pharmacy owners decide to cooperate and buy or start a wholesaling company to achieve lower drug prices and make the distribution chain more effective. Sometimes vertical integration is an unintended consequence of government regulations. For example, in 2001 the Norwegian government decided to relax restrictions on pharmacy ownership (before this date a system of pharmacy privileges existed). Thereafter, companies or individuals could own a pharmacy, as long that they appointed a manager with a pharmacy Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

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degree. The main aim of the reform was to increase the competition in the drug detail distribution system. Vertical integration was expected with beneficial results because it was predicted that integrated wholesaler-pharmacies would be powerful and able to negotiate successfully with drug companies and, thus, prices would be lowered. In reality many new pharmacies were established, but most private pharmacies were sold to three European wholesalers. As a result, Norway ended up with almost all of its pharmacies owned by one of three groups. This reform, which intended to increase competition in drug detail distribution, will not have the intended effect because it is now almost impossible to set up new, independent pharmacies in Norway. The structure with three wholesaler-pharmacy chains has become a barrier to the formation of independent pharmacies (Anell 2005).

8.1 Importation In monetary terms the percentage of drugs imported, varies considerably between countries. This means that the percentage of imported drugs varies between almost 100 per cent (in small countries with no drug industry, e.g., Somalia, Qatar and Libya, Kandil 2004) to 5–10 per cent (in large countries with a well-developed drug industry). It has to be noted that a number of large countries with a middle range per capita income have a low percentage of imported drugs. Egypt might be seen as an example with 7 per cent imported drugs (in terms of value, Kandil 2004). However, it has to be remembered that all these figures indicate the percentage of ready-made drugs imported. In reality, a country may be much more dependent on imports than these figures indicate because domestic production may be based on imported raw materials. There are some interesting examples of national markets once dominated by MNDs, that have now been largely taken over by domestic firms of which India is the most obvious case. In 1970 domestic firms in India had a market share of 20 per cent, but by 2001 this figure had become 76 per cent (Bergman 2006: 36 and Chapter 6). In European countries with significant drug industries the trend is towards an increase in both the exportation and importation of drugs. The reason is that innovative drug firms focus on developing a limited number of new drugs for international marketing. In the former Soviet countries, developments are the opposite of what has taken place in India. By 1984 the Hungarian drug industry was already based on the WHO guidelines regarding drug quality (Reed 2002: 154). However, one consequence of the ending of the Soviet period in 1989 was that the drug markets opened up to foreign competition. The out-of-date production facilities in the Eastern European countries could not compete with foreign products in terms of perceived quality and marketing. For example, in Hungary in 1990, there were 20 000 people employed in the drug industry, but ten years later that figure had dropped to 14 000 (Reed 2002: 100–157, 240). Imports in 1990 accounted for a very small proportion of the drug market, but by 1997 had risen to just over 60 per cent (Reed 2002: 358). The Hungarian drug market there is now dominated by foreign countries selling their drugs under brand names. Most of the drug R&D undertaken in Hungary during the Soviet period has now ended as it was not successful in producing new inventions. It is most unlikely that domestic pharmaceutical companies, now private, will undertake any significant R&D in the future (Reed 2002: 241).

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A similar increase in the percentage of the drugs imported has also been noted in Greece, since entering into the EU. In 2003, 70 per cent of drugs consumed were imported (in terms of monetary value terms). In 1990 the corresponding figure had been 31 per cent. This change has been associated with an increase in pharmaceutical expenditure. The introduction of price controls and a more restrictive reimbursement policy could not be said to have hindered this increase in expenditure. In spite of the reforms made, a reason for the increase in expenditure, is that the drug companies counteracted the cost-reducing aims of the reforms by introducing new, more expensive drugs. The introduction of price controls, which focus on the price of drugs in the National Health Insurance system is now being proposed. However the Supreme Court in Greece had previously declared such a change as unconstitutional (Contiades, Golna and Souliotis 2007). The European Union system of parallel importation of drugs has been described fully in Chapters 4 and 7. Parallel imports mean that a wholesaler can buy a drug in one country, where prices are low and then import it into and sell it in a second country, where there are no price controls or control where the price is set at a higher level. This method ensures the company makes a profit. The wholesaler does not need to have the original registration of the drug in the two countries. However, in Europe, the wholesaler must have a parallel import registration authority in the country in which the company is selling the drug. Parallel imports are only allowed for drugs which are registered in the two EU countries, i.e., the one where the drug is bought and the other in which it is sold. The drug has to be the same in both countries, i.e., the same documentation, ingredients etc.

8.2 Different types of wholesale systems Countries vary considerably in the way their drug wholesaling is organized. However, it is possible to distinguish three major groups: 1. A wholesale system based on a number of privately owned wholesalers. The wholesalers can be either independent or owned by manufacturers or a group of pharmacy owners. In some countries one-channel systems exist. This means that a specific drug preparation can only be bought from one wholesaler. In Latin America, e.g., Peru, there has been a change from a system where the drug companies themselves market their drugs to the pharmacies to a system where wholesalers have become more important. A number of new wholesalers have been established and often base their marketing on imported drugs. The domestic drug companies can still sell their drugs directly to pharmacies. In Europe, the tradition has been that most drug companies do not sell drugs directly to pharmacies. In fact, it is an advantage for the companies to sell via the wholesalers instead of selling directly to the pharmacies. The companies believe, that this route provides a more efficient distribution channel. However, the drug companies still advertise and send their company representatives to pharmacies and hospitals to encourage sales of their drugs. Drug wholesalers tend to operate in more than one country. As a result of company mergers, the number of wholesalers is decreasing in Europe although the trend is not

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uniform throughout the continent (Taylor, Mrazek and Mossialos 2004). For example, in countries of the former Soviet Union, the number of wholesalers increased considerably when the Soviet Union dissolved, but has of late remained static (Mrazek et al. 2004). In Latin America, the trend is towards an increase in the number of wholesalers because each drug production company wants its own wholesaler (see above). 2. A wholesale system consisting of a single government organization covering the entire country. Today there are few places with such a system. 3. A wholesale system including both government and private sub-systems. As mentioned in previous chapters, this is common in many low and middle income countries (Latin America is an exception to this, as there are no public distribution channels). In most of these countries the two sectors have their own separate channels for importing drugs. The government wholesaler often imports by public tender and delivers drugs to the public health care sector, whereas the private wholesaler imports his own drugs, without tender, from foreign drug companies and delivers to the private pharmacies. The hospitals and health care clinics run by the church institutions (which are common in many African countries) often use the public sector importation system. However, there are also examples where this ‘mission sector’ has established its own organization for drug imports. In the private sector, foreign drug companies do not usually have their own wholesaler but use the national wholesalers available in the country. However, the individual drug companies still provide their own commercial information about the drugs, even if they do not handle them physically. By not having any importation allowances, a central government in a developing country can, restrict the resources going to the imported drug sector for financial reasons. This means that only some of the drugs needed by the public sector health posts and health centres are ordered and delivered. In the public sector the ‘over-demand’ in comparison to supply reflects the poor financial state of these countries. The government cannot afford to import all the drugs asked for because the patients are unable to pay the full price of those delivered (Chapters 4 and 7). In developing countries, it is not uncommon for there to be illegal and informal drug wholesale systems based upon smuggling or illegal sales from pharmacies, drug companies or from health care personnel to local vendors (Van der Geest 1987).

8.3 How to evaluate a wholesaling system The efficiency of a drug wholesale system can be looked at from at least five different perspectives. These perspectives can be taken together as a whole or used in parallel in order to get an overall understanding of the efficiency of any wholesale system: 1. The average costs of transferring one drug package from a central warehouse to a local pharmacy or health care unit. Of course, these costs vary considerably, depending both on the internal efficiency of the wholesale system and the transportation facilities available. This way of evaluating the system requires that specific cost data is collected, something which is impossible in many low economy countries.

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2. The average waiting time between ordering drugs and receiving them from a wholesaler in a pharmacy or a health care unit. These waiting times vary from half a day in many industrialized countries to weeks, may be months, in some developing countries. 3. The availability of drugs. This is a significant problem in the public sectors of low and middle economy countries because the fragile nature of their national finances frequently prevents wholesalers from importing the amount of drugs necessary to cover the entire order (Gelders et al. 2004 and above). This means that health posts and health centres can only get drugs delivered a few times per year and are often without important drugs (see discussion above). 4. The provision of drugs of good quality. Most important is that the drugs are labelled in the proper way including drug name and strength, quantity, batch number, storage requirements, production date and expiry date. Vaccines and serums should be kept in cold places during transport to ensure quality. 5. The drug wholesaling system can offer other services to the government and other parts of the pharmaceutical system in the country, e.g., sales statistics. The percentage of the drug price going to wholesalers varies. However, this can reflect different service levels and marketing conditions rather than the efficiency of the different systems. In developing countries, the efficiency of the drug wholesaling system is often poor for several reasons (Yudkin 1980): 1. The central medical store is not managed properly. Some drugs may have been purchased in larger quantities than necessary, whereas frequently used drugs are often not in stock. 2. An efficient transportation system is not available. 3. Theft and corruption cause problems and weaknesses in the wholesale system. For example, in an African country it was found that 30 per cent of the drugs available there did not reach the patients for whom they were intended (Van der Geest 1987). 4. Drugs are destroyed because of poor handling, e.g., vaccines not stored at the proper temperature. Historical factors can influence the storage and service levels. In industrialized countries, storage levels are kept low in pharmacies. This is achieved by the frequent rapid delivery service offered by the wholesalers. For example, in many countries the ordering of drugs by pharmacies from wholesalers is now computerized. A pharmacy can place an order and receive it from the wholesale system obtain the same day for the following day. This can result in a tenfold increased in the ‘annual turnover rate’ of the stock. In a small country, it is possible to get all one’s wholesale drugs from a single, central warehouse. However, in larger countries, each wholesaler has to operate with a number of depots to decrease the delivery times to pharmacies and health care units. In developing countries, this can result in problems because the wholesale depot of the government (public)

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system may be in the same town as a major hospital and the hospital chief could have good personal relations with the chief of the wholesale depot. In this case, the hospital receive more drugs than is optimal for the system (it has to remembered that demand in the public sector is much higher than the supply in most developing countries). Consequently health centres are supplied with fewer drugs than requested, or the drugs requested do not necessarily reach distant areas of the country. To overcome this, the most vital drugs can be sent directly to health posts and health centres thus ensuring that the drugs will not go to other places (the so called ‘kit system’). Such a system has been used in a number of African countries, e.g., Kenya, Tanzania, Zambia (Hogerzeil 1984: 34, Jitta, Whyte and Nshakira 2003). However, this option has its disadvantages. For example, the central purchasing depots frequently do not know exactly which drugs the health posts and the health centres want. The packages have to be arranged to satisfy a ‘general demand’. The real local demands, however, do not always correspond to this. In the long run it is probably better to establish an effective ordering system whereby each health care unit submits information about the types of drugs and quantities required. A drug kit system does not answer information queries nor does it ensure that health care personnel diagnose and prescribe in rational ways (Jitta, Whyte and Nshakira 2003).

8.4 Procurement Drug procurement can be defined as the organizational and administrative problems faced by a wholesaler. This has most often been discussed in relation to the situation found in the public sectors of developing countries. For pedagogical purposes, the process by which a government wholesaler buys drugs by tender can be divided into the following stages (e.g, Brouselle and Champagne 2004): 1. Determining which drugs should be bought 2. The choice of method for quantifying the need for a drug 3. The choice of method for buying a drug 4. Deciding upon a standard contract 5. Establishing relationships with drug firms 6. Signing the contract 7. Ensuring fulfilment of sales obligations 8. Feedback for improving the procurement decision system. In reality, the process will normally become much more complex than this list, with different institutions and sponsors involved in the process. These institutions and sponsors may have different goals and views about the best strategies to reach those goals (Brouselle and Champagne 2004). The criteria for the choice of drugs to be included in a procurement system in the public sector of a developing country have already been outlined in Chapter 4, when discussing

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the essential drug concept. Three different methods have been applied in determining the quantities of drugs needed (Hogerzeil 1984: 24): 1. The population-based method. According to this method the determinant factor in calculating the amount of drugs should be the prevalence of various illnesses within the population (Simmonds 1982). 2. The service-based method. This method uses the morbidity pattern among patients visiting a number of ‘typical health institutions’. The quantities are estimated on the basis that all existing and planned health care units should be supported with enough drugs to treat their patients in a medically responsible way. 3. The consumption-based method. This method is based on an analysis of the drug consumption per 100 patients in a number of ‘typical health care institutions’. Estimates of total needs are projected from this data. The data requirements of the three methods differ considerably. The second and the third methods have been recommended for practical use because, in contrast to the first method, they take into account health care organizations that have limits on the health care efforts which they can undertake. The weakness with the first method is that drugs can be lying idle in the wholesale system because there are not enough health care units to reach all the patients. Most procurement agencies working for the public sector invite tenders to get the drugs they want at low prices (discussed in Chapter 7). International organizations, like the World Bank, can help an individual country to finance pharmaceutical tenders. In this way the country can pay a lower price because the payment is made more or less directly (RodriguesMongui´o, Rovira and Seoane-V´azquez 2007). The determination of a standard contract is part of the procurement operation. In general, it seems to be better for the buyer to pay the seller in the seller’s own currency. This usually means a lower price and currency exchange operations can be handed over to financial experts. However, in practice, many developing countries receive a significant part of their public sector drugs via international aid, which can mean that other contractual terms must be accepted. In a standard contract, the last date of payment has to be specified. It is recommended that the procurement agency checks the quality of the drugs delivered before the order is paid (UNCTAD 1982: 14–16). The practical organization of the tender depends on the circumstances operating in the country. To have an effective organization, it is essential for the procurement agency to acquire the necessary expertise and market knowledge. The order system should be given considerable attention. Three different wholesale order systems have been used in developing countries: 1. The procurement headquarters decides the quantities of the drugs each health unit should receive during a year. 2. The health care units are given the right to order when their stock of drugs is running low. However, because of financial difficulties in their own countries, they often only obtain a fraction of what they want.

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3. The health care units have an annual budget for drugs. These budgets are determined in proportion to the size and the type of health care unit. The units then have to try to keep their drug use within the budget. Each unit is ‘charged’ or the price of the drugs delivered. However, the prices are only used as a way to encourage efficiency. No money actually changes hands (Schoch 1984). It is recommended that the procurement agency should not only be responsible for the purchase of drugs, but should also be given responsibility for all wholesale activities until the drugs reach the health care units. An administrative system has to be set up to ensure that any problems, e.g., delays, quality problems or ‘leakages’, are reported to the central office of the agency so that matters can be corrected. To ensure an efficient procurement system in the public sector, a government can start drug production in its own land, at least in the form of tablet production (Gelders et al. 2006: 55). This is an option for those countries where there is a public drug distribution system, e.g., many African and Asian countries. However, in Latin America the situation is different because the countries have no public drug distribution systems. Patients in open health care have to buy their drugs from private pharmacies. Therefore, the role of the governments is quite different in Latin America compared with countries which have public drug distribution systems. However, the ‘transparency’ of drug prices is very important for all countries. To compare drug prices, the drugs have to be of similar quality. This means that governments have to obtain drug quality and bioavailability/bioequivalence data to find which drugs are of a similar quality and which of those is ‘the best buy’.

8.5 Summary The wholesale function can be defined as the collection of goods from producers and the distribution of goods to the retailers. This means that importation is included as a part of the wholesale function. Countries vary in the way wholesaling is organized. It can be based on a number of privately owned wholesalers, a single government organization or a system including both government and private sub-systems. A wholesaling system can be evaluated in a number of ways: the average cost of transferring the drug from the central warehouse to the retailers, the retailers average waiting time between ordering and receipt of the drugs, the probability that an ordered drug cannot be delivered, the quality of the drugs delivered and the other services offered by the wholesaler. Developing countries often have a problem in keeping the efficiency of their wholesaling systems at a high level. Drug procurement can be defined as the organizational problems faced by a wholesaler. However, the way procurement is organized varies considerably between countries because of historical, cultural and economic factors.

References Anell, A., Deregulating the pharmacy market: the case of Iceland and Norway. Health Policy, 2005, 75: 9–17.

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Bergman, A., FDI and Spillover Effects in the Indian Pharmaceutical Industry. Lund: University of Lund, Department of Economics, 2006 (Master Thesis). Brouselle, A. and Champagne, F., How was the UNAIDS drug access initiative implemented in Chile. Eval. Program Plan., 2004, 27: 295–308. Contiades, X., Golna, C. and Souliotis, K., Pharmaceutical regulation in Greece at the crossroad of change: Economic, political and constitutional considerations for a new regulatory paradigm. Health Policy, 2007, 82: 116–129. Dong, H., Bogg, L., Rehnberg, C,. and Diwan, V., Drug policy in China: pharmaceutical distribution in rural areas. Soc. Sci. Med., 1999, 48: 777–786. Gelders, S., Ewen, M., Noguchi, N. and Laing, R., Price, availability and affordability – an international comparison of Chronic disease medicines. Report presented at a WHO planning meeting in Cairo December 2005, WHO, HAI, 2006. Hogerzeil, H.V., Standardised Supply of Essential Drugs in Ghana. Utrecht: Utrecht University, 1984 Jitta, J. Whyte, S.R.and Nshakira, N., The availability of drugs: what does it mean in Ugandan primary care. Health Policy, 2003, 65: 167–179. Kandil, O., The pharmaceutical industry in the Arab world: challenges, controversies and future outlook. Drug Disc. Today, 2004, 9: 543–545. Mrazek, M., de Jonchere, K., Petrova, G and Mossialos, E., The pharmaceutical sector and regulation in the countries of Central and Eastern Europe. In Mossialos, E., Mrazek, M. and Walley, T. (eds.), Regulating Pharmaceuticals in Europe: Striving For Efficiency, Equity and Quality. London: Open University Press and WHO, 2004: 323–333, web-site: www.euro.who.int/document/E83015.pdf. Reed, T., The regulation of medicines in Central and Eastern Europe. Sussex: University of Sussex, 2002 (Ph.D. Thesis). Rodriguez-Mongui´o, R., Rovira, J. and Seoane-V´azquez, E., Analysis of the World Bank’s pharmaceutical lending. Health Policy, 2007, 81: 102–116. Schoch, C., A state pharmacy for the Comoros. World Health Forum, 1984, 5: 80–81. Simmonds, S.P., Essential drugs for primary health care standard packages. Lancet, 20 February 1982: 435–436. Taylor, D., Mrazek, M. and Mossialos, E., Regulating pharmaceutical distribution and retail pharmacy in Europe. In Mossialos, E., Mrasek, M. and Walley, T. (eds.), Regulating Pharmaceuticals in Europe: Striving For Efficiency, Equity and Quality. London: Open University Press and WHO, 2004: 196–212, web-site: www.euro.who.int/document/E83015.pdf. UNCTAD, Technological Policies in the Pharmaceutical Sector in Venezuela. Geneva: UNCTAD/TT/25, 1982. Van der Geest, S., Self-care and the informal sale of drugs in south Cameroon. Soc. Sci. Med., 1987, 25: 293–305. Yudkin, I.S., The economics of pharmaceutical supply in Tanzania. Int. J. Health Serv., 1980, 10: 455– 477.

9 Drug retail distribution

‘Drug retail distribution’ refers to a public pharmacy in which a customer can come and buy an OTC drug or get a prescription drug dispensed. However, this definition also embraces a dispensing unit at a government run health centre as a type of retail distribution outlet. This means that a retail distribution unit can be owned privately, by an insurance agent or by a government. The details of these systems differ considerably from one country to the next (e.g., Taylor, Mrazek and Mossialos 2004). In China alone there are about 200 000 pharmacies (Qiang 2005) and there could be as many as one million distribution units globally. All countries have systems for delivering drugs directly to patients and for health care institutions to provide drugs for patients, both in internal care (inpatients, patients staying overnight in the institution) and in open health care (outpatients). The delivery of drugs is usually called ‘the pharmaceutical service’. In this chapter, we focus on the pharmacy service to outpatients. However, it has to be remembered that industrially produced medicines can be distributed by community doctors in some countries, e.g., in South Africa (Gilbert 1998). In many countries, medicines can also be distributed by local vendors with little or no professional background, e.g., in Africa (Nordberg 1974, Van der Geest 1987). We also find stores selling traditional herbal drugs and manufactured preparations which cannot be regarded as medical drugs, but which fulfil demands similar to those of the pharmaceutical service (Cocks and Møller 2002). Traditionally pharmacies combined the delivery of drugs with other functions, e.g., drug information however, the exact functions of pharmacies vary between countries for historical, cultural and economic reasons. The forms of government control over the pharmacy service also varies between countries. This will be discussed in the first part of this chapter, followed by descriptions of the goals of pharmaceutical systems. The WHO has formulated a number of criteria which can be used to measure ‘Good Pharmacy Practice’. These criteria include quality of service, quality of medicines and quality of dispensing (WHO 1996).

Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

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9.1 Pharmaceutical care In recent decades, there has been a lively international debate about what the new professional role of the pharmacist should be. Historically, drug production was an essential aspect of what took place in pharmacies. Now, this aspect has been taken over by the pharmaceutical industry and the profession has had to change to adapt to activities which centre on providing advice and information to patients and prescribers. The concept of pharmaceutical care (PC) was defined by Hepler and Strand (1990) as ‘the responsible provision of drug therapy for the purpose of achieving definite outcomes that improve the patient’s quality of life’. This means that the pharmacist should not just take responsibility for the distribution of drugs, but ought to take responsibility for the outcomes of the drug therapy as well as the human aspects of drug use (Currie 2003). However, the pharmaceutical care concept is not so simple as it looks at first sight. It has the following features within it (e.g., Cipolle, Strand and Morley 2004, Wiedenmayer et al. 2006: 7–11, 25–39, Van der Mil and Schultz 2006): 1. Pharmaceutical care places an emphasis on achieving specific goals. This aspect lies close to Hepler’s explicit stress on ‘definite outcomes’. In pharmaceutical care, pharmacists have to evaluate the degree to which the drugs they are dispensing will have positive medical results, will result in few, if any, side effects and will help to provide patients with a high quality of life. We can also add patient satisfaction to that list and low costs in terms of time and money for the patient. However, there may have to be trade-offs between these outcomes. This means that to achieve one of the goals we have to adapt, even sacrifice, one or more of the others. 2. Pharmaceutical care involves many of the activities or tasks the pharmacist undertakes. Farris and Schoplocher (1999) have compiled a scale detailing different types of behaviour or tasks, which they termed ‘pharmaceutical care behaviours’. However, it has to be remembered that the lists vary depending on the country or the region. This is because this set of activities is influenced by cultural, organizational and economic factors. The activities in the list developed by Farris and Schoplocher were classified into three groups: i. Novel activities ii. Traditional activities iii. Documentation. A problem with this division of tasks is that what is novel and what is traditional varies considerable over time, between countries and between different retail units in the same country. The goals and processes of the pharmaceutical care tasks have to be adapted, not only to the type of drug and patient the pharmacist meets (Sexton, Nickless and Green 2006), but also to the cultural and organizational context in which the tasks are undertaken. How to follow up the patient outcomes is very much dependent on the cooperation and agreements with the other health professionals handling the patient’s health care.

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3. Pharmaceutical care involves identifying and solving the patient’s medication problems. The pharmacist not only sells the drug, but has a duty to follow up the effects of the medicine and to respond to the concerns of the patient as long as they are taking the drug (Narhi, Airaksinen and Enlund 2002, Blenkinsopp 2004). This aspect of pharmaceutical care can include identifying and solving prescription errors (Westerlund , Almarsdottir and Melander 1999, Dean et al. 2002, Naylor 2002, Cipolle, Strand and Morley 2004: 40-53, 171-200) or handling non-prescription drug problems (Westerlund et al. 2001). One important task for pharmacists is to reduce ‘polypharmacy’, i.e., reduce the number of drugs prescribed to specific patients. For elderly patients this might be big problem, especially if they meet different physicians who prescribe without considering the other prescriptions the patient might have. It has been clearly shown that pharmacists might reduce this problem and improve the medical outcomes (Chumney and Robinson 2006). Observing a failure to comply by the patient is also another aspect with which the pharmacist should be concerned. In Australia, pharmacists, in cooperation with medical clinics, make home visits (Home Medication Reviews) to different groups of patients to analyze the patients’ medication problems. One group of patients who can have significant medication problems is people with mental illnesses and these problems can affect their drug compliance (Bell et al. 2005 and 2006). 4. Pharmaceutical care involves cooperating with other health professionals. The extent to which such cooperation takes place varies between countries and regions. In the US, pharmaceutical care is seen as including direct recommendations to prescribers concerning what should be prescribed to individual patients (e.g., Hanlon et al. 1996). In Europe this is not something that pharmacists usually do. However, pharmacists ought to have an overview of all the prescriptions of the patient. A patient could have gone to more than one doctor and got ‘double prescriptions’ (prescriptions from two different doctors who have prescribed the same or similar drugs for the patient’s medical condition). A problem here is that the pharmacist can have insufficient medical data to make a proper evaluation, although patients tend to be positive about providing medical information to health professionals (Whiddett et al. 2006). This situation is evolving with the advent of computerized patient records and initiatives such as pharmacist prescribing (e.g. UK). In Australia, pharmacists can reach an agreement with a group of physicians and a group of patients to ensure they are given more medical data in order to have fuller information to provide pharmaceutical advice. In the UK, there is a system by which primary care pharmacists are helping GPs to handle specific matters concerning medicines (Silcock, Raynor and Petty 2004). 5. Pharmaceutical care requires that the pharmacist fulfil the criteria suggested for ‘concordance’ (Chapter 1). Among other things this means the pharmacist needs to have a fairly good knowledge of the customers’ wants, beliefs and attitudes (in other words – their medical discourses, see Chapter 1). This also means that the pharmacist should encourage customers to be active participants in the communication process, e.g., by asking open-ended questions. It has been suggested that fuller documentation of the individual patient’s medicines and the effects of the treatments can lead to better therapeutic results. An example is when a pharmacy keeps a record of all the prescriptions given out to each individual patient (PMR, patient medical record). Such a system can facilitate communication

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between pharmacy staff and the patient. However, this means that the patient has to sign up with an individual pharmacy or be connected to an interpharmacy computer network (Rossing, Holme Hansen and Krass 2001). Even without such records, most pharmacists can determine the reasons for prescribed medicines when a patient comes in with their prescriptions. This is called ‘a medication review’ and can be done in some detail if the patient is willing. The medication review is almost always combined with advising the patient how to take their medicines. Also, it can be undertaken in cooperation with the prescriber (Blenkinsopp, 2002). However, there has been a problem in that the general public does not always know about these types of services (Carroll and Gagnon 1984). When informed about them, most pharmacy customers are in favour of this kind of support (Britten, Gallagher and Gallagher 1992). Another problem with PMR seems to be that the general public has many different interpretations about the utility and need for this activity (Norgaard, Sorensen and Morgall 2000). A PMR system is, of course, of more importance in countries which have a national health insurance system than in places which do not have such a system. The reason is that prescriptions play a much more central role in those countries with a national health insurance system. There seems to be considerable variation within a country as to the number of pharmacists who have introduced pharmaceutical care into their professional practice (Rossing, Holme Hansen and Krass 2001). Many factors explain these internal variations – the pharmacists’ attitudes, beliefs and expectations (their discourses), social factors and organisational features (e.g., Farris and Schoplocher 1999). There is a limited number of studies indicating that pharmaceutical care interventions lead to positive results for the patient. There is, however, evidence that such interventions improve the symptoms of people with asthma and have a beneficial effect on blood pressure, cholesterol levels and medication use. However, positive changes in other medical indicators such as morbidity, mortality or quality of life are less evident (Roughead, Sempel and Vitry, 2005).

9.2 The degree of formal government control of outpatient pharmacies At the beginning of the twentieth century, when drug distribution systems were discussed intensely in Europe (Lilja 1987) it was generally assumed that the form of ownership, together with the drug laws, determined the behaviour of the pharmacies. Today these assumptions seem very outdated. Many organizational factors affect the drug distribution system. Structural factors, such as the type of ownership, can be very influential, but we must bear in mind that a wide variation in behaviour is possible within each structural category. Institutional differences are easy to detect, but it can be more difficult to determine the differences in administrative processes. The reason is that there are few reliable descriptions of administrative processes. Often the researcher has to draw up their own descriptions before comparisons can be made. International comparisons of drug distribution systems must be analyzed with caution. The desired goals of these systems differ from country to country. Because the goals can differ, it is difficult to decide which system is most ‘efficient’. This is because a valid evaluation of efficiency requires that the goals of the organizations being compared are the

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same or at least very similar. However, national comparisons – whilst not like-with-like – can provide ideas about how national problems can be solved. Also, it has to be remembered that reforms are processes rather than significant changes from one day to the next. Many of the features of an organization reflect older adaptations to environments which do not exist today. For example, to change an organization from state-owned to private will mean that many of the administrative processes from the old organization will survive into the new organizational format. When discussing the degree of government control of outpatient pharmacies, the following three classifications can be used: 1. Whether it is a state-owned system 2. Whether the government controls the locations of the pharmacies 3. Whether the government controls the drug prices. Of the possible combinations of these three classifications, in reality only four main groupings can be found. The reason is that some of the combinations are highly improbable. For example, all state-owned systems have subsumed within them the notion of government control of both location and price. In fact the desire to have location and price controls is a major factor in the establishment of state-owned systems. These four combinations are:

State owned systems State-owned drug distribution systems have different goals from privately-owned systems. Private systems often aim at profit maximization within each privately owned pharmacy. In state-owned systems, the costs of the entire system are taken into account in any evaluation of the system. The institutional structures and the administrative processes vary considerably in stateowned systems. This can be explained by differences outside the drug sector and the historical process when the new organization was formed (see discussion above). For example, the state drug distribution organization in Sweden, Apoteket AB, gets most of its drugs from private pharmaceutical firms (Lilja 1987). However, in the state-owned system of a developing country, the drugs are often bought by tender (Chapter 7). When locating new pharmacies, the perceived needs of the patients are taken into account in one way or another in all types of drug distribution systems. In a state-owned system it is possible to achieve quite an equal distribution of pharmacies throughout the country because it is not necessary for each pharmacy to be profitable or even self-sufficient (as is the case with private pharmacies). Many developing countries have organized state-owned ‘public’ drug distribution systems (Chapter 4). Most of these state systems operate side-by-side with a private drug system. If a drug is required which is not available in the state system (where the drugs are available free or at a nominal price), the wealthier patients can go to the private system where they will probably pay more for the drug. Because of the powerful influence of the middle class in many developing countries, it is difficult to end or restrict private practice by legislation. This

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is also the reason why reforms intended to transfer resources from the private to the public sector are seldom successful. The wealthy can usually find loopholes in such legislation. In developing countries, the public and private sectors are invariably connected. For example, if a drug is available in the public sector the price will be low in the private sector. However, if the drug is not available in the public sector the price will be high in the private sector pharmacies. Patients who can afford it can use the private sector if they cannot get the prescribed drug from public health care (Maiga et al. 2003). Different views on a public distribution system may result in political conflicts in a country. Bolivia is an example where a public drug distribution system based on tenders and publicly owned pharmacies was introduced in 1981 inspired by the WHO essential drugs program (the ENASME program). This resulted in a major conflict with the drug companies and their political supporters who wanted an open economy with no import restrictions. The Bolivian public distribution system was mainly directed at 28 percent of the population who were associated with the health insurance system and who paid regular fees to the health insurance organization. A change in government to a more right wing party resulted in the closure of the program in 1985, in spite of the fact that it was working quite efficiently (Accion International por la Salud, 1987: 1981–1985). The Bolivian experience showed that the public distribution system has to be politically supported to be sustainable. Some major difficulties faced by decision-makers and administrators in developing countries face are how to overcome budget restrictions, how to encourage efficiency and how to avoid shortages in the public drug system (Chapter 4).

Private systems with government control of drug prices and of the locations of pharmacies In Denmark and Finland the state controls drug prices and the locations of new pharmacies. In both countries a special system exists to select pharmacy owners. This system, developed at the end of the nineteenth century, is based on ‘personal privileges’. When a pharmacy owner retires or a new pharmacy is planned, the vacant ownership post is advertised in public. The experience and professional qualifications of the candidates are assessed by a government body, which also appoints the new pharmacy owners who subsequently run their pharmacies as private businesses. However, the government controls the profitability by deciding the price setting rules to operate in all the pharmacies in both these countries.

Private systems with state control of drug prices without location control The UK can be seen as an example in this category. Every pharmacy graduate can become a member of The Royal Pharmaceutical Society of Great Britain after one year of preregistration training. This gives the pharmacist the right to establish a pharmacy wherever they desire. However, a mild form of location control by the government has been introduced. Pharmacies located far away from their nearest competitor can receive financial subsidies. Directly after the Soviet period, Estonia switched to a system similar to that of the UK. However, it has now introduced location control (see above). The reason for this change

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was that the number of pharmacies increased too quickly, with insufficient attention being paid to the need for quality and the small profit margins in a system where the drug prices were strictly monitored. In Russia and China, there has been a change from a distribution system based on government owned pharmacies to private pharmacies. Although no detailed investigations of these system transformations have yet been undertaken, there has been a study of the drug prices, drug availability and drug affordability in one Chinese province (Quing 2005). In Iceland, there has been a switch from a system based on government control of location to one similar to that in the UK (see description later). The reason for this change was to bring about more competition between pharmacies (Morgall and Almard´ottir 1999). In countries with a drug reimbursement system (as in Europe) pharmacy owners can get paid by a fixed fee per item dispensed or by a specified margin of the product’s price. Often these percentage margins are lower for the more expensive drugs (Taylor, Mrazek and Mossialos 2004). The UK has a national insurance system which pays most of the costs of prescribed drugs. All customers – with the exception of certain groups, e.g., the elderly and the unemployed , who get their medication free – pay the same price for a prescribed drug delivered within the NHS system (the health care and drug reimbursement system) regardless of the pharmacy where the prescription is processed. The state pays most of the costs of drugs prescribed within the NHS system. The prices of drugs are determined by negotiation with the pharmacy owners (for pharmaceutical services) and with the drug industry (for the drugs delivered to the pharmacies). However, there is no price control for drugs sold outside the NHS system, e.g., for non-prescription drugs. The private drug distribution system in the UK exists side-by-side with a state distribution system for the NHS hospitals. Each NHS region buys its hospital drugs by tender. The prices paid for the drugs are kept secret, but are known to be much lower than the prices paid by community pharmacies. In a number of countries, a pharmacy has to be owned by someone with a degree in pharmacy. In other countries pharmacies can be owned by a limited company. The new reform in Iceland gave limited companies rights to own pharmacies, whereas previously ownership was restricted to pharmacists only (Morgall and Almard´ottir 1999). In Norway, similar legislation in 2001 resulted in an unintended structural change. Most of the pharmacies there were soon sold to three foreign-owned international pharmacy chains (Anell and Hjelmgren 2002).

Private systems without state control of drug prices and of the locations of new pharmacies The pharmacy system in the US is the most noteworthy example in this category. In principle, no restrictions exist to prevent the establishment of new pharmacies in a particular state (the US is a federal system) where the pharmacist is registered. However, the US drug distribution is in fact a very complex system, with pharmacies of very different types including conventional drug stores offering a variety of non-drug goods, owned by a pharmacist, to big pharmacy chain stores which are part of a company with a large number of pharmacy outlets. In recent years, a national social and health insurance system has been one of the central topics of public debate in the United States. However, up to now, no such system exists

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there. Instead, a large proportion of the population takes out private health insurance. Most poor people cannot afford this. There is, though, a federal Medicaid program, directed at poor patients, which can offer pharmaceutical services. One drawback of this program is that it covers only a small fraction of the poor in the US. The federal government controls the prices of the drugs delivered under the Medicaid program and the pharmacies are paid by the government for the costs of the drugs delivered via this program.

9.3 Drug distribution aims It is important to formulate aims when considering how a drug distribution system can be improved. If the aims are not defined, it is almost impossible to do worthwhile periodic evaluations of the effectiveness of the system. Therefore, in the evaluation of pharmacy practice, it is necessary to compare the empirical data collected from pharmacies with the goals of the system, which are detailed in official national documents. In some countries, these goals have been formulated around national drug laws and regulations. One example is Sweden, where there is an official agreement between the state and Apoteket AB (Lilja 1987). This document, contains details of what is expected of the drug distribution system. However, the general nature of many of these documents often leads to considerable freedom in how a decision-maker applies these principles. Certainly informal rules are frequently established among those working in the system, but sometimes problems can arise which lead political bodies to debate and reassess the aims of the system. This can result in new statutory regulations. In the following part of this chapter, a number of national goals to which a system should aim are listed. These objectives are formulated in general terms. Formulating goals in detail must be the responsibility of national decision-makers, who can determine their priorities with due consideration given to national cultural and economic traditions.

Short travel times to the pharmacy service The first two classes of drug distribution systems discussed above referred to decisions about the locations of pharmacies taken by political bodies at a national level. In these countries the location is often determined when a housing development is planned, e.g., a new suburb. The international trend is to establish pharmacies in the same buildings as open health care clinics. Thus, cooperation between pharmacy personnel and the other health care personnel at the clinics can be improved. Contact between the two groups can be achieved by having everyone working together in one building sharing the same restaurants, facilities etc. The resulting relationships can be of great help when common problems arise (see the discussion about pharmaceutical care above). Many different systems are used to ensure that the public has an acceptable pharmacy service at a reasonable cost. For example, in Nepal, a group of private retailers have been allowed to sell a selected range of drugs at state-controlled prices. The government wholesale organization transports the drugs to the retailers and puts a 10 to 15 per cent mark-up on the wholesale cost to cover its outlay on transport and administration. The retailers are then allowed to add a further 10 per cent for their commission, but are subject to periodic

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inspection to ensure that there are no safety risks involved. The system seems to have been successful in isolated areas and where the health-care workers are prepared to cooperate with the retailer (Thomson 1982, Kafle et al. 1992). There are considerable international variations in the number of inhabitants per pharmacy. In the Nordic countries there are restrictions on the location of pharmacies, resulting in a higher number of inhabitants per pharmacy compared with countries with no restrictions. In developing countries, e.g., many of the African states, the number of drug outlets (private and public sectors combined) is much lower than in other countries. The main reasons for this are finance and the lack of educated pharmacy personnel. In such places it may not be possible to insist that prescription drugs be dispensed by qualified pharmacists. In most public sector drug outlets medicines are handed out by medical assistants, whose educational background consists of only a relatively short course in the principles of drug therapy. However, if the work in the pharmacy is correctly organized and full instructions and information are available, the safety risks can be kept to a minimum. In Latin America, the situation is quite different from that in most African countries. The number of pharmacy students in Latin America has increased because there are more pharmacy schools and more parents are willing to invest in their children’s studies. Parents generally want their children to have as secure a future as possible and a good education goes a long way to ensuring this. However, the increased number of pharmacists has led to more pharmacy premises, but also to stronger competition among pharmacists to get a job. In practice, this means low wages. Young pharmacists also meet competition from pharmacy technicians. A pharmacy owner might opt to hire technicians because a technician’s salary is lower. In Latin America, opportunities in drug production are limited, so newly graduated pharmacists have little chance of employment (this description is based on personal interviews in Peru by JL). In countries where there is no national health insurance or a public drug distribution system, people buy drugs from pharmacies directly (as OTC drugs) rather than first going to a physician to get a prescription. This is because a visit to a physician is costly in terms of time and money, of which the patient may have little. For example, in Egypt, less than 20 per cent of the drugs sold in pharmacies are based on prescriptions from a physician (Benjamin, Motawi and Smith 1995).The situation in Latin America is similar, where OTC sales account for most of the drugs sold in pharmacies (based on personal interviews in Peru by JL). Dispensing doctors are found in some African countries, such as Zimbabwe. Here it is possible to make a distinction between doctors who dispense ‘for profit’ (DDs) and doctors who only dispense under certain circumstances, e.g., there are few other dispensers (NDDs) (Trap 2001: 7). There is a debate regarding the degree to which the practice of dispensing doctors results in irrational drug prescribing and low quality pharmacy practice. In general, DDs prescribe more drugs, more antibiotics, more drugs of limited value and give more injections than other doctors (Trap 2001: 69–71, 81–132). The quality of pharmacy practice as provided by DDs is sub-standard, at least in Zimbabwe (Trap 2001: 133–156). In many Asian countries, e.g., in Japan, physicians are also allowed to sell drugs. This means that they not only prescribe, but also dispense drugs to their patients. Naturally this practice is opposed by pharmacists, who have difficulties in making their pharmacies profitable in the face of such competition. In South Korea, as in many Asian countries, the health care system is dominated by the private sector. However, in South Korea in July 2000 a reform was passed aimed at separating the roles of physician and pharmacist. Henceforth,

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medical clinics were not allowed to have pharmacies on their premises. The aim of this legislation was to reduce the over-prescribing of drugs and decrease the prescribing of drugs of limited value. By separating prescribing and dispensing, the physicians could no longer profit from prescribing expensive drugs. In the presidential election in South Korea in the end of the 1990s, irrational prescribing and better health care featured prominently. The piece of legislation which was eventually passed, although extreme in the eyes of many, did have the support of the Korean Pharmaceutical Association. It was not simply separation of the prescribing and dispensing roles, but it went further in that it did not allow medical institutions to hire pharmacists for dispensing. The reform was not popular with the general public nor with the physicians whose earnings were going to be marked by reduced. The physicians threatened to go on strike and to avoid this the government increased their wages (Kang et al 2002, Kim, Chung and Lee 2004). However, the threat of strike action did not succeed in stopping the reform. It went through and decreased the number of prescribed drugs but it did not stop the illegal selling of prescription-only drugs from community pharmacies (Kim, Chung and Lee 2004). Physicians started to prescribe more expensive drugs so that the drug costs for the national health insurance system increased as an indirect consequence of the reform. This explains why in one year, the sales of drugs in South Korea by foreign pharmaceutical companies rose from 10 per cent of the drug market to 23 per cent (Kim, Chung and Lee 2004). In Taiwan, many pharmacies are sited just outside health clinics. These pharmacies focus on serving these clinics and often have cooperation agreements with them (Chen, Chou and Hwang 2006). Non-prescription drugs are sold in general stores in many countries, but in others they are restricted to pharmacies only, e.g., in Northern Europe. Particularly in developing countries, general stores can have a selection of different drugs, including antibiotics for sale. In this situation, the shop assistants and the customers might not always be well respond of the indications and proper dosages of these drugs (Wulf-Gould et al. 1991). Historical and economic factors explain why many countries have outlets which sell pharmacy-only medications. The general public needs drugs and few pharmacies exist. Recently drug sales over the internet have become more and more popular. Countries vary in the extent to which this is allowed (Taylor, Mrazek and Mossialos 2004: 203). However, even if it is not permitted, it is difficult to restrict because the drugs are sent by ordinary mail with no special marks on the envelope. For example, Viagra used for male erectile problems, has been marketed heavily and with considerable success over the internet. However, in countries with a national health insurance system – as in Europe – internet sales are low, because the patient has to pay the full commercial price for drugs bought this way. The three main problems with internet sales are that prescription drugs might be sold without a visit to a physician, patient information might be lacking and counterfeit products might be distributed.

Satisfactory range of drug preparations The definition of a ‘satisfactory range of drug preparations’ has received considerable attention within pharmacy and medicine over the past few years (see the discussion about essential drugs in Section 4.9).

