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TRIBUNE PHOTO: JAIME VALDEZ - Blood factors keep Matthew Tache alive, but drug company marketing tactics are costing taxpayers millions.When Matthew Tache was a child, hemophilia summer camp was free, courtesy of major pharmaceutical companies. Tache recalls being handed business cards by drug company representatives in between camp activities.

As an adult, Tache gets all-expenses paid trips around the country. In hotel rooms in Atlanta and San Antonio he answers a few market research questions such as what advertising works to persuade him to choose a particular drug brand, or which packaging makes a drug more appealing.

The Southeast Portland resident knows he's a gold mine for the drug companies. The drugs Tache uses to combat the hemophilia he was born with will cost about $25 million, give or take a few million, over the course of his lifetime. They're all covered by insurance.

So it's not surprising that the handful of drug companies that produce the blood factors that keep Tache alive have competed for his business since he was a small child. And it's equally unsurprising, in an age when drug companies increasingly bypass marketing to physicians in favor of marketing directly to consumers, that Tache has been the target of more than a few inducements.

Like many hemophilia patients, Tache has found work in the industry supporting his treatment. As a medical manager for a private home health care firm, he gets paid to connect bleeding-disorder patients with health care providers. And yes, he feels a little queasy about his role.

“There's tons and tons of money,” says Tache, 37, who has begun to question whether all the marketing and payments directed toward people with blood disorders is ethical.

Bypassing doctors

It's not, says Dr. Adriane Fugh-Berman, co-author of a new study that is shaking up the national bleeding-disorder community. Much of that money comes, indirectly, from the rest of us.

Hemophilia drugs are far more expensive in the United States than in other countries. Taxpayers foot the bill for a large portion of that excess cost through Medicaid and Medicare, which cover many hemophilia patients. Private health insurers defray their hemophilia costs by raising premiums for the rest of their subscribers.

The money flowing from pharmaceutical companies to nonprofit hemophilia advocacy organizations and patients like Tache has led to a distorted treatment model, where decisions about which drugs patients should use often are being made without input from physicians, says Fugh-Berman, who teaches at Georgetown University Medical Center in Washington, D.C., and is director of watchdog organization PharmedOut.

TRIBUNE PHOTO: JAIME VALDEZ - Matthew Tache has been courted by drug companies aware that his lifetime drug treatments will cost about $25 million.

Drug company bribes

Tache has friends who have switched drugs from one pharmaceutical company to another that promised college scholarships, or from one company to another that sponsored a hemophiliacs-only golf tournament with substantial cash prizes for winners. He knows hemophilia patients who, during job interviews with drug companies, have been asked, “Who can you get to switch?”

“The use of bribes that don’t look like bribes has been a hallmark of marketing to physicians for many years. It's not widely known that these same tactics are used to target patients,” Fugh-Berman says.

Fugh-Berman's study showed how far drug companies are willing to go to build brand loyalty among the approximately 20,000 hemophilia patients in the United States.

Patients get free summer camps,college scholarships, jobs and boatloads of gifts from the drug companies. Hospitals with hemophilia treatment centers get patients who have their prescriptions filled at the hospital pharmacies, often at discounted rates provided by the drug companies, and millions of dollars in annual donations from drug companies.

Even hemophilia advocacy organizations get funding from the drug companies.

But the drug companies benefit most of all, according to Fugh-Berman. Hemophilia drugs are a $3.5 billion annual business in the U.S. alone. Tache's annual drug bill comes to about $700,000 a year. So if a patient like him can help steer one or two patients to a particular brand of drug, the summer camps, consultancy fees and gifts represent a no-brainer investment for the drug companies, he says.

In Tache's view, there really isn't that much difference between the products offered by the different drug companies, so recommending one over the other isn't that big a deal. But Fugh-Berman says it is a big deal. In fact, she says, the system promoted by the drug companies has allowed them to keep selling their products at unjustifiably high prices without having to conduct studies showing which drugs work best.

