Category Archives: Big Pharma
By Bob Aronson
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Everyone, unless you have the riches of Donald Trump, everyone complains about the cost of prescription drugs and the complaints are justified. No other country in the world pays as much for prescription drugs as Americans do. Big Pharma, that’s Washington DC talk for the huge pharmaceutical companies, is making sky high profits and they aren’t going to end anytime soon. In the latest year in which I was able to find numbers 2012 the top 11 global drug companies made nearly $85 billion in net profits. That’s net, folks, not gross. The gross number is, well, gross.
Big pharma is ripping off Americans and no one seems to care other than ripped off Americans. The Republican congress sure doesn’t care, they all have their hands out for the lobbying money big pharma so liberally spreads about. And – the Democratic White House of the last 8 years hasn’t said much either. Now we have a new President about to take office and several months ago in a primary debate he made a big deal out of the high cost of drugs, but we haven’t heard much from him since. Let’s hope he has the guts to take on big pharma. The pressure on Trump to do nothing will be tremendous. He’ll get it not only from the drug companies, but from all the politicians whose pockets have been lined with campaign donations by big pharma lobbyists. Trump can bellow all he wants, if congress won’t go along he’ll be shooting blanks at a stationary target.
During the Democratic Primary campaign Bernie Sanders made a big deal out of reversing the Citizens United ruling that allows corporations, unions and the like to make almost unlimited contributions to political campaigns. So if you are asking where the politicians are who are supposed to be looking out for us. I’ll tell you where. They are out being fitted for new big pharma cheer leading outfits. The more money big pharma makes, the more money they get in the campaign coffers.
The number of conflicts of interest between the regulators and the regulated boggles the mind. How do these people who are so obviously biased and in the industry’s pocket, get into these positions of power? I shouldn’t even ask the question, because the answer is so obvious. For example; PhRMA, (the Pharmaceutical Research and Manufacturers of America) which spent $18.4 million lobbying lawmakers last year and BIO (Bio-technology Innovation Organization) which spent $8.4 million, are among the most visible groups on Capitol Hill. Get this. Former Louisiana Congressman Billy Tauzin chaired the committee which oversees the drug industry. You know how he got the chairmanship? Well, he was a Democrat, but when the Republicans took over the majority he switched parties. Now that’s a lust for power. Then he abruptly resigned his congressional seat and shortly thereafter emerged as the new leader of PhRMA where was a paid a cool $2 million a year. That deal leaves a stench on the paper this is printed on.
The Tauzin defection and sell out of his integrity was among the beginning rumbles of even greater conflicts of interest. For example, the Obama FDA commissioner, Robert Califf, was confirmed despite the fact that there were 23 proven financial links to drug makers. And – it gets worse. Did you know that 30 percent of sitting U.S. Senators and 20 percent of U.S. congressmen own pharma stock? I won’t go into detail here, but if you want to learn more about this disgrace go to https://www.statnews.com/2015/12/01/congress-pharmaceutical-investment/
When did you first realize how bad this gouging was? Was it last year when that cocky little jerk Martin Shkreli of Turing Pharmaceuticals, testified about the Daraprim price hike from $13.50 to $750. As a result the anti-parasitic drug became unaffordable for thousands of Americans. In the meantime Shkreli was on Twitter calling lawmakers “imbeciles” for even asking any questions about his unethical and immoral price hikes.
Others of you with Hep C may have experienced the greed of Gilead Sciences drug Sovedeldi which sold for $84,000 for a 12 week course of treatment in 2014. Headlines were screaming “Rip-off,” patients were dying because they couldn’t afford the drug, but Gilead was unaffected. One of their execs even sent out an internal memo saying, “Let’s hold our position whatever competitors do or whatever the headlines.” In an incredible understatement the GOP led Senate Finance Committee said the price did not reflect research and development but a “revenue” push. Revenue push nuts! That’s unabashed price gouging especially in light of the fact that the same drug cost $900 a year in Egypt. Forbes, the conservative business magazine, pointed out that US taxpayers are picking up the tab since most US hepatitis C patients are uninsured, underinsured or imprisoned. Those in prison don’t qualify for any help at all. They are destined to suffer and because they are suffering run the risk of contributing to the Hep C epidemic.