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The level of drug availability in pharmacies can be measured by recording the percentage of customers who immediately receive the drug they ordered, i.e., the ordered drugs are stored in the pharmacy. For example, a service level of 95 per cent means that 95 out of every 100 orders from customers can be dispensed immediately. A high store-service level is normally set for vital prescription drugs, because there can be medical risks if these drugs are not available immediately. The store-service level can be used both for planning purposes and for controlling the efficiency of the drug distribution system (e.g., Gelders et al. 2005). A small pharmacy cannot have the same high store-service level as a larger pharmacy because this will result in unacceptably high prices for the drugs they stock. However, a small pharmacy may cooperate with physicians (and other groups of health care personnel) in the neighbourhood. If the prescribers have a say in selecting the drugs which the pharmacy keeps in stock, they will try to prescribe these drugs. Thus, a higher store-service level will almost certainly be achieved. Normally only ‘acceptable’ orders may be included in the store-service analysis. This means that orders for drugs which are not accepted for distribution in certain countries are excluded. Clearly, the drugs that are regarded as acceptable varies between countries. A developing country with a short list of essential drugs will have only a few acceptable drugs. Computerized systems for drug ordering are being used move frequently by pharmacies. The pharmacy store manager names the drugs wanted and determines the amounts required. The computer stores this information (the ordering quantity in Figure 9.1). Computer systems can record how many units are in stock by scanning the bar code to an ‘electronic reader’ at the moment of sale, the computer keeps the number up-to-date. The computerized system can thus indicate when it is time to order additional quantities of a drug (the ordering point in Figure 9.1). Of course, the same function can be performed by an ‘ordering card’ placed near where the drug is stored. In Figure 9.1 the x-axis indicates time and the y-axis shows the changes in the number of packages stored over time. The pharmacy has a safety level, which is the minimum number of packages still in stock when a new order must be submitted to the wholesaler. At this point details of the new order are sent to the wholesaler. Figure 9.2 graphically shows how the optimal ordering quantity can be determined. The y-axis indicates the costs and the x-axis indicates the ordering quantities. The total costs,

Units in stock

Ordering quantity

Safety level Time

Figure 9.1 Units in stock in a pharmacy

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Optimal ordering quantity Total costs

Costs for keeping the inventory

The costs for ordering The quantity ordered

Figure 9.2 How the optimal ordering quantities are determined by considering the costs for keeping the inventory to the ordering costs

for both keeping the inventory and for ordering, are indicated by the bold line in Figure 9.2. The total costs have been calculated by adding the costs for keeping the products in the inventory (depending how long a product stays in storage and the costs for keeping a package in storage) and the costs for ordering (how much it costs to order and to handle the product when it arrives to the pharmacy). The cost for keeping the products in inventory begins at the crossing of the x- and y-axes and increase with a larger inventory. This is because the inventory costs are strongly dependent on the quantity stored. The costs for ordering diminish if we have more than one multiple of an item in each ordering period. As can be seen in Figure 9.2, total costs tend to reach a minimum at certain ordering quantities. This can be interpreted as the optimal ordering quantity. Some pharmacies concentrate on the sales of prescription drugs while others emphasise those of self-medication items. For example, pharmacies placed in shopping centres will focus upon OTC drugs, while pharmacies near health centres concentrate on prescription drugs. Of course, cultural and organizational factors also affect which of these orientations a pharmacy emphasizes. For example, almost all European countries have national social insurance and drug reimbursement systems. This reflects the fact that these countries are, to some extent, welfare states. In such a system most drugs (in terms of monetary value) are sold as prescription drugs. In contrast, in countries without national insurance systems, e.g., most Latin America countries, the majority of drugs sold are non-prescription and are bought directly by patients or their families. This means that we find a considerable variation between countries in the amount spent, on self-medication per head of population. In some parts of Asia, Africa and Latin America there is a special room in the pharmacy where injections are given. Many people in these countries believe that an injection is more medically beneficial than a tablet which explains why they want an injection instead of a tablet. But this can be a problem because injections can result in an infection if the syringe used has not been properly sterilized (Kotwall 2005). Also, an injection is much more costly than the same dose in tablet form (Igun 1987, Reynolds Whyte et al 1994, Birungi 1994). In many low and middle income countries, it is fairly common for a drug to be out of stock in the public health care dispensary (Gelders et al 2005: Executive summary). This is because there are insufficient economic resources in the country to satisfy demands. In

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a study from China, the median availability for some of the analyzed generic preparations was almost zero per cent (Quing 2005: 4, 22). However, this finding could be explained by a methodological anomaly – the supposed medical value of some of these drugs in China might differ from the supposed medical value according to a European or a North American perspective for example. If a drug is only available in small quantities, the staff in the dispensary have to ‘ration’ the drugs left. There are a number of publications discussing which principles can be applied in health care rationing (e.g., Wailoo and Anand 2005). However, it appears there are no publications about those principles which should be used if rationing has to take place in the distribution of drugs.

Convenient opening hours Historically, European pharmacies were open day and night. Not until quite late on in the 19th century were their opening hours reduced, mainly in order that the staff had better working conditions. Today pharmacies tend to follow local office and commercial business hours. In many European countries, e.g., the UK, the pharmacy owners in a community have an agreement so one or two pharmacies are open outside normal business hours on a rota basis. In the international pharmaceutical debate, ‘on-line pharmacies’ is a popular theme. Today, most of the on-line pharmacies are to be found in the US and there are many different kinds. Some only sell OTCs, others sell prescription drugs after a prescription has been sent to the pharmacy and there are those which offer physician consultations followed by prescription drugs. For a system with on-line pharmacies to work safely it is necessary to have clear rules regarding what such pharmacies might offer to the customers (M¨akinen, Rautava and Forsstr¨om 2005). On-line pharmacies mean that a customer can order a drug by email at a competitive price. The drugs will then be delivered to the customer by post. Some of these pharmacies offer on-line consultations for customers who order a prescription drug. It seems that this on-line practice has become most popular for buying lifestyle pharmaceuticals like Viagra (for sexual dysfunction) and Xenical (for weight loss). For countries which have a national insurance system, on-line pharmacies have to be situated in the buyer’s home country for part of the costs to be covered by the insurance system (M¨akinen, Rautava and Forsstr¨om 2005).

Safety Safety is a complex concept, which can be divided into a number of aspects: 1. A member of the public should be given the non-prescription drugs they have requested and the drugs prescribed for them. 2. The drugs delivered should be of acceptable quality. Among other things, this means that vaccines should be stored at the required temperature to ensure their potency during transportation and storage. Also, the drugs should be delivered within the acceptable shelf-life period.

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3. The labels on drug packages should include all necessary information about taking the drugs. 4. Drugs should be handled in such a way that losses from theft are minimized. This is a great problem in many developing countries, where losses of up to 30 per cent can occur (Van der Geest 1987). 5. Prescription drugs should only be sold or delivered as a result of a prescription or in a way that accords with local safety requirements. However, an international problem is that, in many developing countries, antibiotics can be bought without a prescription and without a proper indication (Van der Geest 1987, Wolffers 1987, Bojalil et al 1994). People there can buy individual capsules of antibiotics because they are unable to pay for a whole package. This practice can lead to the development of resistant strains of bacteria, which can spread to other settings and countries. 6. Illegal drug sales should be stopped. Smuggling and the sale of drugs by unauthorised sources are common in many developing countries (Van der Geest 1987). The most common reason for this is illegal activity profiteering from theft. Another reason is that there are often long distances between pharmacy outlets in rural areas. Other explanations are that there may be relatively few drugs in the public drug sector and that effective control measures are not enforced. However, the only practical way to stop illegal drug sales is to increase access to legal drugs. Without this, the general public can be expected to oppose any reform to stop illegal drug sales. 7. A drug should only be used for an indication for which there is empirical evidence that it produces acceptable therapeutic results. There has been a lot of debate on this point (see the discussion about evidence-based medicine in Chapter 2). For example, the recommendation and sale of medical abortifacients in Latin America have been criticized both because of the drugs recommended and also because of the lack of information given to the customers (in most Latin American countries, abortion, if not illegal, is very strictly limited) (Lara et al. 2006). In low per capita income Asian countries, it is not unusual to find dispensed drugs without a proper label (Stenson et al. 2001). One reason for this is that the health professionals frequently withhold drug names to ensure higher patient loyalty to a health care institution (Stenson et al. 2001). In developing countries, the quality of the pharmacy service tends to deteriorate with the distance from the provincial capital (Stenson et al. 2001). In some situations, people want a drug for psychological reasons. A patient simply wants something for his medical condition, even if that something is of questionable value in terms of proven effects in clinical trials. In such situation, of course, if no other option is available, the pharmacy staff can, offer a drug of questionable value but with no side effects. It is important to make a distinction between health hazards which are considered a possibility and health hazards which are unknown and of which we are unaware. An example of a situation where there is a degree of expectation of some side effects is when there have been reports of these in medical journals. An example of an unknown health hazard was when Thalidomide was prescribed in the 1950s. The medical community at the time had absolutely no idea that Thalidomide could result in serious physical handicaps in the children of mothers who used the drug during pregnancy.

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One rather common type of safety problem is the selection of a wrong package by pharmacy staff. Packages similar in design, size and colour can cause mistakes. To avoid these types of mistakes, comparisons with packages similar in design etc. should be made when a new preparation is about to be registered for use in a country. The design of a new preparation, may have to be changed to diminish the possibility of mistakes if it is in a similar package to an existing one (Filik et al. 2004). Another way of preventing errors is to have a rule that all prescriptions, before they are dispensed to patients, must be checked independently by two people. When storing items in the pharmacy, similar looking drug preparations should be kept in different places, with the risk of an error highlighted. The education and experiences of the staff in the pharmacy affect safety. We can expect fewer mistakes by experienced staff than by new and unskilled personnel. Of course there is considerable variation between countries in terms of education levels and educational requirements of pharmacy staff. In a number of countries, even although at least one pharmacist is required to be in the pharmacy, this is not always the case. In such situations the risk of mistakes is increased. Countries have different ways of labelling drugs prescribed for outpatients by physicians. For example, in most European countries, it is standard that a computer-written label is attached to the package. The label details the prescription explaining how and when to take the prescribed drug. In all EU pharmacies, the provision of an approved patient leaflet is now mandatory. The main advantages of using computers in pharmacy dispensing and storekeeping can be summarized as follows: 1. Computer systems can save staff working time. They help in the calculation of total prices and in deciding the sums to be paid by the national insurance system and by the patient. Computers can also be used in the ordering of drugs and in handling business records. These factors create more time for the pharmacist to provide drug information to the customer. 2. Computer systems can lessen the risks of the staff mixing up packages. Before putting the label on the package, the pharmacy staff will check the preparation name, strength and package size, and the code number, as an extra safety check. 3. Computer systems can cut down safety problems by giving patients receiving prescriptions more information. Computers can send messages to pharmacy personnel about what to tell patients. These messages can also be given to patients in a written form as a reminder. 4. Computer systems permit prescribers to be connected to the pharmacies on-line. This means that a prescriber can have a computer terminal from which they send their prescription, via a phone network, to the pharmacy to which the patient is going. When the patient calls at the pharmacy, the prescription is already ready and can be handed over to them at once. 5. Computer systems can be used in the search for incompatibilities, drug interactions, precautions etc. (Kirking et al. 1986).

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There can be a conflict between the need for safety and the demand for short waiting times in pharmacies. Safety controls require personnel and can lead to waiting times for the customers, however this just has to be accepted. Even after the introduction of a number of safety controls in the handling of prescriptions in pharmacies it is still not possible to eliminate risks entirely. However, norms of ‘acceptable’ levels of safety have to be established.

Short waiting times for the customers The time the customer spends in a pharmacy can be divided into queuing time and direct service time. At peak hours, the former can exceed the latter quite considerably. However, in general, only a small number of pharmacy customers are dissatisfied with their waiting times. This is because waiting times in a pharmacy are similar to the ‘normal’ waiting times in corresponding service institutions elsewhere in the country. Often the waiting time for nurses or doctors is far greater than for pharmaceutical services. Queuing time can be reduced by increasing the number of staff in the pharmacy. However, national norms, which vary between countries, determine the number of staff in relation to sales. In privately owned pharmacies, the owner can hire as many staff as he wants, but he will have to take the effect on his profit margins into account. From a global perspective the total time to get a prescription or to buy an OTC drug in a drug outlet varies considerably, but extremely short times can be found in health care centres. In a Jordanian study the total dispensing time there varied between 13 and 41 seconds in the centres under observation (measured as mean values in each centre, Otoom et al. 2002). The dispensing times can be compared to the consultation times for medical services in the same country. The mean values for medical consultations in that same survey varied between 1.7 minutes and 5.9 minutes (Otoom et al. 2002). However, in most pharmacies in most countries, the total dispensing time is longer than those noted in Jordan.

Drug information and customer–pharmacy staff interactions When handing out a drug, pharmacy personnel should ensure that the customer is fully informed about it, e.g., what it is to be used for, the correct dosage, how long it should be taken, how to take the drug so that it is most effective (Schommer 2000, Chapter 16). For prescription drugs, the doctor will probably also issue important advice. The importance of oral pharmacy information varies according to different types of drugs. For example, the public seldom asks for information when they choose between aspirin-like drugs. Families normally have a store of these in their homes. Each family will have its own favourite brand. Customers buying these drugs know the preparations they want before they enter the pharmacy. However, when selecting brands in other OTC groups, information from the pharmacy can be influential, e.g., when choosing a cough medicine. The information delivered in the pharmacy and the customer–staff interactions are very much dependent on the customer’s personal characteristics and how the pharmacist responds to these characteristics (e.g., Schommer 2000). This means that the interactions are

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determined by the expectations of the customers and of the pharmacy staff. However, the interactions are also influenced by the expectations they have about the other person’s cognitive rules and behaviour (Lilja and Larsson, 1993, Guirguis and Chewning 2005, Austin, Gregory and Craig Martin 2006). For example, there is a tendency among pharmacy staff to deliver more information and more OTC alternatives when they assume that the customer wants to make an independent decision. On the other hand, if the staff assume that the customer wants to transfer decision-making to them, they restrict information and recommend an OTC brand (Lilja and Larsson, 1993). This means that the pharmacy staff are required to empathise with customer for suitable customer–pharmacy staff interactions (Lilja et al., 2000, Lonie 2006.). Of course, these factors can vary depending on cultural features and/or the specific expectations developed in the local pharmacy setting. In many countries, pharmacies can have a very active role in advising customers how to deal with illness. Less fortunate, people who cannot afford to visit a physician view pharmacy staff as a more accessible member of the health care professions (Cosminsky 1994). In the UK, pharmacy staff are required to conduct structured interviews before dispensing certain classes of drug. In the future customers will probably demand more specific information about the drugs they receive, e.g., specific side effects, medical effects. The internet will become an even more important source for medical information when today’s generation of internet users gets older and seeks more health care. This will require new communication styles in pharmacies and the pharmacist might find themselves helping the customer to reformulate a question in a way that facilitates the customer’s internet searches. In many parts of the world, pharmacy staff have to depend on the available commercial drug information to develop their knowledge base, e.g., El Salvador (Ferguson 1981). There are international codes of conduct and national laws governing such information. However, academics and professional groups, often wish to develop channels for more ‘commercially independent’ drug information. We can expect motivation for professional development to increase if such information is easily available. To be a member of a professional group and discuss professional matters will become more interesting and may be come fun. Already a lot of independent commercial information can be found by anyone on the internet. A problem here is the language as most medical and pharmaceutical data on the internet is in English. However, in the future, more medical information will be translated into other languages. To read professional texts in English could come to be regarded as an essential professional skill. The information given in a pharmacy is likely to be affected by the design and organization of the pharmacy (Schommer 2000). However, there have only been a few studies which have looked at how the design of pharmacies can affect patients’ behaviour and decisions (e.g., Granas et al. 2005). In developed countries, many pharmacies have counselling or interview booths. More and more pharmacies offer a website, which can include a number of different types of information, e.g., recommendations for other medical websites. In the US, where the number of internet pharmacies has grown, information regarding specific drugs is very important, because the customer does not meet a ‘real’ pharmacist (Ghoshal and Walji 2006). In spite of the information from pharmacies, the choice of OTC preparations continues to be very much influenced by the commercial activities of drug companies, e.g., advertisements.

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Suitable working conditions Few scientific studies of the working conditions in pharmacies have been undertaken outside the US. However, pharmaceutical work seems to be regarded as rewarding. There are few pharmacists who start work in pharmacies and then change to other jobs during their professional lives. International comparisons of the relative satisfaction from work in pharmacies are difficult to interpret. The attitudes revealed reflect physical and psychological factors as well as the level of professional aspiration among pharmacists and their staff. However, the level of satisfaction might reflect the working conditions outside the pharmacy sector. This would be because pharmacists compare their situation with those faced by other professional groups in the same country. Similar conditions will apply to those who are not pharmacists and are working in pharmacies.

Ethical considerations A central norm in pharmacy ethics is that no information about a customer’s drugs and medical conditions should be given to others without the customer’s consent. Several similar norms are formulated in national drug laws. Other norms are found as written ethical codes for the profession or as oral traditions which are passed down from one generation of pharmacy staff to the next (Wingfield, Bissell and Anderson 2004).

Cooperation with other sectors of the health care system Lack of cooperation between the drug distribution system and other parts of the health care system is not an unusual problem. Today there are efforts in many countries to address this issue (see the discussion above about pharmaceutical care). To encourage cooperation, medical clinics and pharmacies are often situated near one an other, perhaps in the same building. If these units are close by, informal contacts frequently occur, which, promote professional links in the long run. Drug information is one of the areas which would benefit from improved cooperation between professional health care groups. A list of standard answers to the most frequently asked questions about self-medication and drug use could be developed by professional organizations. Also, a clinic of GPs might give a group of pharmacists the responsibility for the maintenance and follow-up of a group of patients who are in need of professional surveillance, e.g., those diagnosed with depression. There is some evidence that pharmaceutical care directed at a group of such patients can improve compliance, increase patient satisfaction and reduce visits to physicians (Finley et al. 2002). In the UK, a number of pharmacists have been employed either part-time or full-time by GPs organized in group practices (so called Primary Care Trusts). Amongst other things, a pharmacist can advise a GP on prescribing the most cost-effective drugs (Silcock, Raynor and Petty 2004). A similar system has been introduced in Germany (Guignard and Bugnon 2006).

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Low drug prices in the pharmacy Drug retailers normally operate with retail margins of about a third of the drug price to the customer (before the reimbursement system has been considered). This margin varies between countries, reflecting the tasks the retail system undertakes and the way it is organized (Huttin 1989). However, several European countries have introduced a system in which there are separate charges for the product handling costs and a remuneration for professional pharmaceutical service. For example, in Switzerland, for drugs delivered inside the national health insurance system, i.e., prescribed drugs, pharmacists receive compensation for the handling costs, a combination of a percentage mark up on the price for buying the drug and a fixed fee per item for professional service. The fee for the pharmaceutical service is charged on the basis of the type of service offered (six different types including direct observation treatment, preparation of a pill organizer and generic substitution). For the OTC drugs, the pharmacies have greater freedom to set their own prices (Guignard and Bugnon 2006). In some countries, e.g., China, there are legal restrictions on the margins of drug detail distribution (pharmaceutical service). A 15 per cent mark up is allowed for modern drugs, 16 per cent for Chinese herbal preparations and 30 per cent for Chinese herbs (Dong et al. 1999). Today, China has a market economy and these rules apply both for private and publicly owned pharmacies. As a national goal, the prices of the drugs have to be kept low to allow most people to be able to afford the drugs they need. However, the prices have to be high enough to assure reasonable profitability for pharmacies. Without reasonable prices, the motivation and recruitment of pharmacy staff will suffer.

An efficient organization In all national drug distribution systems there are at least some checks on the relative efficiency of the system. A simple productivity index might be formulated by calculating the number of drug preparations delivered per year and the number of hours worked by staff during the year. Such an index of productivity has to be regarded as a very rough and ready measure. A pharmacy might not provide much information to its customers in contrast to its neighbouring pharmacies – and this is not measured and evaluated by such a simple productivity index. Also low productivity can be the result of factors which cannot be influenced by pharmacy managers, e.g., an old, unsuitable interior. This is why such productivity indices have to be supplemented by other types of data in order to get a more reliable indication of the relative efficiency of a pharmacy. Productivity might mean productivity from ‘inside’ (how closely the organization comes to fulfilling its explicit goals) or productivity from an ‘outside’ perspective (how flexible the organization is and how able it is to adapt to the demands of the environment in which it operates). A study by Roberts et al. (2005) investigated the factors associated with a propensity to organizational change and adaptation. Among the factors they identified were communication and social networks within and outside the pharmacy, government policy, professional satisfaction and wages.

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Several studies have analyzed the quality of service in pharmacies. One way to collect data about the quality of service is to use ‘simulated patients’ (a simulated patient is an individual who is trained to visit a pharmacy to enact a scenario that tests specific behaviour by the pharmacy staff, Watson, Norris and Granas 2006). Of course, direct observations, video recording and the staff’s self-evaluations can also be used to analyze the service quality. The service assessments are usually done by dividing the service quality into a number of categories. The general public has a positive attitude towards the pharmaceutical service (e.g., Truter and Van Niekerk 2001). Indeed, in a Nordic European study, pharmacists were found to be more critical of their service than the customers (Hedvall and Paltschik 1991). Most consumer studies of the pharmaceutical service have been limited in scope. For example, the patients’ opinions regarding patient medical records (PMR) kept in pharmacies have been analyzed. Many customers are well disposed to PMR. However, there is also a group who regard such a system as of little value for them. One problem with PMR seems to be that the records are kept in one pharmacy, but many customers visit more then one pharmacy. A great number of studies have analyzed the customers’ attitudes to the information provided in pharmacies. It is not possible here to give an overview of these studies (a summary is given in Lilja, Larsson and Hamilton 1996). In general, pharmacy customers are positive about the information provided in the pharmacy and most want this type of information (Airaksinen, Ahonen and Enlund 1993).

9.4 Summary With regard to formal government control, drug distribution systems can be divided into four groups: state-owned systems; private systems with government control of drug prices and of the locations of pharmacies; private systems with state control of drug prices, but without location control; and private systems without state control of both drug prices and locations of pharmacies. However, a wide variation in system behaviour is possible within each of these groups because of differences in environmental factors and administrative processes. Eleven different drug distribution aims, as seen from a national perspective, were described: short travel times to a pharmacy service, a satisfactory selection of drug preparations, convenient opening hours, safety, short waiting times, drug information, suitable working conditions, ethical considerations, cooperation with other parts of the health care system, low pharmacy prices and an efficient organization.

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Gelders, S., Ewen, M., Noguchi, N. and Laing, R., Price, availability and affordability – an international comparison of Chronic disease medicines. Report presented at a WHO planning meeting in Cairo December 2005, WHO, HAI, 2006. Ghoshal, M. and Walji, M.F., Quality of medication information available on retail pharmacy web sites. Res. Social and Adm. Pharm., 2006, 1: 479–498. Gilbert, L., Dispensing doctors and prescribing pharmacists: a South African perspective. Soc. Sci. Med., 1998, 46: 83–95. Granas, A.-G., Horn, A.-M., Grane, K., Letveit, G. and Moen Rorvik, E., Endringer i apotekens fysiske utformning fra 1985 til 2005 (English: Changes in the physical design of pharmacies). Norges Apotekerforenings Tidskrift, 2005, 3: 136–141. Guignard, E. and Bugnon, O., Pharmaceutical care in community pharmacies: practice and research in Switzerland. Ann. Pharmacother., 2006, 40: 512–517. Guirguis, L.M. and Chewning, B.A., Role theory: literature review and implications for patient– pharmacist interactions. Res. Social and Adm. Pharm., 2005, 1: 483–507. Hanlon, J.T., Weinberger, M., Samsa, G.P., Schmader, K.E. et al., A randomized, controlled trial of a clinical pharmacists intervention to improve inappropriate prescribing in elderly outpatients with polypharmacy. Am. J. of Med., 1996, 100: 428–437. Hedvall, M.-B. and Paltschik, M., Perceived service quality in pharmacies: empirical results from Sweden. J. Soc. Adm. Pharm., 1991, 8: 7–14. Hepler, C,D, and Strand, L.M., Opportunities and responsibilites in pharmaceutical care. Am. J. Hosp. Pharm., 1990, 47: 533–543. Huttin, C., The distribution of pharmaceuticals – an international study. J. Soc. Adm. Pharm., 1989, 6: 184–196. Igun, U.A., Why we seek treatment here: retail pharmacy and clinical practice in Maiduguri, Nigeria. Soc. Sci. Med., 1987, 24: 689–695. Kafle, H.H., Gartoulla, R.P., Pradhan, Y.M.S., Shrestha, A.D., Karkee, S.B. and Quick, J.D., Drug retailer training: Experiences from Nepal. Soc. Sci. Med., 1992, 35: 1015–1025. Kang H-Y, Park, C.Y. and Joong, K.H.J., Public attitude and knowledge on a new health policy for pharmaceutical care in Korea. Health Policy, 2002, 62: 195–209. Kim, H.J., Chung, W. and Lee, S.G., Lessons from Korea’s pharmaceutical reform: the separation of medical institutions and pharmacies for outpatient care. Health Policy, 2004, 68: 267–275. Kirking, D.M., Thomas, J.W., Ascione, F.J., and Boyd, E.L., Detecting and preventing adverse drug interactions: The potential contribution of computers in pharmacies. Soc. Sci. Med., 1986, 22: 1–8. Kotwall, A., Innovation and safety of medical technology: a review of the literature on injection practices. Soc. Sci. Med., 2005, 60: 1133–1147. Lara, D., Abuabara, K., Grossman, D. and Diaz-Olavarrieta, C., Pharmacy provision of medial abortifacients in a Latin American city. Conception, 2006, 74: 394–309. Lilja, J., The nationalization of the Swedish Pharmacies. Soc. Sci. Med., 1987, 24:423–429. Lilja, J. and Larsson, S., ‘Mental mirrors’ of pharmacists: how do pharmacists perceive overthe-counter customers. Int. J. Pharm. Pract., 1993, 2: 136–141. Lilja, J., Larsson, S. and Hamilton, D., Drug Communication – How Cognitive Science Can Help the Health Professionals. Kuopio: Kuopio University, 1996. Lilja, J., Larsson, S,. Hamilton, D. and Issakainen, J., Empathy as a communication strategy in the pharmacy – a study based on cognitive and behavioural analysis. Int. J. Pharm. Pract., 2000, 8: 176–187. Loney, J.M., From counting and pouring to caring: the empathic development process of community pharmacists. Res. Social and Adm. Pharm., 2006, 2: 439–457.

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10 Drug consumption

Drug consumption can be looked at both from a narrow and from a broad perspective. If narrow, the main issue for the researcher is the volume of drug consumption, which differs between countries and can be explained by a number of factors, such as the per capita income in these countries. However, when taking a broader perspective, the concern is to investigate what lies behind the drug prescribing of physicians and the drug behaviour of the public. In the narrow sense of drug consumption, what is central is the ‘what’, i.e., statistics and quantitative variables. In the broader perspective, qualitative studies have also to be conducted, for the researcher is interested in the ‘why’, i.e., the reasons for the behaviour. In the first part of this chapter, consumption is described in quantitative terms, but is followed by two examples of qualitative studies are discussed.

10.1 Historical perspective During the first decades of the twentieth century, a number of studies on drug consumption were published, as a result of an increased public interest in drugs. Pharmacists wanted to make comparisons between countries, in order to build a case for new legislation which would guarantee them a more secure financial future. This was the background to the first published study in which the factors influencing the level of drug consumption in the Nordic countries were analyzed (Foss 1904). At the beginning of the twentieth century, the question of who should own pharmacies first started to be discussed and analyzed in Northern Europe (Lilja 1987). From an analytical standpoint, the question of ownership to a large extent became, a matter of collecting experiences from countries with different systems of ownership. As one important area of conflict between the interest groups was the profit levels of the pharmacy owners, detailed statistics about profit margins and the income from the sale of drugs were collected in Sweden from the 1920s onwards.

Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

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The first extensive statistical analysis of physicians’ prescribing habits was published in Sweden in 1927 (SOU: 98–103). The reason for this study was a suspicion that a number of physicians prescribed alcohol in large volumes as medicine. The temperance movement, which was very active at this time, wanted legislation to put an end to this practice. The results from the study indicated that a small number of physicians were responsible for most of the alcohol prescribed in the country. These findings led to a change in the law in Sweden. From this time on it became possible to revoke a doctor’s license to prescribe alcohol and narcotic drugs, although he could continue to practise as a physician. The changing role of European pharmacies from the 1920s to the 1950s created a demand for new kinds of statistics. Details of drug sales were used to indicate how the pharmaceutical industry’s ready-made drugs increased its share of the total market, taking sales away from pharmacy-produced drugs. When health insurance in European countries became compulsory and included most of the prescribed drugs, other types of data were needed to find out the amount of reimbursed drugs prescribed. In the UK, soon after the NHS was established in 1946, research was begun to identify the factors which explained differences in prescribing patterns between geographic districts. The aim was not only to create a decision base for administrative cost controls, but also to ensure that reimbursed drugs were used properly (Martin 1967). The Thalidomide catastrophe in 1961 created new data needs. To determine the risks of side effects, the number of reported side effects had to be compared with the amount of drugs sold. Therefore, it was, necessary to have accurate figures on drug sales. At the same time, market research organizations, such as IMS, collected and analyzed product sales data, for sale to interested parties. During the 1970s in many industrialized countries, computers began to be used by wholesalers and later by pharmacies. This made it possible to get data about sales quickly and cheaply. The Nordic European countries are examples of where this development started early. It may be that this willingness to innovate can be explained by national factors, e.g., computers were in general use in these countries. It also reflects the fact that it is easier to establish a computerized system within unitary organizations than in countries where the pharmacy system consists of a large number of independent organizations.

10.2 Measurement of drug consumption There has been an intense international professional debate as to how to measure the amount of drugs a nation consumes. The main reason for this is that many authors have wanted to compare countries’ drug consumption rates. Any reader of such studies has to be aware of the social and financial affiliations a researcher has, since the rates can be measured by different methods and a researcher might choose a method to suit his interests. By using one method of measurement as opposed to another, different conclusions can be reached. The official national definitions of ‘drugs’ vary reflecting different national traditions. However, there is now an international classification system available, the so-called ATC system. This system starts with a classification of the drugs according to the system in the body that the drug mainly affects. Because a drug can affect a number of bodily systems, it can be found in several places in the classification. Then, the drugs are classified according to the main indication (the main disease or symptom it is used to treat). At the third level, drugs for the same indication are classified according to chemical similarity.

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A list of eight different methods of measuring the amount of drugs consumed is given below. Each of these methods has advantages and disadvantages, and their suitability for different tasks varies.

Sales value in monetary terms The sales value indicates the resources spent on different forms of drug treatments and is, therefore, often used in financial reports of drug consumption. Another advantage of this criterion is that these numbers can be added to calculate the total figure for several different drugs, if so desired.

The weight of the drugs consumed The weight of different drug chemicals can be used in an analysis of the production, the export and the import figures of a country. This method has been applied in the international control of narcotics. However, to add the mass of different chemicals in kilograms is meaningless.

Number of packages sold The number of drug packages sold can be used in any managerial analysis of stores and in any analysis of the inventory function of pharmacies. This measure is also often used by drug companies to determine their competitive position and their marketing plans. The market share is defined as that part sold by the company of the total number of packages in the drug group sold. The number of packages is frequently used as a measure because it is assumed to reflect the sales events. In such an event, one drug is most often bought. By its various marketing activities, the goal of a company is to get more prescribers to choose its drug rather than those of other companies. This also applies in the marketing of non-prescription drugs to those members of the public who choose drugs for self-medication. However, to compare countries by the number of packages sold can lead to biased results because packaging formats often vary from country to country.

Number of prescriptions The number of prescriptions written is frequently used in an analysis of the work-stream and in an analysis of pharmacy efficiency (Chapter 9).

Number of dosages (or the number of tablets, litres of infusion solutions etc.) Some decades ago the number of tablets was often used as a measurement of a country’s drug consumption. Today, it is more often used when deciding how the total production plan for a firm can be sub-divided into a number of proposals for each factory, the work of

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each factory contributing to the fulfilment of the larger plan. In such a situation, the total drug production plan frequently has to be sub-contracted to individual factories according to their production capacity, as measured by number of tablets, litres of infusions and so on.

Defined daily dose (DDD) This method was developed during the 1970s as a measure that indicated the amount of drugs consumed by the population. For each drug, a main active ingredient and a main medical condition are chosen. For the medical condition, a normal daily dose is decided upon, based on the recommendations in handbooks or from prescription studies. Using this procedure each drug can then be associated with a daily dose. By taking the sales figures for the different packages of each drug, the total consumption in DDD (defined daily dosages) can be calculated. DDD per 1000 inhabitants per year is the most frequently used measurement of national comparison. One advantage of this measure of consumption is that the DDDs for a number of drugs can be calculated by adding the DDDs for each drug in the group. However, the measure has been criticized because the drugs are not used in the same way in all countries. Thus, the DDD norm of a drug may reflect the prescription habits in a few countries, but the sample of countries may not be representative and the results may thus be biased. This measure has also been criticized for the way it has been used in practice. The DDD numbers only describe the statistical ‘mean’ of the users’ drug consumption. In reality, a small part of the population consumes most of the total drugs used, whereas another part of the population does not consume any drugs. The DDDs for a country are mostly based on the statistics produced by the wholesalers in the country.

Prescribed daily dosage (PDD) Collection of the PDDs requires a special study where the prescription data is collected. The number of daily dosages can be calculated from the prescriptions by dividing the amount prescribed by the daily dosage the patient is supposed to take. The interpretation of PDD and DDD figures is different. PDD statistics show – how many days a group of patients supposed to use a specific drug and on the other hand, DDDs, indicate the amount of chemicals patients in a country have bought.

The percentage of the population using a drug All of the measures described up to now – except the PDDs – can be calculated from sales figures. Sales data indicate neither the part of the population that consumes a drug nor the users’ pattern of consumption. Interviews must be conducted to get this type of information and can result in valuable data about the personal characteristics and attitudes of the intended information receivers, data which is of great interest when planning an

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information campaign. This kind of data cannot be calculated from sales figures. It seems that many investigators stop their search for information after getting some easily available sales figures, but these statistics should only provide the starting point for more intensive analysis.

10.3 Factors which determine the volume of a drug consumed in a country Many researchers have found significant geographic differences in the volume of drug consumption have been found by many researchers. However, knowledge of the factors which determine drug consumption in quantitative terms is much more limited. One reason is that factors which are most important vary for the drug groups and often vary depending on the country and the local sub-culture within the country. The following listing indicates, in the form of a general model. However, the main factors which determine the amounts of a drug consumed in a country. It has to be remembered that the relative importance of each of these factors depends on the type of drug and the specific factors operating:

r Living conditions r Nutrition r Working conditions r Climate r Housing conditions r Hygiene factors r Health risks r Population factors r Genetic factors r Age distribution r General health status r Sex distribution r Income and its distribution r Government drug control

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r The distribution system r The number of pharmacies and other outlets which offer a pharmaceutical service r The degree to which drug reimbursement pays for the prescribed drugs r Sickness detection factors r The culture r The number of persons identifying themselves as having the condition r The number of persons contacting professional health care r Prescription factors r The number of prescribers r The social networks of prescribers and their influence r The means and volume of commercial information r The means and volume of non-commercial information r The rules determining the part of the costs to be paid by the patient r The attitudes of the prescribers with regard to the condition and its treatment r Self-medication factors r The social networks and their role in self-medication r The means and volume of commercial information r The means and volume of non-commercial information r Price and availability of non-prescription drugs r The attitudes and beliefs found in the population with regard to non-prescription drugs. To summarize, a number of underlying living conditions and population factors can lead to health problems. However, there is an indirect relationship between these factors and the amount of drugs consumed for a condition during any time period analyzed. This relationship varies from country to country and according to the local culture. Patients in one place may not define a condition as a disease and may not go to physicians or use self-medication in the way one might expect in other countries (Chapter 15). Drug consumption is also dependent on the organizational factors operating in drug control, drug distribution and amongst the

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health professionals of a country. The attitudes of prescribers will influence whether or not a drug is prescribed for a condition and, if so, which drugs are prescribed (Chapter 14). For drugs available without prescription, the self-medication behaviour of the layman will, in the same way, determine which drugs are consumed and the amounts. In some countries, even minor illnesses can result in drugs being taken whilst in other lands drugs will generally be avoided (Chapter 15). The culture and the financial situation operating in the country will affect the decision-making processes before a drug is consumed. The reimbursement and co-payment rules which detail whether the whole drug costs or a part of the costs will be paid by health insurance can significantly influence on the amount of drugs consumed (Chapter 4).

10.4 Factors found to be related to the volume of drug consumption There are a number of factors which have been found to be associated with the amount of drug use and the most important of these are discussed below. However, it should be remembered that the importance of the factors varies between drug groups. Therefore, it is recommended that in future studies, the drug groups (or the diagnoses) should be analyzed separately from one other. Each drug group is influenced by a somewhat different set of factors and the influence of a specific factor can vary, depending on the drug group. The health care organization and local culture can also affect which factor is most important.

Time Often drug consumption is analyzed by a time-series illustrating the drug sales in a country. However, it is very difficult, to identify those factors which explain changes in drug consumption from a specific period in time. Figures indicating sales over a period of time can be a starting point for further investigation using data from other sources, e.g., medical records, interviews with prescribers designed to test hypotheses about the processes behind the changes. In general, there has been an increase in drug use over time. The following factors might explain this trend:

r More effective drugs have been introduced and an increase in sales has been noted as they become popular when they cure medical conditions.

r The importance of health and drug treatments has increased over time because fewer people are prepared to accept going untreated for symptoms or medical conditions.

r Drug use has traditionally been influenced by a family’s financial situation. However, in

many countries, insurance systems or public funds now pay a significant part of the drug costs, making the family income less important in affecting drug use. Of course, this is a factor where we find large variations between countries.

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The level of industrialization and income In many developing countries, the mean drug consumption of industrially produced drugs can be as low as US$1 per capita per year. In rich industrial countries, the corresponding figure is over US$100 per capita per year. Other countries fall between these extremes. In general, there is a strong association between the degree of industrialization and annual per capita incomes. This makes it difficult to say if it is the degree of industrialization or the per capita income which explains this variation in drug consumption. However, when we discuss and analyze drug consumption here, we mean the consumption of drugs produced by the pharmaceutical industry. This means that the consumption of all drugs (including herbal drugs and home remedies) is not as low in developing countries as indicated by the figures for the sale of industrially produced drugs. In poor countries, it is the sales of drugs for infectious conditions which are the most frequent. In wealthier countries, it is drugs for heart and the circulatory system, together with psychotropic drugs, which are the most often used, reflecting the incidence of disease in general. However, there are great national variations between industrial countries which seem to indicate differences in culture and traditions. For example, it has been suggested that the patterns of drug use in a country can be associated with the population’s concern about specific types of medical problems. The French are said to be obsessed with their livers, the British with bronchitis. In poor countries which have neither national health insurance nor a public drug distribution scheme, we find considerable variations in the consumption of medicines depending on the family income. In the poor income groups, there is a much lower consumption of medicines than in the rich families (e.g., Falkingham 2004). In those countries, many people have to take out personal loans or sell household assets to afford health care. Still, for many people, lack of money is a barrier in paying for modern drugs (Falkingham 2004).

Cultural and organizational factors The relationship between the numbers of prescription and non-prescription drugs has been discussed by many authors. Increased access to health care facilities can be expected to lead to more prescriptions being written. However, the public can buy a non-prescription drug from a pharmacy or a drug store if access to other forms of medical care is difficult or costly. In countries with no insurance system or no public drug distribution scheme, most drugs bought in private pharmacies are non-prescription drugs, e.g., in Latin America. Often there are few drugs which require a doctor’s prescription. Peru can be seen as an example, where, in effect, only psychotropics require a doctor’s prescription. For a patient, there is no need to visit a physician because they can buy the drug they need without a prescription and they do not get the drug cheaper if they visit a doctor. So a visit to a physician, from the patient’s perspective, can be seen as a waste of time and money (Chapter 15). The situation in developing countries with a public drug distribution sector is different. Patients who visit a public health post or health centre can get a drug without charge or at a low cost. However, as already mentioned (Chapter 9), it is far from certain that the drugs needed will be available in the public sector when the patient visits a health post or a health centre.

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In countries with a health insurance system, most drugs, in monetary value, are prescription drugs. This is encouraged because the patient with a prescription usually gets the drug at a low price (the health insurance system pays most of the cost). In Europe, most of the drugs bought, in monetary terms, are prescription drugs. This is because there is no reimbursement for self-medication drugs, even if they are prescribed by a physician. This rule was introduced by the insurance system to achieve lost savings (see 4.6). Medicines for serious illnesses require a prescription from a doctor, irrespective of the reimbursement system.

10.5 Factors which influence drug consumption at the individual level A number of factors are related to individual drug consumption. It is only possible to mention the most important ones below.

Skewed distribution Drug consumption rates vary considerably within any population. A small group of consumers can be largely responsible for the total consumption of a specific drug, whereas the majority may never use the drug at all in the period surveyed. This is also the case when the figures for the consumption of a number of drugs are added together. A large part of the population never takes an industrially produced drug during a year, but some people have more than ten prescriptions in that same period.

Morbidity factors Morbidity factors influence the level of drug consumption. Those who feel ill take more drugs than those who feel well. However, people who do not think of themselves as being ill take drugs such as analgesics, skin ointments, laxatives, cough medicines or psychotropics. Also, among those who might be diagnosed as being depressed or among those who see themselves as depressed, only a minority take anti-depressives (Chapter 15). So the patient’s and the prescriber’s attitudes and beliefs play a part in whether or not a drug is taken.

Age In certain drug groups, consumption increases with age. This is because many medical conditions, e.g., heart disease, circulatory problems or cancer, are most prevalent in the middle-aged and elderly. Looking at drug groups separately, each has its own age–drug use relationship. However, it has to be noted that age (and sex) are not just biological variables. To large extent ‘age’ influences drug use by the ‘discourses’ associated with age because thoughts and attitudes change with age. This means that a researcher has to find the mechanisms of how ‘age’ influences drug consumption.

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Gender Most drug consumption studies indicate that women take more drugs than men. Of course, the importance of the sex factor varies depending on the drug group analyzed. For example, psychotropic drugs are used more by middle-aged women than men of the same age (Holme Hansen 1989).

Civil status In general, married people take more prescribed drugs than unmarried ones. Divorced people fall somewhere in between. These differences may reflect the more tense social interactions of married couples in comparison with the unmarried. We can expect married people to spot symptoms earlier than an unmarried person because a partner can be more sensitive to change (Chapter 15). The spouse may also encourage health care visits once a problem has been identified. Such visits can lead to prescriptions or to the purchase of non-prescription items.

Income and level of education The relationship between individual drug consumption and income varies between countries. Families with low incomes in the UK use more drugs than those with higher incomes (Dunnell and Cartwright 1972: 52). However, in other countries, such as Canada, a positive association has been found between the consumption of prescribed nonpsychotropics and the education level, i.e., those with a high income take more of these drugs than those with a low income (Sarma, Basu and Gupta 2007). These national differences can be affected by financial and cultural factors. The health insurance system can encourage or discourage high income groups depending on how it is organized. The values held by poorer people and their lifestyle can also be expected to vary between countries. The relationship between drug consumption and income has also been found to vary depending on the specific drug analyzed. For example, more psychotropic drugs are taken by those with low incomes than those with high incomes (Virtanen 1977: 40–42) and by women who work at home full-time rather than those who have a job outside the home (Harding 1986: 56). Vitamins, on the other hand, tend to be used by well-educated people with relatively good incomes (Klaukka, Riska and Kimmel 1985).

Role of Media Alarming medical news and warnings to the general public can influence medication prescribing and patient choice significantly, either positively or negatively. For example, reports on the safety of anorectic agents and reports regarding the safety of calcium channel antagonist groups influenced prescribing patterns (Williams, Kelly and Feely 2000).

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Other factors Other factors have been found to be related to the individual’s level of drug consumption. For example, people with a nervous disposition seem to consume more drugs than the ‘non-nervous’ (Dunnell and Cartwright 1972: 60). Where one lives may also influence drug consumption. For example, the level of noise in the home has been related to a person’s drug consumption. In a study of drug consumption in an area near an airport, it was found that those who lived close to the airport took more psychotropic drugs than those living at a distance. In Roman Catholic countries, e.g., Peru, where abortion is forbidden, drugs which have not been tested for efficacy and safety as contraceptives are, nevertheless, used as supposed guards against pregnancy (Bonnema and Dalebout 1992). However, in lands where abortion is permitted, e.g., most European countries, emergency contraception pills can be bought even without a prescription. These can be taken after intercourse to prevent pregnancy (Aneblom 2003, Larsson 2004).

10.6 Qualitative studies of drug consumption We need both quantitative and qualitative studies to understand drug consumption. However, most published studies have been quantitative in nature. To give an example of a qualitative study, the results of a qualitative study involving approximately 50 elderly people in Sweden participants. Will be described were recruited from organizations for the elderly in Uppsala, Sweden (Asplund et al. 1983). Those who used sleeping pills or sedatives were invited to participate in the study. They were divided into groups of about five to eight. Each group was offered coffee and snacks and was given a number of themes to discuss, i.e., they were focus groups. The discussion can be summarized by the following points:

r The elderly defined sleeping pills and sedatives differently from the health professionals.

The elderly regarded a pill taken at the evening to facilitate sleep as a sleeping pill independent of the chemical ingredient. A sedative drug was regarded as a drug taken during the day to alleviate worries, independent of the chemical ingredients.

r Most of the elderly saw no alternative to a sleeping pill. Many of them looked at TV in the

evening. They seemed to be much more involved in their TV programmes than younger viewers who saw TV as a way of relaxing. However, the elderly could get quite upset after seeing a programme and said they had to take a pill to fall asleep.

r The elderly had no difficulties in getting sleeping pills prescribed by their doctors. r Most of the elderly in the study had started taking sleeping pills after some critical event, e.g., the death of a near relative.

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r The drug dosage behaviour varied in the group, but was only slightly dependent on what

their doctor had said to them. Some took a pill every night. Others had developed more complex dosage schemes based on their experiences and their expectations. For example, one of the participants took sleeping pills two nights followed by three nights without a pill. The explanation for this strategy was that it was said to reduce the risk of drug dependency. Others took a drug in the evening depending on what they were supposed to be doing the following day. For example if the grandchildren were coming they might take a sleeping pill to ensure they were well rested in order to enjoy fully the visit.

r The participants had no clear definition of a ‘drug abuser’. They did not regard themselves as drug abusers, even if they had taken sleeping pills every night for the last five years. They regarded drug abusers as young people who took illegal drugs.

