By Eva Ciabattoni
 Marcia Angell takes the pharmaceutical industry and the FDA to task in a new book. |
According to Marcia Angell, former editor-in-chief of the New England Journal of Medicine and author of “The Truth About the Drug Companies” (Random House, 2004), the pharmaceutical industry is not your friend. Angell became disillusioned during her 20 years at the journal, as more and more research was sponsored by drug companies in order to make their products look good.
Far from being an innovator trying to cure disease, big pharma has become a business that wants to maximize the bottom line, an area where it has done a superb job. In 2002, the combined profits of the 10 drug companies in the Fortune 500 exceeded the profits of the other 490 put together by nearly $2 billion. In 2001, the CEO of Bristol-Myers Squibb made just shy of $75 million - not counting stock options.
While trumpeting high R&D costs, in reality big pharma relies on taxpayer-sponsored research at universities and government agencies like the National Institutes of Health for its drug pipeline. It purchases the rights to the molecules and then does what it is ideally suited to do - manufacturing, distribution and marketing. In effect, Angell argues, consumers are charged twice: once as taxpayers funding the research and again as consumers buying the drug.
Even though the industry hides behind a smoke screen of confidentiality, Angell documents that most of big pharma spending is in the areas of marketing and administration and speculates that the tax-deductible R&D budgets might provide cover for additional marketing expenses, like the Orwellian “education” of doctors and the public.
Drug companies invest heavily in their legal departments to extend the monopoly rights granted by patents, including challenges to makers of generics. They introduce similar versions of drugs about to lose patent protections and launch huge marketing campaigns to convince doctors to prescribe the me-too version at the high price of the original. The FDA requires a drug to show only that it is better than nothing at all; not that it is better than other drugs for the same condition.
The story of Claritin is illustrative. Claritin was a blockbuster drug with sales of $2.7 billion a year. In addition to patenting the molecule for Claritin, Schering-Plough patented the molecule that Claritin turns into in the body - the actual molecule that is responsible for the action of Claritin. Just before the patent ran out on Claritin, Schering-Plough introduced Clarinex (the Claritin metabolite) as the next-generation drug for allergies. When the price of Claritin dropped, Clarinex kept the company coffers full.
Some drugs go hunting for diseases or symptoms, like Sarafem, which is pink Prozac, but approved for something called PMDD - premenstrual dysphoric disorder. It was tested in children for the good-for-business reason that testing a drug, any drug, in children buys a six-month patent extension.
Big pharma is interested in long-term afflictions in elastic markets (arthritis, high blood pressure, high cholesterol), less in acute illnesses (infections) or those afflicting the poor (tropical diseases, tuberculosis) or public service (vaccines).
As required by any publisher who wants a semblance of a happy ending, in the last chapter Angell proposes a list of sensible solutions to close the most egregious loopholes. But with the pharmaceutical lobby being the largest lobby in Washington, the proposals are not likely to be implemented. That’s the invisible hand of the not-so-free market that just slapped consumers, whose own invisible hand has been tied by bogus safety concerns about Canadian drugs.
How’s this for a universal health care proposal? Stay healthy; buy the stock.