“We don’t know if there are actually therapeutic differences among these drugs,” she says. “That's really important information for patients to have. Is their science being bought?”

The advocacy organizations haven't been pushing for those clinical studies, she says.

Madonna McGuire Smith, executive director of the Hemophilia Foundation of Oregon, declined to be interviewed for this story but offered an email response to questions raised by Tache and Fugh-Berman:

"I work diligently to ensure that all of our members are aware of the boundaries that must exist between patients and pharmaceutical companies, which is why we are continually educating them on how to be ethical, smart and informed consumers.”

Tache says he's going to start a new drug soon, called ACE 910. Currently he gives himself an injection every other day, and he estimates each infusion costs between $3,000 and $4,000. With the new, longer-lasting drug, he'll only have to insert a needle into his hand or arm every three weeks. He figures it will be expensive, but it still will be covered by his insurance.

A big part of that cost is marketing, according to Fugh-Berman, citing a study that found drug companies spend three times as much on marketing as on research and development.

“People should care about which therapies and regimens are best, but to an extent they're protected from the real cost,” Fugh-Berman says. “Taxpayers should not be covering the cost of marketing drugs.”

Outsize costs

A California study last year showed that treatment costs for hemophilia, despite the small number of people with the disease, were eating up a huge portion of the state's Medicaid budget — 42 percent of the state's Medicaid spending on drugs for children and young adults. The state paid $57 million for drugs for one child with hemophilia over a three-year period.

Oregon annually spends about $21 million for the 260 hemophilia patients who receive Medicaid support, according to the Oregon Health Authority.

Money spent on direct-to-patient marketing for hemophilia drugs should serve as a warning sign, Fugh-Berman says.

“If you've got a fabulous drug that cures cancer you don’t need to market that drug. If you’ve got a wannabe drug that doesn’t have any advantage over what is already on the market, you’re going to have to market that drug a lot.”

Hemophilia not that unique

Payments to patients and nonprofit advocacy organizations aren't limited to hemophilia. Pharmaceutical companies have been known to send nurses free of charge to the homes of multiple sclerosis patients. Some of those nurses, Fugh-Berman says, help patients fill out forms that justify using a more expensive drug over a cheaper alternative.

Health insurer United Healthcare recently sued a nonprofit kidney-patient advocacy organization, charging it with using money from dialysis companies to steer indigent patients to dialysis services.

Fugh-Berman recognizes that sending children with hemophilia to free summer camp where they learn how to inject themselves involves a certain amount of compassion. But it's unethical, she says, and crosses a line that separates compassion from bribery.

“It should be an unbiased health care provider who is managing your health care, not an employee of the pharmaceutical company,” she says.

OHSU experiencing it

Dr. Michael Recht, medical director of the hemophilia center at Oregon Health & Science University, has experienced that dynamic first-hand. Recht says a new hemophilia drug was introduced last year that, on average, will cost at least $100,000 more a year but is no better than current drugs.

“We’ve seen a dramatic increase in direct marketing to our patients,” Recht says. But he's more disturbed by the high cost of hemophilia drugs. “The more important question is, are patients in the U.S. who have hemophilia paying the same amount for exactly the same drugs that are available in other parts of the world? And the answer is no,” he says.

Hemophilia drugs are three to five times more expensive in the U.S. than in Canada, Recht says. Most countries put limits on how much drug companies can charge for their drugs.

Home-care companies that deliver drugs to patients, often owned by patients and their family members, also are a big part of the problem, Recht says.

Matthew Tache has worked for one of those Portland home health care companies. He says some provide a real service and others are more about persuading patients to use one manufacturer's drugs. But he believes that OHSU's hemophilia treatment center is just as much a part of the compromised system.

“OHSU makes money off which drugs you choose," Tache says.

