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The Northern Myth

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'.

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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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