- Health Care, Drugs & Insurance
The Truth About Big Pharma : Exposing The Evils of Drug Companies
Big Pharma = Big Bucks
Corporations Run Capital Hill
In 1816, in a letter to George Logan, Thomas Jefferson wrote, “I hope we shall…crush in its birth the aristocracy of our moneyed corporations which are already to challenge our government to a trial of strength and to bid defiance to the laws of their country.”
Nearly two centuries later we find that it is Thomas Jefferson’s hopes crushed, not the intention of corporations to effectively own Capital Hill. The scandalous 700 billion dollar bail out financed by hard working American taxpayers is a dazzling example of corporate mafia at work. The subject of this article though is not the bail out but the patently immoral tactics of the pharmaceutical industry also known as Big Pharma.
Marcia Angell MD, in her book, The Truth about the Drug Companies, writes, “The combined profits for the top ten drug companies in the Fortune 500 ($35.9 billion) were more than the profits for all the other 490 businesses put together ($33.7 billion). Over the past two decades the pharmaceutical industry has moved very far from its original high purpose of discovering and producing useful new drugs. Now primarily a marketing machine to sell drugs of dubious benefit, the industry uses its wealth and power to co-opt every institution that might stand in its way, including the US Congress, the FDA, academic medical centers, and the medical profession itself.”
Facts About Drug Companies
Facts About Drug Companies
On a daily basis Americans are hit with a barrage of ads from the drug companies promoting a message that ‘yes these drugs are expensive, but they are essential to your well-being and our research and development costs are huge – you get what you pay for’. We are being fed a big serve of BS!
Now I am not refuting that the pharmaceutical industry hasn’t helped to produce and provide effective drugs that have saved, improved and extended millions of lives, but their criminal and deceitful practices have caused a lot of grief, pain, unnecessary financial strain and deaths as well.
Some facts about the industry and the people they ‘serve’:
- Americans spend over $200 billion on prescriptions drugs with a growth of 12% annually.
- The rising cost of drugs means that many Americans simply can’t afford them or take less than the prescribed dose and are too embarrassed to tell their treating doctor, therebye making an accurate assessment impossible.
- The elderly are the most vulnerable – without supplementary insurance, and an average cost of $1500 a year for each drug they take, the costs are an impossible burden for many seniors.
- Despite the drug industry’s claims, research and development accounts for a relatively small part of their costs, especially when compared with marketing and administration, which soaks up about 36% of sales revenue – 250% more than R&D.
- In 2001, the former chairman and CEO of Bristol-Myers Squibb, Charles A. Heimbold Jr. made just under $75 million on top of $76 million in unexercised stock options (Families USA).
- Many of the new innovative drugs are developed not by the drug companies, but by universities, biotech firms or the NIH – this is largely tax-payer funded research.
- The vast majority of drugs marketed as ‘new drugs’ are ‘me too’ drugs – essentially a new name, packaging and marketing pitch is the only real difference – for example, the many cholesterol lowering drugs on the market.
- IMS Health estimated in 2006 that the worldwide sales of prescription drugs was around $643 billion with U.S sales accounting for half of that figure.
- Pfizer makes $50 billion a year.
- Americans pay much more for prescriptions drugs than virtually any other country in the world – sometimes hundreds of percent more.
- Amongst the crimes committed by big pharma are illegally overcharging Medicaid and Medicare, paying kickbacks to doctors, anti-competitive pricing practices, clandestine deals with generic companies to keep cheap generic drugs off the shelves, promoting the use of drugs not approved for certain ailments, misleading advertising and hiding evidence of wrong doing.
- Civil and criminal fines barely make a dent in the company’s earnings.
- Merck’s drug Vioxx killed about 60,000 patients – about the number of Americans killed in the Vietnam War. This claim was made by David Graham of the FDA, much to the disgruntlement of his FDA bosses
The 800 Pound Gorilla
The drug industry today is such a colossus that it has gotten used to throwing its weight around and getting away with pretty much what it wants. Between 1960 and 1980, prescriptions drug sales were holding steady but from 1980 to 2000 they increased 300%. Profits skyrocketed and Big Pharma was born under the Reagan administration and a cultural shift toward the view that greed is good.
To quote Angell,
“Starting in the Reagan years and continuing through the 1990s, Americans
changed their tune. It became not only reputable to be wealthy but something
close to virtuous. There were winners and there were losers, and the winners
were rich and deserved to be. The gap between the rich and poor, which had been
narrowing since World War II, suddenly began to widen again”. Under two terms
of Bush, the gap became a chasm and today the standard of living for the
average American has seen a dramatic fall, while the fat cats of Wall Street are licking their blood stained lips.
The Bayh-Dole Act sponsored by Sen. Bob Dole and Sen.Birch Bayh allowed universities and small biotech firms to patent their discoveries and strike deals with the big drug companies who then market the new drugs. Big Pharma was able to cash in on what is tax-payer funded research. Drugs licensed from academic institutions and biotech firms provide the research for roughly a third of the drugs marketed by big drug companies. Chasing the almighty dollar, the academic studies being carried out by the brightest minds in the industry are now focusing on research that may lead to a drug that is highly desirable and marketable to the drug industry - a bias that is not necessarily in the best interests of the tax paying public.
Another shift in legislation that proved a huge windfall for big pharma was the Hatch-Waxman Act which extended the monopoly rights for brand name pharmaceuticals – an exclusivity that translates to big bucks since no other company could sell the same drug for a particular time period. This allows the company to charge for the drug at a premium – as soon as drugs become generically available they drop in price by as much as 80%.
The drug companies employ armies of lawyers to have these exclusive rights extended for as long as possible, keeping the price of drugs to the public high - a public whose tax dollars paid for a good part of the research. With the explosion of drug company profits came political clout. If the FDA, the federal agency responsible for regulating the pharmaceutical industry gets in the way, the big drug companies exert a little ‘pressure’ and call on their friends at Capital Hill.
Legislative reform of drug companies is well overdue – Americans can no longer afford to fund the insanely lucrative empire that is Big Pharma. As Angell points out, the industry should be regarded as a public utility and they should have to open their books and reveal the truth of how they conduct their business. The FDA should impose a new provision that ‘new’ drugs will only be approved if they are in some way an improvement on the pre-existing drug marketed under a different name.The placebo test is an inadequate way of monitoring the usefulness of the release of a 'new product'.
In more recent developments, the White House confirmed that it has promised Big Pharma that any health care legislation will prevent the government from negotiating lower drug prices, and that they will not allow the importation of cheaper drugs manufactured abroad, a change that Obama promised during his political campaign. This a huge win for Big Pharma. Last week, Nevada Senator and U.S. Senate Majority Leader, Harry Reid was exposed for accepting large sums of money from Big Pharma in order to shape and direct the recently passed health care bill in their favor.
Drug companies are the strongest lobby group in Washington and give massive sums of money to political campaigns. I wonder how many of us know that we are being taken for a ride by Big Pharma? Votes are the most powerful currency in a democracy and if more of us voice our demand for reforms within the industry, we may well see things change for the better– at least for the 98% of us that are not amongst the elite who insist on milking the cow dry.
The Truth About Drug Companies by Marcia Angell
The Whistelblower: Confessions of a Healthcare Hitman
The Body Hunters: Sonia Shah