But that’s only, and I hate clichés, but here goes anyway – the tip of the iceberg that sank the Titanic. Let’s hope the big pharma ship hits the same obstacle. There are many, many more rip offs that most of us don’t’ know about because we only have a familiarity with the drugs we personally take and for some reason the mass media have mostly ignored the get rich schemes of big pharma.
They will tell you that the high prices reflect the cost of research and development. I know from first –hand experience that’s not true. For some 25 years I was a communication’s consultant that helped large and small pharma companies bring the products to market. Developing new drugs and or devices is expensive. Just getting FDA approval costs a lot of money in clinical trials and in paying physician experts for their testimony, but big pharma in particular doesn’t bat an eye at those costs because they spend more on promoting drugs and on advertising than they do on research and development and they pass those costs on to you.
You probably didn’t know this but we, the United States and New Zealand are the only two countries in the world that allow prescription drug advertising. The companies are trying to put pressure on doctors to prescribe by going directly to consumers and asking them to ask their docs for a prescription of the latest snake oil and some of it is snake oil. Some drug companies will make minute changes in the chemical structure of a drug, rename it and call it a new drug. Prilosec, for example became Nexium. It was essentially the same drug but changing the formula a smidgeon and giving it a new name netted billions for the parent company. http://articles.mercola.com/sites/articles/archive/2002/12/18/nexium.aspx
Here’s a partial list of some very expensive drugs. So expensive some patients choose to die because they can’t afford them. It used to be said that some seniors had to choose between eating and taking their drugs. That’s no longer true, even giving up eating won’t save enough money to buy these drugs.
- Kalydeco treats a rare form of cystic fibrosis in patient’s ages 6 years and older priced at a $300,000 a year.
- Acthar, a drug that treats treat seizures in infants under 2-years-old priced at a $300,000 a year.
- Kadcyla, a breast cancer drug that costs $94,000 for a year.
- Zydelig, a leukemia drug, made by Gilead the (Hep C drug maker) that costs $57,755 a year.
- Xyrem, a drug that treats narcolepsy for $35,000 per year (Honesty suggests that I (Bob Aronson) disclose having helped the developers of Xyrem get FDA approval)
- Abilify, a psychiatric drug usually added on to another expensive psychiatric drug, that costs $17,316 year.
(Some of the above was developed by Martha Rosenberg an investigative reporter whose work has appeared in Consumers Digest, the Boston Globe, San Francisco Chronicle, Chicago Tribune, New Orleans Times-Picayune, Los Angeles Times, Providence Journal and Newsday. Her Random House food and drug expose, Born with a Junk Food Deficiency: How Flaks, Quacks and Hacks Pimp The Public Health, was cited in the American Society of Journalists and Authors 2013 Outstanding Books awards. On Twitter you can find her at @MarthRosenberg.
It’s bad enough that Big and even small Pharma gouges us with high prices, their greed knows no bounds. Now I understand, many pharma companies are attempting to re-incorporate outside of the US in order to dodge U.S. taxes. Does that really surprise anyone?
So far we’ve dealt with the high prices of prescription drugs, the multi-million dollar lobbying effort on the part of big pharma and lawmakers and administrators who have clear conflicts of interest. But what about physicians. Well, they’re not clean either.
According to a federal on-line data base, pharmaceutical companies and device makers paid doctors some $380 million in speaking and consulting fees over a five-month period in 2013. http://www.nytimes.com/2014/10/01/business/Database-of-payments-to-doctors-by-drug-and-medical-device-makers.html?_r=0 some doctors were paid over half a million dollars each, and others made a lot more by sharing in the royalties from products they helped develop.
