Australian politics

Sep 13, 2013

‘Cheap at twice the price’. The Prime Minister and Big Pharma

Max Markson told The Northern Myth that if AMGEN was paying $80,000 a year to have Tony Abbott promote their brand that it was sponsorship that was 'cheap at twice the price'.

Bob Gosford — Likes birds and people, not necessarily in that order.

Bob Gosford

Likes birds and people, not necessarily in that order.

Roll back to first light on 8 September 2013. Tony Abbott, Australia’s Prime Minister elect, emerges barefoot into the early morning light. He is in his cycling gear and squats to put on his cleated cycling shoes then walks to his waiting road-bike in that curious clickety-clack heel-bound duck walk that cyclists have when off their bike. No-one looks cool walking in those shoes but not being cool has never bothered Abbott. Like half the country I was nursing a slight hangover and was watching the early news from the east coast. Abbott was in neck-to-knee lyrca emblazoned with sponsors for his annual charity fund-raiser Pollie Pedal, which his office runs in conjunction with Carers Australia. Pollie Pedal’s sponsors include Gerry Ryan’s Jayco caravans, a law firm, a book chain and three pharmaceutical companies – alphapharm, Roche and Pfizer. Running across Abbott’s chest in bright blue and down the outside of each thigh is the logo “AMGEN”. So who or what is AMGEN?

The Australian branch of AMGEN – the world’s largest biotechnology company – has been the major sponsor of Pollie Pedal since 2007. In 2013 that sponsorship was valued at $80,000 while alphapharm, Roche and Pfizer would each have coughed between $20,000 and $50,000 as ‘supporting’ and ‘major’ sponsors respectively. So far so good – there is nothing controversial about large companies tipping their hard-earned in to assist worthy causes. But what happens when one of those companies admits to criminal conduct and pays a large fine to settle Federal and State lawsuits in the United States? In December 2012, AMGEN pleaded guilty to illegally marketing its product Arensep and agreed to pay $US762 million in criminal penalties as well as settlements in related whistle-blower lawsuits. Arensep is a synthetic version of erythropoietin – EPO – an artificial blood booster that stimulates the production of red blood cells. EPO has valuable uses in the treatment of anaemia and in the 1990s was used enthusiastically – and illegally – by endurance athletes in search of an effective energy boost. Kathleen Sharp, whose bookBlood Medicine: Blowing the Whistle on One of the Deadliest Prescription Drugs Ever‘ examines the sharp marketing practices used by some Big Pharma companies to promote their products, notes that AMGENand Johnson & Johnson (the other major manufacturer of EPO) had for years been locked in a marketing war. By 2000:

… Amgen changed a few molecules on its drug patent and unrolled a new EPO drug. In July 2002, Amgen received FDA approval to sell Aranesp in chemotherapy patients, which was Johnson & Johnson’s market. At first, Aranesp sales were modest. But according to a 2006 suit filed by rep Kassie Westmoreland, Amgen solved that problem. It began overfilling each Aranesp vial with 19-percent more drug. Hospitals paid for the standard dose. But they could keep the free “extra” drug, pool it, and collect enough to inject a “free” dose into a patient. Why would they do this? Because Amgen’s doctor-clients could bill huge insurers such as U.S. Medicare and state Medicaid plans for the free drug. Westmoreland’s suit claims that Aranesp’s free sample worked like a kickback, paying clients to drop Procrit and buy Aranesp. To sweeten the deal, Amgen sent doctors on paid weekend retreats and party “seminars” and taught them how to bill for the free drug. Westermoreland’s 140-page suit describes an elaborate scheme that enlisted not just doctors, but drug distributor AmerisourceBergen and others. Such schemes inflate the cost of America’s taxpayer-funded programs. In 2006, just as Floyd Landis was winning his soon-to-be-stripped Tour title, EPO was selling $12 billion a year globally — and much of it off-label. The following year, studies showed that the drug was so dangerous, the FDA was forced to slap a stern, black-box warning on it. By 2010, it became clear that in many cases the expensive drug worked no better than a placebo, and in some patients, it actually grew cancer cells.

