The pharmaceutical industry hereafter referred
to as Big Pharma is a
major factor in the
continued and uncontrolled rising costs of health
care. Big pharma is a $550 billion per year industry. It is a
business that has taken the
marketing and distribution of drugs to
staggering profits for its shareholders. It has done this through
myths, deceptions, corruption, co-opting of physicians and medical
education, questionable advertising, governmental lobbying,
controlling the FDA,, and even creating and marketing disease.
There are nine pharmaceutical companies on the Fortune 500 list. In the
year 2002, these companies had profits greater than all of the other
There are several good
books in which the topics are discussed in
more depth. I
would like to give special credit and acknowledgment to
Angell, M.D. and her book, "The Truth About the Drug
She is a former editor of the New England Journal of
and has spoken and written extensively about the
industry. She has used and coined many of the phrases
I will be using. Two phrases in particular I love to use are "me
too drugs" and "blockbuster drugs"
I have spoken of a paradigm shift. As patients, we have participated
in taking too many medications at times, physicians certainly often
prescribe too many medications, insurance companies have in the past
too willingly paid for medications, and our government has stood by
doing nothing to help. While we have all participated in various
ways, we need to understand how Big Pharma seized its position.
The industry would like us to believe that the high prices are
necessary for research and development of new drugs. The exact amount
that the drug companies spend on various activities is sometimes
difficult to calculate. We know however, that the drug companies
spend three to 10 times as much money on marketing compared to research.
Historically, much of the research on pharmaceutical products has been
done by public institutions including universities and the
Institute of Health. One of the biggest blockbusters
of all time,
Taxol, which is a cancer drug derived from the
bark of a tree was
discovered with public money. Merck captured
the patent rights and
went on to make billions and billions
of dollars from this drug.
One of the early antiviral drug
treatments for AIDS was an old drug
that had been around
for some time. It was captured and sold at
as are many other drugs, especially in the area of
Many of the new drugs which come out every year are actually
new, but rather a slight minimal molecular change on a previous
These drugs are essentially the same. They are referred to as
too" drugs. For example, Prilosec was the original purple pill.
As its patent approached the end, a slight molecular change was made.
The "new" drug that appeared was named Nexium. In recent years,
these" me too" drugs account for about 74% of the new drugs. When the
new drug is marched out, advertising on television is accelerated,
promotion to physicians and samples are initiated, and health care
costs continue to rise.
The public is led to believe through such methods as emotional
television advertisements by celebrities that the pharmaceutical
companies are good guys trying to make our lives better and the price
The marketing of new drugs is one of the most clever and sophisticated
activities of big pharma. Direct marketing to consumers via the media
is certainly becoming a topic of discussion. The marketing and
promoting of drugs to physicians, medical schools, professional
organizations, hospitals, medical journals, etc. is an area I find
Exactly how much money is
spent on marketing to physicians is
difficult to determine.
This is partly because much of the marketing
as education. It is estimated that the drug
$30,000 per year per doctor with direct office
It is believed that the drug companies spent at least $13
per year on physician advertising and many think it is closer
$35 billion per year. Sales representatives visit physician
with literature and studies (often done by the companies),
and other enticements. There are laws and rules to try to limit
but the interpretation and application of such guidelines is
The initiation of this pharma/doctor relationship is in medical
with new medical students. I recall many of my classmates
to Indianapolis for a weekend of education and
fun provided by big
pharma. Gifts such as medical textbooks
are showered upon students.
This relationship continues through
training and extends into
practice. A few years ago, a colleague
of mine spent a weekend of fun
in Palm Springs, California
to receive education about a new drug.
More recently the tactic is to invite a group of physicians to a
meeting at an expensive restaurant where fine food and beverages are
served. It is done in the name of education because a physician
expert is brought in to discuss a medical condition. The medical
condition just happens to be treatable by the drug company sponsoring
the dinner. The dinners are expensive and the speaker is
generally $3-$5000 for his talk. At one time,
physicians were even
given an additional stipend from $100-$500
to simply attend these
meetings as "consultants"
to review and comment upon the information
presented. I believe
this practice has stopped.
advertise heavily in medical journals. They
large amounts of money to have advertising booths at
meetings and conferences. They have established subsidiary
to sponsor medical meetings and programs for educational
To me, it is such a major conflict to have the seller of a
provide the education on its needs. The majority of
swear the pharmaceutical advertising does not influence
Studies show the influence is profound and confirmed that
is not a charity. Organized medicine needs to address this
Direct consumer advertising of drugs is allowed only in the United
States and New Zealand. Billions of dollars are spent every
the amount is continually increasing. In 1994, $265
million was spent
on direct advertising. 10 years later in
the early months of 2004
this amount was spent on erectile
dysfunction drugs only. Drug
companies contend the advertisements
are educational and informative.