R In a similar study, disulfiram (Antabus ) users were investigated (Lilja 1988). Antabus is used in the treatment of alcohol problems. It is supposed to be taken each morning and prevents the patient from taking alcohol that day. This is because Antabus in combination with alcohol leads to flushes, difficulties in breathing, a higher pulse rate, nausea etc. This study was based on individual interviews with people who had used Antabus for their alcohol problems. The main result was that their own experiences, not the information from others, determined how effective they regarded Antabus to be. The group could be divided into two, depending on their experiences and the conclusions they drew from these experiences:

1. Those who had taken Antabus and alcohol and had had a strong reaction. In general, they regarded this drug treatment to be effective. 2. Those who had tried to combine Antabus and alcohol, but had not suffered a strong reaction tended to believe that this drug treatment was ineffective. The lack of reaction in the second group can be explained scientifically by too low a dosage of the drug. However, nobody discussed the effects in terms of the dosage level. They attributed the effects to the drug as such – the drug could be effective or not. Their experiences determined whether the drug was seen as effective. The two surveys described here indicate that qualitative studies can give lot of new information which quantitative studies cannot provide. For example, they can provide a type of knowledge which can improve communication between health professionals and patients.

10.7 Summary Historically, studies of drug consumption were first published at the beginning of the twentieth century. The reasons for collecting such data have varied over the years and so has the type of data collected. Since the introduction of computers, a large amount of data about consumption has been generated at a low cost. A researcher can choose eight different ways of measuring the volume of drug consumption: sales value in monetary terms,

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weight of drugs consumed, number of packages sold, number of prescriptions, number of dosages, defined daily dosages, prescribed daily dosages and the percentage of the population using the drug. The choice of method is determined by the type of problem under study. Significant geographic differences in the level of drug consumption have been found by different researchers. Many factors influence the level of drug consumption in a population. Their relative importance depends on the type of drug, the medical condition and the country under investigation. However, the factors can be classified under a number of headings: living conditions, population factors, drug control, drug distribution, sickness detection factors, prescription factors and self-medication factors. Several factors have been found to be related to the level of drug consumption in a population: time; the level of industrialization and the per capita income; cultural and organizational factors; morbidity factors; age and sex distribution; civil status; and income and level of education. Qualitative studies of drug consumption to determine the beliefs and expectations of drug consumers can produce findings not detectable by quantitative studies. Such studies can provide the basis of information to improve communication between health professionals and their patients.

References Aneblom, G., The Emergency Contraceptive Pill – A Second Chance. Uppsala: Uppsala University, 2003. Asplund, T. et al. Pensionarers bruk av psykofarmaka (English: The use of psychotropics among retired people). Sv. Farm. Tidskr., 1983, 87 (n. 8): 24–22. Bonnema, J. and Dalebout, J.A., The abuse of high dose estrogen/progestin combination products in delay of menstruation: the assumptions and practices of doctors, midwives and pharmacists in a Peruvian city. Soc. Sci. Med., 1992, 34: 281–289. Dunnell, K. and Cartwright, A., Medicine Takers, Prescribers and Hoarders. London: The Institute of Social Studies in Medical Care, 1972. Falkingham, J., Poverty, out of-pocket payments and access to health care: evidence from Tajikistan. Soc. Sci. Med., 2004, 58: 247–258. Foss, T., Nogle apotekforhold i Norge, Sverige og Danmark, sammanlignat med hverandre (English: Some pharmaceutical factors in Norway, Sweden and Denmark – a comparison). Kristiania, 1904. Harding, I., Mood-modifiers and elderly women in Canada: the medicalization of poverty. In McDonnell, K. (ed.), Adverse Effects, Women and the Pharmaceutical Industry. Penang: International Organization of Consumer Unions, 1986: 51–86. Holme Hansen, E., How widely do women and men differ in their use of psychotropic drugs? J. Soc. Adm. Pharm., 1989, 6: 165–183. Klaukka, T., Riska, E. and Kimmel, U.-M., Use of vitamin supplements in Finland. Eur. J. Clin. Pharm., 1985, 29: 355–361. Larsson, G., The Adoption of New Contraceptive Method – Surveys and Interventions Regarding Emergency Contraception. Uppsala: Uppsala University, 2004. Lilja, J., The nationalisation of the Swedish pharmacies. Soc. Sci. Med., 1987, 24: 423–429. Lilja, J., Users of disulfiram (Antabus) in Uppsala, Sweden. Soc. Pharmacol., 1988, 2: 205–228. Martin, I.P., Social Aspects of Prescribing. London: Heineman, 1967.

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Sarma, S., Basu, K. and Gupta, A., The influence of prescription drug insurance on psychotropic and non-psychotropic drug utilization in Canada. Soc. Sci. Med., 2007, 65: 2553–2565. SOU, Missbruk av alkoholhaltiga varor m.m. (English: Misuse of products with alcohol content etc.). Stockholm: Statens Offentlig Utredningar, 1927. Virtanen, P., Vardkonsumtion och valfard, Part 2. (English: Consumption of health care and welfare). Stockholm: Institutet f¨or Social Forskning, 1977. Williams, D., Kelly, A. and Feely, J., Influence of media and regulatory changes on prescribing of Cotrimoxazole and Trimethoprim in Ireland. Pharmacoepidemiol Drug Saf., 2000, 9: 313–317.

11 Marketing of drugs

This chapter consists of six parts, beginning with the historical background of drug marketing followed by sections discussing the context for drug marketing, the marketing goals of drug companies, the factors influencing a company’s level of spending on commercial information and the relative effects of different commercial media. The sixth part deals with commercial media directed at the general public followed by a national perspective on commercial information is given.

11.1 Historical background The term ‘industrialization process’ refers to the change from small-scale manual production to large-scale industrial production. In most publications, the industrialization process has been described almost solely with reference to Europe. This is why we know much more about developments there than the corresponding processes elsewhere in the world. Readers are recommended to search for data which describe the industrialization process in their own country. The industrialization of the drug sector in Europe can be divided into five stages:

The transfer of production of raw drug materials from pharmacies to the drug industry (in Europe from the mid-nineteenth century to the 1880s) Until the middle of the nineteenth century, the entire production processes for most drugs were on a small-scale manual basis inside pharmacies. However, about this time German drug firms appeared and started producing and marketing internationally raw drug materials on a large scale. One reason for this transfer of production was that new chemicals, like the

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alkaloids, could not be efficiently purified on a small scale. By the end of the nineteenth century, pharmacists had become dependent on the raw materials offered by the drug industry (Chapter 2). Pharmacists now produced ready-made drugs from raw materials and often sold them directly to patients without prescriptions, under chemical or non-proprietary names. However, in most European countries, drugs were available in the market place from travelling salesmen with no pharmaceutical background. The medical and pharmacy professions attacked this practice, but could not stop it effectively by legal means (Chapter 2).

The selling of quasi-drug products outside the pharmacy system (in Europe from about 1880 to 1920) During the nineteenth century, advertisements were placed by industrial companies in newly established and mass-produced newspapers for ready-made drugs available directly to the general public (Apple 1986 and Chapter 2). These entrepreneurs were rarely pharmacists. In most European countries, the drug laws were ineffective in preventing this new type of marketing outside the pharmacy system. This resulted in conflict between the entrepreneurs and the pharmacists. However, these disputes led to new drug laws at the beginning of the twentieth century, which clarified and indicated which goods were restricted to pharmacyonly sales and which could be sold in general shops.

The transfer of ready-made drug production from pharmacies to the drug industry (in Europe from about 1920 to 1950) During the period between the two World Wars, ready-made drug production in Europe was transferred from individual pharmacies to the drug industry, which started to market its new drug preparations to physicians under trade names. This development was both unexpected and undesirable from the pharmacists’ point of view. They tried to prevent it by supporting drug laws regulating the importation and marketing of ready-made drugs. In some countries, like Sweden, pharmacy-owned organizations were set up to control industrially produced drugs. The pharmacists hoped that such controls would give them a competitive advantage. These pharmacy-owned organizations checked the chemical contents of the industrially produced drugs and also ensured that advertisements did not overstate the medical value of the drugs being sold this way. Later, these organizations were often taken over by national governments (Lilja 1985). In the Nordic countries and the Netherlands, pharmacy owners also established units for the development and standardization of ‘pharmacy drug preparations’ so that part of the pharmacy drug production became industrialized within the pharmacies. However, the reforms could not prevent the trend towards most drug production being taken over by drug firms. This was because the drug firms had much more efficient production and marketing methods and could offer new drugs of significant medical value (Lilja 1985 and Chapter 2).

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The introduction of new marketing activities (in Europe from about 1950 to 1980) Many new and medically important drugs were introduced during the innovation period (1940–1965, see Chapter 2). A company’s products were patented and sold worldwide under trade names. Almost all the new drug chemicals introduced during this period were prescription-only medications. Drug companies relied on their sales representatives calling upon physicians as their major marketing technique. The physicians were contacted individually by each drug firm to arrange a visit from a company representative. From the firm’s point of view, this was found to be a much more effective strategy than relying solely on advertisements. In many countries, a new professional group of sales representatives appeared over the next two or three decades. As mentioned in Chapter 2, the Thalidomide catastrophe hit the drugs sector in 1961. The general public and the health professionals become much more concerned about the risk of side effects. New laws were introduced requiring clinical trials to be undertaken, and the benefits and risks were evaluated before a new drug was marketed.

Marketing of drugs from the 1980s Today, drug firms plan their marketing activities much more carefully than during the innovation period. By the time a drug is in the development stage, drug companies have discussed how it should be marketed (Corstjens 1991: 1–9). Through market research, drug companies find the cognitive and social processes by which prescribers and the general public select their drugs for the medical condition for which the potential new medication is intended. Thus, marketing activities can become more effective. For example, if the health professionals are concerned about the side effects, the marketing focus is on the decreased risks of side effects associated with the new ‘innovative’ drug. Also, the roles of the drug company representatives have changed from being general salesmen to specialists, in order that they have a much better knowledge base when meeting the physicians. The marketing department of the drug companies is sub-divided by drug group because each drug group has to be marketed differently. Marketing has became associated with clinical trials. This is because it was found that the experts who had been responsible for the clinical trials later became opinion leaders and could ‘informally’ market the new drug they had tested, if the results were encouraging (Chapter 2)

11.2 The contextual factors which affect the diffusion of a drug In Chapter 1 we discussed what is meant by a ‘discourse’, i.e., the mental maps people have regarding a phenomenon. Sometimes, a new drug will be strongly supported by a positive and unanimous opinion among medical experts and health professionals. In such a case it is likely to be made available to the public very quickly after approval (see Rogers and

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Shoemaker 1971, for a general discussion about the factors which determine the diffusion of an innovation). When many drugs first appear on the market there can be differing opinions regarding their value (see the discussions about the majority vs. the minority social influence process in Lilja, Larsson and Hamilton, 1966: 62–65). Examples are psychotropics, e.g., benzodiazepines, anti-depressants. There are experts, health professionals and patients who all regard these as effective drugs with minor side effects. But there are many other people in these groups who regard benzodiazepines and anti-depressants as dependency forming, who associate them with side effects and who believe them less effective than psychotherapy. In such a context we might expect the prescription market to be heterogeneous. Some will be heavy prescribers, but others will have a very restricted approach to psychotropic medications (Breggin 1993, Lilja, Larsson and Hamilton 1996: 241–256, Valenstein 1998, Lilja et al. 2002). There are few empirical studies which have analyzed how contextual factors influence drug diffusion processes (Valenstein, 1998, is one of few such publications).

11.3 The marketing goals of drug companies Private drug companies are assumed to be interested in maximizing their long-term profits. Companies owned by a government, but operating in the drug sector side-by-side with private firms, are often forced to behave in a similar way to those in the private sector. However, to say that drug companies simply aim to maximize profits is a generalization. Both the drug companies and outside observers need more specific goals than this, because an almost endless number of acts can be consistent with ‘long-term profit maximization’. This is the reason why a drug firm often has the following three marketing aims (Corstjens 1991): 1. To be the first to introduce a new generation of drugs. A new drug generation can be defined as a set of drugs offering a clear medical advantage over those already available on the market. Drugs of the same generation are supposed to offer the same medical advantages whilst suiting some patients better than other alternatives. However, analyzed in more detail some years after their introduction, the drugs in a specific generation can vary considerably in their medical effects. For a drug company with a research-based strategy, it is a great advantage to be the first to introduce a new generation of drugs, because physicians and the general public seldom change from one drug to another within the same generation. This means that most physicians will continue to prescribe the drug first launched even if similar, and perhaps cheaper, drugs are marketed later on. Likewise, a patient will continue to buy a non-prescription drug over a long period if it seems to give good therapeutic results. This is the reason why drug companies spend significant resources to try to ensure that they are the first in the market with a new type of drug (Chapter 5). A drug company finding that its new drug will not be the first of a new generation may market the new drug for slightly different medical conditions than originally intended. From a company’s point of view, this can result in a commercial success. There have, however, been some notable examples where it has been better to be second in a class (H2 blockers, beta-blockers).

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The situation is quite different for the generic drug companies, which sell drugs with the same ingredients as existing drugs. They are forced to offer a low price so that their drug is accepted on the market. Here, the price might be a more important variable than being the first on the market. However, the first drug company which markets a generic product just after the patent period has ended has a considerable commercial advantage compared with generics entering the market later. The reason for this is that prescribers and OTC users will remember the first cheap drug entering the market. A considerable number of prescribers and OTC consumers will become loyal to this first generic drug. This is especially so if the generic drug is a branded generic drug. However, the advantage of being the first generic is less important in countries with a drug substitution system, in comparison to countries which have no such system. 2. To have high annual sales. It is a great advantage for a drug company to achieve high annual sales. This is because the direct production costs are low in relation to the price of a new patented drug (Chapter 7). Under such circumstances a small increase in sales can generate significant company profits. 3. To gain a considerable market share. A significant position in terms of a share in the drug market can result in a good position for the marketing of future drug generations. Physicians satisfied with the brands they have can be expected to prescribe new drugs sold by the same company, rather than new drugs sold by other companies (Slatter 1977: 93). It is important to remember that a drug company, in general, gets the main share of its revenues from only a few of the drugs it markets (Slatter 1977: l04, Comanor 1986) and this only for the limited term of the patent.

11.4 Factors determining what a drug company spends on the marketing of a new drug A number of factors influence the resources a drug company spends on marketing a new drug. Seven of the most important factors follows: 1. The competitive situation 2. The age of the drug 3. The drug class 4. The expected effects of more commercial information 5. Rules of thumb 6. The size of the company 7. The image of the company. Each of these factors is discussed below:

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The competitive situation A new drug can be classified into one of four groups according to its relative advantages and the similarity of its effects to those of drugs already on the market: 1. A competitive situation where it is easy to compare the effects of a new drug with those of existing drugs and to show that the new drug offers a considerable advantage. If the new drug has a significant therapeutic advantage, i.e., it has greater medical benefits and fewer side effects than existing drugs, it can be marketed and distributed widely on that basis, without much commercial information. 2. A competitive situation where the new drug offers a significant medical advantage, but the effects are difficult to compare with drugs already on the market. This category of new drugs may at first acquire only a small share of the market because decision-makers are uncertain of its advantages. Accordingly, a company may spend a significant sum on commercial information to inform prescribers and the general public about the benefits of its drug. 3. A competitive situation where the effects are easy to compare with existing drugs, but the new drug does not offer any significant advantages. This class of drugs also needs to be supported by large amounts of commercial information to become accepted by prescribers and users. The money spent on commercial information may be essential from a company point of view, but less so from the public’s perspective. For most people it is better to get new drugs, which offer significant medical advantages instead of new ‘me-too’ medicines with only minor advantages backed up by a lot of commercial information. 4. The medical effects are difficult to compare with existing drugs and the new drug does not offer any significant advantages. Sometimes companies market drugs which are difficult to compare with existing drugs, but which seem to offer only minor advantages. Marketing campaigns for such drugs should be regarded as ‘mistakes’ from the company’s point of view, because most of these drugs will not gain wide acceptance, despite a large budget going on commercial information.

The age of the drug In general, the majority of money allocated to commercial information is spent during the first year of a drug’s appearance on the market. However, although a large initial promotion campaign can be regarded as a necessary requirement, it is not a guarantee of success (Slatter 1977: 82–84, 107). Figure 11.1 describes the life cycle of a drug. Not all drugs go through the five stages indicated. For example, the production of unprofitable drugs is normally stopped at an early stage by the company. The shape of this curve is affected by the nature of a new medicine. If it is a new invention, the curve will usually rise more steeply and fall dramatically when the limited period of protection ends.

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Sales

Introduction

Growth

Maturity

Saturation

Decline

Time

Figure 11.1 The life cycle of a drug preparation

The introduction stage can be one of slow or rapid sales growth, depending on the perceived qualities of the drug, the attitudes of prescribers and the general public, the competitive situation and the information back-up. Also, the sales increase during the growth stage will vary depending on the marketing situation. Commercially successful drugs usually achieve their maximum market share two to six years after their introduction (Slatter 1977: 67). It is during the maturity stage that the top sales occur, followed by a slow decline in the saturation stage. A drug company which recognizes that one of its drugs has moved into the saturation stage may decide to reintroduce the drug by organizing a marketing campaign to support it. Such a decision is normally taken if the drug still offers a significant therapeutic advantage over its competitors on the market. An increase in commercial information can lead to a corresponding growth in sales (Cox 1967). The next time sales drop, the company may introduce another sales campaign resulting in a wave-like sales curve. However, a drug company might instead introduce an improved modification of the existing drug to get higher sales. There are a great number of factors other than company marketing which affect the diffusion of a new drug. The discourses regarding how a medical condition is supposed to be treated influence the acceptance rate. As mentioned in Chapter 1, the discourse regarding a specific condition can differ between medical experts and ordinary GPs. In such cases, professional information can be used to convince GPs about ‘medical evidence’ (Greenhalgh et al. 2005 and prescription studies from a normative perspective in Chapter 14). Other examples of factors which can influence sales are the price of the product, the price of other products, e.g., the price of tobacco vis-a-vis the sales of nicotine replacement therapies, seasonal variations. (Tauras, Chaloupka and Emery 2005).

The drug class Empirical studies indicate that the percentage of sales value spent on commercial information varies between drug groups in a country. For example, in the UK in the 1960s, 16 per cent of the sales value of skin preparations was allocated to commercial information,

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while only five per cent of the sales value of circulatory drugs was spent in this way (OHE 1967: 65). A number of factors have been suggested to explain these findings:

r The age of the preparations. To some extent, when the drug first appeared on the market can affect what is spent on commercial information. We can expect that more will be spent on commercial information on a drug group with many new drugs than on a drug group consisting of only old drugs (Slatter 1977: 88).

r The drug type. During the last few years, a number of prescription-only drugs have been declared as over-the-counter medications in Europe, resulting in an increase in spending on commercial information. A company must spend more money if the target audience is the general public rather than physicians (Slatter 1977: 133–145).

r The information needs of the decision-makers. Physicians require more information about

some drug classes than others (Hornbrook 1978). The manufacturers respond to this by allocating more resources to those classes where greater information is needed by the physicians.

r The stability of the market in terms of total sales. It has been suggested that drug companies only spend a small percentage on commercial information in rapidly expanding drug markets. This is because most drug companies in such situations tend to underestimate the increases in sales (Hornbrook 1978).

The expected effects of more commercial information Figure 11.2 indicates the supposed relationship between sales value and company spending on commercial information. Small amounts of commercial information can be ineffective because the messages will not be recognized by the intended audience and will not lead to informal discussions about the drug being marketed. However, more commercial information can result in the right level of awareness in the target population which produces a

Sales

Marketing resources

Figure 11.2 The drug advertising response function (MacKowiak 1985)

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small increase in spending which, in turn, leads to improved sales. When vast amounts of commercial information are provided, a saturation point is probably reached at which most of the potential users are already using the drug (MacKowiak 1985) The curve in Figure 11.2 indicates the effect of commercial information on sales, assuming that all other factors remain constant. The exact form and place of the curve can vary depending on the environmental and competitive circumstances. It can be very difficult for a company to determine the precise shape of the curve because the competitive situation can change frequently. If a company spends more resources on commercial information, a competitor can decide to make a counter-move and also increase its spending in that area. This means that the first company has to search for a new curve to optimize its spending on commercial information (Steele 1964).

Rules of thumb Many drug companies apply rules of thumb when deciding about budgets for commercial information. For example, a drug company can decide to spend the same percentage on commercial information as its main competitors. Alternatively, the drug company may decide to spend x per cent on commercial information regardless of what other competitors do. Some drug companies use media planning systems to determine their marketing budgets. For example, a company may decide that 70 per cent of the general practitioners in a country should be informed about the existence of a new drug. The company will then decide on the media to be used in order to achieve its stated aim and the resources that will be required.

The size of the drug company Small drug companies spend more on commercial information than bigger companies, in terms of a percentage of sales. This is because a small company spends more on commercial information to compensate for economies of scale in marketing. Such economies are to be found in the personnel in the sales organizations. In each country, there is a minimum number of staff for sales organizations to be effective. For example, in a small country, only five or six sales representatives are required to establish good personal relations between a company and the opinion leaders in medicine and pharmacy.

The company image Well-known drug companies can achieve wide acceptance of their drugs without the provision of the same levels of commercial information as less well-known firms. Company images are influenced by a great number of factors. For example, a research-based drug company, renowned for many innovative drugs, is usually ideally placed to introduce new drugs. However, some drug companies have been associated with scandals or accidents which may lead some people to avoid their products. One well-known example is the boycott of Ciba-Geigy products as a result of the company’s decision to continue to sell Enterovioform after its side effects had been widely recognized (the SMON catastrophe, Hansson 1977).

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Based on this experience, most international drug companies are careful to stop the international marketing of a drug as soon as the incidence of a serious adverse effect becomes unacceptable.

Historical factors, national culture and economy In a number of studies, drug advertisements have been analyzed over time. For example, in the US at the beginning of the twentieth century, advertisements tended to centre around medical themes popular at the time – weak nerves, weak hearts, the use of phosphate compounds, using laxatives to get rid of body toxins etc. (Crellin 2004: 51–93). Based on such studies, we can conclude that content of the commercial information reflects the popular themes in the specific culture and at the specific time. As mentioned in Chapter 9, there is now a relative oversupply of pharmacists in Latin America. This makes it cheap for drug companies to hire pharmacists as company representatives. So the relative manpower costs influence how much a company spends on personal commercial information. It could also be argued that the oversupply of pharmacists and the low wages tend to lead to a situation in which a high percentage of drug costs are spent on commercial activities. In several countries, e.g., the UK, there is a tradition of the government controlling the drug costs allocated to commercial activities when it negotiates with drug companies about the prices of NHS drugs. Even more important is that professional groups in Europe and Northern America, and especially the physicians’ organizations, are often critical of the content and amount the drug companies spend on commercial activities. However, in Latin America (and in a number of other countries) the situation is different. The professional organizations are weak and much less disapproving of commercial activities. One reason for this is the close connection between the professional organizations and the drug companies in many countries. Gifts from companies might be seen as the tip of the iceberg. Uncertain employment prospects and low paid jobs lead to a positive attitude to alternative work, e.g., in the drug companies (Accion Internacional por la Salud 1987: 61–70, which describes the situation in Peru). In richer countries, e.g., Europe, North America, there are self-regulating professional groups which monitor the drug companies and are quite prepared to take issue with the content and spending on commercial activities by companies. This means that we can talk about a ‘national professional tradition’ with regards the professional–company relationships in a country.

11.5 The relative effects of different media and messages in commercial drug information to prescribers Companies use a large number of different media in drug marketing: sales representatives; advertisements; postal mailings; company journals; catalogues; reprints; books; exhibitions; symposia; gifts and drug samples. The media used vary between countries and drug companies. For example, some drug companies rely more on advertisements, while others prefer postal mailings. However, as a general trend, drug companies in many countries today spend less on advertising and mailings and more on sales representatives and market

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planning than 20 years ago. This is because personal contacts, e.g., with company representatives, are more effective in changing prescribing habits than mailings (Ferber et al. 1958). The relative influence of different media varies depending on the drug group and the age of the prescriber (Wilson et al. 1963). The information sources used by prescribers have been investigated in a large number of studies. In brief, physicians start to prescribe a new drug as a result of a communication process involving a number of media and messages. A single medium alone seldom changes a prescribing habit (Caplow and Raymond 1954). Most influential is the interaction between information from colleagues and company representatives. If other physicians’ attitudes towards a new drug are positive it will quickly be accepted. The representatives often use recommendations from other physicians when providing information about a new drug, verbally or by distributing materials written by medical experts (Coleman, Katz and Menzel 1966). Advertisements and postal mailings interact with information from salesmen to make physicians familiar with a new drug, before and after meeting the representatives (Hampton 1961, Wilson et al. l963). In a recent survey, 20 per cent of American physicians considered information from the drug industry representative about diseases or treatments ‘not very useful’ and 13 per cent considered ‘not very accurate’ (The Kaiser Family Foundation, 2002). A company undertaking media planning considers the role each medium should have in the process to influence prescribers or members of the general public. The way the information is received and accepted can be divided into five stages: 1. Receiving the message 2. Receiving the main argument in the message 3. Changes in expectations and beliefs 4. Changes in attitudes 5. Changes in behaviour. The process can stop at any of these steps. The changes in attitudes and behaviour which occur will, in part, be determined by the media used and the beliefs and attitudes of the physicians prior to receiving the new information. For a message to be effective it must lead to informal contacts between local opinion leaders and others (Lazarfeldt’s two-step model in Chapter 16). However, it seems that a message alone will not improve drug sales, but if commercial information is combined with details of the significant positive qualities of the marketed new product then significant increases in sales can follow (MacKowiak 1985, Comanor 1986). This may also explain why a new drug with a low therapeutic value has a higher failure rate than drugs with higher therapeutic value (Reekie 1977: 20). Whether a physician (for a prescription drug) or patient (for non-prescription medication) will start to use a drug is to a large extent determined by the discourse they have. For a sender of drug information (commercial or non-commercial) it is necessary to have a fairly good knowledge of these discourses (see sections about social constructionism in Chapter 1, the prescribing process in Chapter 14, the decision-making process of laymen in Chapter 15 and drug information in Chapter 16).

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It has to be noted that most of the references discussing the relative worth of different media are rather old. The reason is that studies in this area require cooperation between drug companies and social researchers and a willingness among drug companies to publish the results. Today these requirements are difficult to achieve. Drug companies regard marketing data in this area as a company resource which gives a competitive advantage. This trend in restricting marketing data reflects the increased competition from generic companies. Previously, the larger research-based companies perhaps regarded their strong competitive position as more secure.

11.6 Commercial media directed at the general public For non-prescription drugs, the drug company has to direct the commercial information at the general public. However, to reduce cost, the drug companies consider the cost per consumer contact when selecting between different media. Also, in drug marketing to consumers, the company tries to aim its media campaigns at the population groups which are potential users of the drug, e.g., skin ointments to women, acne preparations to adolescents. This means that the advertisements are put in media which the target group uses. Among the most popular media for commercial information to the general public are newspapers, magazines, street ads, cinema ads and pamphlets, which might be distributed through different organizations. In contrast to most other countries, in the US advertising regarding prescription drugs is allowed (‘direct-to consumer (DTC) advertising’, Perri, Shinde and Banavali 1999, Schacter 2006: 192–194). Indeed, between 1994 and 2000 there was a considerable growth in DTC drug advertising (Schacter 2006: 192). Pharmaceutical companies and consumers are positive about such information, although health professionals are sceptical (Perri, Shinde and Banavali 1999). The results of a recent survey of American consumers (Health Poll Report, 2005) showed that a vast majority of adults (90 per cent) have seen or heard advertisements for prescription medications, but many are sceptical of the information provided. Less than two in ten (18 per cent) said they can trust what pharmaceutical companies say in their ads ‘most of the time’, nearly half as much as an earlier survey conducted by the Kaiser Family Foundation in 1997. Despite this scepticism, many people are paying attention to these ads. Sixty-four per cent of people who have seen prescription drug ads say that these ads generally provide useful information at least ‘some of the time’. Twenty-six per cent of those who have seen drug ads say they have talked to a doctor about a medication as a result of seeing an ad, and more than half of those people said the doctor prescribed the particular medication (Health Poll Report, 2005).

11.7 A national perspective on commercial drug information A drug company spends money on commercial information in order to inform prescribers and OTC drug users about the existence and the value of its products. However, this may not be the best way of improving a nation’s health, since this information will not guarantee that the drug will be used in such a way as to best serve a country’s drug goals. In fact, some

11.7 A NATIONAL PERSPECTIVE ON COMMERCIAL DRUG INFORMATION

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argue that commercial information can contribute to a lowering of standards and can hinder non-commercial, professional and government solutions to health problems Silverman, Lee, and Lydecker 1982, Melrose 1982, Viktora 1982, Lexchin 1989). This can be very big problem particularly in developing countries. This is because health professionals there do not have strong professional organizations and there is little independent information, both for prescribers and patients, about the drugs available (Medawar 1979, Chatley 1990: 51–68). The risk of ‘overuse’ of some types of drugs because of heavy marketing has been discussed by many authors (Braithwaite 1984: 204–261), e.g., psychotropics (Breggin 1993), hormonal therapy for menopausal women (Coney 1992) and hypertension (Kawachi 1992). Many authors stress that a drug is often marketed by sales representative for wider therapeutic indications than those for which it is registered (indications allowed in marketing) (e.g., Rost 2006). The offering of free drug samples, gifts and travel to prescribers by drug companies has, in particular, been heavily criticized (e.g., Medawar 1979: 121–124). There are studies in which a single medium has been investigated by content analysis. For example, Hemminki (1977) analyzed the oral information provided by pharmaceutical representatives to a sample of physicians. The data collection was undertaken by nonparticipant observation. According to the researcher side effects and contraindications were often neglected. In a number of studies, advertisements for drugs have been analyzed to determine if the advertisements give valid view of the drugs advertised. For example, in Brazil, Wzorek et al. (2007) found that 75 per cent of the analyzed advertisements did not reach the limit of high quality. In another study the aim was to identify how the arguments in the advertisements were backed by references given in the ads. It was found that 44 per cent of the claims in the ads were not supported by the references given. Most often this was because the slogan recommended the drug to a different patient group from that assessed in the reference study (Villannueva et al. 2003). However, this type of study is very dependent on the criteria used and the sample of advertisements analyzed. There might also be significant differences between companies. We have not found studies of the scientific quality of drug company sponsored conferences. However, there are some sporadic notes in the literature regarding this medium. For example, in 1983, it was noted that Helicobacter pylori was detected as an important causal factor leading to ulcers. However, in 1988 one of the leading producers of proton pump inhibitor drugs still had a big international conference to launch its new drug. However, the Helicopbacter pylori research was not mentioned by any of the speakers, in spite of the fact that this theory was well known at the time (Ciacci et al. 2006) There have been increasing concerns about health professionals having close relationships with the drug industry (e.g., Braithwaite 1984: 298–305, Rost 2006). Today, journals require that the authors of scientific papers must state whether they have received any financial support from industry for the project or have a professional connection with industry (e.g., Alpert 2005). However, this does not solve the problem entirely. Content analysis of published drug studies indicate that strong support by the drug industry is associated with the reporting of positive outcomes of drugs tested (Finucane and Boult 2004). Lobbying by the drug industry regarding issues relevant to it and determined by professional, patient or political organizations has been seen as a problem in the US. Similar groups seeking influence are also to be found in many other countries (e.g., Landers and Sehgal 2004).

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Another problem is that informing people about specific risks from a medication can create a negative attitude towards the drug concerned (Morris et al. 1986). This means that a profit-making company tries to avoid ‘ads’ detailing the risks involved in taking a drug. But health problems can occur if prescribers and patients do not receive this kind of information from independent sources. This can be particularly serious in developing countries, which have no reliable systems for providing independent drug information (Silverman, Lee and Lydecker 1982). However, there are codes of practice established by the R&D-based medicines industry that require the full approved prescribing information to accompany all promotion to doctors for prescription medicines.(e.g., ABPI 2006) It has been argued that advertisers use subtle symbols to influence prescribers to ‘medicalize’ psychological conditions and that they promote ‘shot-gun’ therapy instead of analyzing the patient’s personal situation in the treatment of psychological conditions (Goldman and Montage 1986). Also, there is a significant risk that patients will become dependent if they are prescribed a tranquilizer for their anxiety (Haafkens 1997, Lilja, Larsson and Montagne, 2001). In prescribing for psychiatric problems commercial information can lead to overprescribing. For example, many physicians give an antidepressant even when the patient’s problem does not fulfil the criteria for clinical depression (Freeling 1993). Prescribing for psychiatric conditions is quite controversial, and what is rational prescribing is to a large extent influenced by the prescriber’s own values (Lilja et al. 2002). There has been an intense debate on the extent to which commercial drug information can lead to unfair economies of scale and can hinder price competition by establishing brand loyalties which serve as barriers to other companies considering entry into the market (Steele 1964, Slatter 1977: 85). Other authors, more positive to the present marketing behaviour of the drug companies, argue that such criticism cannot be sustained. Instead they insist that commercial information facilitates the entry of small companies to the drug markets (Hornbrook 1978, Comanor 1986). Internet information will be used more and more used by the general public and health professionals. One of the problems with the internet is ensuring that the user finds reliable information. For example, many websites are published by drug companies or organizations sponsored by drug companies. The discourses provided on these websites may reflect the companies’ interest rather than the interests of the general public. The information provided could describe the medical condition in bio-genetic terms instead of the psycho-social factors which also have a strong impact on many medical conditions (Read 2008). In some countries, gifts from pharmaceutical companies to physicians are common place. This is dubious marketing practice because receiving a gift can influence the physician to prescribe the company’s drugs on grounds other than their medical qualities. Therefore, from a patient outcome perspective, the most suitable drugs might not be prescribed. Also, it might impose a financial burden on patients and the public. These are the reasons why, in European and North American countries, restrictions on gifts to prescribers from the pharmaceutical industry were established several years ago (Marco et al. 2006, ABPI 2006). The lack of independent reliable ‘evidence’ data might make it difficult for a member of the public or a health professional to evaluate the commercial messages. Of course, the situation is much better today when we have computerized databases from which scientific data can be found. The internet has facilitated such searches. Still, a more open policy regarding the reasons for public decisions is preferable. This would facilitate the search for reliable information (Abraham 2002).

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11.8 Summary The industrialization process in the European drug sector began almost 150 years ago, when the production of raw materials was taken over by German industry. By the end of the twentieth century, the production of ready-made drugs worldwide was more or less the responsibility of industry. The transfer from pharmacy to industrial production has created the need for drug marketing. Drug companies tend to have three marketing goals: to be the first to introduce new drug generations; to achieve high annual sales; and to acquire a considerable share of the market. Several factors influence the resources a drug company spends on marketing a new drug: the competitive situation; the age of the drug; the expected effects of commercial information; rules of thumb applied by the company; the size of the company; and the image of the company. Companies use a large number of different media in drug marketing. However, today they spend most money on sales representatives and market planning because these are probably their most effective ways of changing prescribing habits to the company’s benefit. Advertisements and postal mailings are primarily designed to familiarize prescribers and potential OTC drug users with the drug. Commercial drug information has been criticized on many different grounds. Firstly, exaggeration occurs in advertisements. Secondly, commercial information can lead to irrational prescribing from society’s point of view, as the marketing of some psychotropics has shown. Thirdly, commercial information can lead to market domination and high prices.

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Coney, S., The explotation of fear: Hormone replacement therapy and menopausal woman. In Davis, P. (ed.), For Health and for Profit. Oxford: Oxford University Press, 1992: 179–207. Corstjens, M., Marketing Strategy in the Pharmaceutical Industry. London, New York, Tokyo, Melbourne, Madras: Chapman & Hall, 1991. Cox, W.E., Product life cycles as marketing models. J. Business, 1967, 40: 375–384. Crellin, J.K., A Social History of Medicines in the Twentieth Century – To be Taken Three Times Daily. New York, London, Oxford: Pharmaceutical Products Press, 2004. Ferber, R. et al. The effectiveness of pharmaceutical promotion. Bull. Econ. Business Adm., 83, Illinios, 1958. Finucane, T.E. and Boult, C.E., Association of funding and findings of pharmaceutical research at a meeting of a medical professional society. Am. J. Med., 2004, 117: 842–845. Freeling, P., Diagnosis and treatment of depression in general practice. Br. J. Psychiatry, 1993, 163 (suppl. 20): 14–19. Goldman, R. and Montage, M., Marketing mind mechanisms: decoding antidepressant drug advertisements. Soc. Sci. Med., 1986, 22: 1047–1058. Greenhalgh, T., Robert, G., Macfarlane, F., Bate, P., Kyriakidou, O. and Peacock, R. Storylines of research in diffusion of innovation: a meta-narrative approach to systemic review. Soc. Sci. Med., 2005, 61: 417–430. Haafkens, J., Rituals of Silence – Long-Term Tranquilizer Use By Women in the Netherlands. A Social Case Study. Amsterdam: Het Spinhuis, 1997. Hampton, R.J., An Analysis of the Relationship between Variations in Promotion and Sales of Ethical Pharmaceutical Products. Ph.D. thesis, University of Wisconsin 1961. Hansson, O., De samvetslosa lakemedelsbolagen – Om Smon-skandalen (English: The Drug Companies Without Moral Consciousness – About the SMON Catastrophe). Stockholm: Zindermans, 1977. Health Poll Report, Views on Prescription Drugs and the Pharmaceutical Industry, 2005. http://www.kff.org/healthpollreport/feb 2005/index.cfm Hemminki, E., Content analysis of drug-detailing by pharmaceutical representatives. Med. Edu., 1977, 11: 210–215. Hornbrook, M.C., Market structure and advertising in the US pharmaceutical industry. Medical Care, 1978, 16: 90–109. Kawachi, I., The pressure to treat – doctors, the pharmaceutical industry and mass treatment of hypertension. In Davis, P. (ed.), For Health and for Profit. Oxford: Oxford University Press, 1992: 162–178. Landers, S.H. and Sehgal, A.R., Health care lobbying in the United States. Am. J. Med., 2004, 116: 474–477. Lexchin, J., Doctors and retailers: therapeutic education or pharmaceutical promotion. Int. J. Health Serv., 1989, 19: 663–679. Lilja, J., Det svenska apoteksvasendet 1920–1952: Fran sjalvstandiga apotek till apotekskollektiv (English: The Swedish pharmacy sector 1920–1952. From independent pharmacies to a collective or pharmacies). Sv. Farm. Tidskr., 1985, 89 (n.7): 12–22. Lilja, J., Larsson, S. and Montagne, M. (eds.), Dependence on psychotropics – a multidimensional perspective. Substance Use and Misuse, 2001, 9–10: 1129–1407. Lilja, J., Larsson, S. and Hamilton, D., Drug Communication – How Cognitive Science Can Help the Health Professionals. Kuopio: Kuopio University, 1996. Lilja, J., Larsson, S., Hamilton, D. and Bauer, M., Ethical values in the treatment of depression and anxiety. In Salek, S. and Edgar, A. (eds.), Pharmaceutical Ethics. London: John Wiley Sons, Ltd, 2002: 137–160.

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MacKowiak, J.L., Effects of promotion on pharmaceutical demand. Soc. Sci. Med., 1985, 20:1191–1197. Marco, C.A., Moskop, J.C., Solomaon, R.C., Geiderman, J.M. and Larkin, G.L., Gifts to physicians from pharmaceutical industry: an ethical analysis. Ann. Emerg. Med., 2006, 48: 513– 521. Medawar, C., Insult or Injury? An Enquiry into the Marketing and Advertising of British Food and Drug Products in the Third World. London: Social Audit, 1979. Melrose, D., Bitter Pills. London: OXFAM, 1982. Morris, L.A., Brinberg, D., Klimberg, R., Millstein, L. and Rivera, C., Consumer attitudes about advertisements for medicinal drugs. Soc. Sci Med., 1986, 22(6): 629–638. OHE, Innovation and the Balance of Payments. Teeling-Smith, G. (ed.). London: OHE, 1967. Perri, M., Shinde, S. and Banavali, R., The past, present and future of direct-to-consumer prescription drug advertising. Clinical Therapeutics, 1999, 21: 1790–1811. Reekie, W.D., Pricing New Pharmaceutical Products. London: Croom Helm, 1977. Rogers, E.M. and Shoemaker, F.F., Communication of Innovations. New York: Free Press, 1971. Rost, P., The Whistleblower: Confessions From a Health Care Hitman. New York: Soft Skull Press, 2006. Schachter, B., The New Medicines – How Drugs Are Created, Approved, Marketed and Sold. Westport, Connecticut & London: Praeger, 2006. Silverman, M., Lee, P.R. and Lydecker, M., Prescription for Death: The Drugging of the Third World. Berkeley, California: University of California Press, 1982. Slatter, S.S., Competition and Marketing Strategies in the Pharmaceutical Industry. London: Croom Helm, 1977. Steele, H., Patent restrictions and price competition in the ethical drug industry. J. Ind. Ec., 1964, 12: 198–223. Tauras, J.A., Chaloupka, F.J. and Emery, S., The impact of advertising on nicotine replacement demand. Soc. Sci. Med., 2005, 60: 2351–2358. The Kaiser Family Foundation, National Survey of Physicians. Part II: Doctors and Prescription Drugs. 2002. http://www.kff.org/rxdrugs/loader.cfm?url=/commonspot/security/getfile .cfm&PageID=13965 Valenstein, E.S., Blaming the Brain – The Truth about Drugs and Mental Health. New York, London, Toronto, Sidney, Singapore; The Free Press, 1998. Viktora, C.G., Statistical malpractice in drug promotion: a case study from Brazil. Soc. Sci. Med., 1972, 16: 707–709. Villanueva, P., Peiro, S., Librero, J. and Pereiro, I., Accuracy of Pharmaceutical advertisement in medical journals. The Lancet, 2003, 331: 27–32. Wilson, C.W.M., Banks, J.A., Mapes, R.E.A. and Korte, S.M.T., Influence of different sources of therapeutic information on prescribing by general practitioners. BMJ, 1963, (Sept. 7): 599–607. Wzorek, L., de F., Correr, C.J., Badaro Trindade, A.C. and Pontarolo, R., Analysis of medicine advertisement produced in Brazil. Pharm Pract., 2007, 5: 105–108.

12 The market structure

In the drug sector, there are about 200 national markets and 100 different product markets (see Chapter 7 for a definition of product markets – products which are similar from the buyer’s perspective. For example, the OTC analgesics (including acetylsalicylic acid, paracetamol and ibuprofen preparations), might be regarded as a drug market.

12.1 The existing international market structure International drug sales are increasing rapidly. There are a number of reasons for this:

r More people can afford industrially produced drugs. r Health insurance systems have been established and are in place in many countries. This means that the patient no longer has to pay the entire costs of his medication when he is sick.

r New, more effective drugs have been and continue to be developed. r People are more willing to take drugs when symptoms appear. Most of the world’s industrially produced drugs are used in the richest countries. This means that there is an enormous variation in drug consumption per capita across the world (Chapter 10). Measured in terms of the national sales of medicines, the following countries are the biggest consumers: the US, Canada, Spain, Switzerland, Australia, Germany, France, Italy and the UK (in 2001, measured in sales value, Dept. Health, Br. Pharm. Ind., 2002: 33). However, the reliability of these sales figures can be questioned, because we do not have similar statistics for countries with large populations, e.g., China, India, Russia.

Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

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On a worldwide basis, there are about 50 000 drug companies producing ready-made drugs and around 1000 making drug chemicals (the exact numbers are unknown). These companies are spread unevenly throughout the world. Most drug production takes place in the US and Europe. However, Japan, Mexico and India have increased their share of the world’s drug production. A limited number of large multinational drug companies dominate the scene. It has been estimated that the 30 biggest companies manufacture about 50 per cent of the ready-made drugs produced in the world. The production of drug chemicals is very much concentrated in the sense that a few large companies are responsible for most of the world’s production (Chapter 6). Most of the drug research takes place in a few highly industrialized countries, e.g., the US, the UK, Japan, Germany and France (Chapter 5). Each of the MNDs focuses its research on a limited number of projects (Chapter 5). In some markets (‘drug groups’), a single drug product can have a dominant position. For example, in the market for statins (prescribed to lower the cholesterol level and to prevent coronary ailments) one product alone had 42 per cent of the world market and another 32 per cent (Permanand and Altenstetter 2004: 40). In economic terms this could be called an oligopoly. However, we do not have more detailed data regarding market shares on the global level. To better understand the international drug market structure, more research is needed. National drug sales statistics are not published. Instead the data is collected by the drug industry and drug wholesalers and sold to the drug firms for sums beyond the pockets of social researchers. The leading drug companies sell their products in a large number of countries. They not only have marketing subsidiaries, but also production units in many places. The great expansion in the number of foreign subsidiaries occurred after the Second World War (Knickerbocker 1973). In recent decades, MNDs have become even bigger by acquisitions and mergers with other, usually smaller, independent drug companies. New ‘biotech companies’ are particularly attractive takeover targets for MNDs. It is very difficult to identify what is and is not a ‘biotech company’ because what precisely ‘biotechnology’ is is subject to a fierce debate. The MNDs maintain their dominant position by engaging in R&D activities and by having extensive marketing systems. In general, they produce a large number of different drugs for a number of different drug markets. Nevertheless, there is a tendency towards specialization, i.e., each MND focuses on certain drug groups in its research and this determines in which drug markets they will be active in succeeding decades (Chapter 5). Some countries seem already to have a dominant position in generic drug exports, e.g., India. Their export figures are based on an efficient production system, which makes it possible to set low prices. For the rich industrialized countries, low prices are not regarded as so significant. Most people in rich industrialized countries prefer high quality to low prices. Nevertheless, international generic companies can buy their ready-made drugs from India and market them under their own trade names. The rather poor image India may have in terms of quality becomes a minor problem when marketing Indian drugs in the rich countries, because the ready-made generic will be sold by a company located in an industrialized country. How much of this kind of importing takes place is not known and more research is needed here. However, the most important thing is not where drug is produced. What matters is being able to assess the safety risks of drugs from different producers and so determine the quality of the medication.