The 340B federal discount drug program allows OHSU to buy hemophilia drugs at a discount and sell them through its hospital pharmacy, according to Tache. That represents a lot of money, he says, since nearly nine of 10 local hemophilia patients receive treatment through OHSU. Many of those patients, Tache points out, are covered by Medicaid or Medicare.

“They're making all that money off the taxpayers,” Tache says.

OHSU officials say the 340B program helps the hospital fund services such as mental health counseling and summer camp for hemophilia patients, and that the price the hospital charges for hemophilia drugs often is below the maximum allowable Medicare rate.

Tache says the whole system feels corrupt to him.

“It's like everybody is in the wrong, but we're all equally in the wrong.”

From nonprofit and drug company

The Oregon Hemophilia Foundation and the National Hemophilia Foundation declined interviews for this story. The Oregon foundation submitted an email statement: "As executive director of the Hemophilia Foundation of Oregon, and the mother of three children with von Willebrand disease, I know firsthand that the cost of treatment for bleeding disorders is high, as it is for many other chronic diseases, like cancer. That is why we work in partnership with all stakeholders in our community — including government, payers, health care professionals, patients, caregivers and pharmaceutical companies — to advance not only the development of innovative medicines, but also access to them.

"As a parent in the community, I appreciate how people with bleeding disorders need to be educated and informed about all aspects of treating our disorder. As a chapter leader, I work diligently to ensure that all of our members are aware of the boundaries that must exist between patients and pharmaceutical companies, which is why we are continually educating them on how to be ethical, smart and informed consumers.”

Madonna McGuire Smith, executive director, Hemophilia Foundation of Oregon

The Tribune also contacted a number of pharmaceutical companies, all of which declined interviews. Shire Pharmaceuticals provided the following email response:

"At Shire we are firmly committed to compliant patient relationship practices and have stringent ethical policies for how we engage with all members of the hemophilia community. We strongly believe that engaging with patients in a compliant and educational manner enables them to become more active and informed participants in their care."

Geoffrey Mogilner, senior director, communications and public affairs, Shire

What is hemophilia?

Hemophilia is a rare genetic disorder in which sufferers lack a protein that helps the body form blood clots. Men born with the disease greatly outnumber women.

Clotting-factor infusions help most hemophilia patients lead normal lives. Some clotting factors are made from human blood. Newer therapies, called recombinant clotting factors, are not made from human blood and tend to be more expensive.

In the late 1970s and early 1980s, about half of all people with hemophilia and 90 percent of those with severe hemophilia became infected with HIV after using contaminated clotting factor made from human blood. Today, viral killing methods are used on blood products, and there have been no recent reports of HIV transmission.

Sources: National Hemophilia Foundation/ National Heart, Lung and Blood Institute

Matthew Tache

History of mistrust

Matthew Tache calls pharmaceutical companies “sociopaths.”

The Southeast Portland resident, who was born with hemophilia, formed that view after watching many of his friends die after being infected with the HIV virus. They had used blood factors made from contaminated blood, which infected many hemophilia patients through in the 1980s and 1990s.

Tache and others are convinced the pharmaceutical companies were aware that some of the drugs were contaminated (there have been large financial settlements paid by the drug companies). On the other hand, Tache has benefited greatly not only from the drugs that treat his hemophilia, but also from the drug companies’ direct-to-patient marketing. So his full view of drug companies is a bit more nuanced.

“They’re sociopaths that you need,” he says. “But you don’t know when to trust them.”

Tache says the gifts and fees are about more than just trying to persuade hemophilia patients to use one drug company’s product over another. “All these things are goodwill,” he says. “It’s saying, ‘Forgive us for the human loss that occurred because of some of our greediness.’ ”

Recently Tache traveled to his home state of Pennsylvania for a meetup with area hemophilia patients, some of whom attended hemophiliac summer camp with him 30 years ago. He says he was pleasantly surprised to find only about half reported being infected with HIV.

“I assumed everyone I went to summer camp with was dead,” he says.

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