The advertisements generally
show happy people and happy lifestyles
because of these drugs.
It is impossible to convey safety information
in a thirty
Recall the Vioxx advertisements. Vioxx was marketed on television while the company had information about its dangers.
It is estimated that 160,000 people died of heart attacks and or strokes from this drug. The companion of Vioxx, Celebrex
stayed on the market partly because reviewing FDA officials had financial interests and connections to Celebrex. The position
of Celebrex today as a potentially dangerous drug is being diminished by its maker as it points to the fact that other similar
drugs are dangerous too. Information on bad reactions to drugs and even deaths is not shared by the drug companies as
it is considered proprietary information.
In the fall of 1982 in the Chicago area seven people died after taking extra strength
Tylenol capsules that had been laced with cyanide. Johnson and Johnson produced Tylenol capsules. With aggressive advertising
Johnson and Johnson increased the market share of Tylenol from 4% to 35%. They sold an estimated $400 million
worth of nonprescription painkiller a year. A drug company representative was telling me about the Tylenol capsules.
I was puzzled as to why they put out capsules with codeine in them too for prescription use. He explained that
their research told them people perceived capsules as being more powerful. I was encouraged to prescribe more expensive Tylenol
capsules with codeine. Over the counter sales of extra strength Tylenol told another story too. They sold more
capsules with the same ingredient than tablets, and they sold them at a higher price.
The other part of the tragedy is that the
family was gathering after the death of a member, and the deceased's brother found a bottle of Tylenol in the kitchen.
He gave his wife a capsule and took one himself, and they both died. Again, a tragedy because Johnson & Johnson
set the situation up, and consumers think of taking pills in times of grief and for other unjustified reasons.
drugs have a patent life giving the companies the opportunity to maximally exploit. If a new use for a drug is approved, the
patent is extended. Many years ago when Prozac neared the end of its patent, it obtained approval for the treatment of pre-menstrual
mood dysphonic disorder (PMDD). The chemical was placed into a pink capsule and sold to many unsuspecting women who did not
know even what they were taking. Today, a month of treatment with brand Prozac can cost over $400 while the same generic
treatment for one month can cost 10 or $15.
The process of creating and marketing new diseases and treatments is
known as disease mongering. The most recent example of this is restless leg syndrome. Most everyone has experienced this at
one time or other, and while treatment is seldom necessary, there are suitable low-cost generic treatments available.
People are encouraged to take an expensive and potentially risky drug for a disease they just learned affected them. I am
of the opinion that many of the more modern diseases and treatments fall into this category.
Drug companies have another way of creation
of disease and selling the medications which is accomplished with the help of the FDA and physicians. With scientific studies
often sponsored by the drug companies, the incidence of a certain disease can be increased by changing its definition. For
example, redefining high cholesterol can instantly result in numbers of new customers. The definition of high blood pressure
has changed many times over the years and the recent changes have substantially increased the number of people needing medications.
It is wrong to have the people who are making and selling the drugs to be doing the studies and providing information and
recommendations. However, the control of the FDA by the drug companies is significant. I again recommend the book by Marcia
Angell MD, "The truth about the Drug Companies".
The emphasis on pharmaceutical products affects our approach to illness
and our attitudes and expectations regarding treatment. I reviewed the FDA treatment recommendations for hypertension a few
years ago which was totally oriented towards drugs. There was not an adequate discussion of other modalities of treatment
including diet weight loss exercise salt restriction and so on.
After convincing the patient and physician to use a certain drug, the drug companies still found themselves in the
position sometimes of having to convince a third-party payer to cover the costs. In recent times, the insurance companies
have found themselves paying for more medications. To somehow control costs, the idea of an approved a drug list or formulary
arose. Most all people now know that certain insurance companies have distinct lists for distinct problems which are often
different. That is, one drug company might demand a Lipitor for the treatment of elevated cholesterol while another might
demand treatment with Crestor.