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12.2 The market structure in a specific country There is more market structure data available for national markets. If the drug sector sales are divided into nine broad markets, the market share taken by the eight most sold drugs in each of the nine drug markets in the US in 1982 varied between 57 per cent and 70 per cent. The figures of market shares of the eight most sold brands remained stable throughout the 1980s. Most drug markets can be described as oligopolies, i.e., markets where there are only a few sellers (Corstjens 1991: 102, see also Braithwaite 1984: 161–169). Similar percentages have been found in European countries. However, little recent data has been published. In some drug markets, where only simple production technology is required and where patents have expired, we can expect there to be many producers. This is especially so in drug markets with a large number of patients suffering from serious diseases. The introduction of generic substitution might have decreased the market shares of the biggest companies in the generic drug markets in countries with a national health insurance system. Detailed data here is also unavailable. There are also markets where only a few drug companies are involved. Statins and HIV-AIDS medications are two examples of these rather concentrated markets. In general, the concentration ratios are bigger in small than in large countries, because there are costs associated with launching a new drug on a national market, e.g., costs for sales allowance, for drug registration, for marketing. The total sales in a country have to be big enough to cover these costs. This means that there are considerable entry barriers into the drug sector (Chapter 7). If there are medically valuable drugs protected by strong patents in the drug market, these are much bigger barriers than those in a drug market in which generic drugs can occupy a significant market share. The number of sellers in a drug market in a specific country can be expected to be determined by the following factors (Measday 1977):

r The size of the potential national market – more preparations in countries which have a high potential market (see above).

r The medical value of the drugs of this type. The higher medical value the more preparations we might expect (see above).

r The degree of patent protection. When a patent expires we can expect the number of sellers to increase considerably if the drug has significant medical value.

r Whether it is legally easy to market a new drug in the country. In some countries it can be difficult for foreign companies to market new drugs because the registration process puts them at a disadvantage. The drug reimbursement system (which exists in countries which have national health insurance) can also protect indigenous companies from their foreign competitors.

r Whether it is technically easy to develop ‘me-too’ drugs of similar medical value to the original preparation (Chapter 5). However, there is a natural limitation on the number of me-too drugs it is possible to market in a country. In the US, this restriction is about 10–15 me-too drugs on the most profitable drug markets (Spilker, 1989: 36).

r Whether companies which want to establish ready-made drug production units can acquire raw drug materials.

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r The economies of scale, scope and learning in ready-made drug production (Chapter 6). r The

economies of scale, scope and learning in the marketing of ready-made drugs (Chapter 13).

r The profits a newcomer can expect. These profits depend, not only on the ruling price and the price the newcomer has to set to achieve a significant market share, but also on the size of the market and the market share which a newcomer can expect (Chapter 7).

r Whether a company can develop ‘a market segmentation strategy’ according to the buyers’ price-sensitivity or according to the specific needs of a special patient group (Corstjens 1991: 44–62). If companies achieve such segmentation, then different preparations can be sold in a group. There might be a market for the high price sensitive buyers, e.g., private or public drug plans which require the pharmacist to select the cheapest drug preparation, and a low price sensitive market, e.g., for patients who want to keep to an original brand (Lexchin 2004). To what extent such a segmentation is possible depends on the size of the national market (segmentation is easier in big markets), on whether there are sufficient low price sensitive buyers (this depends on the support for low price drugs provided by professional groups and/or the national government) and on how far it is possible to divide the population into groups with different ‘perceived needs’. In practice, a drug company can maintain a high price for an old branded product (targeted at the low price sensitive buyers) and still launch a new, low priced brand aimed at the high price sensitive buyers (Lexchin 2004). For prescribers, there seems to be an advantage in having a market with three or four different drug preparations with similar medical qualities compared with a situation where there is just one preparation for a specific medical condition. The prescribers seem to feel safer in prescribing a drug when there is a number of similar preparations on the market since some seem to suit certain patients better than others. It is a less risky situation, both theoretical and empirically, the different but similar preparations supporting each other in terms of the perceived value of this treatment option (Healy 1997: 122). In future we can expect the MNDs to get bigger. However, they do concentrate on developing new drugs. Hopefully, generic drug companies all over the world will succeed in making their drug production more efficient.

12.3 Summary Today, the international drug sector is dominated by a limited number of drug companies. They keep their position by extensive R&D activities and through skilled marketing. The MNDs will almost certainly continue to grow by concentrating on R&D. However, we can expect many drug producers will be able to produce generic drugs for their own domestic markets. Also, some countries, e.g., India, are and probably will become even more significant exporters of ready-made generics. The market structure within individual countries varies considerably and within a country it also varies between drug groups. There are markets with just one or a few sellers and markets with a large number. However, most drug markets seem to have only a limited

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number of sellers. Many factors influence the number of sellers in a specific drug market in a specific country, including the profits a newcomer can expect.

References Braithwaite, J., Corporate Crime in the Pharmaceutical Industry. London, Boston, Melbourne and Henley: Routledge and Kegan Paul, 1984. Corstjens, M., Marketing Strategy in the Pharmaceutical Industry. London, New York, Tokyo, Melbourne, Madras: Chapman & Hall, 1991. Healy, D., The Antidepressant Era. Cambridge, MA and London: Harvard University Press., 1997. Knickerbocker, F.T., Oligopolistic Reaction and Multinational Enterprise. Boston, MA: Harvard University Press, 1973. Lexchin, J., The effect of generic competition on the price of brand-name drugs. Health Policy, 2004, 68: 47–54. Measday, W.S., The pharmaceutical industry. In Adams, W. and Brock, J.W. (eds.), The Structure of American Industry. 5th edn. New York: MacMillan, 1977: 250–284. Permanand, G. and Altenstetter, C., The politics of pharmaceuticals in the European Union. In Mossialos, E., Mrazek, M. and Walley, T. (eds.), Regulating Pharmaceuticals in Europe: Striving for Efficiency, Equity and Quality. London: Open University Press and WHO, 2004: 38–54, web-site: www.euro.who.int/document/E83015.pdf. Spilker, B., Mutlinational Drug Companies: Issues in Drug Discovery and Development. New York: Raven Press, 1989.

13 Drug control

Consisting of three parts, this chapter discusses, firstly, the various definitions of drug control, secondly, what is involved in the drug control process and, finally, the measures which can be employed to control drugs. Drug control has evolved over a considerable period of time. As mentioned in Chapter 2, the first drug laws (including measures to control the quality of the drugs) were introduced as early as the thirteenth century in Southern Europe. Similar types of laws spread northwards. The practical part of drug control was undertaken in the pharmacies. However, national pharmacopoeias were developed, in which most of the significant drugs available in a country were described. These pharmacopoeias also included norms for preparation and quality control (Chapter 2). New legislation banning the marketing of secret drugs produced outside the pharmacy system was introduced in France during the Napoleonic period in the first decade of the nineteenth century and in the UK later in the nineteenth century. However, this legislation only existed for a short period (Stieb 1970: 23–24). At the beginning of the twentieth century, both in the UK and in Northern European countries, the organizations for physicians and for pharmacists set up laboratories to test those preparations which had secret contents (Anderson 2005). In Sweden, for example, in 1915, a private laboratory was taken over by the government and this was the start of national drug control. At the same time, secret drugs (the drug contents were revealed neither to the general public nor to prescribers) were not allowed to be sold in pharmacies (Chapter 2).

13.1 Definition of drug control The concept of drug control means different things to different people. A definition of drug control can have any of four starting points: 1. A number of politically determined goals for the drug sector in a country, i.e., the national drug policy Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

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2. A list of drug control institutions in a country and a division of tasks between them 3. The formal rules, i.e., the laws regulating the drug system in a country 4. A number of formal and informal rules which influence the drug system in a country. In this chapter the phrase ‘drug control’ is most often used in the first of the abovementioned senses. Drug control is seen here as a means of ensuring that drugs conform to predetermined national goals. As discussed in Chapters 1 and 3, a country’s drug policy is an abstraction which cannot necessarily be found in a national document. A national drug policy has to be seen as the result of a process of conflict and negotiations between the interest groups involved – health professionals, drug producers, drug wholesalers, drug retailers, drug control agencies, political groups and patients. International influences are strong in the drug field, so interest groups cannot, on their own, determine the national drug policy (see discussion below). As already discussed in Chapter 3, the national drug policy goals are not easy to separate from the rules and strategies used to govern the national drug sector. Each set of rules, each strategy, focuses on the achievement of a limited set of goals. For example, drug registration concentrates mainly on the quality aspects of industrially produced drugs etc. This means that the decision processes by which goals and the rules or strategies are selected are often connected. Goals and rules or strategies have to be more or less determined at the same time.

13.2 Process model of the drug control system in a country The drug control decision process can be viewed as having five stages: 1. The definition of the problem 2. The decision process by which a new formal policy is introduced 3. The decision process by which new norms are developed 4. Introduction of a procedure for measurement of deviance between norms and behaviour 5. The decision processes to ensure that the behaviour corresponds with the norms and the new formal policy. The decision process starts when a drug problem is recognized. This is not a mechanical process, but a social activity, in which various actors formulate their views, perhaps disagreeing with each other (Chapter 1). Drug control problems can take many forms. For example, the introduction of the NHS in the UK, in 1948, made it essential to bear in mind the rising costs of drugs (Anderson 2005). A government level, conflicts over goals can arise. In many countries there can be a clash between industrial goals – developing a

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competitive national drug industry – and health goals. In practice, this can lead to disagreements between the government agencies responsible for the achievement of these goals, e.g., in regard to the level of clinical trial data necessary before a drug can be made available for sale (Lofgren and de Boer 2004). The best strategy for price control will be affected by which of these goals is given priority. If the industrial goal is given priority, it is important to have close cooperation between the national drug industry and the drug control agencies. If price is the priority, such cooperation is not required. Instead, whoever is responsible for price control has to be a hard negotiator insistent on their prices, regardless of whether it is a national company or not (Lofgren and de Boer 2004). New policies are often based upon earlier policies either in the form of official regulations or in the form of unofficial administrative processes which influence subsequent courses of action. Administrative solutions which have been tried and tested successfully are used again and again, but those which do not seem to be effective are dropped. Proposals for change are often built on ideas and opinions already accepted and so original solutions are rarely tried. This means that there are national traditions – specific medical cultures – which tend to be rather stable over time. Even inside Europe, such national traditions might be identified. As mentioned above, in the UK cost control measures have been given a lot of attention since the introduction of the NHS (Payer 1990: 101–123). In France, outcome measures, as clinical trials, tend to be given less attention compared with more process measures. This means that clinical trial data is given less priority in France compared with the US and the UK (see the discussion about evaluations in Section 1.4 and Payer 1990: 35–73). These medical traditions might be regarded as different ‘discourses’ (Chapter 1). For example, body organs might have different meanings depending on the medical national tradition. In the US, the heart is regarded as a ‘pump’ while in Germany, the same organ does not receive such a mechanistic interpretation (Payer 1990: 80). The medical discourses seem to be connected to the national general cultures (Payer 1988). For example, the Englishman is said to be a man of action while the Frenchman is said to be a man of thought (Payer 1990: 37). There is, of course, a considerable variation among the health professionals in a specific country as to which discourses the professionals accept. Today, a country often uses the ideas of another to handle a drug related problem. For example, until the beginning of the last century, the Northern European countries borrowed most of their drug control rules from Germany, but lately they have made use of ideas from the US and the UK. Since 1965, in the European Union, there are EU Directives which have to be implemented in the drug legislation of each of the member countries (Abraham and Lewis 2000). Drug legislation can be interpreted and used in different ways in the countries which have similar legislation. Goals, values and frames of reference influence the selection of administrative policies. The process by which this takes place is not as direct as might be expected. Often each interest group will argue for a few administrative reforms which it sees as important. Today health professionals, the drug industry and political groups are important factions, which can determine the control methods chosen. A number of interest groups may collaborate to achieve their aims. The distribution of power among such groups is not the same in all countries (the actors in the drug system mentioned in Chapter 1). When a formal policy which applies to all drugs is introduced, we can expect interest groups to give it considerable attention and probably to mobilize more resources. Such decisions can produce more long-lasting results than a new policy for a single therapeutic situation. In cases such as this, professional and administrative bodies can be anticipated

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to have much more to say than political bodies. To interest political forces, a politically important value has to be involved. The ‘attention threshold’ is probably much higher for political bodies than for other interest groups. This means that the decision process will depend on the type of problem. There is also a great variation between countries in the way the decision processes are organized before a new formal policy is established. Also, these processes may change over time (Lilja 1987 and Chapter 1). It is important to determine how the national norms relate to the new policy. Historically, national pharmacopoeias have provided important examples of production norms. The pharmacopoeias were especially important when drug production was located in the pharmacies, since they made it possible to achieve a more uniform quality of drugs. We still have only limited knowledge of how new drug norms are established. From the way norms are set in other areas, it would appear that the following factors are influential: 1. The norms existing in other countries 2. Values and frames of reference of the administrative personnel in drug control 3. Values and frames of reference of the professional groups involved 4. Availability of optional production techniques 5. The expected health effects of alternative norms 6. The economic consequences of alternative norms 7. The effects to be predicted on the actors involved (mainly prescribers and patients) 8. The existing techniques for measuring deviances between norm and behaviour. 9. The means and resources necessary to achieve acceptance of alternative norms. The norms can vary even between countries with similar cultural values and in similar economic situations. This is because a norm is often the result of reflexive interpretation processes and the decision-making process in similar countries can lead to different interpretations. One example is that of the norms regarding preservatives in vaccines (Freed et al. 2002). The norm setting process and the processes leading to decisions which ensure that behaviour corresponds with norms often take the form of informal professional activities (Vuorenkoski et al. 2003). This informality can make the process more efficient than if it had taken the form of open political discussion. One problem, from a democratic perspective, is that the values influencing the decisions may not be those of the general population. Another issue is that the norms are often best formulated in scientific terms. One interpretation of why a scientific language is used is that it can decrease the risk for opposition groups being formed (Vuorenkoski, Toivianen and Hemminki 2003). The interpretation of animal testing results in government drug control can lead to different conclusions. Drug company representatives will interpret results in positive terms, i.e., the drug can be used by humans. Independent researchers are often more sceptical. The selection of the animals can be a problem. Company representatives may argue that if some tumours are found in the animals tested, that the animals selected were particularly prone to that disease. This is an example of how bias can develop because of the personal interests

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of the researcher (Abraham 1995: 98–178, 206–216). Another problem with animal tests is determining the necessary duration and sample size. Here too there is the risk of bias, depending on the interests of the researcher (Abraham 1995: 185–186). Since the early 1990s, a collaborative development of harmonized testing guidelines has addressed such problems (International Conference on Harmonization, ICH, Geneva, http://www.ich.org). The importance of decision-making processes has been stressed. This leads to the conclusion that the formulation of a national drug law in a developing country cannot solve the country’s main problems. In practice, these laws are often adapted from those of the colonial mother country and are largely unsuitable for the developing country (Johnson-Romould 1980). Even the building of a national control laboratory can turn out to be of only limited value, for there may be few contacts between the national control laboratory and rural areas distant from the urban centre. The laboratory may be an ‘island of high technology’, but the drugs at the rural level are still handled much as before. For a developing country, it is usually better to build a small national control laboratory and use the available resources to make the drug system work better, e.g., by training administrators and health care personnel in a relevant fashion (Johnson-Romould 1980). Which goal or control aspect is given priority depends on the problems at the national level. For example, the introduction of the NHS reimbursement scheme in the UK in 1948 led to a significant increase in drug prescribing and government spending on drugs. This made drug control in the 1950s in the UK much more focused on costs than was the case in many other countries. The Thalidomide catastrophe changed the priorities. Thereafter, far more of the drug control efforts were put into avoiding unwanted drug side effects (Anderson 2005, and the ‘garbage can model’ discussed in Chapter 1). In Singapore, traditional Chinese medicine (TCM) plays an important role in health care and has been included in a special drug control program in which safety and quality is monitored. This seems to have increased the level of public confidence in these products (Yee et al. 2005). Noted and published deviances from a drug control norm might have effects outside the drug control system. It has been shown that a refusal of new drug application from a drug company (i.e. the drug was not registered) may lead to a considerable decrease in stock prices of the drug company (Sarkar et al. 2006).

13.3 The processes to ensure that each aspect of drug control complies with the necessary norms or standards There is a number of ways to ensure that each aspect of drug control complies with the necessary standards. The following are among the most important:

r To ensure that the education system of the health professionals provides full informa-

tion about the norms. This is especially important in countries with weak professional organizations.

r To ensure that the norms established are regarded as legitimate by the professionals and

the general public. One way to do this is to encourage discussions about alternative laws

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and let professional organizations influence the norms. With such a process there is a risk that professional groups will change the norms to something more in line with those of their own group. These may not always be the same as the national goals, which a majority of the population wants.

r To ensure that drug control staff are motivated to enforce the norms. r To ensure that the norms are in line with similar norms in other parts of the society. New policies, norms and control measures do not have their full effect at once. Often it takes many years (if ever) to recognize all the effects of a reform.

13.4 Control measures Control decisions can be based on many different types of data. Today, most of the data used is from the natural sciences and originates from the drug companies or from a national drug control laboratory. In future, more social science data are likely to be used in drug control decisions, perhaps not so much in the national selection of drugs (in the drug registration process) as in the decisions to optimize drug use, i.e. in the information processes involving prescribers, patients and the general public. Drug control decisions can be taken at different levels in the drug system: 1. International level 2. National level 3. Regional level 4. Institutional level 5. Prescriber level 6. Patient level. Historically, most of the drug control decisions have been made at a national level, as part of the drug registration process. Potentially effective drugs are checked before they are allowed to be sold in a country. In many low or middle per capita income countries, there is also an Essential Drugs Policy which takes this procedure one step further by restricting the number of drugs permitted to only those regarded as most essential (Chapter 4). However, it is also important to get patients to take drugs in a way which realizes their full therapeutic potential. A national centralized control organization is probably not the best structural solution to bring this about, other than in small homogeneous countries. Local organizations are better suited to influence prescribers and patients. The most effective kinds of local organization vary between countries and reflect cultural differences. In future we can probably expect many more control decisions to be taken by local organizations (see Chapters 14 and 15). At the international level, we can hope for more efficient information systems including data about the medical value of the different drugs, e.g., summaries of clinical trials, results

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of adverse drug reaction studies, details of judgments made by experts and evidence of control decisions taken by various countries. Hopefully, new information and education systems will relay this information all over the world – often via the internet. At a national level, the problem will be how to incorporate this information into policies and changes at a local level (Chapters 14, 15 and 16). Many different measures have been used to control drugs. The Thalidomide catastrophe resulted in an increase in the number of these being introduced at the same time in many countries. The most often used drug controls are: 1. Registration of importers, producers and sellers 2. Authorization to start clinical trials on patients 3. Drug authorization and registration before marketing 4. Inspections at the different levels in the system 5. Tests on drugs after registration 6. Systems of reporting side effects 7. Prescription and sales restrictions 8. Control of the distribution of commercial information or other tools used by drug producers to influence prescribers, the general public, patients and retailers. 9. Price and cost controls 10. Formulary committees 11. Official information to health care personnel and the general public. The selection of control measures varies between countries and over time (Bruun 1983, Abraham et al. 2005). There is a great need for comparative studies into the reasons in many countries for the choice of a specific control measure and into the consequences of this selection. We can probably not expect to find data indicating the ‘best drug control measures’. What we can hope for is a better understanding of how cultural, organizational and economic differences influence the decision-making processes and a better understanding of the factors determining the efficiency of drug control measures used (see the discussion about evaluations in Section 1.4). It has been questioned why Viagra was released in the USA after six months and why the medical abortion pill was approved four years after its application. Social and political pressures are said to have influenced these registration processes (Hollander, 2006). The harmonization of medicines regulations in the EU, the US and Japan has been encouraged by the MNDs. There is a risk that these companies have special interests which they favour in the harmonization process. These interests may not be the same as those of the general population or be in line with the national interests (Reed, 2002: 3, 393–395).

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It is possible that international standardization still might have a number of positive effects. It can motivate increases in quality, efficacy and efficacy. More research is needed to understand the consequences of international drug control standardization. One problem often discussed concerns relations between the national drug control bodies and the drug industry. In a number of cases, national drug control personnel have been found also to have close connections with the drug industry (DHEW 1977; House of Commons Health Committee, 2005; and Chapter 1). In some countries, close and cooperative relations between drug companies is regarded as a national advantage, i.e., the positive relations might lead to higher investments in the domestic drug companies. Australia is an example of this group of countries (Lofgren and de Boer 2004). In other countries too close relations between drug industry and the drug control is regarded as a great problem. This might hinder the drug control agencies in making their own analysis and might lead to decisions which have a drug industry bias. Another problem concerns relations between prescribers and the drug industry. In some countries these have been regulated by formal means (e.g., House of Commons Health Committee, 2005). In other places informal norms exist assuring the independence of prescribers. But there remain places, e.g., some of the developing countries, where there are no norms, no regulations and no legislation, to prevent ‘gifts’ from the drug industry going to prescribers (Melrose 1982). A more recent national survey of 2608 physicians conducted by the Henry J. Kaiser Family Foundation in America (The Kaiser Family Foundation, 2002) concluded the following:

r Few doctors think information from drug company representatives is ‘very useful’ (15 per

cent) or ‘very accurate’ (nine per cent), but the majority believe it is at least ‘somewhat useful’ (59 per cent) and ‘somewhat accurate’ (72 per cent).

r Almost all physicians (92 per cent) have received free drug samples. A significant number of physicians (61 per cent) say they have received meals, tickets to events, or free travel from a drug company representative. Twelve per cent say they have received financial incentives to participate in drug trials and 13 per cent have received financial or other in-kind benefits.

The situation varies greatly from a global perspective. In some countries, such as the UK, there is a tighter control enforced by the ABPI (Association of the British Pharmaceutical Industry) Code of Practice (The Prescription Medicines Code of Practice Authority, 2006). After the Thalidomide tragedy in 1961 (Chapter 2), the control of drug safety and efficacy was given priority. An adverse reaction can be defined as ‘an appreciably harmful and unpleasant reaction, resulting from an intervention related to the use of a medicinal product’. Such a reaction can take many forms. The best way of preventing these is to avoid drugs with significant adverse risks being registered, and to avoid prescribing drugs with potential serious adverse reactions to patients. If an adverse reaction has occurred, the patient ought to stop taking the drug, unless the medical advice is to the contrary, and be given specific treatment for the reaction (Edwards and Aronsson 2000). In spite of every effort, adverse reactions still occur. For example, 10 per cent of the admissions to hospitals are drug related and most of these events can be classified as adverse drug reactions (Stanton et al. 1994). This high figure explains why there have been many approaches to remedy this situation. Controls in the medical clinic and in the distribution

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stage have been amongst the most successful strategies used to avoid ‘medication errors’ (Naylor 2002).

13.5 Clinical trials The US drug control (FDA) requires that a new drug application for marketing is supported by two independent controlled clinical trials (this means that the new drug has to be compared with a placebo or a drug already registered). The FDA has guidelines on how such studies should be undertaken (Tsien and Pahl 2005: 171–173, Yngling and Begley 2005, Yates 2006a, 2006b). Similar regulations exist in many other countries. However, there is a control problem associated with clinical trials, even if many countries do require that details of all clinical trials be sent to the drug control authority and are accepted. For example, there is a risk that researchers do not follow the plans sent to the authorities. There is also a risk that researchers or laboratory staff falsify data from clinical or animal tests, especially when they work under psychological stress (Braithwaite 1984: 51–109). This has, since 1985, been addressed through the introduction of codes of Good Laboratory and Good Clinical Practice. Internationally accepted ethical principles for drug tests have to be followed (e.g., Braithwaite 1984: 87–91). This means, that if a drug intended for clinical trials has been known to be associated with minor health risks, based on data from animal tests, this information must be conveyed to those volunteering for the trials in order that they be given the opportunity to abstain from participation. Historically there have been cases where drug companies have undertaken risky clinical trials on Third World patients (e.g., Braithwaite 1984; 265–268). Today, such behaviour is much more unlikely to occur because of the much better communication systems available and because of the international cooperation of NGOs working with the WHO in the health sector. There is an ongoing professional debate as to what degree large-scale randomized clinical trial should be encouraged. By collecting data from many different locations, a larger sample of patient data might be collected. There is a number of problems associated with large-scale studies. The treatment might differ between the locations, the patients may vary etc. This means that generalizations from such studies might have low validity for treatment of an individual patient. A large-scale study might lead to significant differences between the new drug and placebo. This could be a statistical artefact. If the drug had much higher treatment capabilities than the placebo this could be more easily be shown in a smaller study, where ‘statistical significance’ is less easy to be achieved (Penston 2004).

13.6 Summary Drug control can be defined in many different ways. However, the control process can be viewed as a decision-making one starting with policies, goals and frames of reference already established. When a ‘problem’ occurs, a new formal policy is likely to be introduced which accords with these factors. From this policy norms can be extracted and administrative means devised to ensure that behaviour accords with these norms.

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Both policies and the decision-making processes vary between countries, reflecting cultural differences, national organizational differences, and differences in power among the ‘actors’ in the drug delivery system. Historically, most drug control takes place at a national level. However, more and more local control bodies are appearing because these organizations can influence prescribers and the general public in much more effective ways. There is also a trend towards the establishment of a single market with free movement of goods through a single marketing authorization applicable in each part.

References Abraham, J., Science, Politics and the Pharmaceutical Industry – Controversy and Bias in Drug Regulation. London: UCL Press, 1995. Abraham, J. and Lewis, G., Regulation Medicines in Europe – Competition, Expertise and Public Health. London, New York: Routledge, 2000. Abraham, J. and Davis, C., A comparative analysis of drug safety withdraw also in the UK and the US (1971–1992): Implications for current regulatory thinking and policy. Soc Sci. Med., 61: 881–892. Anderson, S., Drug regulation and the welfare state. Government, the pharmaceutical industry and the health professions in Great Britain, 1940–80. In Berridge, V. and Loughlin, K. (eds.), Medicine Markets and Mass Media: Producing Health in the Twentieth Century. London, New York: Routledge, Taylor and Francis Group, 2005: 192–217. Braithwaite, J., Corporate Crime in the Pharmaceutical Industry. London, Boston, Melbourne and Henley: Routledge and Kegan Paul, 1984. Bruun K., Controlling Psychotropics -The Nordic Experience. London: Croom Helm, 1983. DHEW, Final Report: Review Panel on New Drug Regulation. Washington: Department of Health, Educucation and Welfare, 1977. Edwards, I.R. and Aronsson, J.K., Adverse drug reactions: definitions, diagnosis, and management. I ,2000, 356: 1255–1259. Freed, G.L., Andreae, M.C., Cowan, A.E. and Katz, S.L., Vaccine safety policy analysis in three European countries: the case of thimerosal. Health Policy, 2002, 62: 291–307. Hollander, I., Viagra’s rise above women’s health issues: an analysis of the social and political influences on drug approvals in the United States and Japan. Soc. Sci. Med., 2006, 62: 683–693. House of Commons Health Committee, The Influence of the Pharmaceutical Industry. Fourth Report of Session 2004–05. Volume 1. London: The Stationary Office Ltd, 2005. Johnson-Romould, F., Some factors influencing the regulation of pharmaceuticals in developing countries, with particularly reference to Africa. Dig. Health Legislation, 1980, 31: 646–650, 453–483. Naylor, R., Medication errors – Lessons For education and health care. Oxford: Radcliffe Medical Press, 2002. Lilja J. The nationalization of the Swedish pharmacies. Soc. Sci. Med., 1987, 24: 423–429. Lofgren, H. and de Boer, R., Pharmaceuticals in Australia: developments in regulation and governance. Soc. Sci. Med., 2004, 58: 2397–2407. Melrose, D., Bitter Pills. London: OXFAM, 1982. Payer, L., Medicine and Culture: Notions of Health and Sickness in Britain, the US, France and West Germany. London: Victors Gollancz, 1990.

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Penston, J., Large-scale randomised trials – a misguided approach to clinical research. Medical Hypothesis, 2005, 64: 651–657. Reed, T., The Regulation of Medicines in Central and Eastern Europe. Sussex: University of Sussex, 2002 (Ph.D. Thesis). Sarker et al. 2006 Stanton, L.A. et al. Drug-related admissions to an Australian hospital. J. Clin. Pharm. & Therapeutics, 1994, 19: 341–347. Stieb, E.W., Drug control in Britain 1850–1914. In Blake, I.B. (ed.), Safeguarding the Public. Cambridge: John Hopkins Press, 1970: 15–26. The Kaiser Family Foundation, National Survey of Physicians. Part II: Doctors and Prescription Drugs. 2002. http://www.kff.org/rxdrugs/loader.cfm?url=/commonspot/security/ getfile.cfm&PageID=13965 The Prescription Medicines Code of Practice Authority. Code of Practice for the Pharmaceutical Industry. London: ABPI, 2006 Tsien, A.Y. and Pahl, P.E., Food and administration modernization act. In Berry, I.R. (ed.), The Pharmaceutical Regulatory Process. New York: Marcel Dekker, 2005: 165–239. Vuorenkoski, L., Toivianen, H. and Hemminki, E., Drug reimbursement in Finland – a case of explicit prioritising in special categories. Health Policy, 2003, 66: 169–177. Yates, R.A., Purpose and design of clinical trials. In Griffin, J.P. and O’Grady, J. (eds.), The Textbook of Pharmaceutical Medicine. Massachusetts: Blackwell Publishers, 2006a, 198–238. Yates, R.A., Conduct of good clinical practice. In Griffin, J.P. and O’Grady, J. (eds.), The Textbook of Pharmaceutical Medicine. Massachusetts: Blackwell Publishers, 2006b, 239–274. Yee, S.-K., Chu, S.-S., Xu, Y.-M. and Choo, P.-L., Regulatory control of Chinese proprietary medicines in Singapore. Health Policy, 2005, 71: 133–149. Yngling, G. and Begley, A., Clinical research requirements for new drug applications. In Berry, I.R. (ed.), The Pharmaceutical Regulatory Process. New York: Marcel Dekker, 2005: 349– 375.

14 Drug prescribing

The chapter is divided into seven parts. First, four types of prescribing studies are discussed: normative; sociological; information processing; and cognitive. This is followed by a section on how a physician’s prescribing habits change, a section on how a clinician decides upon a diagnosis and a final section about placebo effects.

14.1 Normative studies Normative prescription studies aim to determine the extent of deviance between a prescription norm and prescription behaviour in practice. This is often a starting point for discussions about how to correct the differences identified. Authors vary in how explicitly they define their norms of ‘rational prescribing’. Most authors give only vague definitions like ‘a drug treatment shall be appropriate, effective, safe and economic’. To analyze how far prescription practice deviates from the opinion of a group of experts or from a number of clinical trials, the norms have to be specified in more detail. To do this it is necessary to analyze different medical conditions separately. For each of these conditions a norm of ‘acceptance’ has to be specified. This means that sales data or data from prescriptions alone is not the best way of studying this problem, because these data forms do not include information about the medical condition for which the prescription was written. One way of getting the necessary information is to examine medical records or to give prescribers ‘paper patients’ or ‘video patients’, for whom they prescribe in the form of an experiment. The results can then be compared with norms derived from clinical trial data or from medical experts (Lilja 1976). This corresponds with the ‘evidence-based medicine’ strategy mentioned in Chapter 2. In prescription reviews, an index is constructed to reflect the level of medical suitability. For example, prescribing a drug of questionable value can be counted as one factor indicating a low level of medical suitability (Chapman et al. 2004). The percentage of injections and antibiotics prescibed have also been used as indicators of prescibing rationality (Hogerzeil et al. 1993). Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

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Some authors argue that “good prescribing” cannot be determined without considering the patient’s values, the patient’s cognitive processes and the social conditions in which the patient lives. This means that the prescriber has to empathise with the patient, the patient’s values and social circumstances (Chapman, Durieux and Walley 2004). In developing countries, it is not unusual to find examples of the prescribing of useless medicines, e.g., vitamin prescriptions for conditions in which vitamins have been shown not to help (Melrose 1982, Greenhalgh 1987). If such drugs are prescribed privately it means that the patient may have to spend considerable sums of money. In an Indian study, it was found that the mean cost per prescription was 24.50 rupees while a manual labourer earned on average about three rupees a day (Greenhalgh 1987). In such countries, prescriptions for dangerous drugs are also frequently reported (Greenhalgh 1987). In Asian countries, it is not unusual to find physicians and pharmacists who believe that antibiotics can reduce the complications of common cold (Cho, Hong and Park 2004). However, prescribing practices may vary considerably within a developing country. In urban teaching hospitals, they may be quite up-to-date (Greenhalgh 1987). Over-prescribing can also be found in industrial countries.One study concluded that the reasons for prescribing digoxin could only be justified in just over half the cases (Cupples, Irwin and McDevitt 1986). Prescribing of drugs with known serious side effects for non-appropriate reasons also takes place in industrial countries. Antibiotics, for example, are prescribed for conditions where it is inappropriate to do so, e.g., the common cold. New popular drugs are often ‘over-adopted’, meaning that they are used for medical conditions other than those for which they have been proved effective. The degree of rationality in psychotropic prescribing has also been analyzed in several studies (e.g., Cooperstock 1983, Lilja, Larsson and Hamilton, 1996: 173–180). Several studies have found that GPs seldom discuss lifestyle changes when first prescribing a benzodiazepine (a class of anxiety reducing drugs with rather high potential risks of causing user dependency problems, Parr et al. 2006). However, when a patient has become dependent on such drugs, the clinicians then are more inclined to discuss the value of lifestyle changes with the patient (Parr et al. 2006). In many studies, the possible savings from financially sensible prescribing have been analyzed (Martin 1967, Mapes 1977, Barnett, Creese and Ayivor 1980, Greenhalgh 1987). The prescribing of drugs with more than one medically active ingredient is often criticized for medical and financial reasons. Medically, such combinations mean that the dosage cannot be adapted to achieve the optimal health effects, because the other active ingredients will be given at too high or at too low a level. Irrational poly-pharmacy prescribing for elderly patients has been a great problem in high per capita income countries for decades (Wyles and Rehman 2005) and it is a practice which seems to be very difficult to change. However, there are situations where combination drug therapy might be suitable (Tangalos and Zarowitzl 2005) and where patients are charged per item, they may save money. Another unsuitable prescribing procedure is that of injections, when tablets could be given. Injections are often very popular, but are much more expensive than other dosage forms and are associated with much more safety risks than tablets (Barnett, Creese and Ayivor 1980, Itavyar l987 and Hutin 2005). Also, there are groups of patients who want a specific medicine, e.g., parents who want antibiotics for their children who have upper respiratory infections. Such infections are often caused by a virus and the prescribing of antibiotics in such situations is regarded as irrational. Frequent prescribing in such situations can lead to drug resistance. To handle

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this problem prescribers need special information strategies to convince parents that no antibiotic is needed under these circumstances (Stivers 2005). When prescribing, health professionals have to give patients sufficient information to satisfy the patients’ needs and wants. In general, a patient wants to know the cause of their problems, how they ought to be treated, possible side effects and the expected results from the treatment. This means that the information provided has to be disease specific (Thompson 2000, Babrow, Hines and Kasch 2000, and Chapter 16). The reasons for irrational prescribing have generated intensive discussion. In a memorable publication, the Swedish physician Linn´e (in 1752!) mentioned 21 reasons for irrational prescribing. Many of these are discussed by later authors, e.g., incorrect diagnosis, outdated medical knowledge, inappropriate combinations of drug chemicals (Linn´e 1752). Modern writers also agree that irrational prescribing is the result of a number of factors. Literature surveys stress the importance of knowledge and education in influencing the quality of prescribing. Irrational prescribing habits in developing countries often seem to be the consequence of an absence of independent information sources together with aggressive marketing by drug companies (Johnston 1980, Greenhalgh 1987) although this may have changed in the last 25 years. In all countries, lack of time can lead to irrational prescriptions. Unsatisfactory prescribing can also be associated with the graduation date of the prescriber. Younger, more recently educated doctors seem to prescribe more appropriate drugs than their older colleagues (Haayer 1982). The introduction of continuing education programs, adopted in many countries, can improve the quality of the prescribing amongst older doctors. In a study based on a cognitive psychological model, the aim was to influence the prescribing of benzodiazepines through an educational program for physicians. The program was found to change significantly the propensity to prescribe benzodiazepines and other psychotropics, according to the physicians’ behaviour following video-vignettes shown before and after the intervention. One reason for this, according to the authors, was that the prescribers made a common decision not to prescribe psychotropics for mild psychiatric-psychological conditions (Larsson and Lilja, 1994). There seems, also, to be a relationship between a physician’s job satisfaction and their prescribing habits. The more professionally satisfied a physician is, the more likely they are to read medical journals carefully which, in turn, results in more up-to-date prescribing. Recently a new type of study has become more common. In these studies, the aim is to detect and classify prescription errors. In prescriptions issued to infants, omissions are frequent (omissions regarding dosage forms, frequency of doses and strength). Sometimes it is not omissions, but the wrong dosage, the wrong frequency and the wrong drug strength are prescribed (Al Khaja et al. in press). Prescription errors seem to vary considerably between therapeutic situations, between countries and between clinics (Chapter 9). Studies from developing countries have indicated that many patients are diagnosed incorrectly and are therefore given a wrong prescription, albeit that the prescriber is less likely to be a doctor than in developed markets. Several measures have been suggested to improve this situation. Many have recommended organizational changes to improve prescribers’ drug knowledge, e.g., Soumerai et al 1984. Also, by organizing an efficient feedback system (drug utilization reviews), prescribers can become more aware of the quality of their prescribing (Wettermark, Nyman and Bergman 2004). Feedback in combination with educational initiatives does not always lead to a more rational prescribing behaviour. For example, a program aimed at influencing the prescribing of benzodiazepines to the elderly resulted in no significant

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changes (Pimlott et al. 2003). However, in the US, the introduction of more strict federal regulations for psychotropics has decreased the prescribing of such medication in nursing homes for disciplinary reasons or purposes of convenience (Hughes and Lapane 2005). Formulary committees have been another strategy to handle the problem of inappropriate or incorrect prescribing (a formulary committee is a committee of experts which recommends a limited set of drugs for each medical diagnosis). To date, the influence of such groups has been mostly restricted to hospital prescribing (Plumridge 1984, Ridley 1985, Hasl´e-Pham et al. 2005).It seems to be a considerable variation between formulary committees in regard to their organisation and to aspects given priority (Williams et al. 2007). But the discussion processes in a professional drug formulary committee can have a strong impact on the motivation of those professionals not on the committee, in helping them to understand and accept the recommendations of the committee (Lipsy 1992, Hutin 2005). National clinical guidelines can also be used to encourage better prescribing (Grimshaw and Russell 1993, Chapman, Durieux and Walley 2004). Another reform is to introduce ‘academic detailing’. This means that a number of experienced medical clinicians or clinical pharmacological experts are used as teachers in continuing education courses for GPs (Chapman, Durieux and Walley 2004). As in other educational interventions, reinforcements are needed to sustain improvements in prescribing (Simon et al. 2005). Formulary committees’ guidelines are not always followed by GPs. One reason for this is that the experts who produce the recommendations have different perspectives from the GPs (different ‘discourses’ in the terminology suggested in Chapter 1). The experts recommend drugs based on data from clinical trials (based on an evidence-based medicine perspective, Chapter 2) while GPs try to fit their prescriptions to the needs and characteristics of the individual patient (Armstrong 2002). These differences in discourses may explain why it is so difficult to convince ordinary GPs to change their prescribing habits (Greenhalgh et al. 2005). To encourage prescribers to be more aware of economic considerations, each prescriber or group of prescribers can be given target budgets. The prescribers could be rewarded if they keep to their budgets or be penalized if they do not. The UK is one country in which such a transformation from individual GPs to Primary Care Groups (PCGs) has been encouraged by the government. Nevertheless, the collaboration between the various professions which constitute a PCG varies in practice from one group to the next (Sheaff 2001). Target budgetary systems also have shortcomings. There is a possibility that prescribers reject expensive treatments solely to comply with budgetary restrictions without considering the medical benefits of such medication to their patients (Walley and Mossialos 2004). It has to be remembered that there is no ‘best system’ to encourage good prescribing. When discussing and designing good prescribing systems, the lay culture (including lay values and beliefs) and the professional culture, as well as the social and economic conditions in the country have to be considered. It is not recommended that the system in one country be taken and applied to another place without making changes.

14.2 Sociological studies There are great variations in the prescribing habits of countries reflecting both the general lay culture and the prescribing culture among physicians. Sociological studies here refer to those investigations aimed at analyzing the sociological relationships between the prescriber and

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his environment. The most famous of these was done by Coleman, Katz and Menzel in the 1950s (Coleman, Katz and Mendel 1966). This study is based on the diffusion of innovation model which was popular among social scientists in the 1950s and 1960s (Greenhalgh et al. 2005). Coleman et al. analyzed the way a widely used antibiotic was introduced into a number of small towns in the United States. As the dependent variable they took the point of time when physicians first started to prescribe the drug. This point of time was called ‘the time of adoption’. The antibiotic studied was medically more effective than the drugs which it replaced. This meant that a physician who started to prescribe the drug also continued to prescribe it. This is not the general pattern of drug diffusion. Normally a physician who tries a drug once may prescribe it later in some similar clinical situations. He may also stop using the drug after trying it for the first time because the anticipated beneficial effects did not occur. Coleman et al. studied prescribing by analyzing the prescriptions collected in local pharmacies. From these prescriptions they recorded the date of adoption (the dependent variable) and the prescribing physician (this information was used in transformed form as the independent variable). The analysis was based on a sociological framework. The physicians were asked to name those doctors in the town who were their friends, those with whom they discussed drug therapy and those from whom they normally sought advice about drugs. Based on this data, Coleman et al. constructed three networks: a friend network, a discussion network and an advice network. It was found that two physicians who were in direct contact with each other in a network adopted the drug at about the same point in time. The physicians at the centre of the networks were the innovators. They were the ones who first started to prescribe the new drug. They were inclined to inform the physicians with whom they were in direct contact. Thus, the information was spread from the centre to the physicians on the periphery of the network (in fact the study by Coleman et al. supports Lazarfeld’s two step hypothesis of mass media communication described in Chapter 16). The innovators were also found to read more professional journals, attend more professional meetings, prescribe more drugs (that innovators are frequent prescribers was supported later by Strickland-Hodge 1981), share offices (a finding later supported by Williamson 1975) and to be more professionally oriented than physicians who prescribed the drug later. The study by Coleman et al. established that contact with colleagues is an important information source when physicians adopt new drugs. It must be stressed that the new drug in this study was in a medical sense very innovative. For the prescriber this means that they are facing a situation of relatively high uncertainty. Empirical studies indicate that prescribers rely more upon professional sources in such situations than they do when the uncertainties are less pronounced (Hibberd and Meadows 1980: 7). In less uncertain situations physicians probably depend more upon commercial sources. Another question to ask is whether the results from the Coleman et al. study can be generalized. Winick, in contrast, found that local opinion leaders seemed to have less influence on prescribing in big cities (Winick 1961). We have no direct empirical evidence to support our view, but our belief is that opinion leaders, regarded as experts, play a more important role today than 40 years ago. This is because this group of physicians, to a large extent, is responsible for the conclusions drawn from clinical trial data, which are more significant now. Physicians do not study the written reports of clinical trials, instead

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they are more likely to be informed by their colleagues (Denig 1993). Evidence from the marketing of new drugs also indicates that the opinions of national experts are of vital importance in getting doctors to prescribe a new drug (see the description in Chapter 2 about the case where a Swedish and a Swiss company each marketed on preparation each with the same active ingredient). The greater the number of patients a physician has the more he is thought likely to be an early adopter. Although one study found this (Strickland-Hodge and Jepson 1981), another did not (Dybdahl, et al. 2005). For some drug groups, organizational acceptance seems to be very important for a physician to start prescribing a new drug. For example, this seems to apply to new drugs for the treatment of alcohol and illegal drug addiction. For these conditions, both pharmacological and behavioural interventions are needed which might make drug adoptions more difficult because such combinations mean cooperation between a number of professional groups (Saxon and McCarty 2005). Several sociological background factors can influence the prescribing of general practitioners (Eaton and Parish 1976). Amongst other things, whether the patient pays directly for the consultation has some effect on the physician’s prescribing behaviour. Those patients who pay for the consultation themselves tend to be prescribed more expensive drugs than those covered by insurance (Bryant and Prohmmo 2005). Health care personnel, despite not having conducted a full medical examination, are often given considerable freedom to use drugs in hospitals according to rules decided upon by the physician in authority. Normally the treatment regimens decided by non-physicians are authorized afterwards by the doctor signing the clinical records. How this is organized varies considerably between countries and among different clinics in the same country.