Big pharma says paying physicians has little or no effect on what they prescribe. Ok, if that’s true why the drug do companies pay doctors all of that money if they aren’t getting a huge return on investment. To be fair, there are efforts to reduce the influence Pharma representatives have on physicians. Many hospitals and clinics no longer take samples as a display of independence, but that’s a double edged sword. A good any patients counted on getting those free samples to cut the cost of the drugs they take. Doctors claim these pharma payments have no effect on what they prescribe. But why would drug companies pay out all those millions of dollars if the practice didn’t provide them a healthy return on their investment?
Americans spend more money per person on prescription drugs than any other nation on earth and we aren’t anywhere near being the healthiest. We spend nearly $3 Trillion a year on health care and a full ten percent of that is spent on prescription drugs. While Government pays some of this tab through Medicare, Medicaid, and subsidies under the Affordable Care Act we pick up the rest through insurance premiums and taxes. And – the premiums, co-payments and deductibles are getting higher all the time. .
Big pharma, not satisfied with their outrageous profits are so driven by greed that they will go to any extreme to continue the revenue flow. Not long ago just before its patent expired on Namenda, one of the only Alzheimer’s drugs, Forest Laboratories said it would quite selling it in favor of a new formula that offered an extended release. But there was really nothing new about it, just a minor change in the chemical structure and that kept it from going generic at a lower price.
And, of course, you are all likely familiar with the fact that U.S. law prohibits the U.S. government from using its considerable bargaining power under Medicare and Medicaid to negotiate lower drug prices. No one wants to admit to this but that came about because it was big pharma’s payoff for not opposing the 2003 Medicare Part D Bill of the George W. Bush Administration.
Lest I haven’t made my case about how big Pharma is ripping us off, did you know that healthcare and big pharma pay their CEOs more than any other industry? Want proof? Median pay for healthcare and pharmaceutical executives amounted to $14.5 million in 2015, higher than for leaders in any other sector, according to Equilar, a California firm that researches and analyzes executive compensation. Median compensation for all CEOs in the study, which looked at pay packages of 341 executives at S&P 500 companies across multiple sectors in 2015, was $10.8 million.
The increase in healthcare executive pay from 2014 to 2015 was also greater than in other sectors. Healthcare CEO Pay rose 7 percent last year over the amount in 2014, while the comparable median pay increase for all industries was 4.5 percent.
Here are just a few examples of CEO pay in healthcare and pharma. Leonard S. Schleifer CEO of Rgeneron Pharmaceuticals total compensation in 2015 was $47,462,526, Jeffrey M. Leeiden of Vertex Pharmaceuticals got $28,099,826 and Larry J. Merlo of CVS health took home $22,855,374
Who is worth that? Compare that to the $400,000 annual salary of the President of the United States who also gets a $50,000 annual expense account, a $100,000 nontaxable travel account, and $19,000 for entertainment. Add it all up and it doesn’t begin to compare with the health care and pharma CEOs.
I don’t know about any of you readers, but if I was the head of a pharma company making that much money and read about all the people who were dying or sick because they couldn’t afford meds I would likely shoot myself.
Because The U.S. just held elections it is too early to provide information on who chairs the committees in the house and senate that might influence the price of prescription drugs. This website might offer you some assistance. http://physics.mnstate.edu/cabanela/contacting_the_congress_shutdown.php
If you’d like to write to the President of the United States, Here’s his address. If you write now your letter will go to President Obama. If you write after inauguration day on January 20th it will go to President Trump.
The White House.
1600 Pennsylvania Avenue, N.W.
Washington, DC 20500.
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Bob Aronson is a former Journalist, Governor’s press secretary and international communications consultant. He is retired and lives with wife Robin in Jacksonville, Florida. Bob had a heart transplant at the Mayo Clinic in Jacksonville in 2007 and spends most of his time promoting organ donation and writing blogs about donation/transplantation and related subjects. He is the founder of Facebook’s over 4,000 member Organ Transplant Initiative (OTI) and of Bob’s Newheart blogs where there are nearly 300 posts on subjects like this. http://www.bobsnewheart.wordpress.com