Regulatory Capture

Around the world, drug regulatory agencies spend billions of dollars engaged in activities which purport to ensure the safety, efficacy and quality of legal drugs. If the goal of regulation is to protect public health and safety, there can be no argument that it has failed. Safe drugs are not associated with annual rises in mortality and morbidity, effective drugs are not associated with increased prevalence of the conditions they are designed to treat and with greater chronicity of those conditions, quality drugs are not discovered to be contaminated with solvents months after their manufacture and release to the market. Effective regulation does not see companies repeatedly breaching standards and shrugging off sanctions.

According to the World Health Organisation, “In drug regulation, the government acts as the guardian of the public by controlling private powers for public purposes.”

Yep, they sure do act that way, but that’s exactly what it is – an act. Behind the failure of drug regulation is the fact that it is conducted by governments whose fortunes are entwined with those of the pharmaceutical industry. International drug regulators are one of the best examples, along with the regulators of the finance industry, of regulatory capture – the co-option of regulatory agencies by the organisations they regulate. Regulatory capture involves industry convincing regulators that their interests are convergent and manipulating regulatory processes for their own ends.

How this occurs is well documented and nicely summed up by the following quote from economist Fred Grygiel;

The road to Regulatory Capture is paved with some combination of regulator complacency, cozy relationships with regulated companies, and ultimately, conflicts of interest that may result in ethical, and in extreme cases, criminal misconduct. as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefits.

In the financial sector, regulatory capture was epitomized by the claim that what was good for Wall Street was good for America and the idea that the industry and its regulators had shared goals.

Internationally it has become clear that government regulation of pharmaceutical companies has become a tool of the industry. Rather than protection, drug regulation is providing consumers with a false sense that the drugs they take are rigorously tested for safety and efficacy, that systems are in place to gather data on adverse reactions and withdraw drugs from the market where harms outweigh benefits, that the information provided to consumers is independent and scientific and that their health is protected by forces keeping industry in check. As such, regulation has become little more than an extension of the marketing departments for pharmaceutical companies, particularly in the absence of direct to consumer advertising.

Nowhere more than Ireland is the conflict of interest inherent in government regulation of the pharmaceutical industry more evident. Ireland is the largest net exporter of medicines in the world with 52% of global medicines originating from this country. Pharmaceutical drugs comprise 60% of the total value of Ireland’s exports and provide over 60,000 Irish jobs .

The Taoiseach (Prime Minister) of Ireland, Enda Kenny has made clear his view that the pharmaceutical industry is critical to economic success in Ireland and that the government sees itself benefitting from the fortunes of pharma. In a speech at the launch of Alexion Pharmaceutical’s new Irish plant last week he said

The pharmaceutical and biopharma industries play a vital role in our economy. Eight of the top 10 pharmaceutical companies in the world have Irish facilities, and the country is one of the premier global locations for pharmaceutical and chemical product manufacture. I want to thank Alexion Pharmaceuticals for this important investment and to assure the company of my Government’s on-going support.

In response, Leonard Bell, chief executive of Alexion Pharmaceutical said the company looked forward to an ongoing partnership with the Irish Government.

The Taoiseach also recently wrote the introduction to a report on growth by a pharmaceutical representative body in Ireland saying

The Irish Government and its agencies have developed and implemented a range of policies and supports to enable the continued growth of [the pharmaceutical sector] which is of strategic importance to the Irish economy in terms of driving growth and jobs. We are committed to continuing to work closely with industry to support and further develop these sectors.

Irish Minister for Social Protection, Joan Burton, when asked about economic recovery in Ireland openly discusses her concern about the loss of drug patents and rise of generic drugs and her plans to ensure Ireland is the most attractive country to manufacture pharmaceutical material for the market but also for clinical trials.

Ireland’s Minister for Children, Frances Fitzgerald, is married to a child and adolescent psychiatrist from the country’s premier university, Trinity College, who is a member of the  speakers bureau for Shire Pharmaceuticals and receives consulting fees from Shire and Eli Lilly. Frances Fitzgerald recently wrote an endorsement for a directory of ADHD services produced by HADD which claims ADHD is a medical/neurobiological condition in which the brain’s neurotransmitter chemicals, noradrenalin and dopamine do not work properly and on its website that non-medical approaches to treating ADHD are ineffective. 

When she hosted a public information event encouraging Irish Citizens to vote in favour of ratifying a treaty in a nationwide referendum, she spoke beside David Gallagher, the Managing Director of Pfizer Healthcare Ireland who supported her call for ratification of the economic treaty.

