Pharmaceutical Companies: How Much Do They Control?
Every day Americans are subjected to a barrage of advertising by the pharmaceutical industry. Mixed in with the pitches for a particular drug—usually featuring beautiful people enjoying themselves in the great outdoors—is a more general message. Boiled down to its essentials, it is this: “Yes, prescription drugs are expensive, but that shows how valuable they are. Besides, our research and development costs are enormous, and we need to cover them somehow. As “research-based” companies, we turn out a steady stream of innovative medicines that lengthen life, enhance its quality, and avert more expensive medical care. Yes, we have them to thank for medicinal breakthroughs, and scientific research certainly isn’t cheap; however, when the goal of a pharmaceutical company turns from profit to excess profit, everyone suffers.
Paying for prescription drugs is no longer a problem just for poor people. As the economy continues to struggle, health insurance is shrinking. Employers are requiring workers to pay more of the costs themselves, and many businesses are dropping health benefits altogether. Since prescription drug costs are rising so fast, payers are particularly eager to get out from under them by shifting costs to individuals. The result is that more people have to pay a greater fraction of their drug bills out of pocket. And that packs a wallop. Many of them simply can’t do it. Others, too embarrassed to admit that they can’t afford to pay for drugs, leave their doctors” offices with prescriptions in hand but don’t have them filled.
Prescription drug companies aren’t putting a lot of resources toward new, groundbreaking medication, according to a recent report in BMJ, a medical journal based in London. Instead, it’s more profitable for them to simply to create a bunch of products that are only slightly different from drugs already on the market, the reports authors said. Sales from these drugs generate steady profits throughout the ups and downs of blockbusters coming off patents.The authors go on to say that for every dollar pharmaceutical companies spend on “basic research,” $19 goes toward promotion and marketing. And what is the most profitable area of drug sales? Psychotropic drugs. Mood altering and behavior modifying drugs aimed at brain chemistry. Worldwide sales of antidepressants, stimulants, antianxiety and antipsychotic drugs exceed $82 billion a year as of 2003.
The people hurting most are the elderly. When Medicare was enacted in 1965, people took far fewer prescription drugs and they were cheap. For that reason, no one thought it necessary to include an outpatient prescription drug benefit in the program. In those days, senior citizens could generally afford to buy whatever drugs they needed out of pocket. Approximately half to two thirds of the elderly have supplementary insurance that partly covers prescription drugs, but that percentage is dropping as employers and insurers decide it is a losing proposition for them. At the end of 2003, Congress passed a Medicare reform bill that included a prescription drug benefit scheduled to begin in 2006, its benefits are inadequate to begin with and will quickly be overtaken by rising prices and administrative costs.
These are just one of many reforms I advocate in The Truth About the Drug Companies. Some of the others have to do with breaking the dependence of the medical profession on the industry and with the inappropriate control drug companies have over the evaluation of their own products. The sort of changes required will take government action, which in turn will require strong public pressure. It will be tough. Drug companies have the largest lobby in Washington, and they give abundantly to political campaigns. Legislators are now so thankful to the pharmaceutical industry that it will be exceedingly difficult to break its lock on them.