Saturday, November 11, 2006

The Truth About the Drug Companies

The Truth About the Drug Companies: How They Deceive Us and What to Do About It (Kindle Edition)

Another book that I read earlier this summer was "The Truth About the Drug Companies: How They Deceive Us and What to Do About It" by Marcia Angell. Now, this lady was an editor-in-chief of the New England Journal of Medicine for almost 20 years, so what she writes carries a lot of credibiliy.

The author takes many claims made by the drug industry, about the high cost of bringing new drugs to the market, about the billions of dollars it spends on research, and reveals them to be false. The drug companies spend more on marketing than they do on research, in fact they spend more than twice as much on marketing and administration than they do on research.

Many of the blockbuster drugs on the market today (blockbuster drugs are those that have sales in excess of a billion dollars annually) are a result of research done at government funded labs, paid for by the taxpayer, and not at drug companies' research labs.

The drug industry spends billions of dollars on "educating doctors", another way of bribing doctors to not prescribe generics, even though they cost much less than the branded drugs, on encouraging doctors to prescribe medicines to patients who may not need them, and more...

Each facet of the industry is covered in separate chapters, like "Marketing Masquerading as Education", "Patent Games", "Buying Influence", "Just How Innovative is the Industry", "How Good Are New Drugs", etc...

This book was also a New York Times bestseller, and the Publisher Weekly gave it a "starred review", saying "In what should serve as the Fast Food Nation of the drug industry, Angell presents ... a powerful case ... for reform." High praise indeed. Now, the book is not quite in the same league as "Fast Food Nation", which is more detailed in its research, more broad in its coverage of the entire ecosystem of the fast food industry, but this book is written for the average American, which means that some of the technical details that would otherwise have made this book more compelling but inaccessible have been left out. The size of the book also is not daunting, at slightly over 300 pages.

One gauge of just how overmedicated a society we are becoming, especially the west and the US, consider this: a recent issue of Reader's Digest had three or four pages of content followed by four pages of ads for prescription drugs - almost across the entire issue! For everything from arthiritis, allergies, erectile dysfunction, menstrual problems, and many more that I didn't even know would qualify as ailments.

Here are snippets from the book:

Before its patent ran out, for example, the price of Schering-Plough's top-selling allergy pill, Claritin, was raised thirteen times over five years, for a cumulative increase of more than 50 percent—over four times the rate of general inflation.

Furthermore, in one of the more perverse of the pharmaceutical industry's practices, prices are much higher for precisely the people who most need the drugs and can least afford them. The industry charges Medicare recipients without supplementary insurance much more than it does favored customers, such as large HMOs or the Veterans Affairs (VA) system. Because the latter buy in bulk, they can bargain for steep discounts or rebates. People without insurance have no bargaining power; and so they pay the highest prices.

Second, the pharmaceutical industry is not especially innovative. As hard as it is to believe, only a handful of truly important drugs have been brought to market in recent years, and they were mostly based on taxpayer-funded research at academic institutions, small biotechnology companies, or the National Institutes of Health (NIH). The great majority of "new" drugs are not new at all but merely variations of older drugs already on the market. These are called "me-too" drugs. The idea is to grab a share of an established, lucrative market by producing something very similar to a top-selling drug. For instance, we now have six statins (Mevacor, Lipitor, Zocor, Pravachol, Lescol, and the newest, Crestor) on the market to lower cholesterol, all variants of the first.

From 1960 to 1980, prescription drug sales were fairly static as a percent of US gross domestic product, but from 1980 to 2000, they tripled. They now stand at more than $200 billion a year.

In the 1990s, Congress enacted other laws that further increased the patent life of brand-name drugs. Drug companies now employ small armies of lawyers to milk these laws for all they're worth—and they're worth a lot. The result is that the effective patent life of brand-name drugs increased from about eight years in 1980 to about fourteen years in 2000.[10] For a blockbuster—usually defined as a drug with sales of over a billion dollars a year (like Lipitor or Celebrex or Zoloft)—those six years of additional exclusivity are golden.

Drug industry expenditures for research and development, while large, were consistently far less than profits. For the top ten companies, they amounted to only 11 percent of sales in 1990, rising slightly to 14 percent in 2000. The biggest single item in the budget is neither R&D nor even profits but something usually called "marketing and administration"—a name that varies slightly from company to company. In 1990, a staggering 36 percent of sales revenues went into this category, and that proportion remained about the same for over a decade.[13] Note that this is two and a half times the expenditures for R&D.

Kindle Excerpt:

© 2006, Abhinav Agarwal. All rights reserved. Reposted to this blog Nov 2011