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by Peter Huber

Forbes, July 9, 1990 at Pg. 92

Copyright 1990 by Peter Huber. Electronic copies of this document may be distributed freely, provided that this notice accompanies all copies.


It has become "a rich man's drug for a poor man's disease," remarks one observer. The drug is Clozaril, developed by Sandoz Pharmaceuticals in the early 1960s. It is now recognized as a breakthrough therapy for schizophrenia, which means Clozaril could do far more for the homeless in this country -- many of whom are schizophrenic -- than all of the endless posturing on the issue from Washington. Congress could make the drug widely available to the poor with a one-sentence, zero-cost bill. Everyone would benefit, except lawyers. So count on it that nothing whatsoever will be done.

Here's the picture. Schizophrenia afflicts over 2 million Americans, who are often completely destitute because they cannot work or sustain contact with family and friends. Many of them thus spend decades in squalid institutions or end up on the streets.

Clozaril, by all accounts, does wonders. It is the first drug to treat the schizophrenic's apathy, anxiety or catatonia. It produced none of the serious side effects of conventional antipsychotic drugs. But 1% or 2% of patients on Clozaril will develop a rare and potentially fatal blood disease. Careful monitoring, however, can identify these patients before they are seriously harmed.

In a rational world, Clozaril would be classified a prescription drug, to be distributed with a careful warning to doctor and patient, and that would be that. Many lives that would have ended in misery on the streets would be saved. Tragically but quite predictably, some patients would get the medicine without adequate monitoring, and some fraction of those would then be killed by the treatment. Sandoz would continue to work calmly with the Food & Drug Administration and prescribing doctors to prevent such accidents. The risk would never be completely eliminated, but accidents notwithstanding, the world would be much improved.

This is in fact pretty much what has happened in Europe. Clozaril was introduced in the 1960s, then withdrawn when the fatal side effects first became apparent. After further tests, the drug was reintroduced; by mid-1989 it was available in Switzerland, West Germany, Austria, Denmark, Finland, the Netherlands and Portugal, and was undergoing clinical trials in the U.K. The cost is reported to be as little as $30 per week.

The American scene is rather different. The FDA got around to approving Clozaril in February 1990, almost three decades after it was first tested in Europe. But Clozaril is going to cost U.S. patients $175 a week. That's $9,000 a year, which means that thousands who need the drug aren't going to get it. By current estimates, Clozaril is now available to fewer than one in ten patients who might benefit from it.

No one wants to say this openly, least of all Sandoz, but you can charge this mess to the American legal system. The law used to insulate drug companies from the misuse of prescription drugs with a simple, reliable rule: Once the manufacturer supplies a proper warning to the doctor, subsequent misuse is the sole responsibility of the doctor, pharmacist or patient. But in its boundless folly, today's American law insists that drug companies remain broadly liable for misadventures involving their products, even if the fault rests far downstream.

Sandoz has therefore decided to do precisely what the U.S. legal system demands: It is taking responsibility not just for the drug but for every detail of its distribution and use. Sandoz will market Clozaril through a health agency, Caremark Homecare Inc., which will supply the drug only in exchange for a weekly blood sample. Courier connections between Sandoz and Caremark outlets allow Sandoz to maintain a national, up-to-the-minute database of Clozaril patients. Of course, such things cost.

From Sandoz' perspective, however, almost no cost is too high. Here's what Sandoz must surely fear. It's 1995 and Congressman Henry Waxman has seized on the Clozaril "tragedy" as another opportunity to flail at the FDA. After the first lash or two, the FDA is tearfully considering a complete ban on the drug. In 1996 superlawyer Stanley Chesley assembles a class action on behalf of 1,100 Clozaril users in a federal courtroom in Cincinnati. Thereafter Sandoz' legal department is the fastest-growing division of the company.

For obvious reasons, this is a quagmire Sandoz does not care to explore. Sandoz is understandably reticent about how things might go wrong: A spokesman for the company just delicately points out that the company "simply cannot afford any fatalities."

Thus, yet again, our unlimited right to sue eclipses our right to do more important things. Doctors, pharmacists and patients, in any combination, would readily assume the risk and accept responsibility for Clozaril if they could. But the law no longer affords them any legally effective way to do so. Warnings, waivers, consent forms and such -- the traditional ingredients of a binding private contract -- just aren't reliably enforced in court anymore, at least not when matters of health and safety are affected.

Anatole France observed that the law, in its majestic impartiality, forbids the rich and poor alike to sleep under the bridges of Paris. Our laws are equally fair. Rich and poor retain an unbounded right to sue anyone (like Sandoz) who might somehow be blamed for hurting them. But as he freezes on the heating grate, the homeless schizophrenic who can't get Clozaril may, in some passing moment of lucidity, wonder whether he wouldn't be better off without his gold-plated right to sue.

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