The Pan Pharmaceuticals recall crisis has a bright side -- it has lifted the lid on the alternative "medicine" industry.
Over the last decade, the alternative medicine industry has boomed with turnover expanding by 240 per cent to $2.3 billion in 2002. Indeed it has become a direct substitute for modern medicine with two out of three Australians consuming alternative medicines on a regular basis and with consumers spending much more on alternative medicine than on real drugs.
Why are people seeking an alternative to what is arguably the most successful technology in human history, that is, modern medicine? Clearly a number of factors contribute to the industry's success, but a regulatory free ride is the key.
The pharmaceutical industry is one of the most tightly regulated sectors in the economy. Even if a drug has been approved by reputable overseas regulators, before it can be sold in Australia it must satisfy the Therapeutics Goods Administration (TGA). It must prove to our home grown regulators that it is safe, that it is manufactured in a safe and reliable manner, that its contents are what the manufacturer claims and that it does what it say it does. Drugs deemed to be dangerous also face restrictions on place of sale, access, the need for on-going testing and the need to keep records of use.
These regulations have generally been very successful in ensuring safety and efficacy of medicine and have engendered a high degree of confidence amongst consumers. They also impose heavy costs on drug companies.
The real scandal is that alternative medicines get the imprimatur of the TGA. While alternative medicines are required to prove that they are not poisonous, that there contents are accurate and that they are manufactured safely (issues brought into question by Pan Pharmaceuticals), they are not required to prove their effectiveness. The TGA does not even need to be notified of the medicinal claims of alternative medicines prior to release on the Australian market.
The special treatment provides a huge cost advantage relative to real medicines and a huge marketing advantage. The alternative industry has exploited this to the hilt with claims of elixirs for every possible aliment.
The fault does not lie solely with TGA processes. Indeed, it largely rests with the ACCC, which has conspicuously failed to enforce truth-in-advertisement laws in this industry.
The cost of alternative medicine quackery is high. While the products are unlikely to cause any harm (as they are mainly common food additives), on the evidence few cure anything. They also lure potentially sick people away from real medicine and drag up to $2.3 billion (equivalent to 50 per cent of the cost of the Pharmaceutical Benefit Scheme) away from real health care.
The solutions do not lie in banning these products or forcing them to pass the same efficacy test as modern drugs -- this would be a costly waste of largely taxpayer fund. Rather, the solution lies with the TGA following the lead of the US Food and Drug Administration and treating them not as a medicine but as a food product and in requiring the ACCC to enforce truth and advertising laws.
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