14.3 Information process studies of drug prescribing Information process studies of drug prescribing are developed on the assumption that the information the prescriber receives influences their prescribing. Certainly, medical opinion leaders can affect what is prescribed by colleagues (see the sociological studies discussed above). However, a physician can use several information sources for individual medical situations. In general, a prescriber develops their prescription habits based on information from a number of sources, including representatives from drug companies (The Kaiser Family Foundation, 2002; Caplow 1954 and Chapter 11). Direct to consumer advertising (DTCA), which is a recent phenomenon, could also influence a physician’s prescribing habits (Health Poll Report, 2005; House of Commons Health Committee, 2005). The prescribing starts with a ‘diagnosis stage’. However, this does not mean that the physician formulates a diagnosis in the official medical sense. This diagnosis may simply take the form of a ‘definition of the condition’ which satisfies both the prescriber and the patient (see the section about diagnosis decisions later in this chapter). The physician uses the information from the patient, the data from medical records, the physical signs, the symptoms found in the examination of the patient and, eventually, the results of laboratory tests to reach a preliminary diagnosis. This is a vital part in the total decision-making process facing the physician. Physicians might take great care in this aspect of medical decision-making. A colleague can be asked for advice or the patient can be referred to a specialist.

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Once the diagnosis has been determined, the process of treatment begins. How frequently drug therapy is chosen depends on the traditions in the clinic and in the national health care system. Drug therapy handbooks (often of national origin) help the doctor to decide on a medicine, dosage form, specific strength, dosage regimen and package size. The physician chooses those which seem appropriate to the condition, age etc. of the patient. The percentage of consultations that result in prescriptions varies between countries. In the private sector of a developing country, this is often nearly 100 per cent (Barnett, Creese and Ayivor 1980, Greenhalgh 1987). In Nigeria, a top number of 3.8 prescriptions per encounter has been noted (Hogerzeil et al. 1993). In Europe and in many other countries, we note a much lower propensity to prescribe (Hogerzeil et al. 1993). However, there are a number of good reasons that a doctor prescribes: 1. Prescribing fits in with the norms of most physicians, which are based on education and available information. 2. The physician wants to indicate to his patient that he cares for him. 3. To achieve a placebo effect. This, of course, reflects the symbolic importance drugs have in modern society. By getting a drug, a patient receives an assurance that they are under the protection of modern science (the placebo effect will be discussed in more detail later). 4. The physician believes that the patient wants a prescription. It seems that prescribers are sensitive, indeed ‘over-sensitive’, to requests from patients. A study by Stimson in Wales found that 86 per cent of the physicians surveyed said that they expected the next patient to want a prescription. However, when he questioned the waiting patients, the researcher found that only 43 per cent said they wanted a prescription (Stimson 1974). A similar result has been reported from a later study (Cho, Hong and Park 2004). It seems that physicians are more aware of the patient’s pressure to prescribe, than the patient’s preference for self-care (Virji and Britten 1991). 5. A private practitioner might be inclined to prescribe to satisfy the patent’s demand and increase the probability that the patient and his family will visit them again later. 6. Prescribing often acts as a visual symbol that the contact is going to end (Heath 1980). Younger physicians tend to use more professional information sources than their elderly colleagues. This is one reason why young physicians tend to be rational prescribers (Haayer 1982 and the discussion about rational prescribers above). As mentioned above, the social network which a physician has can have a strong influence on the adoption of new drugs. When there is a lack of clear evidence of beneficial medical effects, the drug might not be recommended for first-line treatment. In such cases, it has been found that drug adoptions are influenced by the type of information source the prescriber uses. Those prescribers who rely upon commercial sources tend to start to use a new drug lacking clear medical evidence before those who rely upon prescribing decision support systems or who participate in continuing education activities (Greving et al. 2006). So

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marketing by the drug industry will have a significance influence on prescribing still (Mather 2005). Today firms spend most of their marketing efforts on opinion leaders. This is because it is opinion leaders who are likely to influence other prescribers. This means that the companies focus on specialist groups, even if a drug is intended later to be prescribed by GPs. For example, in an Estonian study gynaecologists were found to be much more exposed to commercial promotions about menopausal hormone therapy than family physicians (Hemminki 2004). The attitudes among physicians regarding a specific class of drugs might be difficult to change when the habits have been established over a period of time. Hemminki reports a study where an evidently successful clinical trial did not have the expected result, in terms of opinion changes because of resistance from medical experts (Hemminki 2004). In the future, more advanced electronic systems will be used in prescribing. They will warn the prescriber when they select a drug for a medical condition if it is not suitable and if the patient has to be given special instructions (e.g., Tamblyn et al. 2006).

14.4 Prescription studies based on a cognitive perspective A physician can choose a drug by a habitual or a non-habitual decision-making process. Most of their choices are the result of habitual decision-making processes. However, when a new or unusual situation arises, the physician may use a non-habitual and conscious decisionmaking process. Before a physician first prescribes a new drug they assess whether they have enough knowledge about the drug and its effects – in terms of scientific knowledge, social knowledge (knowledge from social networks), patient knowledge (patient suitability, McKenzie 1968) and experiential knowledge (the prescriber’s personal experiences). The decision to prescribe is seldom taken in response to only one of these forms of knowledge (Prosser and Walley 2006).Why different types of knowledge are important is because the prescription of a new drug has an inherent uncertainty to it (Prosser and Walley 2006).

The non-habitual prescribing process It is important to consider the non-habitual decision-making process because this provides an explanation of how a physician adopts a new drug. If a physician selects a preparation by a non-habitual process,a number of times and gets satisfactory results, we can expect them to choose the same preparation by a habitual process later. In Figure 14.1, a general model of a non-habitual drug selection process is described. To understand the decision-making process for a specific situation, more detailed data needs to be available for the medical condition concerned and the country where the incident is taking place. The four boxes in the centre of Figure 14.1 indicate the components of the prescribing process which are internal to the physician. The expectations from prescribing the drug are one of the central components in this system. These expectations change over time because of influences from external information and from evaluating the progress, or, lack of patients receiving the treatment. The decision criteria used in the selection of drug preparations has been widely discussed in the medical literature, so that it is only possible to give a summary of this discussion. Each

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Decision criteria

External information

The expectations and criteria are compared

Prescription decision

Expectations from the drug preparations

Outcome evaluation

Knowledge about the drug preparations

Figure 14.1 The physician’s non-habitual choice process

decision criterion will be described separately although, in practice, the decision criteria are combined. The combinations are likely to vary among physicians in the same national health care system, reflecting different clinical traditions. The priority given to the decision criteria can also vary between countries and between medical conditions, depending on national values and discourses (Payer 1990). The criteria used in the selection of a drug preparation for a ‘chronic disease’ patient are probably affected by the patient’s worries and perspectives (Gordon, Smith and Dhillon 2006). One reason for this is that the prescriber wants to keep the patient compliance rate at a high level (Chapter 15).

Therapeutic effect The importance of each decision criterion can be determined by direct or indirect questions to physicians. The problem with direct questions is that decision-makers may not be aware of the combination of criteria used in their decision-making process. The physician may select a drug preparation as a result of an unconscious process, as mentioned when discussing decision-making in Chapter 1. When questioned directly, the prescriber may ascribe more importance to the decision criteria which are accepted and regarded as important by his colleagues. This is an argument for using indirect questions in surveys aimed at revealing the drug selection criteria. One example of this is a study in which the relative importance of the three criteria – therapeutic effects, side effects and drug costs – was examined (Lilja 1976). A group of physicians was given a case history (a ‘paper patient’) and asked to estimate the effects of ten named drugs in this situation. The physicians judged each drug on four different scales: a scale indicating their attitude, in general, towards the drug (dependent variable), a scale indicating therapeutic effects, a scale indicating the side effects and a scale indicating the drug costs (the last three were used as independent variables in the analysis). The importance of the decision criteria was determined by using a linear multiple regression analysis. This

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revealed that therapeutic effects were the most important criterion in the selection of drug preparations. This corresponds with other findings (Harrel and Bennett 1974, Denig 1993). The reason why physicians give such importance to the therapeutic effects of drugs is related to the motivations of the physician. Patients go to physicians to be cured. For the physician, it is important to select a preparation which will lead to the return to full health of the patient. In general, side effects occur too rarely to play a vital part in the selection process. The previous treatment results of a specific drug on a patient are, of course, considered by the prescriber. If the patient has been given a drug with previously successful medical results, we can expect a doctor to prescribe the same drug again if a patient presents with the same symptoms.

Low incidence of side effects In the study described previously, it was found that the side effects of drugs influenced their use by physicians. However, side effects were found to be of less importance than therapeutic effects. Younger physicians, gave more importance to side effects than their older colleagues (Lilja 1976). In poor countries, the options may appear different from those in richer societies. Because of the considerable lack of economic resources in a poor country, a patient may have to accept a cheap, standard drug with some risk of side effects rather than a new, more expensive patented drug with minimal side effects (Hogerzeil 1985: 15). In a country where patients can afford higher drug costs, many in the same situation have opted for a more expensive drug. The choice of drugs for tuberculosis is one example of this (Barnum 1986).

Low drug costs When the treatment of acute diseases is discussed, drug costs are defined as the total drug costs over a normal period of treatment. When treatment for long-standing diseases is considered, the drug costs may more conveniently be defined as those for the daily treatment of an average patient. The costs for the patient play a minor role in prescribing, especially in those countries which have national social insurance systems, where the patients pay a small fraction of the real costs of the drug and the insurance system bears the greater part of the expense (Lilja 1976). In these countries, physicians tend to select a highly reimbursed drug to keep the patient’s cost down (Huttin and Andral 2000). However, the decision rules are very much affected by the insurance rules. If just a part of the drug costs is paid by the national insurance scheme, the prescriber might opt for an older and cheaper drug for a low income patient (Huttin and Andral 2000) and possibly at the request of the patient. In countries like the UK. the patient pays the same amount regardless of the real cost of the drug. In this country the drug reimbursement is not planned to steer the prescribers to cheap options, although setting drug budgets for practices is intended to do so. For example, since the late 1990s, the National Institute for Clinical Excellence (NICE) in the UK, has denied access to those products it considers are unacceptably expensive. Medical guidelines can also affect what drug is selected – and the drug costs (Huttin and Andral 2000). Most physicians do consider drug costs, even if their knowledge of the

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real prices is far from correct (Walszak, Swindells and Bhardwaj 1994). Probably those in countries which have introduced generic substitution have become more aware of costs. Difficulties in changing the drugs of patients with long-term diseases and a fear of losing credibility are barriers to prescribing a cheaper brand (Jansson and Anell 2006). In countries where prescribers have computers on their desks, drug prices are easily available. This can lead to more economic prescribing. However, different computer systems vary in regard to the availability of price and cost data. If cost data is assessed as vital, it is recommended that the computer system automatically generates such data and automatically displays it for the prescriber during the consultation. In a poor country, drug costs are much more important. This applies both to decisionmakers in the public distribution system and to those prescribing to individual patients in private practices (Hogerzeil 1985: 26). In countries where insurance organizations have rather strict budget control, GPs might start by prescribing a low cost and potentially less effective drug. If no significantly beneficial results occur, they are more than likely to write a script for a more expensive and more effective drug (Prosser and Walley 2005).

Patient convenience Patient convenience can be a determining factor in those situations where a choice of preparations is available to the physician. An example is the situation where one preparation can be given once daily, while other preparations have to be administered twice daily. Many physicians prefer the preparation which the patient takes only once daily. This is more convenient for the patient and likely also to lead to higher compliance in comparison with a more complex drug regimen. This, in turn, means it is more probable that the patient will take the drug with the result being improvement in health. The importance of the patient attitudes and preferences seem to vary between different medical conditions (Huttin and Andral 2000).

Taste, smell and appearance of the drug In prescribing for children a physician may take into account the taste, smell and appearance of the drug. A pleasant drug formula lessens the risk of refusal by the person for whom the medicine is intended.

Documentation A physician may prefer a drug because its clinical effects are well documented in studies with reputable scientific procedures, as opposed to similar drugs which do not have such documentary support. This criterion may be accorded particular importance in situations characterized by insecurity, but when the choice is between well-known drugs, it may be of less importance. This results in the support of newer drugs rather than older preparations. Research studies are published in the medical literature by generic name rather than trade

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name. Documentation does not refer to clinical trial data only. For example, bioavailability data might affect selection of generic drugs.

Preparations available in the most frequently used dosage forms and strengths Formulary drug committees in hospitals often select preparations which are available in the most frequently used dosage forms and strengths. This is because the more options there are in regard to dosage forms and strength, the more it is possible to adapt the drug treatment to the individual patient.

Country of origin A physician may prefer a home-produced drug to a foreign preparation, if the medical effects are the same. Finland is one example of a country where this criterion is rather popular among physicians (Klaukka et al. 1975). However, a private practitioner in a developing country may prefer a drug produced in an industrialized country rather than a home produced drug, because they think the former more likely to be of high quality.

The prescriber’s company preferences Physicians have company preferences. They try to prescribe drugs produced by companies which have a good reputation for quality or for advanced research. They might also prescribe a drug made locally rather than one from an international company as a way to encourage local production. In developing countries, health professionals can prefer drugs from a well-known international firm because of their supposedly higher quality.

Drug availability Physicians tend to prescribe drugs which are easily available in retail units. They avoid those drugs often in short supply or frequently unavailable. In the above comments, we have assumed that one single set of criteria govern the prescription decision-process of a physician when facing a new therapeutic situation. The non-habitual decision-making process may sometimes be more complex, involving more than one decision point and more than one set of decision criteria. For example, in the prescribing of antibiotics, it has been suggested that one set of decision criteria influences whether to prescribe an antibiotic or not, and another set of criteria affects the decision as to which specific drug should be prescribed (Hepler, Clyne and Donta 1982). Individual prescription studies might be collected by qualitative social science methods. This might give us more detailed pictures of the individual prescriber’s cognitive processes. For example, in Sweden, one physician had the following steps in a decision-making process,

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when prescribing for patients suffering from anxiety and sleeping problems (Larsson and Lilja, 1994): 1. An assessment regarding the misuse risk for the individual patient when prescribing a benzodiazepine. If the risk is regarded as high the patient will not get a benzodiazepine. 2. A judgement whether drug prescribing is the most suitable therapy for the patient. According to the individual physician, young and well-educated patients should not be prescribed psychotropics. They can handle their psychological problems without drugs. They are able to handle the problems by developing new cognitive rules. 3. The physician suggests a non-benzodiazepine to the patient. If the patient accepts this they prescribe this drug. However, if the patient ‘reacts’ by arguing for a benzodiazepine instead the physician might interpret this as a sign of a potential dependency problem. Depending on the situation, the physician might prescribe a small package of a benzodiazepine.

14.5 How standard selections change As mentioned above, physicians, in general, have a limited number of options available to them when treating most of their patients. A physician will have their ‘standard choices’, but over time they change these. The changes occur because of external influences or because of the experiences the physician has when using these drugs (Figure 14.1 above). Normally they will start to use a new drug when an old one has not had the desired effect on a patient or the patient has suffered side effects. They may then try a new drug chosen by a non-habitual selection process. The most influential sources in this process vary from country to country and from condition to condition. In a study in Sweden, a continuing education course for health professionals was evaluated (Larsson and Lilja, 1994). The course lasted three days and was aimed at decreasing the prescribing of benzodiazepines for sleeping and socio-psychological problems. The result of the course was evaluated by video vignettes illustrating patients with these types of problems. Three of the cases were the same both before and after the course. Each video vignette was shown to the participants and they then had to assess the patient’s cognitions and feelings on a number of scales and suggest a treatment for the patient’s conditions in a questionnaire. The next video vignette was shown and the same procedure was followed etc. The results of this study can be summarized in the following points (Larsson and Lilja, 1994):

r The prescribing habits were changed considerably when comparing the results before and

after the course, as measured by the responses to the video vignettes. Benzodiazepines were prescribed much less after the course than before.

r The participants were not aware that they had changed their prescribing behaviour. Both

before and after the course they were asked to indicate their attitudes to prescribing benzodiazepines for sleeping disorders on a five point ordinal scale. No significant difference

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could be found when comparing their attitudes before and after the course. This might be interpreted as an indication that health professionals do not want to accept that a short course could alter their prescribing habits. They wanted to see themselves as having a stable identity and stable habits. To a large extent, the changes took place on an unconscious cognitive level in the prescriber’s mind.

r There was a tendency to see the medical conditions as less serious after the course. This

is one of the explanations for the changes in prescribing behaviour that were noted. The discussions in the group probably made the participants more aware that a prescription is not required for all socio-psychological patient problems.

14.6 Making a diagnosis How a physician goes about making a diagnosis can be regarded as a decision-making process with a number of stages, each stage having a number of different decision rules (Gale 1982):

r The physician collects information about the patient’s symptoms, physical and social capabilities, environmental conditions (including their family and similar problems in the family), former incidences of a similar problem and whether the patient has undergone any treatment for a similar problem.

r The physician formulates a number of hypotheses regarding the factors which have led to the symptoms and the medical condition.

r The physician seeks information about the patient’s social system and the way the patient has handled the condition and might handle it in the future.

r The physician formulates a preliminary diagnosis, perhaps prescribing a drug and giving advice about how to take it and on lifestyle matters generally.

This means that physicians, even in the same geographic area, might vary in the way they diagnose. This is mostly evident in the analysis of psychosocial disorders (Verhhaak 1986, Jenkins, Smeeton and Shepherd 1988). Also, when comparing countries, there are considerable national differences in both how popular specific diagnoses are and the methods used to set the diagnoses (Payer 1990). In practice, the concept of a diagnosis has a number of different meanings. Researchers, members of the health professions and patients might interpret the term differently resulting in communication problems. Four different meanings can be identified: 1. The physician’s personal definition of the patient’s problem. Sometimes it might be better to use such a personal definition rather than using an official diagnostic label (Chapman, Durieux and Walley 2004). 2. The diagnostic term which the physician communicates to the patient.

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3. The diagnostic term which is written in the medical records. 4. The diagnostic term identified by an international classification system, e.g., an ICD class (a class defined in International Classification of Diseases). Traditionally, the physician independently decided upon the diagnosis and the treatment. Today in Europe and in other countries having well-educated patient groups, there is a trend towards the physician and the patient negotiating about the diagnosis and the treatment (Botelho 1992). This means that the relationships in medical encounters have changed. The physician is prepared to consider the patient’s values, expectations and wants and takes them into account (see the section about the actor–spectator paradox and concordance in Chapter 1). For example, some patients do not want to be diagnosed as having ‘depression’. Thus, a physician might avoid using that term when talking with the patient. However, other physicians might try to persuade the patient that they have depression and ought to take an antidepressant. The prescriber might, in these cases, use the supposedly positive medical effects of an antidepressant to convince the patient to accept the drug. Nonetheless it is far from certain that the patient will follow the physician’s suggestion and take the drug as advised (see section about compliance in Chapter 15). The diagnostic processes seem to vary considerably between different medical conditions. For example, hay fever receives very little interest from many primary care physicians. It is a condition which does not require physician care, according to many doctors. In mild hypertension, there is a strong incentive for physicians to use drug treatment to develop patient loyalty and to teach patients to decrease the risk of further complications. So each medical condition is considered differently and the way it is considered can vary between among physicians, even in the same country (Huttin and Andral 2000). In countries where the majority of the population has had little education, the health staff may not reveal to the patient the details of a diagnosis in medical terms. For example, in a study in Manila, the Philippines, only 40 per cent of private practitioners told their patients that they had tuberculosis, even if the practitioner believed it himself. Instead the practitioners often used local terms like ‘weak lungs’ and ‘a spot in the lungs’ (Auer et al. 2006). Most of the studies aimed at analyzing the cognitive processes of prescribing have been undertaken in affluent countries. The cognitive processes might be quite different in a poor country, where few drugs are available and the patient is satisfied as long as they get any drug for their, perhaps serious, medical condition. In such a situation we cannot expect the prescriber to give priority to empathising with a patient they meet for a few minutes.

14.7 Placebo prescribing The concept of a ‘placebo’ is normally used to indicate a ‘drug’ which has no pharmacological effects. However, it is important to make a distinction between:

r Placebo treatment: Using a drug without a pharmacological ingredient. r Placebo effect: The non-pharmacological effect of a drug which also may have pharmacological effects.

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r Placebo intention from the prescriber’s point of view: A drug with mild pharmacological effects which is prescribed mainly to achieve placebo effects.

Many clinical symptoms can be cured by placebo treatment (‘sugar pills’). For example, it has been estimated that about 58 per cent of patients suffering from seasickness can be ‘cured’ by such an approach (based on a review of published studies, Jospe 1978: 43). Placebo treatment does not only have therapeutic effects, but also has side effects. In a study of medical students most of them reported at least one side effect (Jospe 1978: 20). Studies seem to indicate that a placebo is much more effective in reducing clinical pain than experimentally caused pain (Jospe 1978: 28). This may be explained by the important role anxiety plays in clinical pain. Placebo treatment of pain might work by reducing anxiety. However, the mechanisms of placebo treatment are not well understood. Biological substances, like the endorphins, seem to be involved and may give a biological explanation for the pain-relieving effects noted. Of course, it might be that there are many other mechanisms involved in processes leading to placebo effects, e.g., hormonal and immunological mechanisms. The effect of a placebo treatment is very much influenced by situational factors, e.g., the instructions given. A remarkable finding is that placebo treatment seems to work even if the subjects are informed that they are being given placebos (Jospe 1978: 100). The reason for this is perhaps that the subjects may still ‘hope’ that the drug will affect the body. In recent decades, placebo prescribing has been criticized. The following arguments have been used against it (Bok 1974, Brody 1980: 100–107, Greenhalgh 1987, Rabkin et al. 1990):

r The use of placebo prescribing can lead to manipulation of the patient by the physician.

The physician can provide information about excellent therapeutic results although the physician themselves are sceptical of the value of the drug.

r The patient can discover that they are being manipulated. r Placebo drug prescribing can lead to a belief in drugs when it is better to change the patient’s environmental conditions or alter their lifestyle.

r Placebo effects are often temporary and become less effective when repeated.

14.8 Summary Four types of prescription investigations were described: normative; sociological; information process studies; and cognitive studies. In normative studies, actual prescribing is compared with a medical norm of appropriate prescribing. A number of studies have noted differences between these two standards and many measures have been suggested to improve the situation. Sociological studies analyze the relationship between the prescriber and their environment. From such studies we can conclude that colleagues are an important source of information in prescribing.

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Information process studies aim to analyze how new information changes prescribing habits. The prescription process starts with a diagnostic stage. The patient might receive a drug if the prescriber believes in drug treatment for the patient’s condition, if the physician believes the patient wants a prescription or if the physician wants to signal to the patient that the visit is going to end. Most drug choices are the result of habitual decision-making processes. However, in new situations, a physician may select a drug by a non-habitual and conscious decision-making process. The most important cognitive criterion a physician uses for selecting a specific drug is the expected therapeutic effect. Traditionally diagnosis was often made by the physician themselves. Today it is often described as a negotiation process in which both the physician and the patient are involved. Placebo treatment was defined as the act of using a drug without a pharmacological ingredient while a placebo effect was defined as the non-pharmacological effect of a drug which also may have pharmacological effects. The use of placebo prescribing has been criticized. One reason for this is the risk that the physician might, consciously or unconsciously, try to manipulate the information given to the patient to increase the value of the drug.

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15 Patients’ attitudes and behaviour

This chapter is divided into five sections. It begins with an introductory background followed by a discussion about ‘explanatory models’. Thereafter, a process model of how laypeople handle medical symptoms is outlined and the chapter concludes with sections on OTC drugs and drug compliance.

15.1 Background Today self-medication is a popular theme in international medical and pharmaceutical literature. This is a recent development. In the 1940s, many European health professionals believed that in the near future they and their successors would be able to deal with most symptoms and diseases. This opinion was partly a result of optimism brought about by new drugs, e.g., penicillin, which appeared during the ‘drug innovation period’ (Chapter 2). Another reason for such optimistic belief in the future was the expansion in public health care which followed after the Second World War in many European countries, e.g., the UK. If good health care was offered at low prices this would lead to early diagnoses of diseases and fewer serious cases of the most common conditions and illnesses. This optimism has proved unfounded. Even after an enormous expansion in health care facilities there remains a high demand for yet more. The difficult financial circumstances many governments now face make a further sizeable expansion in health care unlikely. Critics have also raised the question of the effectiveness of this type of care. Illich (1976) and McKeown (1976) are perhaps the best known. They have suggested that the individual has to take more responsibility for their own health than most people do today. Laypeople have to change their life patterns, alter their food habits, reconsider their physical activities etc. The diseases now most common in rich countries, e.g., psychiatric, circulatory illnesses, are, to a large extent, environmentally determined. In such situations it is more effective Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

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Figure 15.1 The medical iceberg

to take preventive steps and change the environmental factors influencing health than to put one’s faith entirely in therapeutic efforts like traditional professional health care. It is also sensible to create a better environment (by individual or collective actions) than to emphasise solely the treatment of the diseases (McKeown 1976). The importance of preventive measures is of special concern to low per capita income countries. By introducing better hygiene and sanitary conditions the incidence of many infectious diseases prevalent in these countries can be lowered. For example, in order to decrease HIV and AIDS, education in relationships and increasing the use of condoms in sexual contacts can be important preventive measures. Most laypeople in affluent countries do nothing, or rely on self-care after detecting a minor medical symptom. This is also the case in low per capita income countries, where traditional folk medicine can play an important role and be included in self-care (Hardon 1987 and discussion below). Figure 15.1 illustrates the ‘iceberg’ analogy often used to describe this state of affairs. Only the tip of the iceberg is above the water. This is this part which is seen by the professional health care system. Most episodes are not seen because they are ‘under the water’ and out of the sight of the official system. The individual has decided to do nothing, to use home preparation or to buy OTC drugs etc. (Koos 1967: 39, 43, 49). Less is known of the part of the medical iceberg below the surface than above and this is something which needs to be studied extensively. For example, we ought to know why some people do not contact the professional health care system when they have symptoms later revealed as serious. We need to learn more about the decision-making process of the layperson about their health, in order to encourage those in real need of professional care to contact the appropriate people and organizations. For the remainder of this chapter the phrase, ‘a decision-maker’, will refer to the person taking the decisions for a person who is ‘sick’. Often the decision-maker and the patient are one and the same person. However, parents make decisions for their children. Elderly patients who do not want to make such decisions themselves might let their children resolve the situation.

15.2 Explanatory models Whichever situations they encounter, the layperson bases their decisions on their attitudes, beliefs and behavioural inclinations. In Chapter 1 we used the term ‘discourses’ as a collective name for these mental components (see the section about social constructionism in Chapter 1). The discourse might vary depending on the symptom (the situation) the

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individual has. Also, the discourses vary depending on the culture and on the educational background of the individual. These means that the discourses of an individual are influenced by the local culture and the experiences they have had (Kleinman 1981, Helman 1985). These discourses help the individual to analyze and decide whether what they have are minor medical symptoms (see discussion below). Similar discourses (or ‘illness representations’) facilitate adapting to serious medical conditions. The individual uses their knowledge and their experiences in the ‘construction’ of their illness discourse. However, adapting to a serious medical condition is more than just developing a ‘reliable’ sense of illness discourse. It is often a process which can take a considerable time and involves many of the individual’s cognitive and emotional components (Sharpe and Curran 2006). The process by which the illness representation is formed is supposed to influence how effective the individual is in handling any new situation. For an individual who normally has an active coping style and forms an illness representation which includes elements of such a style, we can expect the outcome to be favourable. People who normally have a passive coping style and whose illness representation does not encourage active coping are in a worse situation. They can expect a less favourable outcome. However, illness representations ought to match, at least in part, reality. To think that ‘beliefs’ alone can improve a medical condition is not enough. The condition must be such that cognitions and emotional factors can have some effect on the medical condition (Sharpe and Curran 2006). It has been noted by a number of researchers that an individual’s standards, values and conceptualizations change after they have become ill with a serious disease. The patient finds new meanings and reconsiders earlier events and values. It is possible here to talk about a ‘response shift’ (Sharpe and Curran 2006). The reader who is interested in the discourses of patients with a specific medical condition can get valuable information from www.dipex.org. However, this site relies totally on data collected in the UK. This means that the discourses in the database cannot always be generalized to other cultures and settings. The decisions taken in relation to health and sickness seem to follow the same main principles found in other areas (Chapter 1). The decision-maker (the patient) uses the information at their disposal in as effective a way as possible. The discourses they have can be seen as a condensed form of their memory of earlier information received. However, the decision-maker has limited time to collect all available information before a decision has to be made. This is why we can speak of ‘bounded rationality’ meaning that the decisionmaker chooses an acceptable course of action based on their discourses from the options available (Simon 1961). There will be many components in all discourses regarding a specific symptom. To facilitate analysis, the components can be grouped as follows:

1. Ideas of causation 2. Symptoms indicating the severity of the illness. 3. Beliefs about the course of the illness 4. Evaluation of therapies. 5. Beliefs and attitudes about how to use the drugs to achieve the desired effects.

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In developing countries, the last point in particular has to be given considerable attention when distributing drugs. This means that in Third World countries, modern drugs are not always used in the way they were originally intended. For example, in India a patient may not take a drug because they regard it as ‘too hot’ for his illness. The rationale for this is that illnesses among ordinary people are often classified on a hot-cold scale. A hot medicine is taken for a cold sickness and a cold medicine is taken for a hot sickness. Food might also be classified on a hot-cold scale. A hot dish is taken for cold sickness etc. (Kirkpatrick 1980: 74). This hot-cold model is also to be found in many traditional Latin America societies (Foster 1985). The hot-cold model is not as simple as might at first appear. It can be used in combination with other medical models (Tedlock 1987). Also, a patient can think in terms of individual suitability when assessing the efficacy of a drug treatment (Hardon 1994, describing the culture in Manila in the Philippines). In wealthier countries, also, the explanatory models of the general public can differ from the corresponding views of health professionals (Dunnell and Cartwright 1972: 65, Helman 1985,Spykerboer, Donnelly and Thong 1986). The combination of therapies might be regarded as a type of flexibility in low and middle per capita income countries. First, the public health care sector does not work properly, partly because of the lack of adequate resources. Secondly, traditional health care is based on other discourses than those we find in modern biomedical medicine. For example, in traditional African health care, the aim is focused on the restoration of disturbed social relationships. The therapist, the patient and the social networks all cooperate to find new adaptive social relationships. This means that even in the future we will find traditional health care. It is not evident that the patient will reveal everything in traditional health care sessions. However, the traditional healer and the patient’s social network have a deeper understanding of the social processes associated with the ‘illness’. The patient themselves may or may not be aware of these process (Van Wolfputte et al. 2002, and Chapter 4). From a health professional’s perspective, the lay models can be regarded as ‘misconceptions’. However, a more empathic perspective would see lay models as based on experience and culture. This means that it is better not to dismiss the patient-customer by telling them that they have the wrong model. Instead a health professional should advise the patient that for this medical condition empirical studies have shown better treatment results can be achieved by using another perspective. As mentioned in Chapter 1, we have to collect data about the discourses of the members of the public if we want to understand their medical decision-making processes or if we want to influence these processes (Helman 1985). However, the discourses vary depending on the social, educational and ethical background of the decision-maker (Kleinman 1981).

15.3 A process model: how a layperson deals with medical symptoms This section describes a general model of how a lay decision-maker may deal with a set of medical symptoms. This model does not specify the types of symptoms involved and in future it may be necessary to formulate more detailed models for different symptoms,

15.3 A PROCESS MODEL: HOW A LAYPERSON DEALS WITH MEDICAL SYMPTOMS Detection of symptoms

Culture

Symptom-judgment stage

Influences from social network

Selecting a course of action

Active search for information

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Action taken

Figure 15.2

A general model of how a layperson deals with medical symptoms

diseases and population groups. However, it has to be remembered that dealing with medical symptoms takes place both on a conscious and an unconscious level. The existence of unconscious processes means that an attempt to analyze such processes by survey methods will not get us very far (Koos 1967: 143). Such an approach has to be complemented with other data collection methods, e.g., observations, longitudinal studies, cognitive laboratory experiments. The first three boxes in the left column of Figure 15.2 represent the beliefs and expectations held by the decision-maker. This means that we cannot observe these components directly. Only by making inferences can we analyze how these components function. The outcome of the decision-making process (‘the action taken’) described in the model will be one of three options: contact with a physician or nurse; self-medication or another decision. A decision-maker can select more than one of these options. In doing this their decision will be very much dependent on the cultural setting. It seems that the public in developing countries often are faced with more options (we are not concerned here with the therapeutic efficacy of these options) and are more likely to combine the options than their counterparts in countries which have highly organized health care systems such as in Europe (Fabrega 1973: 84–85). In the industrialized world, a patient with a serious medical condition is expected to rely on treatment prescribed by health professionals, at least until they see the results (or absence of results) of this therapy. This pattern of thinking probably has been formed by financial systems in these countries (national health insurances) and a general belief in ‘scientific solutions’ to medical problems. The model described here starts with ‘a symptom’ and ends with some action taken. However, drugs are not only taken for curative reasons. They might be used for preventive purposes. In all countries drugs are taken for general well being. In rich countries, people get vitamins and other drugs to avoid later problems or to stay fit physically or mentally. In developing countries, people take traditional medicines to protect them from evil spirits or to remove poison caused by witchcraft (Cocks and Møller 2002). The decision-making process indicated in Figure 15.2 simplifies what is found in practice. A patient may reconsider the severity of their symptoms after getting new information or after trying a treatment and then choosing a new type of therapy. Also, the decision-making

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process does not end with the resolution to contact a physician or to use self-medication. For example, it is necessary for the patient to decide how to take their prescribed drugs. Also, in Figure 15.2, there is only one arrow from each of the three boxes: culture; social network and the active search for information. In reality, culture can have an influence on all the levels in the decision-making process. The same holds for the influences which form the social network and the active search for information. At all stages, education and personal experiences can affect the decision-making processes. To make the figure simple, all these influences have not been included in Figure 15.2.

Detection of symptoms Physical or psychological influences from the environment can play a part in identifying medical symptoms or troubles for an individual. The family plays an active role in the process, when symptoms are detected. Family members of the patient may see some of the symptoms of disease before the individual themselves, e.g., weakness, fatigue, irritability. Sitting at the breakfast table, another member of the family may ask if they are feeling well. It may be the wife or mother who poses these types of questions (Robinson 1971). Such general symptoms are also recognized in traditional societies (Fabrega 1973: 78). However, in a traditional society, a person may regard themselves as ‘sick’ even if they have no physiological problem, which is normally a requisite in more developed countries. A personal crisis may be regarded as an acceptable condition for being thought of as ‘sick’. Of course, in such crisis situations, a traditional healer is often an effective therapist (Fabrega 1973: 212). Gender roles may play a vital part in the symptom-detection stage. The stereotype of men suppressing medical symptoms and remaining silent in comparison with women who speak out about them can be seen as a general pattern, but can be untrue on an individual level. Culture further influences whether a person defines a trouble as a medical symptom. Some cultures encourage the description of daily problems as medical symptoms while others suppress signs of medical symptoms (Stoeckle, Zola and Davidson 1963, Zola 1966). There is a trend today towards the detection of more symptoms than in earlier times. What is now regarded as a medical symptom may have just been seen as part of life by an older generation. This is a result of increased expectations from being concerned about and taking care of one’s health. It might also reflect less trust in religion as a solution to personal health problems.

Symptom judgment stage After a medical symptom has been detected, the decision-maker has to determine the seriousness of the symptom and of the possible underlying disease. Laypeople and physicians have different explanatory models of a disease (‘discourses’ in the terminology discussed in Chapter 1), and because of this can hold different views about the seriousness of a symptom. For example, empirical studies indicate that physicians regard a headache as much more serious than the general public (Wyler, Masuda and Holmes 1968). These differences in attitude can reflect separate aspects of the symptom. Laypeople tend to base their judgment

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on the relative loss of working capacity, whereas physicians base their judgments on their prognosis of the suspected disease. Some medical conditions are rather easy to identify because they tend to be associated with a limited number of evident symptoms. However, other medical conditions might be associated with many different symptoms which are not typical for one disease only. For example, African laypeople tend to identify malaria, not only with a headache, chills and high body temperature, but also with a great number of other symptoms (Dzator and AsufuAdjaye 2004). This complexity of symptoms might explain why the level of education of an individual is associated with his concern that he may have malaria. However, financial factors might also explain why the better educated often seek care for malarial symptoms (Dtzator and Asufu-Adjaye 2004). The process of judgment and its results are influenced by cultural and semantic factors. The medical vocabulary is used to describe a condition in a way that normally reflects the explanatory models and can in this way influence opinions about the severity of the symptoms (Fabrega 1973). To determine the seriousness of a symptom the decision-maker often has to ask other laypeople (family members, relatives, neighbours, or friends) for advice (Hardon 1987). How fast the decision-process will move forward is dependent on a large number of factors. For example, if there is pain, elderly people wait longer before contacting a physician than young people (Koos 1967: 35). A symptom which significantly affects the family income gets closer attention and a speedier decision than the same symptom for a family member who has not got regular work (Koos 1967: 35). The family ‘culture’ and priorities regarding medical matters can also affect the decision-making process (Koos 1967: 37). We need more research to identify those acting as advisers and opinion-leaders in health care matters. However, we can assume that health care personnel, beyond the boundaries of their own work, have this role in their social network. Also, people who have had symptoms or a disease can act as advisers to those with similar symptoms. Immigrants can have difficulty in finding valuable information through such a process because they lack the necessary social networks. In a Swedish study of Finnish immigrants, it was found that the Finns, in the period immediately after their arrival in Sweden, had to contact the professional health care system even for everyday symptoms. Later, when they had developed a social network, they used this group first to get answers to questions about health care (Haavio-Mannila 1976). However, other immigrant groups do maintain their social networks during the period of immigration and thereafter. Personal advice can play a much more vital role in lower social strata than in higher social strata. Firstly, those with higher levels of education can find it easy to get information from written materials, including books, and the internet. They can also extend their search to a wider social network including the telephone information service offered by the health care institutions. A person with this kind of educational background can handle the interaction between physician and patient better than those with less formal education. For the latter the visit to a physician can be frustrating. The physician may use words with which they are not acquainted and discuss their disease in an academic way. The patient can be too insecure to ask clarifying questions (Chapter 16). However, the importance people give to each information source varies. In rich countries, for ‘serious conditions’, information from medical professionals is the only source regarded as appropriate. For less ‘serious conditions’, however, information from other sources is acceptable.

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People who regard themselves as healthy indulge in ‘healthy behaviour’ to prevent disease. This can be compared with the ‘sick role behaviour’ people undertake when ‘feeling sick’. In most cultures, this permits the person feeling unwell to put aside their normal social duties. Both the ‘sick behaviour’ and the ‘healthy behaviour’ are culturally learned as part of the socialization process during childhood (Parson 1951). Whether or not a person adopts a sick role sometimes depends on the household dynamics. The family can be viewed as a play where the actors (the family members) give each other gifts in different forms. An actor can penalize another actor (or the entire family) by withdrawing their gifts. They can signal that they want more gifts from the others in order to interact with them as before. To fall sick can be used as a demand for more care and love from the others. Drugs are often used as signs in the family interaction. By taking a pill the family member who is unwell reinforces their status of ‘being sick, showing’ others that they are really not functioning as normal. Whether or not a person assumes a sick role is influenced by many factors other than the family interaction. Some work roles are more satisfying than others. A person with low social status, e.g., someone who is unemployed, is more likely than others to adopt a sick role. This role can be more rewarding for them than their work role or being unemployed (Robinson 1971).

The stage of selecting courses of action It seems that laypeople divide symptoms into three broad classes (Hardon 1987): 1. Serious symptoms, for which a professional contact (either in the form of health professional who has a formal ‘science’ training or a traditional healer) is needed 2. Symptoms which can be handled by self-care or self-medication (including taking prescribed medication from the household’s ‘pharmacy’) 3. Mild symptoms for which no action is necessary. The exact border between mild, ‘ordinary’ and severe symptoms varies between one layperson and the next even in the same country. Some laypeople have a firm belief in the professional health care system and use this for many different symptoms. Others are more sceptical and use it less often (Dunnell and Cartwright 1972: 55–57, Westin et al. 2004). It seems that for specific medical conditions, more of the upper social classes with a high level of education select professional contacts than people from the lower groupings (Koos 1967: 32, Westin et al. 2004). As discussed above, this probably reflects that an individual with a good educational background finds it easier to discuss their medical condition in an academic way, in the same way a physician might. Availability and costs (direct costs and costs for waiting and travel) can affect whether a health professional is contacted. For a less fortunate family, clinical contact can be expensive. In less wealthy countries, the economic factors are the most important for an individual who has an illness or an injury (Asfaw and von Braun 2004). In rich countries, the ‘psychological costs’ can affect the decision taken. For example, a patient might fear that the symptom

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indicates a serious medical condition. In psychological terms the individual can suppress such thinking. However, some patients in affluent societies will contact a physician for social reasons, to get assurance that their symptom is not a sign of a serious medical condition. This contact might be a substitute for a friend for those patients who do not have close social networks. In countries with a national health insurance system, confidence in health care and availability play a more significant role than pure economic factors in explaining why people refrain from visiting a physician despite a perceived need (Westin et al. 2004). In countries which have national health insurance systems the elderly often visit the same physician at more or less regular intervals. On these visits the patient probably asks the physician for advice regarding new symptoms which are not serious. The mean time between the detection of symptoms and getting in touch with a physician varies according to the symptoms. In countries with a well-organized health care system infectious symptoms ordinarily lead to the physician being contacted shortly after their detection. People who are later found to have endocrine and metabolic diseases often wait for a long time after noticing their symptoms before they contact a physician in contrast to those with other diseases (Pedersen 1976). The same principle is found in low and middle per capita income countries where people begin by self-medicating. If the symptoms do not disappear, a clinic is visited, e.g., as in the treatment of malaria (Nyammongo 2002). Many symptoms are handled by self-medication before a physician is contacted. This also holds for high per capita income countries. In a Danish study, 50 per cent of those coming to an open health care clinic had treated themselves before the visit. If the symptoms do not disappear by self-medication, a physician is likely to be contacted. Self-medication before physician contact is most evident when the patient has a skin condition (Pedersen 1976). Whether a health professional is contacted for a psychological-psychiatric problem depends on the support given by the social network. People who have such support do not go to a doctor for psychological problems as often as those for whom support of this kind is not available. This applies even if it is the same psychological-psychiatric symptoms and the same intensity for both these groups (Lilja, Eriksson and Bauer, 2000). If a course of action gives positive results at an early stage, we can expect the decisionmaker to select the same course later. For example, someone who has cured mild eczema with an OTC drug can be expected to use the same drug again if they have similar symptoms (Branstad et al. 1994). However, if the patient is disappointed they select an alternative. In practice, the patient evaluates the treatment results. These evaluations are based on one’s own experiences are associated with many shortcomings. For example, an individual might take an OTC drug in too low a dosage to get significant therapeutic results. This might be found in low per capita income countries. Many people in these countries cannot afford a dosage high enough to achieve therapeutic results (Both, Johns and Lopez-Palacios 1993). It seems that people in general do not think in terms of dosage levels. They often think the drug effects vary depending on the drug preparation and not because of the dose (Lilja 1988). Pharmacy visits seem to be very popular in many countries. In low income countries many people prefer the pharmacy service and buy a non-prescription drug ahead of visits to medical clinics (Igun 1987, Lewis, Eskeland and Traa-Valerezo 2004). Those with low incomes and with a low education level tend to visit a pharmacy more often instead of going to a medical clinic (Lewis, Eskeland and Traa-Valerezo 2004, Pag´an et al. 2006, Habtom and Ruys 2007). Reasons for going to a pharmacy might be convenience (easy to reach) or the

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extra costs which are incurred by visiting a medical clinic (Cosminsky 1994, Russell 2005). This can be compared to the situation in countries with a national health insurance system (as in Europe). Here, the availability of free consultations with the prescriber will encourage people to contact a clinic to get a prescription, which itself may be subsidized. However, the willingness to visit health care facilities can also be found in those low and middle income countries which have a public distribution channel for health care, including drugs (as in many African countries which have a PHC strategy, Chapter 4). These contacts with health care organizations continue as long as the drugs sought are available. When the clinics run out of stock, the patients become much less interested in visiting them (Chapter 9). So in poor countries, service quality, travel time to get attention, waiting times and the costs associated with losing money because of absence from the daily work can affect the choice of health care, if we do not consider the direct economic factors (Russell 2005, Habtom and Ruys 2007). In these countries, the poor have a much more restricted choice of medical care than the rich. When a member of the family is suffering from a serious disease, the poor often have to borrow money to pay for health care (Falkingham 2004). Among individual patient factors, education is important since the better educated patients are more likely to seek modern medical care than those less educated (Habtom and Ruys 2007). A patient who has tried one treatment strategy may try another if their condition does not improve. For example, we can expect a person who has a chronic condition to use ‘traditional medicine’, such as herbal medicine. However, the popularity of these options varies between countries. In many rural places in the world, herbal medicine seems popular for minor medical conditions. In rural areas, e.g., the Cusco district of Peru, many people first try a traditional medicine (in Cusco this means an Inca medicine). If this does not help the medical problem, people might opt for an OTC drug from a pharmacy. At the third stage, for more serious and chronic medical conditions, a private physician (for those who can afford it) or public health care (for those where low cost treatment is necessary) is contacted (Russell 2005, concerning Sri Lanka, Lew-Ting 2005, for Taiwan, and personal interviews in Cusco by one of the authors, JL). It seems that laypeople in societies in which traditional herbal medicines are often used think that these traditional drugs affect the ‘cause’ of the disease. Western medicine is said to affect just the ‘symptoms’ (Lew-Ting 2005). It is interesting to note this way of thinking contrasts strongly with beliefs held by health professionals in high income countries who think that laypeople take traditional herbal drugs for the symptoms while it is the synthetic drugs which affect the causes. In countries without a national insurance system, lower income groups make much less use of health care (in monetary value) (Falkingham 2004). However, in countries with a national health insurance system the low socio-economic groups have the highest health care utilization rates (Vilhjalmsson 2005). These differences between countries, of course, reflect the general inequalities in incomes between the poor and rich nations in the world. However, even in rich countries with national health insurance, the lower socio-economic groups tend to ‘underutilize’ medical care when the ‘medical needs’ of the different socioeconomic groups are considered. The lower socio-economic groups tend to have many more medical problems than the higher socio-economic groups, but the health care consumption of the low income groups does not satisfy their medical needs to the same extent as high income groups (Vilhjalmsson 2005). Once a drug has been prescribed, the patient evaluates its effects in terms of how it affects their symptoms, their well being (physically and psychologically) and according to

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the results of medical tests. The patient often also considers whether they have suffered any unwelcome consequences from using the drug, i.e., possible side effects (Morecroft, Cantrill and Tully 2006, Gordon, Smith and Dhillon 2007). As mentioned in Chapter 9, in many countries formal prescription-only drugs can be bought without a prescription. This is so, not only in developing countries, but also in private pharmacies in southern Europe. The reason for this practice is that there is no strict control of such sales, and pharmacy staff have been used to making such sales for many years (V¨aa¨ n¨anen, Pietel¨a and Airaksinen 2006).