In mid-December 2012 the Federal District Court in New York accepted AMGEN’s agreement to settle federal investigations into the marketing of several of its top-selling products. That settlement required AMGEN to pay $US150 million in criminal penalties following the entry of its guilty plea to one misdemeanour charge of marketing Aransep for unapproved uses, i.e. ‘off-label’, and a further $US612 million to settle civil ‘false claims’ suits bought by the American federal government, states and whistleblowers. As Andrew Pollack reported in the New York Timesin December 2012 the civil suits:

…contain accusations that go well beyond the off-label marketing of Aranesp. They include off-label marketing of other drugs like Enbrel for psoriasis and Neulasta, which increases the levels of white blood cells. Amgen is also accused of offering kickbacks to doctors and clinics to induce them to use its drugs. These reportedly came as cash, rebates, free samples, educational and research grants, dinners and travel, and other inducements. The government also accused the company of knowingly misreporting the prices of some of its drugs. … Aranesp is used mainly in a hospital, clinic or physician’s office. It is bought by the medical practice, which can make a profit if the patient and insurers pay more for the use of the drug than the practice paid. Ms. Osiecki said Amgen “marketed the spread,” trying to make it more profitable for doctors to use Aranesp rather than Procrit. Such financial inducements could also spur greater overall use of a drug and can violate anti-kickback laws, said Ms. Osiecki’s lawyer, Brian P. Kenney of Kenney & McCafferty in Blue Bell, Pa. … Other whistle-blowers made other accusations. Kassie Westmoreland, a former sales representative, said Amgen overfilled vials of Aranesp, essentially providing free drugs to doctors. They could then bill Medicare or private insurers for the use of that drug, making an extra profit. “Amgen was offering a kickback in the form of extra product subsidized by the taxpayers,” said Robert M. Thomas Jr., one of Ms. Westmoreland’s lawyers.

In April 2013 AMGEN agreed to settle charges of illegally promoting Arensep, paying a further $US24.9 million for making kickbacks to pharmacy providers. Arensep and Neulasta are both listed as among the top products produced by AMGEN on its Australian website. Neulasta – used to reduce the incidence of infection in patients with cancer is listed as the 10th largest selling pharmaceutical product worldwide. Arensep, which has suffered declines in sales in recent years, is listed as the 80th. To date, Tony Abbott’s association with AMGEN has largely passed under the radar. In 2007, the first year of AMGEN’s sponsorship of Pollie Pedal (which had previously been sponsored by the Australian Hotels Association) the Sydney Morning Herald asked Abbott about AMGEN, the association between it’s major products and doping in sport and AMGEN’s sponsorship of Pollie Pedal. Amgen’s sponsorship of the Tour of California earlier this year was criticised as “inappropriate” because EPO’s association with cycling is dubious. Abbott told us yesterday that he was wearing the shirt because he was grateful for Amgen’s sponsorship of the event. “It is a reputable international pharmaceutical company which makes drugs for the treatment of cancer,” he said. Asked if he was aware of the illegal uses of Amgen products to enhance sporting performance, he said he was, but this was “not an issue”. For mine two questions arise here. First, is AMGEN getting good value for the long-term investment in Pollie Pedal.? The Northern Myth put that question to Jane Caro, long-time advertising executive and social commentator. Jane Caro told The Northern Myththat it was:

Difficult … sponsorship of any kind doesn’t really have a set price. It is a negotiation and depends on so many variables. I would imagine that a brand name worn by the PM is worth quite a lot, at least as much as one worn by the Aussie cricket team captain.

Jane Caro referred me to media and PR representative to the stars Max Markson who told me that if AMGEN was paying $80,000 a year to have Tony Abbott promote their brand that it was sponsorship that was ‘cheap at twice the price’ and praised AMGEN for supporting a worthy cause and said that he wouldn’t be surprised if, because AMGEN will get an effective free kick from Tony Abbott’s elevation to the Prime Ministership, they didn’t tip a little extra into the Pollie Pedal hat next time around. Which leads to my next question. Is it appropriate – or ethical – for the Prime Minister and Pollie Pedal to continue their association with AMGEN? The Northern Myth sought comment from the office of the Prime Minister and from Carers Australia but we had received no response by deadline. The Northern Myth is not aware of any proven cases or allegations of any wrong-doing against AMGEN in relation to it’s operations in Australia.

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15 thoughts on “‘Cheap at twice the price’. The Prime Minister and Big Pharma

  1. Randi Wright

    All kinds of parties want to keep people off of them drugs. In fact, a number of pharmaceutical corporations are attempting to keep people off narcotics but namely generic ones, as a number of “Big Pharma” corporations are using narcotic coupon codes to keep individuals purchasing brand-name after patents lapsed. Source for this article: for more information click here

  2. Bob Gosford

    Apologies for the delay in posting this but early this week i did get a response from Carers Australia to my request put to them late last week.

    “Apologies but I am not in the office on Friday’s and as such was not able to respond to your email.

    Carers Australia is very grateful for the sponsorship received by Pollie Pedal and we have been nominated as the recipient charity for Pollie Pedal 2014.”


