OUTRAGEOUS FACTS ABOUT THE DRUG COMPANIES

From THE TRUTH ABOUT THE DRUG COMPANIES:
How They Deceive Us, and What to About It

 by Marcia Angell, M.D.
(Random House; August 31, 2004) 

1. The pharmaceutical industry claims to be a high-risk business, but year after year drug companies have higher profits than any other industry - by a long shot. In 2002, the top ten American drug companies had a profit of 17 percent, compared with 3.1 percent for the other Fortune 500 industries. The biggest drug company, Pfizer, had a profit of 26 percent. 

2. The industry claims to be innovative, but only a small fraction of its drugs are truly innovative. Of the 78 drugs approved by the Food and Drug Administration (FDA) in 2002, only 17 contained new active ingredients, and only 7 were classified by the FDA as likely to be improvements over drugs already on the market. Most of the others were just minor variations of old drugs.

3. The most profitable drugs are variations of top-selling drugs already on the market - "me-too" drugs. There are whole families of me-too drugs, and no good reason to believe one is better than another at equivalent doses. They cash in on already-established, huge markets. The top-selling drug in the world, Pfizer's Lipitor, is the fourth of six cholesterol-lowering drugs of the same type. 

4. The industry's most innovative drugs usually stem from research done at government or university labs. An internal National Institutes of Health (NIH) document showed that only 1 of the 17 key research papers that led to the five top-selling drugs in 1995 came from the company that sold the drug. Big drug companies license or otherwise acquire about a third of all their drugs from' universities, the NIH, or smaller companies.           

5. Contrary to popular belief, big drug companies spend less on research and development (R&D) than they keep in profits and far less than they spend on marketing. By their own figures, in 2002 (when profits were 17 percent of revenues), the top ten American drug companies spent only 14 percent of revenues on R&D and 31 percent on marketing and administration (of which the lion's share was probably marketing). The industry claims to spend $802 million to bring each new drug to market, but independent analysis shows that the true figure is a small fraction of that amount. 

6. The U. S. is the only advanced country that does not regulate drug costs in some way, and other countries spend only about half as much for the same drugs as Americans. Methods vary, but essentially governments in other countries take advantage of their bargaining power to negotiate prices. Still, drug companies do not sell at a loss in these countries. 

7. The pharmaceutical industry has an iron grip on Congress and the White House. It has the largest lobby in Washington, with more lobbyists than elected representatives, and it contributes heavily to political campaigns. Over the past two decades, Congress has enacted a series of laws that practically ensure windfall profits to the pharmaceutical industry, at public expense. For example, the Medicare prescription drug benefit enacted in 2003 specifically prohibits Medicare from negotiating for lower drug prices. 

8. Drug companies promote diseases to fit drugs. To expand sales, they persuade people in affluent countries that they are suffering from conditions that need long-term treatment. Thus, millions of normal Americans come to believe that they have dubious or exaggerated ailments like "generalized anxiety disorder," "erectile dysfunction," "PMDD," and "GERD." 

9. The part of the FDA that approves new drugs receives half its support from drug companies. The FDA reviews drugs for safety and effectiveness before they are allowed on the market, but drug companies pay large "user fees" in return for quick reviews. That means the agency is beholden to the industry it is supposed to regulate.            .

10. New drugs are not required to be any better than old ones, and there is usually no way to know whether they are. Drugs have to be tested before the FDA will approve them, but they do not have to be compared with older drugs for the same condition, only with placebos. That means we don't know whether new drugs are better or worse than old ones. They just have to be reasonably safe and better than nothing -- ­a low standard indeed. 

11. Drug companies have enormous influence over what doctor are taught about drugs and what they prescribe. The companies support most continuing medical education (CME) courses, medical conferences, and meetings of professional societies. They have armies of sales representatives to visit doctors and teaching hospitals to tout their wares, hand out free samples, and provide meals and other gifts. There is ample evidence that this huge investment in medical "education" pays off in terms of the prescriptions doctors write. 

12. Drug companies have a lot of control over clinical trials of their drugs, which makes drugs look better than they are. They support much of the drug research done in academic medical centers by faculty researchers. In return, they insist on designing studies that increase the likelihood of a favorable result. There is good reason to believe that much of the company-supported research on prescription drugs is biased as a result. 

13. The pharmaceutical industry portrays itself as a model of American free enterprise, but it is anything but. Of the top ten companies in 2002, half are European. And while the industry is free to decide what drugs to develop and to price them as high as the traffic will bear, it is utterly dependent on government-funded research and government-granted monopolies in the form of patents and FDA­conferred exclusive marketing rights. 

14. Even while the pharmaceutical industry turns out whole families of me-too drugs for relatively mild conditions in affluent people, it pays almost no attention to major scourges in poor people -- like malaria. It also gives short shrift to less profitable drugs. There are shortages of some vaccines and life-saving drugs, such as antivenins for poisonous snakebites; because few companies want to make them.