Treatment with traditional medicine and herbal medicines In many countries, traditional medicine is popular because people have discourses which encourage the use of traditional medicine. As previously mentioned, Cusco (central Peru), if patients have a problem, first they will take traditional Inca medicine. If this does not help, then they may visit a pharmacy and, if necessary, later go to a medical clinic. This step-wise decision-making strategy is partly brought about by limitations in both money and time. To visit a physician requires payment (if there is no national health insurance) and can take up almost a day in terms of waiting time in many clinics. A similar pattern of use is found with poor rural families in South-East Asia. Here herbal tonics are popular (Van Esterik 1988), however, the use of traditional herbs cannot be analyzed in terms of their instrumental function, i.e., the extent to which the therapy is expected to be effective for a specific medical condition. We have to allow for the fact that the use of herbs is regarded as part of the same discourse – positive attitudes to herbal drugs and a positive attitude to other traditional cultural beliefs are connected. By taking the drugs, the individual is participating in a social activity. They connect themselves with the experiences of earlier generations and with traditional values and beliefs (Pedersen and Baruffati 1985, Van Esterik 1988). In sub-Saharan African countries, we meet a type of traditional healer different from those in Asia, Latin America, North America or Europe. In Africa, demon possession and conditions caused by witchcraft and infertility are typical health problems for which people visit a traditional healer (Stekelenburg et al. 2005). Severe malaria can be thought of as evidence of evil spirits and can lead to a visit to a spiritual healer (Dzator Asufu-Adjaye 2004). Most healers in Zambia today work on a ‘no cure-no pay’ system. This means that the patient does not need to pay if they are not cured. Those who are dissatisfied with an African traditional healer usually then consider attending a health clinic or a hospital, although most of those who visit a traditional healer are satisfied with the treatment they receive (Stekelenburg et al. 2005). The use of traditional herbal medicine is also widespread in some immigrant populations, e.g., among Asian immigrants in the UK. However, knowledge of the traditional herbs is best remembered by the elderly in the immigrant population. The traditional use of herbs is diminishing over time because of generational changes (Bhopal 1986). Herbal medicines are also used by other parts of the population in Europe and Northern America. For example, 20 per cent of the US population has been found to use medicinal herbs over a 12 month period. One reason for this is a belief in the positive consequences of herbal medicine, but there is concern about the side effects of conventional medicine (Wheaton et al. 2004). Another reason is that alternative medicine might be combined with more ‘high technology medicine’. Such a combination might give a positive treatment

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result according to patients suffering from chronic medical conditions (H¨ok et al. 2007). In general, the people who take complementary and alternative medicines have an open belief system and have friends who also are interested in this type of treatment (Honda and Jacobson 2005). In the UK, homeopathic prescribing is allowed within the National Health Service. Of those who get such a prescription (about nine per cent of total GP prescriptions) most (about 80 per cent) note at least some improvement in their condition (Robinson 2006).

15.4 OTC drugs Self-medication has only been investigated from a normative perspective in a few studies. In a Swedish survey it was found that the buyers used non-prescription hydrocortisone ointments in a rational way (Branstad et al. 1994). In developing countries, however, self-medication is not always in line with the recommendations based on data from clinical trials. This means that many vitamins of questionable value are often bought (Hardon 1987, Greenhalgh 1987). The use of oral rehydration therapy (ORT) has been analyzed in a number of studies. Mothers in developing countries are encouraged to give a child with diarrhoea large quantities of fluid consisting of water, sugar and salt in defined concentrations. This can reduce the risk of death by dehydration considerably. It is an important treatment because more than a million children die every year due to dehydration from diarrhoea. The introduction of ORT in many places has been a success, e.g., in Brazil (Sastry and Burgard 2005). One problem with those is that the children do not like the taste of ORT, which often leads the mothers to stop before a sufficient quantity has been given to the child. The large quantities needed for this therapy to be successful contrast with the idea that only a small amount of a chemical is needed to have a beneficial therapeutic effect when using an ordinary drug (Kenya et al. 1990, Hounsa et al. 1993, Touchette et al. 1994). Another problem is to get the mothers to become aware of the risks of a small child having diarrhoea and the need to visit a medical clinic when the child has had diarrhoea for more than five days. However, it seems that mothers, at least in some of the developing countries, are becoming aware of this (Csete 1993). It seems that horizontal social networks (e.g., in the form of womens groups) might introduce appropriate ORT treatment to a population more efficiently than a system based on ‘qualified’ health professionals because the members of a horizontal social network share similar discourses (Edgeworth et al. 2006). In Europe and the US, a number of former prescription-only drugs are progressively being reclassified as non-prescription drugs (Branstad et al. 1994, Bond et al. 2004). This occurs when a drug substance has become well known and has been shown effective in minor self-limiting illnesses at doses usually below the maximum recommended on prescription. The advantages of this reform can be summarized as follows: 1. Resources can be saved by letting less serious cases be treated by the public themselves. Thus, the professional health care system can concentrate on the more severe cases. 2. Laypeople are given responsibility for their own health. In the long run this can be expected to lead to an increased demand for more and better health care information. People can change their lifestyles in accordance with what is known about leading a healthy life.

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The disadvantages of letting more drugs be sold without a prescription are: 1. Laypeople may not be able to distinguish between non-serious and serious symptoms. They may use self-medication instead of going to a physician about something which requires professional care. 2. Laypeople can use drugs in unsuitable ways. One example is the frequent use of laxatives given to children in some countries. 3. Increased numbers of OTC drugs may encourage less than scrupulous companies to try to influence drug selection in unethical ways. Laypeople can lack the necessary information to draw correct conclusions from the data provided by these firms. A judgment on the merits of letting more drugs be sold without prescription must be based on a set of values and knowledge of the resources available that could enable the layperson to identify and manage any disadvantages which may occur from self-medication. For example, the disadvantages mentioned above could be overcome by the creation of an efficient drug control system. Furthermore, the layperson could be given reliable information from independent or government sources. By providing such information many disadvantages could be avoided (Chapter 16).

15.5 Patient compliance Patient compliance can be defined as the extent to which the patient’s behaviour – in terms of taking medications, following diets or making other changes in lifestyle – coincides with the clinical prescription (Sacket and Haynes 1976, Haynes, Taylor and Sackett 1979, Enlund 1982). Today the concept of ‘adherence’ is often used instead of compliance, because of the negative association that compliance might give (see discussion below). Adherence is usually defined as the degree to which the patient’s behaviour corresponds with agreed recommendations from a health care provider (Sodergard 2006). ‘Concordance’ is another concept which has been suggested could be used in place of compliance (Bradley, Holme Hansen and Kooiker 2004 and the discussion about the actor– spectator paradox in Section 1.8). Concordance means that when a drug is being prescribed or recommended it should be a shared decision-making process based on discussions and agreements between the health care professional and the patient (Britten et al. 2004). However, the problem with this concept is that there is no single operational definition which might be used to determine if concordance has been achieved or not. It seems that ‘concordance’ is today almost an ideology in health care. Health professionals have to be skilled in communications, with the ability to interact with all types of patients. They have to negotiate with the patient and to find the patient’s values and wants. However, the degree of acceptance of the concept of concordance probably varies depending on the cultural background of the patient and the health care staff. For example, with a well-educated European patient, this ideal might be easily accepted. However, for someone with little education living in the Third World, this might be more difficult to accept (Bissell, May and Noyce 2004).

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The proportion of drug compliant patients varies within a wide range and may average 50 per cent.The variation reflects both differences between places and settings, in the study sample selected, and in the definitions of non-compliant persons. The importance of achieving 100 per cent compliance to get effective treatment results varies depending on the disease and the drug treatment. High compliance is important where the illness is progressive or infectious and treatment is not linked directly to immediate symptom relief. For example, in HIV treatment, it is said that it is necessary to get 95 per cent compliance to obliterate the presence of any drug- resistant mutations totally (Sodergard 2006: 3). In treating tuberculosis in developing countries, it is necessary to get a very high compliance rate because a high compliance rate is necessary to avoid TB patients infecting other people (Mishra 2006). However, with many other therapeutic situations, it is not necessary to achieve a high compliance rate. For example, in pain treatment, the patient might take medication when they feel it is needed, as long as they do not exceed the dosage level per day, which can lead to an adverse drug reaction. Good compliance is also relevant in the prevention of over-frequent dosing or over-dosing, which can lead to adverse effects. The compliance concept has been criticized as being based on an authoritarian perspective. This is because there is a risk that reforms are undertaken to increase compliance without considering the patients’ own values, experiences and views. The reader has to remember that high compliance with a prescriber’s recommendations does not have an absolute positive ethical value. ‘Compliance’ is a tool which can help the analyst to understand the process of drug use.

How to measure compliance? The compliance rate can be measured by different methods: 1. Interviews Interviews as a method of measuring non-compliance are associated with validity problems. The tendency is for those interviewed to rationalize their earlier ‘deviant’ behaviour when describing it. Non-compliant behaviour is often not reported because interviewees rarely acknowledge all the times that they have failed to comply with medical instructions. However, interviews can also be used to collect considerable data which illuminate the compliant and non-compliant processes. For example, the discourses (including the beliefs and attitudes) held by the patient can be recorded (e.g., Sodergard 2006). 2. Pill-counting Pill-counting has frequently been used to measure drug compliance. Patients are asked to bring their medicine bottles with them when they pay a return visit to their physicians. The degree of compliance is measured by comparing the number of tablets prescribed for the period between visits to the prescriber with the actual number of tablets used by the patient. One of the disadvantages with this method is that it does not measure when the dosages were taken and because of this it only gives a rough indication of

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the patient’s tendency to under- or over-use the medication in relation to the prescribed dosage. 3. Chemical tests The active chemical ingredient of a drug in the patient’s body can be determined by blood or urine analysis. The relationship between the concentration of ingredients in the organs of the body and the intake pattern can be investigated in a pilot study. Once this relationship is known, it is then possible to determine the degree of patient compliance from a test of blood or urine. If there is no suitable chemical way of measuring the quantity of the active ingredient directly in the body, a marker – a substance of no pharmacological significance – can be used to measure the intake of the drug. This may be an ethically questionable practice (depending on the cultural values in the country) to use tests in this way without informing the patients about the study. 4. Other methods Special technical devices can be developed to measure compliance. For example, the degree of compliance in taking eye-drops can be measured by a special bottle with a time-measuring unit and a recording system indicating when the bottle was opened (Norell 1981). A problem in compliance research is that the factors associated with compliance and low compliance vary depending on the way compliance is measured (Mathews et al. 2002).

A cognitive model of the factors which determine the degree of compliance It is possible to distinguish between the factors which influence whether a patient will not even start a course of treatment and those which determine that they will fail to continue to follow it. Among the factors which determine if a patient will not start a drug treatment we find the following: 1. In some situations the patient will not accept the diagnostic decision made by the physician. For example, in developing countries there are people who are not prepared to accept a diagnosis of leprosy because of the considerable stigma associated with that condition (Mull et al. 1989). 2. The price of the drug might be unacceptable to the patient. In developing countries this is not an unusual situation (Isenalumne and Osawaru 1988). 3. The patient does not think the suggested drug treatment is effective for their medical condition. For example, many people will not take an antidepressant, even if it is prescribed because they think they can handle their condition with the support of family and friends.

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Some of the reasons why people stop taking a drug according to the dosage scheme are outlined below: (Lilja, Larsson and Hamilton, 1996: 137–144): 1. Forgetfulness means that people simply do not take their drugs according to the prescribed dosage. This is a bigger problem among the elderly and with those prescribed a number of different drugs. 2. Lack of information and misunderstandings might be reasons why people do not follow their dosage scheme. For example, there might be a problem when a patient visits two different physicians for the same medical condition and gets different drugs prescribed. Deciding which drug to take then becomes the issue. 3. The physiological effects noted by the patient. A patient might stop taking a drug if they notice side effects about which they have not been informed. This means that it is better to inform every patient about possible side effects than to avoid giving out such information. 4. The patient’s expectations can influence how they are taking the drug. If the patient believes that the drug will have an effect on their medical condition they will take it (Sodergard 2006: 33). If they think that they can control their medical condition, will comply with instructions (McDonald-Misszak, Maki and Gould 2000.) On the other hand, people with high blood pressure sometimes stop taking their medication when they feel better. They may still have high blood pressure and so will be at risk of strokes and heart failure because it is not possible for a person to assess their own blood pressure from their bodily symptoms. 5. Inconvenience might be another reason why a person does not follow the dosage scheme. For example, eye drops can be difficult to administer properly, especially for elderly patients. 6. Lack of social support might be a reason why a patient deviates from the prescribed dosage. This means that the patient’s social network can have a strong influence on whether they follow long-term drug treatment or not (Simoni et al. 2002, Sodergard 2006: 33). 7. There is, in a number of sub-cultures, a considerable reluctance to take medicines regularly and a preference to minimize medicine intake (Gabe and Bury 1996, Morgan 1996, Pound et al. 2005). For example, many patients with psychiatric-psychological symptoms want to be autonomous and want to make their own decision about when to take their psychotropics. They regard their drug taking as a form of self-medication (Mitchell 2007). It seems too that working-class women are more sceptical about drugs than middle-class women (Calanan and Williams 1996: 40). 8. How the individual assesses the health care might determine compliance. In some subcultures those patients who have positive stereotypes regarding health care professionals might be more compliant than those who have less positive stereotypes (Bogart et al. 2004).

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9. In poor countries, lack of money might be an important reason why patients have a low compliance rate, even for serious medical conditions like TB (Auer et al. 2006). However, it is beyond the scope of this chapter to analyze all the factors which are associated with the compliance rate. These associations vary depending on the type of disease, cultural aspects (including the disease discourses existing in the culture) and health care factors. When discussing dependency-forming psychotropics, the problem is often the opposite of non-compliance. A patient continues to take the medication because the drug can, according to the patient, alleviate negative feelings and enable them to cope with stressful situations. However, many patients who have taken benzodiazepines think that they are habit-forming and want to stop taking them, but find that they cannot do so (e.g., Lilja, Larsson and Hamilton, 1996: 241–256, Haafkens 1997, Parr et al. 2006).

How to improve compliance Health professionals can use a number of different verbal education strategies to increase compliance (Heszen-Klements 1987, Smith et al. 2005). For example, patients can learn to associate drug intake with situational factors. As previously mentioned, some patients forget to take their medication at the times specified on the drug label. This problem can at least be reduced by technical devices reminding the patient to take their drugs at prespecified intervals and by teaching the patient to associate their intake of the drug with specific daily activities (this method is often called ‘tailoring’). For example, the patient can be taught to associate the first daily dose with their breakfast, the second with their lunch etc. However, other strategies used by physicians are much more questionable from an ethical perspective. For a physician, non-compliance might be an ego-threatening event and they might use authoritarian strategies to reduce the risk, e.g., stressing the doctors’ superior position or their professional knowledge (Heszen-Klements 1987). However, the selection of strategies to improve compliance always involves value judgments. The prescriber and the patient do not always subscribe to the same values. At some point, the values of the patient must be respected by the prescriber (Conrad 1985).A significant percentage of patients may not comply, even after being informed, because they do not have the same expectations about the effects of their drug treatment. For example, people have quite different views about how depression should be treated. Some (both health professionals and laypeople) believe that antidepressives produce good results. However, others (again both health professionals and laypeople) believe that depression should be handled in other ways, e.g., by cognitive therapy (Lilja et al. 2002). In some situations in which it is necessary to reach a very high compliance rate, e.g., with TB, direct observed treatments (DOTS) might be necessary. This means that the health care personnel directly observe that the patient takes their medicines (e.g., Mishra 2006). The use of an injection instead of hoping that the patient will take a prescribed regimen of tablets regularly is a radical way of ‘solving’ the compliance problem in antibiotic therapy (Markowitz 1985). The injections of long-term psychiatric drugs more problematic. There is a risk that the patient might be persuaded – by health care personnel and relatives – to accept such a treatment against their own beliefs. This might be regarded as being an ethically a questionable practice, even if there can be situations when such treatment is

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necessary, e.g., during acute psychosis. However, a more open atmosphere in the clinic, can be argued for so a patient can say what they think about the suggested treatment (see section about informed consent in Lilja, Larsson and Hamilton, 1996: 149–156). In a number of studies, cooperation between pharmacists and medical clinics has been found to lead to an increase in patient adherence (Finley et al. 2002, Sodergard 2006). However, to increase the compliance rate often requires considerable time and resources. For example, in a UK project, patients taking lithium for bipolar disorder were given seven 30 minute education sessions by an expert in cognitive therapy. After such massive intervention, adherence improved (Scott and Tacchi 2002).

15.6 Summary Most of the initial measures households take to respond to acute symptoms seem to be self-care, including self-medication. This suggests that a therapeutic ‘iceberg’ exists with most episodes of illness with much out of sight of the official health care system. Members of the public have different explanatory models (discourses) of illnesses, including ideas of causation, beliefs about symptoms indicating the severity of the illness, views on the course of the illness, evaluation of therapies and ideas on how to handle drugs to achieve the desired effects. These discourses of the general public often deviate from the corresponding discourses held by health professionals. An illness starts when a set of symptoms is recognized, followed by a judgment on these symptoms and the selection of the measures to deal with them. The culture, beliefs and attitudes of the decision-maker and their family, together with external information all influence this process. Of course the specific process varies from one socio-cultural unit to another and from one type of illness to another. The process ends with a decision about the action to take. For example, a patient may contact a physician if the symptoms are regarded as serious and the physician is expected to give proper treatment. Over the last few years, a number of former prescription-only drugs have been re-classified as nonprescription drugs in European countries in order to make financial savings and to encourage members of the public to take increased responsibility for their health without suffering any medical disadvantages. Compliance can be defined as the extent to which a patient’s behaviour coincides with the clinical prescription. The proportion of drug compliant patients may average 50 per cent, but large variations around this figure are normally found. Compliance is influenced by discourses held by the patient before their visit to the prescriber, the information received, changes in the patient’s discourses, situational factors in the patient’s environment and their decisions regarding treatment. Because of the authoritarian perspective behind ‘compliance’ it is much more popular to talk about ‘concordance’ nowadays. This means that the patient’s values and opinions should be respected in the prescribing process. The prescriber and the patient have to reach a mutual understanding of the reasons a specific drug and specific dosage scheme have been chosen.

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16 Drug information

In this chapter, drug information programmes intended for patients and the general public will be discussed. At the beginning of the chapter this will be done from a receiver’s perspective, but it will be followed by a section describing drug information from a sender or provider’s perspective.

16.1 Background A ‘communication network’ includes at least one sender and one receiver. The networks which we shall discuss include a number of senders and a very large number of receivers – the general public. However, to analyze the communication process, it is necessary first to look at what is involved with one sender and one receiver (Figure 16.1). Figure 16.1 provides a very simple illustration of a communication network. When the sender decides to send a message and selects a channel through which to communicate with a group of receivers, they have to consider the discourses to which the receivers subscribe. This means that they have to have a general knowledge of the attitudes and beliefs of the target group. To understand how the receivers interpret the message and how the message influences the behaviour of the receivers, we also have to be aware of the assumptions the receivers make about the sender’s intentions, motivations and knowledge. We might call the assumptions one party makes about the other party’s discourses in a communication network ‘social meta-cognitive assumptions’. To collect data about the meta-cognitive assumptions in a pharmacy setting, a video vignette approach could be used. Indeed, the aim of one Swedish study was to find the meta-cognitive assumptions of pharmacy staff towards OTC customers. Video vignettes illustrating customers with minor medical problems were shown to pharmacy staff. They were of common situations in the pharmacy. For example, a man with a cough was used in one. After seeing each vignette, the participants (the pharmacy staff) were asked to assess the customer on a number of scales, in a questionnaire. They were also asked to describe the Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

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Sender

Message

Channel

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Feedback

Figure 16.1 A communication network

customer in their own words and to provide the type of information the customer ought to be given were the situation real. They were further asked to indicate on two scales whether they would provide the customer with certain named preparations and the extent to which they would tell the customer about the risk of side effects (Lilja and Larsson, 1993). A major finding from this study was that the information the pharmacy staff would have given to the customers in the video vignettes was very much influenced by the assumptions the individual staff member made. If the staff member assumed that the customer wanted to make an individual decision about which drug to select, then the customer was given more information than when the staff member assumed that the customer wanted the pharmacy staff to make the drug choice. If the customer was thought to want to make an independent decision they were given a number of drug preparations from which to choose. Criteria to make a rational selection from the preparations were also suggested to them and they were also told about the potential side effects of the preparations. Similar studies have been undertaken in other Northern European countries. They reveal only minor differences in assessments and social meta-cognitive assumptions between the countries analyzed (Lilja, Larson and Hamilton, 2000). A video vignette study was also undertaken to collect data about the meta-cognitive assumptions customers make regarding pharmacy staff providing information about OTC preparations. Here, video vignettes illustrating pharmacists were shown to two samples of the general public, one a group of middle aged women and another a group of elderly women. After each vignette, the participants filled in questionnaires which included scales assessing their general attitude to the information given by the pharmacy staff, the credibility of the information, the comprehensibility of the information (how easily it could be understood) and the degree of empathy shown by the pharmacy staff. When analyzed, the associations between the scales were determined. Credibility was the scale most strongly associated with the general attitude to the information provided in the pharmacy. If the participant regarded the information as credible they liked what they had been told. The researchers assumed that comprehensibility would be most closely associated with the general attitude of the elderly women to the information provided because it was surmized that older people might have more difficulty than younger ones in understanding the information. However, the researchers’ assumption was entirely wrong. It was the younger women who associated comprehensibility with the general attitude, but not so the elderly. One explanation of this finding might be that the elderly were not as concerned when they did not understand something (they had come to terms with the fact that there are a lot of thing we do not understand), but understanding was something that did matter to the younger women (Franzen et al. 1996, Lilja, Larsson and Hamilton 2000). As mentioned in Chapter 1, health professionals are in a much better position to provide information to patients if they know the patients’ way of thinking (see the actor–spectator

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paradox in Section 1.8). Today, health professionals often use questions directed at the patient to get that information. However, in the future we shall see more interactive computer systems in which patients provide, not only details of their symptoms, but also information about their values, expectations and experiences (Benaroia, Elinson and Zarnke 2007). The medical data clinical encounters provide, vary considerably between countries. In many poor countries, the health professionals in public health institutions get told and say very little (see the discussion in Chapter 4 about the problems in the public drug sector). In countries with a high per-capita income, more information is usually exchanged. Even in such countries, however, failure to disclose vital medical information does occur in clinical encounters (Bugge, Entwhistle and Watt 2006).

16.2 The role of mass media During the 1920s and 1930s it was generally believed that the radio had a very strong impact on the attitudes and behaviour of the general public (Paicheler 1988). However, studies in the late 1930s indicated that information did not pass directly from the mass media to the general public. Local opinion leaders were found to be more influential in providing individuals with news (Figure 16.2). Of course the model indicated in Figure 16.2 simplifies the process. In practice, a message may be relayed through a number of opinion leaders, who use this information in their own decision-making as well as passing it over to others. For a information sender, this often means that the more discussions in local groups, the stronger impact will be noted in the target group. The opinion leaders are people close to the ultimate receivers. Their characteristics were further found to vary depending on the matter under discussion (Katz and Lazarsfeld 1964). For example, in drug matters, the opinion leaders might be those who had suffered from the disease mentioned in the message or might be health professionals acting as opinion leaders in their own social network. Those with higher education qualifications use the mass media more carefully than those who have received less education. People with a short formal education are more likely to depend on personal sources than those with an extensive education (Chapter 15). This can

Mass media messages

Local opinion leaders

Ultimate receivers Figure 16.2

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lead to a diffusion of health information from those with experience of higher education to those with less of a scholastic background. However, most social groups are probably more homogeneous as regards education, which makes this type of information transfer less likely. People who are flexible and innovative and try out new methods use written information as an influential source of change. Those who are reluctant to change and do so only at a later stage rely more on personal sources (Rogers and Shoemaker 1971). In a few studies the mass media content regarding drugs, their use and abuse has been analyzed. For example, Gabe, Gustafsson and Bury (1991) used discourse analysis in their study of newspaper coverage of tranquilizer dependency (mostly discussions of benzodiazepine use). Their findings can be summarized as follows:

r The local press focused more on the patients’ individual experiences, while the national media concentrated more on impersonal stories.

r Some articles described the experiences of ‘ordinary people’ while others’ emphasis was on what had happened to celebrities.

r In general, the mass media description of how an individual became dependent on tranquilizers was of a passive process having taken place. The patient had been stressed and had used tranquilizers to handle the situation. However, the patient then found themselves dependent. They had lost control and had become a victim.

r The process of how someone dependent on tranquillizers stopped taking drugs was gen-

erally described in terms of a much more active decision-making process. The individual had made a positive decision to give up the medication in order to end their dependency problems.

r The narratives in the newspapers often gave an individual’s views in dramatic form. The

theme throughout almost all the narratives was that people could control their own destiny in spite of all the stresses and strains of modern life.

Many studies have looked at the gender aspect of drug advertisements. For example, Curry and O’Brien (2006) found that the stereotype of someone with depression was nearly always female, while heart patients were shown as male. A similar female stereotype in advertisements in medical journals has also been reported by Hansen and Osbourne (1995). A number of factors diminish the impact of the mass media as a source of drug information. Firstly, opinion leaders and ultimate receivers frequently do not interpret the messages in the way that the senders intend. Human perception is selective and messages and arguments are only partially noticed. The arguments presented will be changed so they are understood according to the attitudes and beliefs previously held by receivers, and it is more likely that people will receive messages similar to their opinions without being aware of it. The often sporadic character of mass media messages dealing with drugs also diminishes their impact. Most messages referring to drugs only appear a few times, for example, mentioning a side effect reported by a research team. This story will soon be replaced by new ones about other drugs. In a few well-known cases a drug story may ‘run’ for quite a time, maybe longer than a year, e.g., the side effects of contraceptive pills. In an interesting study by Van Trigt (1995) it has been shown that most messages in the mass media about

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drugs tend to be positive. This is because journalists often refer to publications in scientific journals, which mostly provide good news about medicines. The opinions of the medical experts in a country might have a considerable effect on the mass media. For example, Hemminki (2004) noted that national experts in Finland were astonishingly insensitive to new clinical trial data concerning preventive hormone therapy for menopausal symptoms. The reason might be that the experts’ opinions were formed by information provided over a long period of time. So for them, a single new clinical study was of limited influence on opinions already formed. There is always the risk of a close symbiotic relationship between leading medical experts and influential journalists in a country (Karpf 1988: 110–134, 162–179). However, today the mass media also provides consumer-oriented programmes with the emphasis on patients’ experiences. Karpf sees this development as the result of large numbers of critical young journalists getting jobs in the mass media in the 1960s and 1970s and the knock-on effects of the social changes of these decades (Karpf 188: 57–61). And, as in newspapers, the staff producing TV programmes have a strong influence both on the content and on the style of what appears on the screen (Karpf 1988: 97–109). However, the mass media does affect people’s attitudes and beliefs about drugs. In the long run, it will determine which topics are discussed (the agenda-setting function of the mass media). Every so often, medical news stories appear in the media, even if there are few scientific facts or findings to support the storylines (Benelli 2003).

16.3 Drug information sources used Research methods Interviews and questionnaires can be used to collect data about the sources patients and pharmacy consumers use to get information about drugs. The validity of these methods can be questioned because:

r Unconscious factors can play a part. This means that a person does not necessarily know how they got the information and how different sources influenced their behaviour.

r Some information sources are more easily recognized and remembered than others. The respondents can be expected to report those easily recognized factors but ‘forget’ many of the less recognizable influences, e.g., what friends and relatives said.

r The answers may reflect the desired source of information, which may not be the same as the sources used in practice. For example, information from a physician may be the desired source of information, but may not be a practical option because of its low degree of availability in comparison to information from relatives and friends.

r The interview situation may influence the results. For example, if customers are inter-

viewed in a pharmacy they will likely mention information given in the pharmacy as an important source. However, asked later, somewhere else, they might not give the same answers.

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r In interviews and questionnaires, the mass media is not very often mentioned by re-

spondents. However, we should expect it to have a strong influence on this type of data. This is because mass media messages are picked up by opinion leaders and transferred to information which is then frequently relayed in the form of a personal message (see Lazarfeldt’s two-step model described above in this chapter).

How the situation affects the information search The sources used by a patient who wants more health and drug information are very much dependent on the disease and symptoms. Each problem probably has its own pattern, even though the pattern varies between decision-makers faced with similar problems. We know, for example, that people with skin conditions often use non-prescription drugs before contacting physicians (Pedersen 1976). Patients who have been informed about a serious and stressful medical condition, e.g., in an oncology unit, are more likely to have a relative or friend with them when they meet the clinician. Often it is the relative/friend who asks more questions than the patient themselves (Eggly et al. 2006). The sources a decision-maker uses for drug information also depend on the nature and stage of the disease with which they are confronted. One information source can be of great help and frequently used at one stage, but be of low value and seldom used at later stages. For example, OTC drug information given in pharmacies probably influences a decisionmaker when they have already decided to use a non-prescription drug for their symptoms. The information in the pharmacy then helps them to decide which preparation they should choose. However, in low and middle per capita income countries, retail pharmacies play a different role. Patients are commonly encouraged by friends and relatives to visit a pharmacy as the first professional source of information about their conditions. Retail pharmacies are popular because the supposedly effective treatments are given without delay and at an acceptably low price (Igun 1987). Opinion leaders in the form of friends and relatives are often used as a source for health information at early stages of an illness.However, we still have only a limited knowledge of the characteristics and backgrounds of those who act as opinion leaders in social networks handling health and drug requests. Most likely, health care personnel act as opinion leaders in such networks outside working hours. Also, those who have had first-hand experience of a disease act as opinion leaders, e.g., someone who has had a heart attack will tell their friend what it was like, what happened etc. In some cases, decision-makers may not have a social network for health and drug information. It has been found that many immigrants initially have to contact the health care system about minor health problems because they have, as yet, no social network established in their new country. Some years later, when they have such a network, this can be used and will result in less frequent visits to health care personnel (Haavio-Mannila 1976 and Chapter 15). However, this is a generalization which will not apply to all immigrants. One group which always wants a lot of health information is parents having their first child. They often feel insecure about handling their baby’s minor symptoms, particularly if they do not have the support of older relatives or friends in their neighbourhood. As a result they often contact nurses, pharmacists, doctors, etc., for advice about common childhood ailments (Kirscht 1976).

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For many people, the internet has become an important medium for health information in the high and middle per-capita income countries (Morahan-Martin 2004). One reason for this is its easy availability. Another reason is that it provides anonymity. It seems that most adolescents have developed their own personal system for checking the validity of information available on the internet (Gray et al. 2005). Adults also use the internet, with information on some conditions and symptoms being sought more frequently than others. For example, discussion groups dealing with weight loss seem to have become popular (Fox, Ward and O’Rourke 2005). Several recent studies have analyzed the strategies internet users apply to check the reliability of the data found. This is because the internet provides data of varying quality. The internet users check their findings in different ways, e.g., by comparing the information provided from different internet sites (Adams, De Bont and Berg 2006). Those parents of small children who use the internet, seem very satisfied. Often they use Google and apply their child’s medical condition as the key word (Sim et al. 2007). But for the health professional, the internet patient can be a problem. How the health professional reacts varies. Some are quite defensive, while others are willing to tell the patient about more reliable websites (McMullan 2006).

Information about prescription drugs The first time a prescription drug is given, the prescribing physician is often the most important source of information. However, information from the pharmacy seems to be the most frequently used complementary source (Thompson and Stewart 2001). After having taken the drug on a number of occasions or over a long period of time, the patient’s own experiences become more important. In some situations, what is said in the mass media can have some effect on the user’s opinions about the prescribed drug they are taking. However, most mass media reports only appear once or a few times and seldom have a long lasting effect on the user’s discourses (see discussion about the mass media above). Instead, information provided by other people with the same medical condition is likely to be of more importance to the user of the prescription drug. As a part of the drug registration process, the labelling of the product package must be in accordance with clinical documentation. Prescriber’s information is often supplied in the form of compendia, whilst in many markets (e.g. all of EU and North America) it is mandatory to provide the patient with an approved leaflet containing the information on the product. A great number of studies have shown that many patients want information about the potential side effects of the prescription drugs they are getting (e.g., Airaksinen et al. 1994). However, pharmacists do not give the same importance to side effects when advising patients with prescription drugs (Airaksinen et al. 1994). People are much less concerned about the side effects of OTC drugs because this type of drug should have a low risk of side effects (Branstad et al. 1994) since this is a criterion of approval for OTC status. Not surprisingly, those who have experienced some adverse drug reactions want comprehensive information about medications, compared with those who have never had such an experience (Enlund et al. 1991). The increased interest shown by members of the public in searching for more health and drug information does not mean that they want to take full responsibility for all medical decision-making. Laypeople still trust health care personnel (Strull, Lo and Charles 1984),

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but reducing the risks and uncertainties they feel when they are ill is important to them and so they are intent on collecting as much information as possible from different sources. In a medical encounter, it is not just the health professional who delivers information. A physician might be an information provider or a listener depending on the prescription situation (a new drug being prescribed, a repeat drug or a drug in use but not prescribed in this encounter). If a new drug is prescribed, the physician assumes an information role. However, in the discussion about side effects for a repeat prescription or for a drug in use, the physician is mainly the listener. However, there can be a variation in these roles depending on the patient’s knowledge and experiences as well as the physician’s attitudes and clinical expertise (Richard and Lussier 2007). The communication roles of the physician and the patient are also affected by the medical condition. For example, in medical encounters with patients with depression, the physician takes charge of the interchanges (Loh et al. 2006).

Information about non-prescription drugs The public’s information handling process varies considerably from one non-prescription drug to the next. For example, in many countries, acetylsalicylic acid or ibuprofen preparations are hoarded by families and used for various minor ailments like pain and fever. When the family’s supply of these medicines runs out, more are bought to have in the house, even if no one in the family is experiencing such symptoms at present. Usually the same brand is bought each time. In general, families have strong brand loyalties with this group of drugs. However, cough medicines are not kept in the same way. This type of drug is usually purchased when someone in the family gets the flu or has a cough. Often pharmacy personnel are asked for advice about which preparation of this type to choose. The decision-making process when buying a non-prescription drug can be affected by the fact that it is women rather than men who get the non-prescription drugs in a household. Men and women might use somewhat different information sources and decision criteria in the choice of a non-prescription drug preparation. Pharmacy staff are used as a source of information about non-prescription preparations more often than about prescription drugs. Most buyers of non-prescription drugs say that they allow pharmacy personnel to influence their selection (Blom 1986). However, many buyers have already decided before entering the pharmacy which preparation to get. In these cases, pharmacy information is not given in response unless there is a direct request for information from the buyer. The pharmacist is aware that what is said will have little influence on the drug choice made. Also, advice from health care personnel other than those in pharmacies can influence the public’s choice of preparations. For example, in Northern Europe, midwives have a strong influence on women’s use of contraceptives. One reason for this is that midwives have the right to prescribe oral contraceptives in those countries (Aneblom 2005, Larsson 2003).

16.4 Drug information from a sender’s perspective When planning a drug information programme, its objectives must be decided. A drug information programme often has aims which are not clearly specified. This lack

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of specification can result in less efficiency than in a situation where the goals are known and detailed. For example, the choice of media is dependent on the results being sought. Some media are more suited to improving factual knowledge whilst others are better at achieving attitudinal change. If the goals are not specified clearly, a consequence can be the choice of a medium not best suited to the aims of the programme. Among the most often discussed drug information objectives are (for details see Lilja, Larsson and Hamilton, 1996: 207–224): 1. The receiver’s satisfaction with the information 2. Understanding the message 3. Proper use of the product 4. Emotional support 5. Attitudinal changes 6. Changes in knowledge 7. Behavioural changes 8. Health effects 9. A reduction in adverse drug effects 10. Satisfactory information costs.

Receiver’s satisfaction with the information Senders observe how satisfied the receivers are with the information provided. Hopefully satisfaction is also associated with credibility meaning that the satisfied patient might be more likely to follow the information provided. However, the association between satisfaction and compliance is complicated. (Chapter 15). One problem with analyzing satisfaction in health care, is that patients, in general, tend to be very satisfied. This makes it difficult to learn and, where necessary, change information strategies from feedback about satisfaction levels. The receiver’s expectations will also affect the satisfaction reported meaning that a high level of satisfaction can be explained by the receiver having low expectations about the information to be given. Also, the level of satisfaction depends on when data is collected. From hospital studies, we know that patients are most satisfied directly after discharge. After 12 months they will be somewhat less satisfied (Stevens et al. 2006). For health professionals, it is more difficult to inform aggressive or hostile patients. In such cases it might be best for both the health professional and the patient not to go too deep into the patient’s personal life, because such an exploration can make compliance by the patient most unlikely (Strous, Ulamsn and Kotler 2006).

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Understanding the message Of course, medical information has to be communicated in a way that it is understood by the target group. This means that the content and the information strategy have to be adapted to the characteristics of the target group (see the actor–spectator paradox in Section 1.8 and Thompson 2000).

Proper use of the product The ultimate goal of taking a medicine is to benefit from its full therapeutic effects. This can only be achieved through the proper use of the medicinal product. Information related to this must be communicated to the target group clearly, both in written form and verbally by healthcare professionals. Optimization the therapeutic value of a medicinal product for a patient is not only a professional duty, but is also a moral responsibility.

Emotional support Many patients and pharmacy customers expect emotional support. This would include a number of aspects of social support, such as sympathy, understanding and encouragement (Lilja et al. 2000). Researchers have often stressed the failure of health care systems to give this kind of support to patients. Personal sources can be more suited to providing emotional support than written ones and it is recognized that some health care personnel are better than others at giving such support. However, giving emotional support can be improved by learning (Lilja et al. 2000). Certainly the limited time available to provide emotional support in pharmacy settings can be a barrier, but time is not always the central problem. In providing details about risks to patients or carers the exact format in which this kind of information is delivered seems not to matter. This means that the level of uncertainty felt by receivers does not vary according to the way the information about risks is provided. This was the conclusion of a study of diabetes patients (Edwards et al. 2006). However, the provision of such information to new patients can lead to differences in the feelings of uncertainty, depending on how the details are delivered.

Attitudinal changes Attitude is often used to indicate many types of loaded concepts, such as values, decision criteria, opinions on drugs in general, and on specific brands of drugs. Attitudes can be measured in a number of different ways and how they are measured depends very much on the aims of the information sender. The senders vary considerably with regard to which changes they want to achieve. For example, some senders want to foster attitudes which improve drug compliance, whereas others try to nurture well-informed patients who may or may not follow the instructions. In the latter case, providing information is done in a democratic way and ensures that every patient is fully aware of the

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treatment they will be receiving. Here it is up to the individual to decide to accept the medicine advised or not. However, such a democratic approach is associated with clear ethical problems, if what is involved is a contagious disease, e.g., TB. In such cases, it is important for the patient to take their medicine to avoid spreading the condition to others. However, for most medical conditions, this democratic way of doing things is perfectly acceptable. The existing set of attitudes an individual has, is the result of a long learning process begun in early childhood and also the result of contacts within their social network. From an information sender’s perspective, specific attitudes are usually easier to change than general attitudes, which are often associated with other more fundamental beliefs. To change general or firmly based attitudes, it is often necessary to change other elements as well. Such attitudes cannot be altered by a few lectures or a few mass media messages (see the discussion about discourse changes in Chapter 1).

Changes in knowledge Knowledge can mean many things. Often knowledge is defined to include all beliefs, expectations and cognitive perceptions (excluding attitudes) which are relevant to patient drug behaviour. The ways in which changes in a person’s knowledge of drugs are measured vary considerably. In many countries, it has been noted that people do not have enough knowledge to use the drug preparations to optimize the therapeutic effects. For example, antibiotics are sold and consumed for indications upon which they will not have any effect. Also, the period for using an antibiotic might be too short to avoid the risk of resistant bacteria strains occuring (Wolf-Goald et al. 1991). The changes in knowledge noted following a drug information campaign vary, depending on the receiver and media factors (Lilja, Larsson and Hamilton 1996: 213–218). The receiver’s level of motivation and previous beliefs are important in this matter. It is easier to achieve changes in knowledge if the cognitive elements are congruent with the receiver’s earlier beliefs. The credibility of the sender is one important media factor influencing the magnitude of the changes in knowledge. In general, greater results can be expected if more credible sources are used. However, it is not certain that all receivers perceive the sources in the same way. Comparisons have been made between different media to find out which are best suited to achieving changes in knowledge levels. However, there are many methodological problems involved in comparative media studies. For example, any unbiased comparison must involve holding media costs constant. It must also be recognized that one medium will not be the best for all types of messages in drug information programmes. The medium best suited to convey factual knowledge is not necessarily ideal for other purposes. It has been acknowledged that personal and written drug information can be combined and thus can frequently facilitate learning. Acquiring drug information can also be made easier by involving the family and other social networks in the learning process. We also know that changes in knowledge as a result of limited drug information are not retained for a long period and that knowledge levels, as measured by recall, decrease over time if no reinforcement takes place.

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Behavioural changes Behavioural changes can be of many different types. Drug compliance has been the standard method for measuring the public’s behaviour in relation to prescribed drugs (Chapter 15). However, it is our contention that drug compliance is a complex behaviour which can be divided into smaller units of analysis. For example, it is very important to distinguish between the decision of the patient to take a prescribed drug or not, and the dosage decision made by the patient. These two decisions are quite different and involve different types of information and decision criteria. It is also very important to distinguish between conscious and non-conscious compliance. Non-conscious non-compliance can often be influenced by drug information. Conscious non-compliance can be more difficult to influence if it is related to strongly held attitudes or important situational factors (Chapter 15). There is a need to establish innovative methods to measure patient medication behaviour. Indeed, some new methods have already been developed, e.g., improvements in the ways patients handle inhalers and changes in health care behaviour. Some types of behavioural change can be achieved rather easily whilst others are more difficult, e.g., when the existing behaviour is closely associated with beliefs and attitudes firmly held by the receivers. In a well-known study by Sackett et al. (1975), drug compliance could not be influenced by information, although changes in the patients’ knowledge of drugs and their effects were noted. There may be many different reasons for such findings, but it would seem that drug behaviour is more closely related to the attitudes a person holds than to the acquisition of new knowledge. A combination of media increases the likelihood of behavioural change, compared with information provided from a single medium. Technical devices, e.g., medication containers, together with information seem to be more effective than information alone. Also, verbal information when combined with written instructions achieves a higher degree of compliance. More contacts generally lead to more behavioural changes. However, longer doctor–patient communications are not necessarily associated with greater patient compliance. The content of the message can influence behaviour. Improved compliance can be achieved by letting the patient associate the time when the drug is taken with situations occurring in their ordinary life, so-called ‘tailoring’ (Chapter 15).

