The Euphoric Drug of Profit

Should the Pharmaceutical industry be for profit? The orthodoxy is profit motives new drug discoveries, research and without it most drugs would never be discovered. But is the dogma from the profit church true?

Despite prescription drugs having a market growth rate of ~4.5% per year and total US sales of $286 billion, global $745 Billion, in 2007, the press was all aghast at the market decline and blamed it all on the lack of new products.

I wonder if you look at medicine as a product? Well, in the current state of affairs life saving compounds are.

In 2007, Business week questioned how Big Pharma seemed to be developing drugs, not for the public good and those serious diseases, but for lifestyle drugs, simply because they had the potential for larger profits.

In 2004, Drug companies spent $57.5 billion dollars in marketing drugs in the United States.

Marketing expenditures 2004, Pharmaceutical industry

To actually develop new drugs in that same year, the pharmaceutical industry spent $31.5 billion. So the claim by pharmaceutical companies that they spend much more in research and development than sales and marketing is a lie.

drug ask, drug get study resultsRunning those damn TV commercials and other market techniques work too. According to USA Today, 32% percent of patients ask Physicians for drugs they saw advertised on TV and believe this or not, 82% of all Doctors prescribe something!

From the subcommittee on Oversight and Investigations, Direct-to-Consumer Advertising: Marketing, Education, or Deception?

Congressman Bart Stupak's Opening statement:
magic secret decoder ring: DTC - direct to consumer

Nearly ten years ago, the U.S. Food and Drug Administration (FDA) relaxed its rules related to direct-to-consumer (DTC) advertisements for prescription pharmaceutical products.

Since then, spending on DTC ads has increased from about $1.1 billion in 1997 to about $4.2 billion in 2005. This nearly 300 percent increase in DTC ad spending dwarfs the 86 percent spending increase in advertisements to physicians and the 103 percent spending increase in research and development over the same period.

It becomes increasingly evident by these reports, Pharmaceutical corporations are deciding which drugs to develop by potential profits. Determining R&D investments by sales and market size implies solutions and treatments in the public good or for simple humanitarian reasons are ignored. There is just no profit in it. The need is not what decides which cures will be developed, it's good old fashioned corporate greed, the grease of private enterprise.

truth about drug companies, book cover

In the book, The Truth About the Drug Companies: How They Deceive Us and What to do About it, a series of policy changes are presented. Marcia Angell, the book author, strongly suggests changes from strengthening the FDA to good old fashioned price controls to closing the loopholes in the Hatch-Waxman Act

Even worse to squeeze profits, there appears to be a mass exodus of high value research and development jobs from the Pharmaceutical industry to cheaper labor markets.

Clinical trials are increasingly going offshore, which government oversight and rules are lax and the value of human life is cheap.

While individuals and experts try to speak out, there appears to be no policy or congressional action to stop the madness.

VioxxPublic Citizen maintains a website Worst Pills performing the job the FDA should be doing to protect and inform the public.

Film makers like Michael Moore try to promote policy, in terms of real legislation changes, detailed cause and effect policy proposals in the national interest... nothing is done.

After all, this goes against the church of profit.

A lone Senator, Bernie Sanders introduced a bill to award patents through prize money instead of patent rights.

Yet no one is seems to be tackling one of the worse reasons this monster of a profit system is becoming increasingly at odds with the national interest and the public good.

Is Michael Moore right? Should we just cut to the chase and wipe out this entire industry as a private sector profit making machine?

Stay tuned for this question needs a visit to the history of pharmaceutical research in part 2.


Comments've been reading my mind again!

This might sound crazy, but I was just thinking the same thing! Well, specifically, I was wondering why couldn't the pharma industry be a non-profit one? Or why couldn't some adventurous social entrapanuer start a not-for-profit drug company? I know it sounds insane, but just focus on one drug, be a generic, and try and get grants so that the drug could be given away! Ok, I haven't thought out the economics of this.

sometimes us layfolk can see the obvious

I mean with a three quarters of a trillion dollar in sales yearly...i somehow I think we're swimming against the current, but frankly if the total market actually shrinks (which I doubt the way people have a tendency to reproduce), then this idea could be captured in the rip current.

It's really only a major government action which could do this...but that said, a competitive market which is nonprofit, subsidized by governments could be initiated.

Call it the open source of pharmaceutical R&D.