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The Truth About The Drug Companies: How They Deceive Us And What To Do About It
By Marcia Angell, M.D.
The Truth About The Drug Companies by Marcia Angell, M.D., is an outstanding introduction to the abuses and greed of the pharmaceutical industry and what needs to be done about it.
Angell writes: "Big pharma likes to refer to itself as a 'research-based industry,' but it is hardly that. It could best be described as an idea-licensing, pharmaceutical formulating and manufacturing, clinical testing, patenting, and marketing industry."
We learn that nearly all major drug discoveries don't originate at big pharmaceutical companies. They primarily originate at universities. Some originate at smaller biotechnology companies, which often have ties to universities. Through government grants, U.S. taxpayers usually pay for the bulk of true research and development (R&D) that leads to breakthrough drugs. Then, through technology-transfer programs, companies are able to license rights to produce drugs based upon university and other government-funded research.
For example, Genzyme was founded by some of the National Institute of Health (NIH) scientists who worked to understand and cure the rare abnormality called Gaucher's disease. Genzyme charges patients $200,000 to $300,000 for a year's supply of the drug Cerezyme. One boy's father is quoted: "This isn't Genzyme working late at night to help sick people. The NIH did it. But as soon as the government transferred that intellectual property to the company, they lost all control over pricing."
Angell tells us pharmaceutical companies try to deceive us into believing they're the true medical innovators, spending huge amounts on R&D, so they can justify their excessive pricing of drugs. There is the insinuation—lower prices and R&D will be cut and you won't have lifesaving cures! The truth: real innovation comes from the NIH and universities, and U.S. taxpayers pay for it. But, larger companies, American and foreign, find ways to poach this research and privatize it. So, Americans get to pay twice for drugs. First, we pay for much of the research to develop the drug. Second, we pay high prices for the "proprietary" drugs themselves, allowing drug companies to earn huge profits.
According to Angell, the larger pharmaceutical companies are good at developing are "me-too" drugs and drugs that are just unique enough to extend or get patent rights. Then, they're good at marketing these drugs to consumers and to prescribing doctors. And, they're good at lobbying to get legislation that is favorable to their industry.
We learn about the nefarious history of Nexium, the purple heartburn pill. Essentially, Nexium has the same active ingredient as Prilosec. Prilosec had $6 billion in annual sales. But, Prilosec's patent protection was about to expire. So, ta-da, enter the new and improved and "better" Nexium.
Angell writes: "When the patent expired, it [Prilosec] would face competition from generic manufacturers [driving the price way down], and its sales would plummet."
So, Prilosec's owner, AstraZeneca, created a patentable version of Prilosec, gave it the better name "Nexium" (You've got to give it to them. They really did improve the name.) and spent half a billion dollars in 2001 to advertise and promote the new pill as an improved Prilosec.
A key part of the promotion was to convince people the new pill was "better."
Angell writes: "…four [clinical] trials compared Nexium head to head with Prilosec (for esophageal erosions), and these were crucial to the marketing strategy. The company wanted to show that Nexium was better than Prilosec—an advance over the older drug… But, note what AstraZeneca did. Instead of comparing likely equivalent doses (which would have been no more than 20 and possibly as little as 10 milligrams of Nexium, versus the standard 20-milligram does of Prilosec), the company used higher doses of Nexium. It compared 20 milligrams and 40 milligrams of Nexium with 20 milligrams of Prilosec. With the dice loaded in that way, Nexium looked like an improvement—but still only marginally so and in just two of the four trials. …The logical conclusion might have been simply to double the standard dose of Prilosec, allow generic competition, and forget about Nexium—but that would not have been of help to Astra-Zeneca, only to people with heartburn who objected to paying $4 a pill (which itself might produce heartburn)."
So, of course, 40 milligrams beat 20 milligrams of essentially the same medicine. So, when somebody tells you something is "better," and they're paid by a pharmaceutical company, they could be lying through their teeth.
To get doctors to prescribe Nexium, Astra-Zeneca gave away the usual free samples and special come-on discounts to key medical institutions.
Angell tells us that while the drug companies eagerly compete for high-profit me-too drugs, they're not as interested in producing lower-profit drugs. That's a basic "business" decision. Why produce a low-profit-margin blood-clotting drug, when more profitable drugs can create profit margins of 18% to 25%?
Angell writes: "While me-too drugs flood the market, there are growing shortages of some important, even lifesaving drugs. If companies find drugs unprofitable, they just stop making them. …In 2001, there were serious shortages of many important drugs, including certain anesthetics, antivenins for poisonous snakebites, steroids for premature infants, antidotes for certain drug overdoses, an anticlotting drug for hemophilia, an injectable drug used in cardiac resuscitation, an antibiotic for gonorrhea, …and vaccines against flu and pneumonia in adults." (Other key shortages include childhood vaccines for diphtheria and tetanus.)
The Truth About The Drug Companies discusses many other problems in the drug industry, such as drug companies having substantial control over clinical trials of their own drugs. The book makes the fundamental point that drug companies expect to be rewarded as if they were the great innovator of new breakthrough drugs, when, in fact, the role they play is much closer to exploiting innovation made at universities and the NIH.