  3. bluepoppy

    Why is any PM or Opposition Leader promoting any company let alone BigPharma. Surely that goes against the ministerial code of conduct.

  4. Hamis Hill

    Entirely appropriate for a “False Claim” prime minister to be publically associated with a “False Claim” company.
    Truth in advertising is ethical isn’t it?
    Good article.

  5. John64

    “Is it appropriate – or ethical – for the Prime Minister and Pollie Pedal to continue their association with AMGEN?”

    If it is, then it means the Pollie Pedal needs to be ended full stop and politicians should be banned from partaking in any activity where external sponsorship is involved, including any of those chocolate fund-raisers that might be run at schools their kids attend.

    Given that would be down-right idiotic…

  6. klewso

    “Space to Let”?
    Then again, this was the leader of the “Opposition by Slogan”, with his sponsors?

  7. AR

    Ethics aside (we are talking tories & their ilk) I;m uncomfortably reminded of Margaret Atwood’s malign HelthWyzer Corps in the Oryx & Crake trilogy.
    Let us not forget that one of the clauses in the FTA was the abolition of the scrutiny for placing amerikan concoctions on the PBL. Welcome to the waterless flood.

  8. Warren Joffe

    Well done Crikey but you’ve left me looking like a mystery maker. I wondered for a moment if my reference to Daemon had been accidentally sent to this blog but then realised you had remove both his/her defamation and my response to it.3

  9. klewso

    Where does he hide his Limited News tag?

  10. ruawake

    When Amgen has a drug requiring listing on the PBS will Mr Abbott excuse himself from Cabinet discussion?

  11. Bob Gosford

    According to this report of 28 August in the SMH, then-Opposition leader Tony Abbott promised $16 million to Cadbury chocalate, one of the sponsors for the Pollie Pedal in 2013.


    He is quoted as saying “I have no self discipline when it comes to chocolate.”

    Abbott offers Tassie sweetener

    August 28, 2013

    Andrew Drummond


    Everyone loves chocolate.

    At least that’s what Opposition Leader Tony Abbott was hoping as he mixed pleasure with policy to make a coalition pledge of $16 million for Hobart’s ageing Cadbury factory on Wednesday.

    Mouth ajar with apparent delight at times, the would-be prime minister watched as freshly moulded Freddos plopped onto a conveyor belt.

    But his funding announcement for the privately-owned Cadbury factory quickly came under scrutiny.

    “Sixteen million dollars for a company that has an annual turnover in this country of nearly a billion dollars. Is there still a budget emergency?” a reporter asked after the announcement.

    Admitting it was unusual for the federal government to channel money into a commercial operation, Mr Abbott defended the move.

    “Tasmania is a special place,” he said, citing high unemployment figures and low incomes.

    The co-investment will increase productivity and exports, create more than 300 new jobs and boost north Tasmania’s dairy industry, Mr Abbott added.

    It was a quick stop on the island state for the opposition leader who flew in from Melbourne to spend about two hours at the factory before jetting back to Sydney for his debate date night with Prime Minister Kevin Rudd.

    “Why didn’t he come and spend the night? With all these people he’s got following him, that would’ve been the best thing he could do for Tassie,” said one Cadbury worker.

    Known for his strict fitness regime, Mr Abbott wasn’t actually spotted sampling any delights from the factory, but he indicated he might tuck into some takeaways later.

    “I have no self discipline when it comes to chocolate,” he said.

  12. Warren Joffe

    @ Daemon – yes, I was of course referring to your little gem of a poison pill which somehow crept in under the radar.

  13. Sexton rod

    You look like you need a red-cell booster Bob; don’t worry about Abbott; he’s here for a long time.

  14. Warren Joffe

    Phew. I read the heading and my blood pressure went up. I couldn’t believe that Abbott was going to be the vehicle for big Pharma continuing to rip us all off (excepting the ones that keep me alive and healthy: their products would be cheap at twice the price even if I was paying it all myself!!) by airily regarding the mostly foreign company’s prices as more than acceptable…..

    As it is, you raise a question worth asking but I’m not sure that I’ll be too nitpicking about the answer. I would draw the line at Abbott raising money for charity with his bike riding by wearing a paid for tobacco company’s logo on his T shirt but, given the mirkiness of American anti-trust and similar law and law enforcement, I am not immediately impressed by some adverse results in US legal proceedings. At times that would make me more inclined to bar US lawyers, including, not least, elected and appointed prosecutors, from entering Australia just to show what we think of their blackmailing to achieve plea-bargains…..

  15. Bill

    Oh, I dunno… How valuable was John Howard’s tracksuit to Vodafone?

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