Big Pharma – the cheeky umbrella name given to pharmaceutical industry hotshots like Pfizer or Bristol-Myers Squibb (also cheeky names) – receives a lot of harsh criticism for predating the medical community. In fact, in his 2012 book “Bad Pharma,” physician Ben Goldcare calls the dire situation sparked by the pharmaceutical industry’s influence in medicine a “murderous disaster.”
With the Federal Trade Commission poised to take on Big Pharma at the Supreme Court this month, the industry’s somewhat sketchy practices are facing scrutiny from the nation’s best scrutinizers. But with all the negative rep the industry receives, it’s time to ask: what’s so bad about Big Pharma?
In short, a lot of things.
The approaching Court case, FTC vs. Watson Pharmaceuticals, involves efforts made by large pharmeceuticals companies to stifle competition from generic manufacturers. The practice is known colloquially as “pay for delay:” large scale companies fund expensive research to gain approval from the Food and Drug Administration. As a giant “thank you” for doing their jobs, these companies receive special patents over the drug – often for 12 years or more.
Generic brands – which typically cost 85 percent less than their on-brand counterparts – then challenge the patents in an effort to produce competing products. These challenges often lead to out-of-court settlements between Big Pharma and generics. In exchange for agreeing to hold off production on a competing drug for several years, large pharmaceutical companies offer cash payments to generic companies. In 2012, this practice cost Americans an estimated $3.5 billion.
But hey, it’s just business, right?
Not necessarily. The fight for back-door bargains parallels other free market arguments: regulating this practice will stymie industry innovation and remove the incentive for pharmaceutical companies to make risky investments. And, in order to get these companies to invest in production, an incentive for patent protection is necessary.
Yet, the research and development argument – a powerful one, hypothetically – falls short in the face of fact. According to the Guardian, “84% of worldwide funding for drug discovery research comes from government and public sources, against just 12% from pharma companies, which, on average, spend 19 times more on marketing than they do on basic research.”
So why do companies receive such preferential treatment?
For starters, they’re lobbying geniuses. From 1998 to 2013, Big Pharma spent $2.6 billion on efforts to influence politicians — almost double what Big Oil spent in that same time frame. And, in 2011 to 2012 alone, $257,020,868 from health and pharmaceutical lobby firms went “to U. S. Senatorial and Congressional campaign coffers.”
And Big Pharma does not just look to sway the opinons of lawmakers. Companies shower hospitals, doctors, and med students with a plethora of handouts, including expensive meals, industry-sponsored gifts, and even comped lube jobs (a shockingly “popular technique.”) In 2012, corporate hand-outs to doctors and medical workers amounted to $24 billion.
The negative consequences are pretty obvious. Without access to affordable versions of prescriptions, patients are forced to spend an exorbitant amount on name brand drugs. And even when cheaper drugs are available, doctors don’t always disclose the low-cost option.
These expenses, compounded with the already “too damn high” cost of everything else in the health care system, are great for industry. But they’re really bad for sick people who want to get better. And call me naive, but isn’t that the whole point?