Health effects Some drug information programmes, in which the health effects were subsequently measured, showed positive results. However, other programmes have not been so successful because there are a huge number of factors which can and do influence one’s health. The effects of drug information can be hidden away among all the other factors.

Reduction in adverse drug effects Some drug information programmes have aimed at decreasing the number of adverse drug effects. This can be achieved by giving patients information about the more common adverse reactions. Traditionally, however, many physicians have been opposed to giving out this

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type of information, although in the last ten years, affluent countries have made the provision of a leaflet from the pharmacy mandatory. Empirical data indicates that more information about adverse effects does not lead to more cases being reported (Paulsson et al. 1976, Myers 1984). The evidence is that information about adverse reactions can result in the earlier identification of toxic effects by the patient, and thus earlier physician contact (Jenks et al. 1974, Dodd and Mood 1981). Also, it has been found that patients can be very important in detecting potential medical errors in outpatient cancer care (Unruh and Pratt 2006). Of course, this is an argument for providing patients with reliable patient information systems. However, the patients’ expectations of the physicians’ willingness to provide information regarding adverse effects seem to vary, depending on the culture. In Japan, a higher percentage of patients expect physicians to hold back this sort of information. By contrast, in Denmark there is not the same expectation. The Danes believe that physicians must provide information about recognized adverse effects (Itoh et al. 2006).

Satisfactory information costs The costs of drug information programmes have seldom been mentioned in evaluations of these programmes. However, the costs of a programme are an important dimension in any evaluation and, at the very least, informed estimates must be provided. We know astonishingly little about how to optimize resources for drug information programmes. For example, how should resources be allocated over time to a target population to achieve a number of specified goals?

16.5 Mass media campaigns In most countries, there are organizations which develop and distribute ‘independent’ health information. By ‘independent’ we mean here that the sender has no commercial interests (Karpf 1988: 220–235). In general, the mass media can be a very useful way of providing preventive information to a large population, e.g., in emphasizing that the home-based management of fever (HBMF) can be a prompt and effective treatment for malaria. The mass media can also be used to avoid general use of second line drugs (the drugs which ought to be used when the first drug failed in a treatment programme) as the first drugs for self-treatment of malaria symptoms. The second line drugs ought to be reserved for complicated malaria cases (Ndyomugyenyi, Magnussen and Clarke 2007). However, media campaigns can have a number of different goals. For example, the sender has to decide if the aim is to educate or empower the target group. Traditionally education has been the main goal. With an empowerment approach, one of the aims is to increase the appreciation of the public’s knowledge and ability to make wise decisions about health and illness in cooperation with health professionals (Rowan 2000). Of course, further aims of such an approach are to increase the confidence among the public to make such decisions and to support the public to make suitable health decisions. There are few publications in which health campaigns have been analyzed critically, both in regard to the processes by which they were developed and in regard to the evaluation of

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their effects. An interesting article, based upon data from France, enables us to postulate some hypotheses about these processes (Berlivet 2005). In France, as in the other Europe an countries, preventative health campaigns, mainly based upon media such as brochures, advertisements and television, appeared in the 1970s. These early programmes often focused on the prevention of smoking, which had been identified as a serious health risk by scientific groups in the 1950s and had later become a ‘political issue’. Propaganda had been associated with negative connotations since the Second World War and therefore the programme planners in the area of smoking put their efforts into getting their campaigns perceived as legitimate by the public. One way this was done was by using the damaging effect of smoking on ‘passive smokers’, e.g., children as an argument for ‘stopping smoking’. Gradually such campaigns became accepted as a legitimate strategy for governments trying to improve the health of their people (Berlivet 2005). In the 1970s, the planners had had high expectations of the effect of these campaigns. However, it was soon discovered that it was much more difficult to get the desired results than had been anticipated. One way to overcome this problem was to plan the campaigns in cooperation with university departments. Those in higher education, with a day-by-day involvement in the learning process, stressed the importance of understanding fully how the target groups arrived at decisions before determining the design of the campaigns (see the discussion about evaluations in Section 1.4). The educationists involved in a campaign would always emphasize the value of combining a mass media campaign with practical activities to reduce the barriers to behavioural change, e.g., by helping smokers form stopsmoking groups. These changes in how the campaigns were undertaken were evident in France in the 1980s. However, the new ways of organizing campaigns made them less easy to plan and undertake, because a number of different organizations became involved in the planning and in the evaluation. Also, economic factors in the form of budget cuts reduced the number and size of health campaigns at the beginning of the 1990s. One further consequence of less money being available was that links with the universities were reduced, which had a knock-on effect on campaign planning and evaluation studies (Berlivet 2005). Similar developments to those in France can be found in other countries, although there are few detailed studies of the situations elsewhere.

16.6 The value problem If, in the future, drug information programmes are to be improved, at least three requirements must be met (see the discussion about evaluations in Section 1.4): 1. Whichever programme is selected, there must be some evidence that the programme is suitable for the target group and the selected information goals. 2. We have to understand how the programmes influence the discourses and the behaviour of the target group. 3. The choice of the programme must be based on a set of explicit moral and medical principles.

16.7 SUMMARY

315

The third point – the need for the programme to be underpinned by values – is a very important issue. Any decision to start, develop and evaluate an information programme must be based on some set of values. It is up to those involved in each country to take this discussion forward. However, the value problem cannot be solved at a national level and must be discussed globally. Resources have to be allocated from the rich countries to overcome the problems which the low income countries face in their pharmaceutical systems. It is not just a question of financial resources but for health education in low, middle and high per capita income countries to be successful, descriptions and analyses of different health care systems in all these places have to be undertaken. Students have to be shown that changes are possible even in countries with quite limited resources. In debates about alternatives and possibilities, professionals from different countries have to participate. However, professionals from the rich countries cannot argue that they have the ‘solution’. Too often we have seen that a system did not work when it was transplanted directly from a rich country to a low income country, therefore the new systems and new solutions have to be based on the local culture, the existing local organizational framework and economic feasibility. Value conflicts are not unusual when designing drug systems and the use of placebos is one example of such a conflict. By overemphasizing a drug’s possible therapeutic effects, any curative value for the individual patient could be jeopardized. In the long run, the patient could find out that the prescriber had not told the truth and this could result in a general mistrust of everyone involved in health care (Chapter 14). As discussed in Chapter 1, we need to know both the expected outputs from a campaign and the mechanisms by which these outputs were achieved. This is because the contents and strategies in the campaign have to be adapted to the local culture, the discourses present, and local organizational factors, as well as fitting the economic situation. An understanding of the influential processes can give the planners of new campaigns the opportunity to do this. By considering the environmental factors, the expected outcomes can be improved, even in terms of the health of the population in the target group.

16.7 Summary The information needs perceived by patients can be quite different from their needs when viewed by those with a formal education in medicine or pharmacy. The social network is often used as a source of health and drug information. Information from the health care system is sought less because it can be costly in terms of time and money. The information source used also reflects media habits in the culture, and the supply of health and drug information in the media. Also, the willingness to search for drug information is culturally dependent. Some cultures give higher priorities to detailed health and drug information than others. Friends and relatives are often a source of information at an early stage in an illness. However, we still have only limited knowledge of who act as local opinion leaders. Information from pharmacies is sought more often in the later stages of an illness, when the patient has decided to use a non-prescription drug. However, the information handling process varies from one non-prescription drug to another. An information sender has to give priority to some of the information goals. This is because the effects of channels and message selection are not independent of the goal(s)

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selected. Personal sources can be better in achieving changes in behaviour, whilst details of the existence of a new drug preparation might be more cheaply provided by the mass media. We need to evaluate the outcomes of an information campaign, but also to identify the mechanisms by which its goals were achieved. Such knowledge about the process makes it possible to adapt a campaign to local environmental factors and probably to improve the outcomes in the future. By establishing what the most influential mechanisms are, we can transfer this type of information campaign to other settings and to other cultures more easily.

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Index abortions 215 ABPI 250 acetyl salicylic acid (ASA) 45 see also aspirin actions taken, process layperson model of dealing with symptoms 280–1, 284–8 active substances, production stages 129–48 activism, physicians 11–12 actor–spectator paradox, concepts 12, 25–6, 32–3, 70–5, 196–8, 289–90, 302–3 actors in pharmaceutical systems alliances 8–9, 13–14, 109–10, 120–4 attitudes to drugs 23, 27–8, 29–33, 200, 209–14, 229–30, 277–94, 301–16 the balance model 29–33 concepts 8–17, 25–6, 29–33, 109–10, 252 decision-making processes 27–8, 70–5, 226–7, 280 adjustments to illness, social constructionism 24 administrators evaluations 18–19, 20–1 research 116–26 adverse reaction reports (ADRs), physicians 75–6, 250–1, 312–13 advertisements see also marketing critique 231–3, 304 gender issues 304 historical background 46–57, 220–1, 228 producers 16, 46–7, 50–1, 220–1, 226–33 side effects of drugs 232 stereotypes 304

Africa 7, 16, 22, 64, 66–7, 93–4, 97–9, 102, 130–1, 138–9, 145, 176–8, 181, 189, 192–3, 280, 283, 287 see also individual countries distribution systems 66–7, 176, 178, 181, 189, 192–3 PHC 97–9, 286 prices of drugs 7, 16, 102 private/public drug sectors 93–4, 103, 138–9, 178, 189–90 production 130–1, 138–9, 145, 178 retail distribution 181, 189, 192–3 spiritual forces 22 traditional healers 280, 283, 287 age factors consumption 213, 215–16 marketing 224–5 AIDS 17, 23, 24–5, 54, 71, 83, 116, 239, 278, 290 aims see also goals distribution 188–200 EDs 101–2, 248–9 evaluations 18 alcohol 44–5, 206, 216, 260 alkaloids 46, 220 alliances actors in pharmaceutical systems 8–9, 13–14, 109–10, 120–4 drug companies 13–14, 109–10, 120–4 alternative medicine 22, 23–4, 42–3, 98, 112, 135, 278, 280–3, 287–8 conflicts 42–3

Pharmaceutical Systems John Lilja, Sam Salek, Aldo Alvarez and David Hamilton  C 2008 John Wiley & Sons, Ltd

320

INDEX

alternative medicine (Continued) herbal medicines 43, 98, 112, 135, 278, 280–3, 287–8 historical background of drugs 42–3 homeopathic medicines 43, 288 orthodox/unorthodox accounts 22 social constructionism 23–4 ampoules for injections 129–48 anaesthetics 44–5 analysing equipment, quality controls 144 animal tests 41, 45–6, 47–9, 51–7, 117–18, 246–7, 251 Antabus 216 anti-depressants 213, 221–2, 291–2, 293 anti-vaccination movements 17 antibacterial chemicals 47 antibiotics 50, 73, 124, 135, 136, 138, 141, 194, 255–9, 293–4, 311 antihistamines 50 antimony 41–2 anxiety, social constructionism 24 Apoteket AB 185, 188 approved patient leaflets, pharmacies 195–6 Arabia 40 Argentina 97 ASA see acetyl salicylic acid Asia 7, 10–11, 40, 64, 74–5, 93–4, 112, 189–90, 192–3, 256, 287 see also individual countries herbal medicines 112, 135, 287 prices of drugs 7 private/public drug sectors 93–4, 164 retail distribution 189–90, 192–3 aspiration levels, national drug policies 74–5 aspirin 45 ATC system 206–7 atropine 45 attitudes to drugs 23, 27–8, 29–33, 200, 209–14, 229–30, 277–94, 301–16 see also perceptions childhood learning processes 311 concepts 23, 27–8, 29–33, 209–14, 229–30, 277–94, 301–16 definition 30, 311 information objectives 309, 310–11 Australia 237 available drugs, prescribers 266–7 average unit costs 130–2, 141–8, 174–6 bacteria 47 bacteriology, historical background 47

the balance model 29–33 see also social psychology Bangladesh 11–12 barbasco 2–3 barriers to entry/exit 129–31, 141–8, 165–6, 232–3, 239–40 batch production, concepts 140–1, 143–4 Bayer 45 behaviours information objectives 309, 312 patients 277–94, 301–16 beliefs see also attitudes... concepts 29–33 definition 30 benzodiazepines 222, 257–8, 267, 304 beta-blockers 52–3, 85, 222 biases, clinical trials 74–5, 246–7 bioavailability studies, concepts 74–5, 85–6, 159 biotechnology companies see also producers concepts 13, 109–10, 123–6, 135, 238 bipolar disorder 294 ‘black’ list of drugs, reimbursement controllers 92 bleeding remedy 46 ‘blockbuster’ drugs, research 122–3 blood pressure 52–3, 85, 222, 292 BMA see British Medical Association Bolivia 67, 94, 102, 186 Boots 171 bounded rationality, concepts 279–80 brand loyalties 147, 159, 196–7, 232–3, 308 Brazil 10, 111, 133–4, 288 bribes see also corruption... producers 15 British Medical Association (BMA) 11, 76, 90 budgets 178, 258 see also costs bulk production strategies, producers 111, 129–48 Canada 49, 83, 99, 154, 214, 237 cancers 116, 213 capsules 129–48 capture theory see public interest theories car-journey analogy, national drug policies 61 cardiovascular drugs 116 case studies, concepts 71

INDEX

cheap foreign drugs, production and development systems 19 chemical names, concepts 84–5 chemical period (AD1800–1899), historical background of drugs 44–7, 56, 219–20, 243 chemical tests, compliance measures 291 chemists, research leaders 120 childhood learning processes, attitudes 311 China consumption 237 distribution 6, 171, 181, 187, 193, 199 pharmacies 181, 187 prices of drugs 7–8 private/public drug sectors 94–5, 164 production 133–4 retail distribution 181, 187, 193, 199 chloroform 44–5 choice of drugs with high therapeutic powers see also national drug policies; value judgments concepts 62, 68–9, 70–5, 78, 256–8 choice of drugs with low side effects see also national drug policies; value judgments concepts 62, 75–7, 78 cholesterol levels 238 Ciba-Geigy 116, 227–8 circulatory illnesses 52–3, 85, 116, 222, 277–8, 304 classes of drugs, marketing 225–6 clinical trials see also evaluations; non-experimental...; randomized... biases 74–5, 246–7 concepts 14, 20, 48–9, 51–7, 64, 71–5, 117–18, 124–5, 221, 245, 246–51 ethical concerns 52–7, 75, 124–5, 251 future perspectives 56–7 historical background 40–57, 221 marketing 221 medical experts 73–4, 221, 258, 305 post-Thalidomide period (AD1965 to date) 51–7, 71, 75, 124–5, 221, 247, 249–50 producers 14, 20, 48–9, 51–7, 64, 71–5, 117–18, 124–5, 221, 245, 246–51 secret results 74, 243 side effects of drugs 51–7, 71, 75–6, 124–5, 221, 247, 249–50 types 71–5 closed systems, definition 4

321

cocaine 45 Cochrane system 74–5 cod liver oil 46 codeine 45–6 coffee 40 cognitive processes actor–spectator paradox 25–6, 32–3, 70–5, 289–90, 302–3 compliance factors 291–4 prescribers 262–7, 269, 291–3 social constructionism 24–5, 221–2, 225, 259–60, 278–80 social meta-cognitive assumptions 301–3 cognitive therapy 293, 294 cohort studies, concepts 71 collection of data see also information concepts 20–5, 51–7, 251, 280, 301–3 historical background 20, 51–7 philosophical views 21–2 post-Thalidomide period (AD1965 to date) 51–7, 124–5, 206, 221, 247, 249–50 sources 20, 251, 280, 301–3 collectivism 7 colonial rulers, social group theories of economic development 2 commercial drug information, concepts 69–70, 225–33 communications see also information actor-spectator paradox 25–6, 289–90, 302–3 attitudes to drugs 30–3, 229–30, 301–16 health care professional groups 12, 75–6, 198–9, 228–30, 250–1, 289–90, 294, 301–16 historical background of drugs 42–57 meta-cognitive assumptions 301–3 network concepts 301–3 company preferences, prescribers 266 compensation schemes, side effects of drugs 76–7 competitors market structures 237–40 marketing factors 224 prices of drugs 151, 155–6, 158–60, 166, 225 WHO price comparisons 160 wholesaling 171–2 complementary programmes 19 compliance concepts 23, 28, 247–51, 289–94, 309 controls 247–51

322 compliance (Continued) cultural factors 292–3 degrees 291–3 education issues 293–4, 309 ethical concerns 291, 293–4 improvement strategies 293–4, 309 information 293–4, 309 measures 247–51, 290–3 problems 23, 28 value judgments 293–4 computer information systems 56–7, 195–6, 206, 262, 303 see also technology... CONAMAD 14 concentration ratios, market structures 239 concordance concepts 183–4, 289, 293–4 conferences 231 conflict perspective, concepts 24, 315 consensus diagnosis 55 consultants, production 144–5 consumption 62, 68–9, 78, 205–17, 237–40, 284–94 see also sales values age factors 213, 215–16 concepts 205–17, 237–40 culture factors 209–15 demographics 209–15 determining factors 209–15 education levels 214 efficient system for drug consumption 62, 68–9, 78, 205–17 gender factors 214 historical background 205–6 income levels 212, 214 individual factors 213–15 industrialization factors 212 living conditions 209–10 marital-status factors 214 measurement methods 206–9 media influences 214 morbidity factors 213 noise factors 215 population percentages 208–10, 213 prescribers 210–15 qualitative studies 205, 215–17 quantitative studies 205–15 skewed distributions 213 statistics 205–17, 237–40, 287–8 time-series analyses 211 viewpoints 205 volumes 205–17

INDEX

contextual factors 6–8, 26–7, 221–2, 315 contraceptives 50, 125, 215, 278, 304–5 contract research organizations (CROs) 14–15, 109–26 see also research control groups 20–1, 41–57 controllers see also price...; quality...; regulatory authorities; reimbursement... concepts 8–9, 10–11, 13–14, 15, 51–7, 75–8, 88–102, 220–1, 243–51 health care professional groups 15, 75–6, 243–51 influences 15, 250 political science models 10–11 producers 15, 250 types 8, 15, 243–51 controls compliance measures 247–51 concepts 5–8, 10–11, 13–14, 15, 51–7, 69, 71, 75–8, 123–4, 129–48, 160–3, 186–7, 209–10, 220–1, 243–51, 287 contextual factors 7–8 cost control agencies 160–3, 165–6, 186–7, 206, 244–51 decision-making processes 243–51 definitions 69, 243–4 historical background of drugs 11, 13–14, 41–57, 71, 88–9, 220–1, 243–5 levels 248–51 media 7 pharmacies 184–8, 220–1, 244–51, 287 post-Thalidomide period (AD1965 to date) 51–7, 71, 75, 88, 124–5, 206, 221, 247, 249–50 prescribers 15, 75–6, 243–51, 258 prices of drugs 8–9, 10, 151, 154–67, 173, 186–7, 206, 243–51 process models 244–7 registration requirements 15, 51–7, 85–7, 88–102, 103, 117–18, 131–2, 159–60, 239–40, 249–51, 258 scope 244 social science data 248–50 standards 66, 142–4, 153, 244–51, 261–2, 267–8 systems analysis 5–8 systems concepts 244–51 Thalidomide 7, 10, 29, 51–2, 56–7, 71, 75, 88, 206, 221, 247, 249–50 convenient opening hours aims, pharmacies 193

INDEX

corporatist political science model, concepts 9–11 corruption in underdeveloped lands 1, 8, 15, 67–8, 175 cortisone 2–3 cost control agencies 160–3, 165–6, 186–7, 206, 244–51 costs 13–14, 19, 62–78, 81–2, 110, 112–15, 129–48, 151–67, 174–8, 186–7, 206, 223–8, 244–51, 258, 264–5 see also efficient...; price... breakdown analysis 77, 130–48 budgets 178, 258 concepts 77, 110, 112–15, 129–48, 151–67, 174–8, 258, 264–5 conflicts 13–14 decision-making constraints 29 economies of scale 129–31, 141–8, 165–6, 232, 239–40 import decisions 129–30, 133–4, 137 information 225–6, 309, 313 knowledge 131–2, 141–2 low drug costs 62, 77, 78 marketing 223–30 prescribers criteria 263, 264–5 production 19, 110, 112–15, 129–48, 151–67 R&D 64–6, 81–2, 110, 112–15, 157–8 research 64–6, 81–2, 110, 112–15 volumes of production 130–2, 139–48 wholesaling 174–6 cough syrups 134–5, 196–7, 308 country variations, production 133–4 CROs see contract research organizations cross-contamination risks 141 Cuba 61, 133–4 culture see also norms attitudes 31–2, 209–11, 310–11 compliance factors 292–3 concepts 7–8, 18–19, 22–5, 26–8, 62–3, 96–9, 221–2, 228, 249–50, 278–88, 315 consumption factors 209–15 contextual factors 7–8, 221–2, 315 decision-making processes 26–8, 249–50, 278–88 definition 4–5 discourses 22–3, 278–80, 287, 301–3, 315 evaluations 18–19, 249–50, 280, 315 marketing 228 national drug policies 62–3, 315 PHC 96–9

323

reimbursement controllers 92–3 social representation theory 24–5, 279 curing definitions 70–1, 73–5 currency savings, production 129–30, 137–8, 162 Cusco 286–7 cytostatic drugs 50 Czech Republic, prices of drugs 7–8 data collection see collection of data DDD see defined daily dose decentralization trends, PHC 99 decision makers, patients 278–94 decision-making processes see also choice... actors 27–8, 70–5, 226–7, 280–8 concepts 26–9, 68–9, 70–8, 132–48, 226–30, 243–51, 262–3, 278–94, 306–16 contextual factors 26–7, 221–2 controls 243–51 cost constraints 29 criteria 27–8, 132–48 culture 26–8, 249–50, 278–88 diagnosis 260–7, 268–9, 279–80, 282–8, 302–3 efficient system for drug consumption 68–9, 78, 205–17 feedback issues 28–9, 257–8, 309 garbage can model 29, 247 habitual/non-habitual decision-making processes 262–3, 267–8, 271 information 26–8, 69–70, 226–7, 247–51, 256–8, 268–71, 301–16 levels 248–51 non-prescription drugs 27–8, 285, 288–9, 308 pharmaceutical systems 26–8, 248–51 process layperson model of dealing with symptoms 280–8 production 28, 109–26, 132–48 rational choice perspective 24, 28–9, 279–80, 302–3 repetitive/non-repetitive factors 28–9, 33 research 28, 109–26 scientific perspectives 27–8 seriousness of symptoms 282–7 styles 27 symptoms 280–8, 306 defined daily dose (DDD), consumption measures 208 demand function, economic theory 151–67

324

INDEX

demographics consumption factors 209–15 pharmacies 188–90 Denmark 90, 186, 285 dependency theories of economic development 1–3, 164–5 depression 22, 24, 73–4, 213, 221–2, 291–2, 293, 304 anti-depressants 213, 221–2, 291–2, 293 philosophical viewpoints 22 social constructionism 24 treatments 213, 221–2, 291–2, 293 detection of symptoms, process layperson model of dealing with symptoms 281–5, 306–7 development guidelines, national drug policies 77–8, 244–51 diabetes 22–3, 48, 310 diagnosis see also symptoms; treatments concepts 268–71, 279–80, 282–8, 291–4, 302–3 consensus diagnosis 55 decision-making processes 268–9, 279–80, 282–8, 302–3 interactive computer systems 303 prescribers 260–71, 280, 282–4, 291–4, 302–3 psychological effects 284–5, 291–2 diarrhoea 288 diffusion concepts 39–57, 221–2, 225, 259–60 digoxin 256 dilute hydrocortisone ointments 53 dimensions, evaluations 19–20 diphtheria 47 direct observed treatments (DOTS) 293–4 direct-to-consumer (DTC) 230, 260–1 discourses see also social constructionism concepts 22–3, 278–80, 287, 301–3, 315 diseases 54, 64–5, 68, 70–1, 95–9, 138–9, 277–8, 279–94, 310–11 definitions 70–1 environmental influences 277–8 symptoms 279–94 types 277–8 dispensing issues, prescribers 10–11, 255–71 distribution see also retail...; wholesaling aims 188–200 concepts 45–57, 171–200, 210–11 country variations 6, 12–13, 171–8, 184–5

efficient organization of drug distribution 62, 66–8, 78, 144, 174–200 historical background 45–57, 184–5 kit system 176 quality controls 144, 174–6, 193–6 systems analysis 5–8 vaccinations 68, 175, 193–6 distributors, concepts 8–9, 12–13 disulfiram (Antabus) 216 documentation factors, prescribers 265–6 dosages consumption measures 207–8, 216 prescribers 207–8, 216, 266, 285–6, 292 DOTS see direct observed treatments double-blind clinical experiments, post-Thalidomide period (AD1965 to date) 51–7, 71–2, 221 drug abusers 194, 216, 304–5 drug companies 8–9, 13–15, 62, 65–6, 73–8, 81–103, 109–26, 219–33, 237–40 see also producers alliances 13–14, 109–10, 120–4 definition 13–14 market structures 237–40 national organizations 13 outsourced functions 13, 109–10, 129–32, 145 profits 114, 118–19, 122–6, 146–7, 157–8, 164–7, 240–1 selection of research areas 115–16, 118–19 strategies 109–26, 129–48 drug consumption see consumption drug controls see controls drug information see information drug preparations, life cycles 224–5 drugs, definitions 206–7 DTC see direct-to-consumer EBM see evidence-based medicine economic development, concepts 1–3 economic factors contextual factors 7–8, 315 marketing 228 patients 284–6, 291–3 prescribers 258 economic theory, prices of drugs 151–67 economies of scale 129–31, 141–8, 165–6, 232, 239–40 eczema 285 EDs see essential drugs

INDEX

education issues compliance strategies 293–4, 309 consumption factors 214 mass media roles 303–4, 309, 313–16 primary health care (PHC) 99 standards 247–8, 261–2, 267–8 symptoms 282–6 EDV see essential drugs and vaccine programme efficient organization of drug distribution see also distribution; national drug policies concepts 62, 66–8, 78, 144, 174–200 efficient organization of drug production see also national drug policies; production concepts 62, 65–6, 78, 117–18, 129–48 efficient organization of drug research see also national drug policies; research concepts 62, 63–5, 78, 109–26 efficient organization of drug support see also national drug policies; support... concepts 62–3, 78, 81–103 policy dimensions 81–103 efficient system for drug consumption see also consumption; national drug policies concepts 62, 68–9, 78, 205–17 Egypt 133, 189 Ehrlich, Paul 47 emotional processes information objectives 309, 310 social constructionism 24–5, 279–80 empathy skills pharmacists 13, 26, 182–4, 301–3 prescribers 256, 280, 289–90 Enterovioform 227–8 environment disease types 277–8 systems theory concepts 3–4, 32, 315 essential drugs (EDs) 53–4, 68–9, 94, 99–103, 138–9, 162, 176–8, 186, 248–9 concepts 99–103, 138–9, 162, 176–8, 186, 248–9 critique 102, 176–8 definitions 99–101 drug shortages 101–2, 103 financial criteria 100–1 information 103 lists 99–103, 138–9, 162, 248–9 medical criteria 100–1 national drug policies 99–103, 138–9, 176–8, 186, 248–9 PHC conflicts 102 procurement issues 99–100, 176–8

325

producers 99–103, 138–9, 162, 176–8, 186, 248–9 WHO 53–4, 100–2, 103, 186 essential drugs and vaccine programme (EDV) 53–4, 100–2 essential fatty acids, cod liver oil 46 Estonia 186–7 ether 44–5 ethical concerns clinical trials 52–7, 75, 124–5, 251 compliance issues 291, 293–4 pharmacies 198 post-Thalidomide period (AD1965 to date) 52–7, 75, 124–5, 221 research 124–5, 251 ethnic backgrounds, country variations 6 Europe see also individual countries compensation schemes for side effects of drugs 76–7 controls 245–51, 287 gifts to physicians 232, 250 historical background 46–57, 219–21, 243 ICH process 9–10, 151, 249–50 market structures 237–40 national drug policies 61–2, 88–9, 245–51 national health insurance systems 7–8 OTC drugs 53, 90, 288–9 parallel imports 89, 159–60, 173 prescribers 261–2 producer countries 133–4, 238 registration requirements 88–9 reimbursement controllers 90–1, 206 research 124 retail distribution 190, 206 steroid hormone industry 3 wholesaling 171–4 European Medicines Agency (EMEA) 88–9 evaluations see also clinical trials administrators 18–19, 20–1 aims 18 collection of data 20–5, 51–7, 251, 280 concepts 17–25, 32, 55–6, 71–5, 174–6, 244–51, 280, 315–16 culture 18–19, 249–50, 315 definition 17 dimensions 19–20 historical background of drugs 39–57, 221–2 measurement decisions 19–20

326

INDEX

evaluations (Continued) outcome analysis 18, 20–5, 32, 55, 245–6, 315–16 pharmacies 188–200 process analysis 18, 32, 55, 315 quality of care 19–20 re-evaluations 65–6 reimbursement schemes 17, 90–3 research 116–20 sample sizes 21 stages 17–20 summary of results 20–1 system identification and goals 18–19 systems analysis 17, 32, 174–6 wholesaling 174–8 evidence-based medicine (EBM) see also randomized controlled clinical trials concepts 54–7, 73–5, 85, 255–8 exclusivity policies, concepts 81–103, 165 experimental approaches see also clinical trials critique 71–3 evaluations 20, 71 expiration factors, patent laws 155 explanatory models, patients 278–80 exports 65–6, 132, 138–9, 141–2, 146–7, 238–40 ‘fair prices’, cost control agencies 161–3 families, patients 283–4, 306, 308, 315 FDA, US 53, 82–3, 251, 258 feasibility studies, research projects 120–1 feedback issues communication networks 301–3 decision-making processes 28–9, 257–8, 309 prescribers 257–8, 309 financial opportunities, research spend 114 Finland distribution 6, 186 home-produced drugs 266 HRT trial 305 immigrants 283 focus groups 215–17 folk medicine 39, 42, 43, 64, 98, 112, 135, 247, 278, 281–2 forced production licenses 54–5, 82, 83 foreign investments, dependency theories of economic development 1–2, 164–5 formulary committees 52–7, 249–50, 258, 266 frames of reference 1–33 France 98, 111, 133–4, 237–8, 243, 245, 314

free clinics 98 Napoleonic Wars 44, 243 preventive programmes 314 production 111, 133–4, 238, 243 smoking campaign 314 free clinics 98, 188 friendly societies 49 future perspectives, concepts 56–7, 314–16 garbage can model, decision-making processes 29, 247 gender issues see also women advertisements 304 consumption factors 214 detection of symptoms 282 HRT use 17, 305 OTC purchasers 308 social constructionism 21–4 generic drugs 11, 14, 57–8, 65–6, 82, 84–103, 111–12, 116, 151, 155, 157–8, 166, 223, 238 see also substitution issues concepts 11, 14, 65–6, 82, 84–103, 111–12, 116, 155, 223, 238 definitions 84–5, 102, 155 prescribers 11, 14, 82, 84–103, 157–8 prices 57–8, 85–7, 151, 154–6, 157–8, 159–60, 166 producer strategies 111–12, 116, 238 trade names 84–5, 87, 102 generic prescribing 11, 14, 82, 84–103, 157–8 see also prescribers concepts 87–102, 158 generic substitution see also substitution... concepts 85–102, 155–6, 160, 239–40 definition 85, 102, 155 Germany 45, 46–8, 50, 81–2, 133–4, 141–2, 146–7, 219–20, 237–8, 245 bulk production 111, 141–2 control ideas 245 historical background of drugs 45, 46–8, 50, 81–2, 146–7, 219–20 pharmacies 198 production 133–4, 141–2, 146–7 research 120, 146–7, 238 Sweden 146–7 wars 47, 50, 146–7 ‘ghost authors’, producers/medical experts 14–15

INDEX

gifts to physicians 232, 250 global systems political science models, concepts 9–11 globalization, concepts 9–11 GMP see good manufacturing practice goals see also aims concepts 5–6, 18, 61–78, 188–200, 222–3, 243–51 information 309–16 marketing 222–3 national drug policies 61–78, 230–3, 243–51 PC 182–3 systems analysis 5–6, 61–2 gold 41–2, 48 ‘golden egg’ drugs 110–11 good manufacturing practice (GMP) 142–3 governments see also national drug policies critique 9–11 decision-making processes 27 economic development theories 2–3 health care professional groups 11–12 internal conflicts 10, 244–5 military regimes 10 pharmacies 184–8 producers 13–14, 15 research 110, 124–6 ‘grand’ theories 44 Greece 40, 172–3 habitual decision-making processes, prescribers 262–3, 267–8, 271 Halcion case 89 harmonization talks ICH process 9–10, 151, 249–50 regulatory authorities 9–10, 249–50 harmonized markets, definition 151 HBMF see home-based management of fever Health Action International (HAI) 160, 163 health care professional groups see also physicians; prescribers actor-spectator paradox 12, 25–6, 70–5, 196–8, 289–90, 302–3 budgets 178, 258 communications 12, 75–6, 198–9, 228–30, 250–1, 289–90, 294, 301–16 compliance strategies 293–4 concepts 8–9, 11–13, 21–3, 69–70, 75–6, 181–200, 228–33, 243–51, 255–71, 281–94

327

conflicts 12, 231–3, 244–5, 258, 293, 315 controls 15, 75–6, 243–51 fees 284–5, 287 governments 11–12 historical background of drugs 42–57, 220–1, 243 information 62, 69–70, 78, 196–8, 225–33, 247–51, 256–8, 260–2, 268–71, 301–16 Internet patients 307 national drug policies 62–78 powers 11–13, 245–6 producers 14, 158, 228–33, 250–1 retail distribution 181–200 satisfactory system of drug information 62, 69–70, 78, 196–8, 225–33, 247–51, 256–8, 260–2, 268–71, 301–16 social constructionism 21–4, 32, 70–1, 183–4, 221–2, 225, 259–60, 278–80 types 12 wholesaling 171–8 health hazards, considerations 194–5 health-effects objective, information 309, 312 heart disease 213 Helicobacter pylori 231 Helsinki Declaration 72 Henry J. Kaiser Family Foundation in America 250 herbal medicines 43, 98, 112, 135, 278, 280–3, 287–8 historical background of drugs 4–5, 11, 13–14, 20, 39–57, 71, 81–2, 146–7, 219–21, 243 advertisements 46–57, 220–1, 228 animal tests 41, 45–6, 47–9, 51–7 chemical period (AD1800–1899) 44–7, 56, 219–20, 243 collection of data 20, 51–7 consumption 205–6 controls 11, 13–14, 41–57, 71, 88–9, 220–1, 243–5 diffusion 39–57, 221–2, 225, 259–60 Europe 46–57, 219–21, 243 folk medicine 39, 135, 247, 278, 281–2 health care professional groups 42–57, 220–1, 243 innovation period (AD1940–1964) 49–51, 56, 81–2, 220–1, 277–8 marketing 46–57, 219–21, 228 merchant period (AD1500–1799) 39–44, 56–7 patent medicines 11, 42–3, 46–57, 81–2

328

INDEX

historical background of drugs (Continued) pharmacies/pharmacists 4–5, 43–57, 184–5, 205–6, 219–21, 243 post-Thalidomide period (AD1965 to date) 51–7, 71, 75, 88, 124–5, 194–5, 206, 221, 247, 249–50 research 39–57, 81–2, 146–7, 220–1 social aspects 39–57, 221–2 stages 39–57, 219–21 trademark laws 84–5 HIV/AIDS 17, 23, 24–5, 54, 71, 83, 116, 239, 278, 290 homatropin 45 home-based management of fever (HBMF) 313 homeopathic medicines 43, 288 homogeneity of components, systems analysis 6 hope, social support 24, 310 hormone preparations 2–3, 17, 141 hospital drug formulary committees 52–7, 249–50, 258, 266 hospital markets, price competition 159–60 hot-cold medicines, India 280 housing improvements 96 HRT use 17, 305 humoral theory 41 Hungary 111, 141–2, 172 hygiene improvements 47, 65, 96–9, 278 IADS patients 17, 23 iatrochemistry school 42 ibuprofen preparations 53, 308 ICD 269 ‘iceberg’ analogy 278 Iceland 12–13 ICH process 9–10, 151, 249–50 IFPMA 9–10 illegal drugs sales 194, 260 illness, definitions 70–1 image factors, marketing 227–8 immigrants 283, 287, 306 immunization programmes 16–17, 47–8 implementation guidelines, national drug policies 77–8, 244–51 imports 62–3, 78, 81–103, 112, 129–30, 133–4, 137–8, 171–8 see also wholesaling income levels, consumption 212, 214 India bulk production 111, 129–30, 133–4, 141–2, 145, 147 community health schemes 92

consumption 237, 280 distribution 3, 6 economic development 3 hot-cold medicines 280 imports 172 prices of drugs 256 production 111, 129–31, 133–4, 145, 147, 172, 238, 240 individual factors, consumption 213–15 individualism 7 industrial countries, dependency theories of economic development 1–2, 164–5 industrialization concepts 212, 219–21 infectious diseases 54, 64–5, 68, 95–9, 138–9, 277–8, 285–6, 310–11 information see also communications; knowledge attitudinal-change objective 309, 310–11 behavioural-change objective 309, 312 campaigns 23 collection of data 20–5, 51–7, 251, 280, 301–3 commercial/non-commercial types 69–70, 225–33 compliance 293–4, 309 costs 225–6, 309, 313 decision-making processes 26–8, 69–70, 226–7, 247–51, 256–8, 268–71, 301–16 EDs 103 educated receivers 303–4 emotional-support objective 309, 310 health care professional groups 62, 69–70, 78, 196–8, 225–33, 247–51, 256–8, 260–2, 268–71, 301–16 health-effects objective 309, 312 historical background of drugs 43–57 immigrants 283, 287, 306 interactive computer systems 303 Internet 7, 14, 56, 69–70, 197, 232, 249, 307 knowledge-change objective 309, 311 labels 194, 195–6, 307–8, 310–13 local opinion leaders 303–7 mass media roles 7, 214, 228–30, 303–7, 309, 313–16 message-understanding objective 309, 310 non-prescription drugs 307–8 objectives 309–16 pharmacies/pharmacists 12, 25–6, 195, 196–200, 247–8, 256–8, 301–16

INDEX

post-Thalidomide period (AD1965 to date) 51–7, 75, 88, 124–5, 206, 221, 247, 249–50 prescribers 62, 69–70, 78, 196–8, 225–33, 247–51, 256–8, 260–2, 268–71, 301–16 prescription-only medicines 307–8 programme costs 309, 313 proper-product-usage objective 309, 310, 311 quality issues 69–70, 231–3, 256–8 receivers’ perspective 301–8, 315–16 satisfactory system of drug information 62, 69–70, 78, 196–8, 225–33, 247–51, 256–8, 260–2, 268–71, 301–16 senders’ perspective 301–4, 308–16 seriousness of symptoms 282–7 side effects of drugs 7, 51–7, 71, 75–8, 88, 124–5, 194–5, 206, 221, 232, 247, 249–50, 301–16 sources 7, 14, 20, 56, 69–70, 196–8, 251, 260–2, 280, 301–16 symptoms 281–8, 306 systems analysis 5–6, 69–70 value problems 314–16 information systems see computer information systems informed consent, concepts 76–7 infrastructural factors, contextual factors 8, 315 infusion solutions 129–48, 207–8 injections, ampoules 16, 129–48, 255–6, 293 innovation period (AD1940–1964), historical background of drugs 49–51, 56, 81–2, 220–1, 277–8 innovations diffusion concepts 39–57, 221–2, 225, 259–60 sources 117–18, 123–4, 220–1 INNs see international non-proprietary names inoculations, historical background 41 institutional control level, concepts 248–51 insulin 48 insurance programmes 7–8, 11, 16–17, 49, 51, 66–7, 90–8 interactive computer systems, information 303 interest groups national drug policies 77–8, 245–7 political science models 8–10, 78 intermediates, production stages 129–48 international classifications, drugs 206–7 international cooperation control levels 248–51 national drug policies 61–2, 88–9, 244–51

329

international experiences, contextual factors 7 international market structures, concepts 237–8 international non-proprietary names (INNs), concepts 84–5 international strategies, contextual factors 7 Internet 7, 14, 56, 69–70, 193, 197, 232, 249, 307 interviews 290, 301–3, 305–6 irrational prescribing, concepts 255–8 Italy 82 ‘jamu drugs’ 135 Japan ICH process 9–10, 151, 249–50 production 133–4, 238 research 110, 238 retail distribution 189–90 Kaiser Family Foundation in America 250 Kefauver-Harris Amendments, US 53, 162–3 Kenya 16, 131, 176 kit system, concepts 176 knowledge see also information definition 311 information objectives 309, 311 physicians 12–13 production 131–2, 141–2, 144–5, 147 labels, pharmacies 194, 195–6, 307–8, 310–13 Labour Party 7 Laos 61 Latin America 2–3, 7–8, 11, 64, 66–7, 90–4, 97–8, 112, 135, 162, 164, 173–4, 178, 186, 189, 192–3, 212–13, 286–7 see also individual countries cost control agencies 162 free clinics 98 herbal medicines 112, 135, 286–8 PHC 97 private/public drug sectors 93–4, 103, 138–9, 164, 173–4, 178, 186–90, 212–13 wholesaling 173–4 lay discourses 22, 278–80, 287 Lazerfeldt’s model of mass media communication 303–4 leprosy 291 Liberal administration, welfare reforms 7, 49 Librium 157 life cycles, drug preparations 224–5 lifestyles, patients 277–8

330 lithium 294 living conditions, consumption factors 209–10 local control organizations, concepts 248–51, 255–71 local opinion leaders, information sources 303–7 location decisions pharmacies 185–8, 194, 285–6 production 121, 131–2, 136, 145, 164–5 research 121, 131–2, 136, 145 low drug costs see also national drug policies concepts 62, 77, 78 McKeown thesis 64–5 malaria 40, 44, 54, 83, 283, 313 Mali 101 management issues concepts 5–6 structures 142–3 Manila 269 marital-status factors, consumption 214 market definition 151 market growth, research concepts 115–16 market power, producers 237–40, 252 market research, concepts 117–18 market shares marketing goals 223 statistics 239 market structures concentration ratios 239 concepts 237–40 international markets 237–8 national markets 239–40 segmentation strategies 240 marketing 13, 40–57, 89, 111–18, 134, 138–9, 219–33, 238 see also advertisements; producers age factors 224–5 classes of drugs 225–6 clinical trials 221 commercial information 69–70, 225–33 competitive situation 224 concepts 111–16, 134, 138–9, 219–33, 238 costs 223–30 critique 230–3 culture 228 economies of scale 232, 240 gifts to physicians 232 goals 222–3

INDEX

historical background of drugs 46–57, 219–21, 228 image factors 227–8 life cycles 224–5 market share goals 223 media 228–30 medical experts 52–3, 221, 225 national perspectives 230–3 new drugs 222–5 post-Thalidomide period (AD1965 to date) 52–7, 89, 221 production decisions 134, 138–9 rules of thumb 227 sales goals 223, 225 segmentation strategies 240 side effects of drugs 232 size of drug company 227 strategies 111–16, 134, 138–9, 240 Marxist political science model 9–10 mass media roles see also media campaigns 313–16 information 7, 214, 228–30, 303–7, 309, 313–16 Master Formula Records 143–4 ‘me-too drugs’ 50, 110–11, 239–40 measurement decisions, evaluations 19–20 media 7, 214, 228–30, 303–5, 309, 311–12, 313–16 consumption factors 214 control strategies 7 marketing 228–30 mass media information roles 303–7, 309, 313–16 medical experts 305 patients and patient organizations 230, 303–5, 311–16 prescribers 228–30, 303–5, 309, 311, 313–16 selection criteria 311–12, 313–14 stereotypes 304–5 Medicaid programs 188 medical experts clinical trials 73–4, 221, 258, 305 marketing 52–3, 221, 225 mass media relationships 305 producers 14–15, 52–3, 73–4, 221, 225, 258 social constructionism 23, 221–2, 225 medical ‘iceberg’ 278 men see also gender issues detection of symptoms 282