Recently the Irish government launched the Synthesis & Solid State Pharmaceutical Centre (SSPC) a partnership between Ireland’s universities, government and big pharma. The SSPC is part of a broader programme described as the largest ever state/ industry co-funded research investment in Ireland involving €200 million of Irish taxpayer funding and €100 million funding from the pharmaceutical industry.  The SSPC involves pharmaceutical companies Pfizer, GlaxoSmithKline (GSK), Eli Lilly, and Merck, Eirgen Pharma, Innopharma Labs, Glantreo, and Amebis and educational institutions Athlone IT, Waterford IT, Trinity College Dublin, University College Cork, University College Dublin and NUI Galway.

The SSPC claims its objective is the retention, creation and transformation of direct jobs in the pharmaceutical industry in Ireland. Irish Minister for Jobs, Enterprise and Innovation Richard Bruton TD, describes the project as a major investment in the future of research in Ireland, in the pharma sector, and ultimately in jobs. The Minister for Finance, Michael Noonan says that the SSPC in building a core capability in the area of process R&D will serve to cement the pharmaceutical industry in Ireland.

The project is led by Dr Mary Shire, Vice President for Research at the University of Limerick. Before taking her position at the University of Limerick, Dr Shire was over a period of 11 years a manager in a number of multinational pharmaceutical companies, developing inventions covered by 20 US patents for drug discovery. In 2004 she established a company, Accelerated Technology Solutions which provides training and consultancy to Irish pharmaceutical companies

It is in this environment of ‘partnership’ between the Irish Government, Irish Academia and Big Pharma that the regulatory agency, the Irish Medicines Board is expected, according to the WHO, to restrict the activities of the pharmaceutical industry in a way that is free from political and commercial influence.

Last week, the news broke that GSK in Ireland had released onto domestic and international markets, contaminated batches of the antidepressant Paroxetine. The contamination was detected by the FDA inspecting the Irish plant. GSK had failed to notify customers about the contamination and the FDA have threatened sanctions against the company.

On reading the story, I wondered what involvement the Irish Regulator had had in detecting this breach of regulations and what action it intended to take in response. It seemed remarkable that the American Regulator had discovered such a range of serious breaches of regulations by GSK in Ireland while the Irish Regulator had not. I wrote to the Irish Medicines Board asking whether GSK had reported the issue to the IMB and whether, if they had not, the IMB considered this a breach of regulations. I asked whether the IMB intended to impose sanctions on GSK.

The IMB’s response, which I provide verbatim, could have been written by GSK CEO Andrew Witty

In response to your queries, I can advise that GSK is voluntarily recalling batches of medicines that contain certain batches of Paroxetine active substance that were manufactured at its Cork site. On the basis of available data, each of those batches of Paroxetine active substance complied with specification prior to release. The decision to recall was taken by the company.

The Irish Medicines Board is investigating this matter. For reasons of confidentiality we cannot provide further information at this time.

The FDA have been investigating this issue for many months. They have published their findings and a strongly worded letter to GSK demanding answers and action and threatening sanctions. Why then is the IMB still investigating the matter and refusing to comment? Could it be that the actions of the Irish government are influenced more by the financial relationship it has with GSK than concerns for consumer safety? Could the IMB be compromised by conflicts of interest? Is the IMB a victim of regulatory capture? Should the IMB refuse to approve new GSK products as the FDA has threatened to do, what impact might that have on the Irish tax take and on Irish jobs? What impact might criticizing GSK have on the credibility of a government who has convinced the Irish public that the investment of millions of taxpayer dollars in the pharmaceutical industry is in their interests? Should any investigation being undertaken be focused on the IMB rather than GSK, given the FDA seem to have done the IMB’s job for it?

This is one small example of regulatory capture in one small country. Globally, I believe it is time to consider alternative models of pharmaceutical drug regulation. Government regulation has not, and cannot achieve the public safety goals of regulation.

There are numerous models of effective alternatives to government regulation run by independent third parties. Prof David Healy has shown us that a key regulatory function, pharmacovigilance, can be undertaken by an independent third party with a board of experts from a range of fields, consumers and patient advocates.

The WHO tells us that

Drug regulation is a societal function intended to protect the public. Traditionally it has been considered as a process involving two actors, the DRA and the regulated firms. But policies that foster such arrangements run the risk of encouraging corruption. In order to promote effective drug regulation, arrangements that foster the participation of independent third parties should therefore be considered. Since consumers are the end-users of drugs, all drug regulatory efforts should lead, ultimately, to protection of the consumer. Consumer groups or public interest groups can contribute to these efforts by participating both in the development of regulatory policies and in regulatory activities. They can act as independent attorney generals and protect the public from undue pressure from industry or politicians.

Whether a new model of regulation involves or is independent from government, it is my view that as a matter of urgency, sole responsibility for the regulation of the pharmaceutical company must be removed from its hands. Lives depend on it.