The original formulary deals to have a drug on a list were made directly between
big pharma and insurance companies. The payoff on these deals occurred at the end of the year when the drug company gave what
some call rebates and others kickbacks to the insurance company for each prescription written. The conflict is apparent. Therefore
a new middleman arose called the pharmacy benefit manager (PBM). These companies make the deals. For a brief while, the companies
were subsidiaries of big pharma. More recently, there have been attempts to appear to have separation.
tighten down on drug spending, the insurance companies have become more strict on uses for many medications. When a drug is
approved, its use is a specified on the product label. It occurs in some times that a drug works quite effectively for the
label use, but also works for other problems. For example, a drug such as a beta blocker might be used quite successfully
for treating high blood pressure, and also be used for preventing migraine headaches. If the drug is relatively inexpensive,
the insurance companies frequently will allow use for "off label problems" . If the drug is expensive, then the
"off label" rule is invoked and the medicine is not covered. Occasionally, strong argument and literature can sometimes
convince the companies to pay for the medications. To assist physicians and submitting appeals, the drug representatives will
help bolster arguments by supplying data and even drafting template letters. This process of promoting a drug for off label
use by drug companies is extremely illegal but goes on every day.
The drug companies have extensive and sophisticated administrative and
legal support for their operations. They have the largest lobby of any industry in Washington, DC. They calculate quite well
the costs and profits of potentially dangerous medications. Sometimes it is worthwhile to continue with a risky drug, raking
in the profits, and quietly settle lawsuits later. Tapp Pharmaceutical did this recently for $750 million.
RULES, AND RULERS
Big pharma has been the master at influencing
legislators, and obtaining a variety of favorable laws and regulations. The most valuable asset of a drug company is its ownership
of the patent. A patent gives the company a monopoly and allows it to market and set prices for maximum profit. When a drug
loses its patent, a generic company may produce it and experience good profits at a much lower selling price. Big Pharma has
influenced the patent laws.
Another way drug companies slow down and generic competition is by suing the generic manufacturer. This occurs near
the end of the patent time when a generic company is preparing to produce the medication. The very act of the lawsuit serves
to automatically extend the patent and profits for six months to one year.
The pharmaceutical lobby is huge and big dollars
flow to legislators for support of big Pharma. In the year 2002, the industry had the largest lobby in Washington, DC when
it employed over 600 lobbyists. The estimated costs of the lobbyists was over $90 million. An example of the control by big
Pharma was seen recently with the new Medicare laws. With the expansion of drug benefits, simultaneously, the Medicare purchasers
were banned from being able to negotiate prices for the drugs. This was a windfall. Also, shortly before the new Medicare
went into effect big pharma raised prices about 5% across board. The close ties between the FDA, and the government is apparent
simply by looking at the names of many of the participants. Many people with significance significant pharmaceutical interests
sit on the FDA boards and panels as drugs are reviewed.
Drug company lobbyists included 26 former members of Congress and another
342 with other congressional or government connections. Before going to the White House, Donald Rumsfeld was CEO of G.D. Searle.
The first president Bush was on the Eli Lilly board of directors. The FDA receives a substantial amount of funding from the
drug industry. A review of the FDA hearing records recently showed that at 92% of the meetings, at least one member had a
financial conflict of interest, and at 55% of meetings over half of the FDA advisers had conflicts of interest. I was always
of the belief that the government role was to protect and advocate for the citizens of. It is apparent that big pharma and
big business substantially control the FDA. Once again, refer to the book by Marcia Angell for further and in more depth review
of the complex industry government influence relationships. There are also several other good books that discuss these topics.
FLASH: THE BEAT GOES ON
This weekend as I
cleaned up the Pharma post, I learned the Purdue Pharmaceutical "chiefs" pled guilty to criminal charges.
The settlement was for just a little over $600 million. This is small change to these guys.
I really see this as a business as usual and
similar to that discussed above. The very disturbing part is that former New York Mayor Rudy Giuliani represented Purdue
pharmaceutical. He raised money for the DEA for a project of the theirs. He met personally with the head of the DEA,
and negotiated the price of the settlement much lower than many people thought it should have been. The incestuous relationship
between government and Pharma continues. Do you think big Pharma will give him financial support in his presidential
When I say the beat goes on, I am not speaking of Sonny and Cher, nor of Michael Jackson, but of beating the consumer.
WHAT TO DO
The above has led us to our current situation
with which many people are familiar. There are people who suffer because they are unable to get the necessary medications.
This is particularly tragic in the area of AIDS and cancer. While some people cannot get necessary medications others are
induced or seduced into taking medications they don't need. This is because the marketing is about profits and is
not associated with doing what is best for people.
We clearly need major reform in the area of drug regulation, FDA operations
and approvals, patent lives, Congressional corruption and oversight. At the same time we need to take a look at our own lives
and lifestyles. We need to learn to do what we can do to avoid or minimize our need for drugs.
Finally, health reform is a current hot topic.
More than anything else we need to keep an eye on our legislators. As reforms and systems are discussed, we need to make sure
that compromises are not made by the legislators at our expense.