INDEX

meningococcal meningitis 47 menopausal symptoms 73, 305 merchant period (AD1500–1799), historical background 39–44, 56–7 mergers and acquisitions 238 message-understanding objective, information 309, 310 meta-cognitive assumptions, communications 301–3 Mexico bulk production 111, 133–4 production 111, 133–4, 238 steroid hormone industry 2–3 midwives 308 military regimes see also wars drug reforms 10 MINSAP, Cuba 61 modernization theories of economic development 1–3 concepts 1 morbidity factors, consumption 213 morphine 44–6 ‘mortality’ considerations, research 120–1 mortality rates historical background 46–57, 64–5 penicillin 49–50, 277 multinational corporations 2–3, 9–11, 15, 109–26, 131–48, 157, 165–6, 172–3, 238 see also drug companies powers 2–3, 9–11, 15, 109–26 profits 165–6, 240–1 research 109–26, 238 Napoleonic Wars 44, 243 national boards of health 52–7 national drug policies see also controls aspiration levels 74–5 car-journey analogy 61 choice of drugs with high therapeutic powers 62, 68–9, 70–5, 78, 256–8 choice of drugs with low side effects 62, 75–7, 78 concepts 11–12, 14, 61–80, 81–103, 243–51 conflicts 62, 244–5, 250, 315 culture 62–3, 315 definition 61–2, 81, 244 development guidelines 77–8, 244–51

331

EDs 99–103, 138–9, 162, 176–8, 186, 248–9 efficient organization of drug distribution 62, 66–8, 78, 178, 199–200 efficient organization of drug production 62, 65–6, 78, 117–18, 129–48 efficient organization of drug research 62, 63–5, 78, 109–26 efficient organization of drug support 62–3, 78, 81–103 efficient system for drug consumption 62, 68–9, 78 generic drugs 65–6, 82, 84–103 goals 61–78, 230–3, 243–51 implementation guidelines 77–8, 244–51 interest groups 77–8, 245–7 international cooperation 61–2, 88–9, 244–51 low drug costs 62, 77, 78 marketing conflicts 230–3 national health insurance systems 7–8, 11, 16–17, 49, 51, 86–7, 90–9, 154–67, 186–8, 206, 213, 284–7 organizational demands 62–70, 78, 315 pharmacies 184–8, 244–51 PHC 95–9, 103, 286 physicians 11–12, 75–6, 244–51 private/public drug sectors 66–8, 93–5, 103, 138–9, 163–4, 172–4, 178, 185–90, 212–13, 284–6 procurement systems 178 producers 14, 73–8, 100–3, 244–51 registration requirements 15, 51–7, 85–7, 88–102, 103, 131–2, 159–60, 239–40, 249–51, 258 reimbursement controllers 8–9, 11, 13, 16, 27, 67, 74, 86–7, 90–3, 103, 119, 154–5, 164, 173, 206, 239–40, 247 satisfactory system of drug information 62, 69–70, 78, 196–8, 225–33, 247–51, 260–2, 268–71, 301–16 substitution issues 68–9, 74, 85–103, 155–6, 160, 239–40 value judgments 62, 70–8, 314–16 national experiences, contextual factors 7, 315 national health insurance systems see also public...; reimbursement... advantages 98–9 concepts 7–8, 11, 16–17, 49, 51, 86–7, 90–9, 154–67, 186–8, 206, 213, 284–7 profits of drug companies 164–6, 206

332

INDEX

National Health Service (NHS) 7, 11, 13, 49, 51, 90–1, 164–6, 187, 206, 228, 244–5, 247, 288 homeophathic medicines 288 profits of drug companies 164–6 National Institute for Clinical Excellence (NICE) 264–5 national markets, market structures 239–40 national organizations, drug companies 13 NDAs see new drug applications Nepal 97, 188–9 Netherlands 17, 52–3, 89, 91, 220–1 neurotransmitter theory 119 new chemical substances strategies, producers 110–11, 113–26, 153, 222–5 new drug applications (NDAs) 82–3, 109–11, 113–26, 222–5 New Zealand 92 NGOs see Non-Governmental Organizations NHS see National Health Service nicotine replacement therapies 225 Nigeria 16–17, 261 nitrous oxide gas 44 noise levels, consumption factors 215 non-commercial drug information, concepts 69–70, 225–7 non-compliance discourses, social constructionism 23 non-experimental clinical studies see also case studies; cohort studies concepts 71–5 Non-Governmental Organizations (NGOs) 3, 17, 92, 93–4, 251 non-habitual decision-making processes, prescribers 262–3, 267–8, 271 non-harmonized markets, definition 151 non-patented generic drugs see also generic drugs important role 14, 65–6, 82, 84–103 prices 57–8, 151, 154–6, 157–8, 166 non-prescription drugs 27–8, 46–7, 53–7, 90–1, 97–8, 112, 113–14, 138, 159–60, 166, 189, 212–13, 226, 229–30, 288–9, 306–8 see also OTC...; self-medication critique 288–9, 306–7 decision-making processes 27–8, 285, 288–9, 308 information 307–8 normative studies 288–9 prescription-only medicines 212–13, 226, 229–30, 287, 288–9, 307–8

producer strategies 112 purchasers 308 side effects 307–8 non-profit making medical research laboratories, historical background of drugs 48 non-repetitive factors, decision-making processes 28–9, 33 Nordic countries 6, 11, 12–13, 42, 84–5, 90–1, 98, 186, 189, 205–6, 220–1 see also Denmark; Finland; Norway; Sweden normative studies OTC drugs 288 prescribers 255–8, 270–1 norms see also culture compliance measures 247–51 concepts 31–2, 66, 142–4, 244–51, 255–8, 270–1 quality norms 31–2, 66, 142–4, 153, 244–51 North America see also Canada; US gifts to physicians 232 OTC drugs 53, 288–9 public concerns over prices 165–6 Norway cost control agencies 162 distribution 6 wholesaling 171–2 novocain 45 nutrition 47, 65, 96–9, 277–8 on-line pharmacies 193, 197 open systems, definition 4 opening hours aims, pharmacies 193 opinion leaders, information sources 303–7 opium 40, 44–5 oral contraceptives 50 oral rehydration therapy (ORT) 288 Orange Book 83 order systems, procurement 177–8 organizational issues market structures 237–40 national drug policies 62–70, 78, 315 PHC principles 98–9 research 109–26 orphan drugs 82–3, 119 ORT see oral rehydration therapy orthodox/unorthodox accounts, alternative medicine 22

INDEX

OTC drugs 27–8, 46–7, 53–7, 90–1, 97–8, 113–14, 138, 159–60, 166, 181, 189, 192–7, 226, 285, 288–9, 301–3, 307–8 see also prescription-only medicines critique 288–9, 307–8 decision-making processes 27–8, 285, 288–9, 308 Europe 53, 90, 288–9 historical background 46–7, 53–7 normative studies 288 North America 53, 288–9 post-Thalidomide period (AD1965 to date) 53–7, 221 price competition 159, 166 side effects of drugs 307–8 social networks 27, 210–11, 288–9, 306–8 outcome analysis, evaluations 18, 20–5, 32, 55, 245–6, 315–16 outsourced functions, drug companies 13, 109–10, 129–32, 145 over-prescribing problems 256–8 overhead costs 130–48, 157–8 P-medicines 53 packages sold, consumption measures 207 packaging, production stages 129–48 pain treatments 290 Panama 132 Paracelsus 41–2 parallel imports 89, 159–60, 173 parallel registrations, concepts 159–60, 173 paramedics 12 see also health care professional groups Paris Convention (1883) 54 patent laws see also generic drugs concepts 14, 54–5, 81–103, 118–26, 133–4, 154–7, 165–6 expiration factors 155 forced production licenses 54–5, 82, 83 Paris Convention (1883) 54 Third World 54–5, 82 ‘Trips’ agreement (1994) 54, 83, 133 patent medicines, historical background 11, 42–3, 46–57 patented drugs, prices 151, 154–7, 166 pathology, historical background 46–7 patient medication records (PMRs) 22, 70–1, 183–4, 200

333

patients see also prescribers actor-spectator paradox 12, 25–6, 70–5, 289–90, 302–3 attitudes 23, 27–8, 29–33, 200, 209–14, 229–30, 277–94, 301–16 behaviours 277–94, 301–16 brand loyalties 147, 159, 196–7, 232–3, 308 compliance 23, 28, 247–51, 289–94, 309 concepts 8–9, 16–17, 69–75, 77–8, 181–200, 245–51, 255–71, 277–94, 301–16 consumption 62, 68–9, 78, 205–17 decision makers 278–94 detection of symptoms 281–5, 306–7 economic factors 284–6, 291–3 explanatory models 278–80 families 283–4, 306, 308, 315 ‘iceberg’ analogy 278 immigrants 283, 287, 306 information 7, 51–7, 71, 75–8, 88, 124–5, 194–5, 206, 221, 232, 247, 249–50, 256–8, 301–16 lifestyles 277–8 media effects 230, 303–5, 309, 311–12, 313–16 pharmacy visits 285–6, 301–3 post-Thalidomide period (AD1965 to date) 51–7, 75, 88, 124–5, 194–5, 206, 221, 247, 249–50 pressure groups 16–17, 77–8 prices in public distribution systems 163–4, 185–8 process model of dealing with symptoms 280–8 responsibilities 277–8, 288–9, 307–8, 313–14 retail distribution 181–200, 284–94 satisfaction levels 309 satisfactory system of drug information 62, 69–70, 78, 196–8, 247–51, 256–8, 260–2, 268–71, 301–16 segmentation strategies 240 self-medication 14, 70, 112, 192–3, 210–11, 277–8, 284–7, 306–7 serious medical conditions 279–80, 282–7 simulated patients 200 social constructionism 21–5, 183–4, 221–2, 225, 259–60, 278–80 symptoms 279–94, 306–7 Third World 16, 67–8, 280–90 PC see pharmaceutical care PDD see prescribed daily dosage

334

INDEX

penetration prices strategies, concepts 157 penicillin 49–50, 153–4, 277 perceptions see also attitudes... actor-spectator paradox 12, 25–6, 32–3, 70–5, 289–90, 302–4 selective aspects 304 perfect competition, concepts 158–9 perspectives see also attitudes... actor-spectator paradox 25–6, 32–3, 70–5, 289–90, 302–3 concepts 3–4, 24, 25–6, 70–5, 258, 301–16 future perspectives 56–7, 314–16 rational choice perspective 24, 28–9, 279–80, 302–3 receivers/senders of information 301–16 scientific perspectives 27–8 systems 3–4 Peru 14, 23, 40, 66–7, 173, 189, 212, 215, 286–7 pharmaceutical care (PC), concepts 26, 181–200 Pharmaceutical Society 49 pharmaceutical systems see also historical background of drugs actors 8–17, 25–6, 29–33, 109–10 contextual factors 6–8, 221–2, 315 controls 5–8, 10–11, 13–14, 15, 51–7, 69, 71, 75–8, 123–4, 129–48, 160–3, 186–7, 209–10, 220–1, 243–51, 315–16 decision-making processes 26–8, 248–51 dynamics 29–33 future perspectives 56–7, 314–16 systems analysis 5–6, 32 pharmacies/pharmacists 4–5, 12–13, 25–6, 43–57, 68, 76, 164, 171–8, 181–200, 205–6, 210–11, 219–21, 243–51, 284–94, 301–16 see also consumption; retail distribution actor-spectator paradox 12, 25–6, 196–8, 289–90, 302–3 ADRs 76, 250–1 aims 188–200 approved patient leaflets 195–6 computer information systems 195–6, 206 concepts 12–13, 25–6, 43–57, 68, 76, 171–8, 181–200, 205–6, 210–11, 219–21, 243–51, 284–94, 301–3 concordance concepts 183–4, 289, 293–4 controls 184–8, 220–1, 244–51, 287 demographics 188–90 efficiency considerations 199–200

empathy skills 13, 26, 182–4, 301–3 ethical concerns 198 evaluations 188–200 government controls 184–8 historical background 4–5, 43–57, 184–5, 205–6, 219–21, 243 improvement aims 188–200 information provisions 12, 25–6, 195, 196–200, 247–8, 256–8, 301–16 location decisions 185–8, 194, 285–6 on-line pharmacies/pharmacists 193, 197 opening hours aims 193 ownership issues 205–6 patient visits 285–6, 301–3 PC 182–200 polypharmacy roles 183, 256–7 prescribers 183–4, 189–90, 198–9, 205–6, 294 prices of drugs 164, 173–4, 185–8, 199 private/public sectors 164, 173–4, 185–90, 284–6 productivity considerations 199–200 professional identity debates 13 profits 199, 205–6 roles 12–13, 76, 181–200, 285–7, 294, 301–3 safety aims 193–6 satisfactory range of drugs aims 190–3 simulated patients 200 statistics 181, 205–6, 237–8 stock levels 190–3, 195–6 systems theory 4–5 travel time aims 188–90 video vignette studies 301–3 waiting times 193, 196 WHO criteria 181 wholesaling 171–8 working conditions 193, 198 wrong packages 195 pharmacokinetic studies 56 pharmacologists, research leaders 120 pharmacopoeias 43–4, 90–1, 144, 243, 246 pharmacovigilance, side effects of drugs 75–6, 250–1 PHC see primary health care phenazon 45 Philippines 22, 269 philosophical views, collection of data 21–2 physicians see also health care professional groups; prescribers activism 11–12

INDEX

ADRs 75–6, 250–1, 312–13 budgets 178, 258 communications 12, 75–6, 198–9, 228–30, 250–1, 289–90, 294, 301–16 compliance strategies 293–4, 309 concepts 8–9, 11–13, 75–6, 87, 198–9, 228–30, 243–51, 255–71, 282–94, 308–16 conflicts 12, 231–3, 244–5, 258, 293, 315 controls 15, 75–6, 243–51 diagnosis 268–70, 280, 282–8, 291–4, 302–3 fees 284–5, 287 gifts to physicians 232, 250 governments 11–12 historical background of drugs 42–57, 220–1 information needs 62, 69–70, 78, 196–8, 225–33, 247–51, 268–71, 308–16 knowledge 12–13 media effects 228–30, 303–5, 309, 311, 313–16 national drug policies 11–12, 75–6, 244–51 powers 11–12, 245–6, 252 producers 14, 158, 228–33, 250–1, 308 side effects information 75–6, 250–1, 309, 312–13 physiology, historical background 47 pill-counting compliance measures 290–1 placebos 20, 51–7, 71–5, 251, 269–70, 315 plant decisions, production 121, 131–2, 136 PMRs see patient medication records pneumonia 47, 50 policies see also national drug policies controls 243–51 polio vaccinations 17 political reforms 10–11 political science models controllers 10–11 interest groups 8–10, 78 politicians see also governments concepts 8–9 decision-making processes 27 national drug policies 11–12, 14, 61–80 polypharmacy 183, 256–7 population percentages, consumption measures 208–10, 213 positivistic standpoints collection of data 21–2, 24 social constructionism 24

335

post-Thalidomide period (AD1965 to date), historical background of drugs 51–7, 75, 88, 124–5, 194–5, 206, 221, 247, 249–50 postal mailings 229–30 prescribed daily dosage (PDD), consumption measures 208 prescribers see also consumption; health care professional groups available drugs 266–7 brand loyalties 147, 159, 196–7, 232–3, 308 budgets 178, 258 choice of drugs 69, 146–7, 256–8 cognitive perspective studies 262–7, 269–70 cognitive processes 262–7, 269, 291–3 company preferences 266 compliance strategies 293–4, 309 computer information systems 262 concepts 8–9, 10–13, 69, 84–103, 146–7, 157–8, 205–17, 228–33, 243–51, 255–71, 280–94, 307–16 concordance concepts 183–4, 289, 293–4 consumption factors 210–15 controls 15, 75–6, 243–51, 258 costs criteria 263, 264–5 critique 255–71 diagnosis 260–71, 280, 282–8, 291–4, 302–3 dispensing issues 10–11 documentation factors 265–6 dosages 207–8, 216, 266, 285–6, 292 empathy skills 256, 280, 289–90 feedback issues 257–8, 309 fees 284–5, 287 generic drugs 11, 14, 82, 84–103, 157–8 gifts to prescribers 232, 250 habitual/non-habitual decision-making processes 262–3, 267–8, 271 historical background of drugs 42–57, 220–1 information needs 62, 69–70, 78, 196–8, 225–33, 247–51, 256–8, 260–2, 268–71, 301–16 information process studies 260–2 media effects 228–30, 303–5, 309, 311, 313–16 non-habitual processes 262–3, 267–8, 271 normative studies 255–8, 270–1 over-prescribing problems 256–8 P-medicines 53 paramedics 12 patient convenience 265–6

336

INDEX

prescribers (Continued) pharmacies/pharmacists 183–4, 189–90, 198–9, 205–6, 294 placebo treatments 269–70, 315 post-Thalidomide period (AD1965 to date) 52–7, 206, 221 producers 14, 158, 228–33, 250–1, 308 rational prescribing 255–8 social networks 27, 32, 210–11, 258–60, 261–2, 283 sociological studies 27, 32, 210–11, 258–60 stages 260–2 standard selection changes 261–2, 267–8 statistics 205–17, 237–8 studies 255–71 systems analysis 5–6 taste/smell/appearance of the drug 265–6 therapeutic effects 263–4 unsuitable prescriptions 50, 256–7 prescription abuse, UK 90 prescription numbers, consumption measures 207 prescription-only medicines see also OTC drugs; ready-made... concepts 50, 52–7, 88–9, 212–13, 226, 229–30, 255–71, 287, 307–8 historical background 50, 52–7, 88–9 information sources 307–8 non-prescription drugs 212–13, 226, 229–30, 287, 288–9, 307–8 post-Thalidomide period (AD1965 to date) 52–7, 88–9, 206, 221, 247, 249–50 prices 151–67 side effects 307–8 pressure groups, patients and patient organizations 16–17, 77–8 preventive programmes 47, 65, 95–9, 277–8, 281–2, 313–14 see also housing . . . ; hygiene . . . ; nutrition . . . ; primary health care price controllers see also controllers concepts 8–9, 10, 154–67, 173, 243–51 price elasticities, ready-made drugs 154–6 prices of drugs 2, 7–16, 27, 62–3, 67–8, 74, 78, 85–7, 90–3, 100–2, 151–67, 178, 225, 256–8, 260, 264–5, 291–2 competitors 151, 155–6, 158–60, 166, 225 concepts 151–67, 178, 225, 256–8, 260, 264–5, 291–2

controls 8–9, 10, 151, 154–67, 173, 186–7, 206, 243–51 cost control agencies 160–3, 165–6, 186–7, 206, 244–51 economic theory 151–67 EDs 100–2, 138–9, 162, 248–9 efficient organization of drug support 62–3, 78, 81–103 generic drugs 57–8, 85–7, 151, 154–6, 157–8, 166 national health insurance systems 7–8, 16, 67, 86–7, 90–3, 154–67, 186–8, 206, 284–7 non-patented generic drugs 57–8, 151, 154–6, 157–8, 166 patented drugs 151, 154–7, 166 penetration prices strategies 157 pharmacies/pharmacists 164, 173–4, 185–8, 199 private pharmacies in the Third World 164, 173–4, 185–8 public distribution systems 163–4, 185–8 raw materials 151–3, 166 ready-made drugs 151, 153, 154–6, 166, 199, 205–6 reimbursement controllers 8–9, 11, 13, 16, 27, 67, 74, 86–7, 90–3, 154–67, 206, 239–40 setting factors 151–67 skimming prices strategies 157 social group theories of economic development 2 strategies 151–67 transfer-pricing strategies 157 WHO-HAI study 160, 163 Primary Care Trusts, UK 198–9, 258, 269 primary health care (PHC) availability of drugs 98, 286 concepts 95–9, 103, 286 constraints 99 critique 97–9 decentralization trends 99 defining criteria 96 EDs conflicts 102 education issues 99 organizational principles 98–9 WHO support 96–7 private distribution systems see also distribution Third World 66–8, 93–5, 173–4, 185–8 private drug sectors 66–8, 93–5, 103, 138–9, 163–4, 172–4, 178, 185–90, 212–13, 260, 284–6

INDEX

concepts 66–8, 93–5, 160–4, 173–4, 185–8, 260, 284–6 private pharmacies in the Third World, prices of drugs 164, 173–4, 185–8 process analysis controls 244–7 evaluations 18, 32, 55, 280–8, 315 symptoms 280–8 procurement see also wholesaling concepts 99–100, 176–8, 185 definition 176 producers see also marketing; prices...; research advertisements 16, 46–7, 50–1, 220–1, 226–33 alliances 13–14, 109–10, 120–4 barriers to entry/exit 129–31, 141–8, 165–6, 232–3, 239–40 bribes 15 bulk production strategies 111, 129–48 clinical trials 14, 20, 48–9, 51–7, 64, 71–5, 117–18, 124–5, 221, 245, 246–51 compensation schemes for side effects of drugs 76–7 concepts 8–9, 13–15, 62, 65–6, 73–8, 81–103, 109–26, 129–48, 151–67, 219–33, 237–40 controllers 15, 250 controls 15, 243–51 cost control agencies 160–3, 165–6, 186–7, 206, 244–51 definition 13 EDs 99–103, 138–9, 162, 176–8, 186, 248–9 efficient organization of drug production 62, 65–6, 78, 117–18, 129–48 efficient organization of drug research 62, 63–5, 78, 109–26 forced production licenses 54–5, 82, 83 generic drugs strategies 111–12, 116, 238 ‘ghost authors’ 14–15 gifts to physicians 232, 250 governments 13–14, 15 herbal medicines strategies 112, 135, 287–8 historical background 45–57, 81–2, 219–21 market power 237–40, 245–6, 252 market structures 237–40 medical experts 14–15, 52–3, 73–4, 221, 225, 258 national drug policies 14, 73–8, 100–3, 244–51

337

national organizations 13 new chemical substances strategies 110–11, 113–26, 153, 222–5 patent laws 14, 54–5, 81–103, 118–26, 154–7 physicians 14, 158, 228–33, 250–1, 308 power 13–14, 73–8, 237–40, 245–6, 252 prescribers 14, 158, 228–33, 250–1, 308 profits 114, 118–19, 122–6, 146–7, 157–8, 164–7, 240–1 project decisions 118–21 segmentation strategies 240 selection issues 115–16, 118–19, 134–9 self-medication strategies 112, 210–11 side effects of drugs 263–5 strategies 109–26, 129–48, 151–67, 240 types 65–6, 109–10 vaccinations 133–4, 141 wholesaling 171–8 product growth, research concepts 115–16 production accessible raw materials 134–6 batch production 140–1, 143–4 bulk production 111, 129–48 cheap foreign drugs 19 concepts 3, 8–9, 13–15, 43–4, 62, 65–6, 78, 90–1, 111, 117–18, 129–48, 243, 246 consultants 144–5 costs 19, 110, 112–15, 129–48, 151–67 country variations 133–4 currency savings 129–30, 137–8, 162 decision-making processes 28, 109–26, 132–48 economies of scale 129–31, 141–8, 165–6, 232, 239–40 efficient organization of drug production 62, 65–6, 78, 117–18, 129–48 exports 132, 138–9, 141–2, 146–7, 238–40 historical background 45–57, 81–2, 219–21 knowledge 131–2, 141–2, 144–5, 147 location decisions 121, 131–2, 136, 145, 164–5 networks 130–48 pharmacopoeias 43–4, 90–1, 144, 243, 246 plant decisions 121, 131–2, 136 quality controls 66, 129–31, 139–48, 153, 159–60, 243–51 recruitment factors 142–5 regulatory authorities 121, 131–2, 145–7, 220–1, 243–51 safety factors 131–2 selection issues 115–16, 118–19, 134–9

338

INDEX

production (Continued) service facilities 137, 140–1 specialized production units 141 stages 129–48 standardization 64–5 systems analysis 5–6 tablets 49, 111–12, 129–48, 178 technical assistance levels 132, 144–5 technological factors 132, 136–7, 144–5, 159–60 volumes 130–2, 139–48, 151–67, 177–8 production lines, concepts 130–1, 139–48 productivity efficient organization of drug distribution 66–8, 78, 174–6, 199–200 efficient organization of drug research 109–10, 122–4 pharmacies/pharmacists 199–200 wholesaling 174–6 profits of pharmacies/pharmacists 199, 205–6 profits of producers 114, 118–19, 122–6, 146–7, 157–8, 164–7, 224–5, 240–1 see also returns critique 164–7, 240–1 NHS 164–6 public concerns 165–6 statistics 164–7, 240–1 promotion programmes 95–9 see also preventive... proper-product-usage objective, information 309, 310, 311 psychiatric diseases 14, 50, 55, 74, 116, 154–5, 212–14, 222, 256–8, 277–8 psychological effects, diagnosis 284–5, 291–2 psychosis 294 psychotropics 14, 50, 55, 74, 116, 154–5, 212–14, 222, 256–8, 293–4 public distribution systems see also distribution concepts 66–8, 163–4, 173–4, 185–8 prices of drugs 163–4, 185–8 Third World 66–8, 164, 185–8 public drug sectors 7–8, 11, 16–17, 49, 51, 66–8, 86–7, 90–9, 103, 138–9, 154–67, 212–13 concepts 66–8, 93–5, 160–4 public interest theories, concepts 9–11 qualitative studies, consumption 205, 215–17 quality of care, concepts 19–20

quality controls see also controllers analysing equipment 144 concepts 8–9, 129–48, 153, 159–60, 193–6, 243–51 distribution 144, 174–6, 193–6 management structures 142–3 Master Formula Records 143–4 planning aspects 142–4 procedures 142–3 production 66, 129–31, 139–48, 153, 159–60, 243–51 wholesaling 144, 174–6, 244–51 quality issues, information 69–70, 231–3, 256–8 quality norms, production 66, 142–4, 153, 244–51 quantitative studies, consumption 205–15 quantity factors see volumes of production quasi-drug products, historical background 220 questionnaires, information sources 305–6 quinine 40, 44–5 R&D 9–10, 45, 52–3, 56–7, 62, 63–6, 78, 81–2, 109–26, 157–8, 238–40 see also research concepts 63–5, 109–26, 157–8, 238–40 costs 64–6, 81–2, 110, 112–15, 157–8 departmental structures 115–16 efficient organization of drug research 62, 63–5, 78, 109–26 randomized controlled clinical trials (RCTs) see also clinical trials; evidence-based medicine biases 74–5, 246–7 concepts 55–7, 71–5, 245, 251 critique 71–5 secret results 74, 243 rational choice perspective, concepts 24, 28–9, 279–80, 302–3 rational prescribing, concepts 255–8 raw materials see also resources economic theory 151–3 efficient organization of drug support 62–3, 78, 81–103 prices of drugs 151–3, 166 production stages 129–48 RCTs see randomized controlled clinical trials re-evaluations 65–6

INDEX

ready-made drugs 129–48, 151, 153, 154–6, 166, 205–17, 219–21 see also generic...; patent... price elasticities 154–6 prices 151, 153, 154–6, 166, 205–6 production stages 129–48 receivers’ perspective, information 301–8, 315–16 recovery rates, treatments 72–5, 286–7, 312–13 recruitment factors production quality issues 142–5 research 123–4 reforms 7, 10–11, 23, 47, 49, 51–7, 64–5 regional control level, concepts 248–51 registration requirements 15, 51–7, 85–7, 88–102, 103, 117–18, 131–2, 159–60, 239–40, 249–52, 258 concepts 88–9, 103, 131–2, 159–60, 239–40, 249–51, 258 parallel registrations 159–60, 173 procedures 88–9, 131–2, 159–60, 251–2 regulatory authorities see also controllers; patent laws concepts 8–11, 15, 49, 50, 51–7, 75–8, 85–7, 88–102, 123–4, 131–4, 165–6, 205–6, 209–10, 220–1, 243–51, 258 corporatist political science model 9–11 critique 8–11, 249–51 global systems political science models 9–11 harmonization talks 9–10, 249–50 patent laws 14, 54–5, 81–103, 118–26, 154–7 political science models 9–11 post-Thalidomide period (AD1965 to date) 51–7, 71, 75, 88, 124–5, 206, 221, 247, 249–50 prescription-only medicines 50, 88–9, 243–51, 258 production 121, 131–2, 145–7, 220–1, 243–51 public interest theories 9–11 retail distribution 188–200, 244–51 secret drugs 49, 88–9, 243 reimbursement controllers see also controllers; national health insurance systems ‘black’ list of drugs 92 concepts 8–9, 11, 13, 16, 27, 67, 74, 86–7, 90–3, 103, 119, 154–67, 173, 206, 239–40, 247 critique 90–3 culture 92–3

339

definition 90 evaluations 17, 90–3 scheme classifications 91–3 religion issues, consumption 215 repetitive/non-repetitive factors, decision-making processes 28–9, 33 research see also biotechnology companies; producers actor-spectator paradox 26 administration 116–26 ‘blockbuster’ drugs 122–3 bulk production strategies 111 concepts 5–6, 13–14, 26, 28–9, 62, 63–5, 78, 109–26, 146–7, 222–3, 238–40, 251, 305–8 costs 64–6, 81–2, 110, 112–15 decision-making processes 28, 109–26 departmental structures 115–16 diseases of the Third World 119, 125 efficient organization of drug research 62, 63–5, 78, 109–26 ethical concerns 124–5, 251 evaluations 116–20 feasibility studies 120–1 financial opportunities 114, 118–19 future perspectives 56–7 generic drugs strategies 111–12, 116, 223 governments 110, 124–6 herbal medicines strategies 112, 135 historical background 39–57, 81–2, 146–7, 220–1 information sources 305–8 leaders 120–1 location decisions 121, 131–2, 136, 145 ‘mortality’ considerations 120–1 national drug policies 62, 63–5, 78, 109–26 networks 109–10, 113–26 new chemical substances strategies 110–11, 113–26, 153, 222–5 organizational issues 109–26 process 116–18, 120–2 product growth 115–16 productivity 109–10, 122–4 project decisions 118–21 recruitment factors 123–4 returns expectations 114, 118–19 rules of thumb 114–15 selection factors 115–16, 118–19 self-medication strategies 112 spend statistics 110, 112–15 stages 116–18

340

INDEX

research (Continued) strategies 109–26 systems analysis 5–6 tests 117–18, 121 Third World 62, 63–5, 78, 114–15, 119, 125, 251 tropical diseases 54 UK 110–26, 238 universities 113–24 US 110–26, 238 resistance discourses, social constructionism 23, 311 resistance problems, antibiotics 50, 256–7, 311 resources see also raw materials concepts 5–6, 62–3, 78, 81–103 EDs 99–102, 138–9 efficient organization of drug support 62–3, 78, 81–103 systems analysis 5–6 responsibilities, patients 277–8, 288–9, 307–8, 313–14 retail distribution see also pharmacies aims 188–200 concepts 181–200, 205–7, 210–11, 244–51, 284–94 definition 181 prices of drugs 164, 173–4, 185–8, 199, 205–6 profits 199 regulatory authorities 188–200, 244–51 returns see also profits... critique 164–7, 199 diseases of the Third World 119, 125 exports 146–7 NHS introduction 164–5 public concerns 165–6 R&D spend 114, 118–19, 122–6 risks 124, 165–6 statistics 164–7 risk aversion 73–4 returns 124, 165–6 Roche 157 Rome 40 Royal Pharmaceutical Society 186–7 rules of thumb marketing 227 research spend 114–15

Russia 94–5, 133–4, 187, 237 see also Soviet Union safety factors see also side effects pharmacies 193–6 production 131–2 sales values 207–9, 223, 225, 237–40 see also consumption consumption measures 207–9 marketing goals 223, 225 salicylic acid 40, 45 salts of mercury 41–2 salvarsan 47 sample sizes, evaluations 21 sanitation reforms 47, 64–5, 278 satisfaction levels, patients 309 satisfactory range of drugs aims, pharmacies 190–3 satisfactory system of drug information see also information; national drug policies concepts 62, 69–70, 78, 196–8, 225–33, 247–51, 256–8, 260–2, 268–71, 301–16 scarlet fever 47 seasickness tables 270 secret drugs, regulatory authorities 49, 88–9, 243 secret results, clinical trials 74, 243 sedatives 215–17 self-medication 14, 70, 112, 192–3, 210–11, 277–8, 284–7, 306–7 see also OTC... critique 289–90, 306–7 definition 112 producer strategies 112, 210–11 retail distribution 192–3, 210–11 senders’ perspective, information 301–4, 308–16 seriousness of symptoms 279–80, 282–7 Serturner, Friedrich 44 serum therapy 47–8, 50 service facilities, production 137, 140–1 sexually transmitted diseases (STDs) 23 shortages of drugs 101–2, 103, 266–7 sickness and health, definition 70 side effects of drugs 7, 10, 29, 51–7, 62, 71–8, 88, 124–5, 194–5, 263–5, 270–1, 304–5, 307–16 see also safety factors ADRs 75–6, 250–1, 312–13 attitudes to drugs 23, 27–8, 310–11

INDEX

choice of drugs with low side effects 62, 75–7, 78 clinical trials 52–7, 75–6, 124–5, 221, 245, 251 compensation schemes 76–7 information 7, 51–7, 71, 75–8, 88, 124–5, 194–5, 206, 221, 232, 247, 249–50, 256–8, 301–16 informed consent 76–7 marketing 232 mass media roles 304–7 multiple side effects 76 OTC drugs 307–8 pharmacovigilance 75–6, 250–1 physicians 75–6, 250–1, 309, 312–13 placebo treatments 270–1, 315 post-Thalidomide period (AD1965 to date) 51–7, 71, 75, 88, 124–5, 194–5, 206, 221, 247, 249–50 prescription-only medicines 307–8 producers 263–5 serum therapy 47–8 severity levels 75–6, 250–1 Thalidomide 7, 10, 29, 51–7, 71, 75, 88, 124–5, 194–5, 206, 221, 247, 249–50 types 75–6, 250–1, 307–8 simulated patients, pharmacies/pharmacists 200 Singapore 247 size of drug company, marketing 227 skewed distributions, consumption 213 skimming prices strategies, concepts 157 sleeping pills 215–17, 267–8 smallpox 41 smoking 225, 314 SMON catastrophe 227–8 social aspects historical background 39–57, 221–2 research 109–26 social constructionism concepts 21–5, 32, 70–1, 183–4, 221–2, 225, 259–60, 278–80 positivistic standpoints 24 social context, EBM critique 55–6 social group theories of economic development 1, 2–3 concepts 2 social meta-cognitive assumptions, communications 301–3 social networks attitudes to drugs 29–33, 209–11, 283, 288–9, 292–3, 306–8, 310–11

341

compliance factors 292 OTC drugs 27, 210–11, 288–9, 306–8 prescribers 27, 32, 210–11, 258–60, 261–2, 283 social psychology the balance model 29–33 norms 31–2 social representation theory, concepts 21, 24–5, 279 social science data, control decisions 248–50 social support 24, 71–5, 310 socio-economic conditions, PHC 96–9, 286 sociological studies, prescribers 27, 32, 210–11, 258–60 South Africa forced production licenses 54–5 retail distribution 181 South Korea 10–11, 189–90 Soviet Union 94–5, 133–4, 172, 186–7 see also Russia Spain 237 specialized production units 141 spectators, actor-spectator paradox 12, 25–6, 32–3, 70–5, 196–8, 289–90, 302–3 Sri Lanka 11, 100, 163 standard contracts, procurement 176, 177–8 standards 64–5, 66, 142–4, 153, 244–51, 261–2, 267–8 statins 238–9 STDs see sexually transmitted diseases stereotypes actor-spectator paradox 25–6, 292–3 advertisements 304 media 304–5 steroid hormone industry, Mexico 2–3 stock levels, pharmacies 190–3, 195–6 Stone, Edward 40 strategies compliance improvements 293–4, 309 marketing 111–16, 134, 138–9, 240 prices of drugs 151–67 producers 109–26, 129–48, 151–67, 240 research 109–26 substitution issues 68–9, 74, 85–103, 155–6, 160, 239–40 see also generic...; therapeutic... concepts 85–103, 155–6, 160, 239–40 definitions 85–6, 102, 155 sulfa chemicals 48–50, 131–2 sulfanilamide tragedy, US 131–2 summary of results, evaluations 20–1

342

INDEX

supply function, economic theory 151–67 support issues concepts 62–3, 78, 81–103 efficient organization of drug support 62–3, 78, 81–103 national drug policies 62–3, 78, 81–103 planning considerations 81–103 Sweden 6, 52–3, 85, 114, 120, 146–7, 185, 188, 205–6, 220, 267, 301–2 distribution 6, 185, 188, 205–6 generic substitution 85 Germany 146–7 immigrants 283 production 146–7, 220 research 120, 147 selections 267–8 Switzerland 52–3, 133–4, 141–2, 237 symptoms see also diagnosis classes 284–5 detection 281–5 discourse components 279–80 education issues 282–6 patients 279–94, 306–7 process layperson model of dealing with symptoms 280–8, 306–7 seriousness assessments 279–80, 282–7 Syntex 2–3 synthetic drugs 45–6, 52–7, 136 syphilis 40, 47 systems concepts 3–8, 32, 244–51, 315 definition 3, 32 systems analysis component parts 5–6 concepts 3–8, 32, 315 evaluations 17, 32, 174–6 homogeneity of components 6 tablets 49, 111–12, 129–48, 178, 207–8, 290–1 advantages 139 consumption measures 207–8 historical background 49, 111–12, 129–48 injections 139, 256 Taiwan 190 Tanzania 16, 93, 176 taste/smell/appearance of the drug, prescribers 265–6 tea 40 technical assistance principles, production 132, 144–5

technological factors, production 132, 136–7, 144–5, 159–60 technology see also computer... biotechnology companies 13, 109–10, 123–6, 135 dependency theories of economic development 1–2 pharmacies 195–6 PHC 96–9 production 129–48, 159–60 tenders cost control agencies 160–3 procurement 176–8, 185 tests animal tests 41, 45–6, 47–9, 51–7, 117–18, 246–7, 251 drug controls 249–51 research stages 117–18, 121 tetanus 47 Thalidomide 7, 10, 29, 51–7, 71, 75, 88, 124–5, 194–5, 206, 221, 247, 249–50 Theory of Reasoned Action (TRA) 27–8 therapeutic effects, prescribers 263–4 therapeutic substitution see also substitution... concepts 85–102 definition 85 therapies 4–5, 11, 13–14, 20, 39–57, 62, 68–9, 70–5, 78, 219–21, 279–94 see also treatments theriac 40 Third World 1–8, 14, 16, 63–5, 66–8, 93–5, 103, 114–15, 129–30, 138–9, 163–4, 173–8, 185–90, 212–13, 251, 280–90 economic development theories 1–3 efficient organization of drug distribution 62, 66–8, 78, 174–200 efficient organization of drug research 62, 63–5, 78, 114–15 injections 16 patent laws 54–5, 82 patients 16, 67–8, 280–90 PHC 95–9, 103 private/public drug sectors 66–8, 93–5, 103, 138–9, 163–4, 173–4, 178, 185–90, 212–13, 284–6 research 62, 63–5, 78, 114–15, 119, 125, 251 tropical diseases 54 WHO 14, 17, 53–4, 66–7, 77, 96–7, 160, 251 time-series analyses, consumption 211 tobacco 40, 225

INDEX

TRA see Theory of Reasoned Action trade names definition 84 generic names 84–5, 87, 102 trademark laws, historical background 84–5 traditional medicines 12–13, 20, 39, 42, 135, 247, 278, 280–2, 286, 287–8 tranquilizers 222, 257–8, 267, 304 transfer-pricing strategies 157 travel time aims, pharmacies 188–90 treatments 4–5, 11, 13–14, 20, 39–57, 62, 68–9, 70–5, 78, 112, 192–3, 210–11, 219–21, 269–70, 277–8, 279–94, 309, 313–14 see also diagnosis antibiotics 50, 73, 124, 135, 136, 138, 141, 194, 255–9, 293–4, 311 choice of drugs with high therapeutic powers 62, 68–9, 70–5, 78, 256–8 cognitive therapy 293, 294 compliance problems 23, 28, 289–94, 309 concepts 70–5, 269–70, 277–8, 284–94 depression 213, 221–2, 291–2, 293 DOTS 293 EBM 54–7, 73–5, 85, 255–8 effectiveness issues 72–5, 269–70, 286–7, 312–13 herbal medicines 43, 98, 112, 135, 278, 280–3, 287–8 historical background of drugs 4–5, 11, 13–14, 20, 39–57, 219–21 homeopathic medicines 43, 288 malaria 40, 44, 54, 83, 283, 313 ORT 288 placebo treatments 269–70, 315 preventive programmes 47, 65, 95–9, 277–8, 281–2, 313–14 psychotropics 14, 50, 55, 74, 116, 154–5, 212–14, 222, 256–8, 293–4 recovery rates 72–5, 286–7, 312–13 self-medication 14, 70, 112, 192–3, 210–11, 277–8, 284–7, 306–7 TB 22, 54, 83, 97, 290, 293, 311 traditional medicines 12–13, 20, 39, 42, 135, 247, 278, 280–2, 286, 287–8 ‘Trips’ agreement (1994) 54, 83, 133 tropical diseases, research 54 tuberculosis (TB) 22, 54, 83, 97, 290, 293, 311 UK ADRs 75–6, 250–1 anti-vaccination movements 17 BMA 11, 90

343

bulk production 111, 133 clinical trials history 48–9 consumption statistics 237, 287–8 controls 245 generic drugs 84–5, 87, 154–6 historical background of drugs 40–57, 75–6, 81–2, 83, 250–1 immigrants 287 marketing 228 NHS 7, 11, 13, 49, 51, 90–1, 164–6, 187, 206, 228, 244–5, 247, 288 non-profit making medical research laboratories 48 P-medicines 53 penicillin 49–50, 277 pharmacies 186–7, 193, 198 prescription abuse 90 prescription-only medicines 50, 88–9 Primary Care Trusts 198–9, 258, 269 production 133–4, 238 profits 164–6 registration requirements 88–9, 249–50 reimbursement controllers 90–3, 206, 247 research 110–26, 238 wholesaling 171–2 Yellow Card Scheme 76 underdevelopment theories, economic development 1–3 unethical/unscientific concerns see ethical concerns UNICEF 100–1, 133 universities historical background 40 innovations 117–18, 123–4 research 113–24 unsuitable prescriptions 50, 256–7 US advertisements 230 Boots 171 bulk production 111, 133, 141–2 clinical trials history 48–9 compensation schemes for side effects of drugs 76–7 controls 162–3, 245, 251, 258 cost control agencies 162–3 distribution 6, 187–8, 193 FDA 53, 82–3, 251, 258 free clinics 98, 188 generic drugs 84–5, 154–6 historical background 46–57 HRT use 17 ICH process 9–10, 151, 249–50

344

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US (Continued) Kefauver-Harris Amendments 53, 162–3 marketing 228–30 non-profit making medical research laboratories 48 on-line pharmacies 193, 197 OTC drugs 53, 288–9 patent laws 82–7 pharmacies 187–8 prescription-only medicines 52, 88–9 prices 165–6, 187–8 production 111, 131–4, 141–2, 146–7, 238 public concerns over prices 165–6 registration requirements 88–9, 131–2, 249–51, 258 research 110–26, 238 steroid hormone industry 3 sulfanilamide tragedy 131–2 wars with Germany 47–8, 50 vaccinations concepts 41, 47–8, 68, 133–4, 141, 193–6 distribution 68, 175, 193–6 historical background 41, 47–8 producers 133–4, 141 Valium 157 value judgments see also decision-making processes choice of drugs with high therapeutic powers 62, 68–9, 70–5, 78, 256–8 compliance 293–4 concepts 62, 73–8, 293–4, 314–16 information programmes 314–16 low drug costs 62, 77, 78 national drug policies 62, 70–8, 314–16 vertical integration, concepts 171–2 Viagra 190, 193 video vignette studies, pharmacies/pharmacists 301–3 vitamin D 46 vitamin tonics 138, 214, 256, 281 volumes of production costs 130–2, 139–48, 205–17 determination factors 146, 177–8 economic theory 151–67 waiting times pharmacies 193, 196 wholesaling 174–8 wars 44, 47–9, 50, 52, 146–7, 238 see also military regimes

Waxman-Hatch amendment 82–7 weight of drugs, consumption measures 207 welfare reforms, Liberal administration 7, 49 WHO see World Health Organization wholesaling see also distribution; procurement competitors 171–2 concepts 4–6, 43–57, 68, 89, 144, 159–60, 164, 171–8, 206, 244–51 costs 174–6 critique 171–3 definition 68, 171, 178 efficiency evaluations 174–8 evaluations 174–8 health care professional groups 171–8 historical background 4–5, 43–57 imports function 171–8 order systems 177–8 parallel imports 89, 159–60, 173 pharmacies 171–8 private/public sub-systems 173–4, 178 producers 171–8 quality controls 144, 174–6, 244–51 standard contracts 176, 177–8 structural issues 171–2 systems analysis 5–6 types of systems 173–6 vertical integration 171–2 waiting times 174–8 willow bark 40 women see also gender issues detection of symptoms 282 HRT use 17, 305 ORT treatment 288 OTC purchasers 308 working conditions, pharmacies 193, 198 World Bank 177 World Health Organization (WHO) 3, 14, 17, 53–4, 66–7, 77, 96–7, 100–2, 103, 133, 160, 163, 181, 186, 251 World Trade Organization (WTO) 54, 82, 83 WTO see World Trade Organization Xenical 193 Zambia 176, 287 Zimbabwe 189 Index compiled by Terry Halliday