October 26

Bitter Medicine: Pills, Profit & the Public Health – ABC News

Date: Thu, 30 May 2002 14:14:47 -0400
From: Vera
Subject: Bitter Medicine: Pills, Profit & the Public Health_ABC News

A Human Rights Organization

Contact: Vera Hassner Sharav


On May 17 The Wall Street Journal reported (in a front page article) that
drug manufacturers’ financial clout, not a drug’s effectiveness, influences
doctors’ prescribing choices. The Journal described a case involving
steroids for sepsis which costs less than $50 vs. a new, highly promoted
drug costing $7,000 a dose.

"The steroids saga illustrates one reason expensive brand-name drugs don’t
face more competition from low-priced generics. There is little incentive
for big pharmaceutical companies — the main financiers of drug research —
to pay for studies of using steroids against sepsis, because the steroids’
patents have expired." [See, Thomas M. Burton, "Drug Prices — Why They Keep
Soaring" WSJ, May 17, 2002, front page]

ABC News reports (below) that although the public is spending $90 billion on
prescription drugs–compared to $64 billion 6 years ago, "adding up all the
drugs approved over the past six years, 80 percent of all those drugs were
deemed by the FDA to be similar to what already exists. In other words, not
a significant improvement."

The rip off is made possible by a public policy that promotes collusion
among drug industry stakeholders: doctors, research institutions, and
government oversight agencies –among them the NIH, FDA, and OHRP. These
government oversight agencies have become the handmaidens of the drug
manufacturing industry instead of providing a system of independent checks
an balances to ensure against abuse in clinical trial drug development and
drug marketing.

As a result, clinical drug trials in recent years have not resulted in
innovative new medicines that benefit the public–they have been manipulated
by industry to increase short term profit margins. ABC reports:
"Surprisingly enough, the FDA says a new drug does not have to be any better
than what already exists. All you have to be able to prove is that the drug
is better than nothing."

Industry-influenced government policies have bestowed extraordinary patent
protection for the pharmaceutical industry. Its profits have increased by
producing copy-cat drugs which are sold at exorbitant prices. False claims
about new drugs mislead doctors and the public alike.

For other aspects of conflicts of interest in clinical research see:
Fourteenth Annual (Military) Tri-Service Clinical Investigations Symposium
May 6-8, 2002, San Antonio, TX. Presentation by Vera Hassner Sharav:


Bitter Medicine: Pills, Profit and the Public Health

May 29, 2002

Consumers spent $90 billion more on prescription drugs last year than the
$64 billion that was spent just six years ago. Are consumers getting their
money’s worth from the pharmaceutical industry? (ABCNEWS.com)

May 29
˜ First there was aspirin to treat pain and inflammation, then came Advil,
Aleve, and 40 other similar drugs. By 1999, Celebrex and Vioxx were on the
scene, and they now outsell every other prescription pain reliever on the
market. Every year, $4 billion is spent on Celebrex and Vioxx alone.

"There’s never been a study showing that they are more effective at
relieving symptoms of joint pain and inflammation than all these other
medicines that have been available for many, many years and are much more
affordable," said Dr. Matt Handley, a physician with Group Health
Cooperative, a nonprofit managed-care organization in Seattle.
On top of the $532 million spent every year on over-the-counter drugs,
consumers spent $90 billion more on prescription drugs last year than the
$64 billion that was spent just six years ago.
And yet, there is little evidence that the huge increase in spending is
dramatically improving the health of Americans. Are consumers getting their
money’s worth?
$802 Million for One New Medicine

Why do prescription drugs cost so much money?
According to a Tufts University study, on average it costs $802 million to
bring one new medicine to market. The high cost of drug development is the
industry’s justification for the high price of drugs.

"The $802 million figure is used by pharmaceutical firms, I believe, to help
explain the enormous challenge involved in bringing a new product to
market," said Ken Kaitin, who runs the Tufts Center for the Study of Drug
Development. "These are extraordinary costs to bring individual products to

While it is not possible to look at a breakdown of research costs ˜
companies aren’t required to make this information public ˜ their profits
are public, and the drug industry is the most profitable industry in the

"Their R&D [research and development] costs could be $15 billion, $15
trillion, $15 gazillion, and it wouldn’t matter if their profits are double
that," said Dr. Marcia Angell, a former editor of the New England Journal of

The drug industry claims its high profits are necessary in order to conduct
expensive research and development. It spends more on research than any
other industry.
The federally funded National Institutes of Health may be the drug
industry’s biggest benefactor. This government agency alone will spend more
than $23 billion on research this year. And much of the research benefits
the drug industry.

"There’s no other industry in which you have so much public investment in
the fundamental knowledge that enables … the development of the commercial
industry itself," said Dr. Bernadine Healy, who used to run the NIH.

And how important is this publicly funded research to the industry? The NIH
looked at the five top-selling drugs of 1995 in a report. It found that
"NIH-funded research played a critical role" in discovering each one of
those drugs.
But however much it may actually cost to develop a drug, which drugs are
consumers getting for their money?

Similar to Existing Drugs
A closer look reveals that much of the profits from prescription sales are
not derived from breakthrough drugs, but rather from drugs that are similar
to already popular medications.

When a drug company submits a drug to the Food and Drug Administration for
approval, the agency tries to determine how important the drug may be. And
the FDA divides all drugs into two categories: "priority" drugs ˜ which are
believed to be a "significant improvement" over what already exists, and
"standard" drugs ˜ which are similar to what exists.

But, adding up all the drugs approved over the past six years, 80 percent of
all those drugs were deemed by the FDA to be similar to what already exists.
In other words, not a significant improvement.

"I think the level of innovation that we’re seeing from the pharmaceutical
industry is really mixed," said Nancy Chockley, who runs an institute funded
by managed-care organizations. In a new report, NICHM found the percentage
of new, innovative drugs coming from the pharmaceutical industry is actually
"What we found is that over the last 12 years that there’s really been a
shift in the type of new drugs being approved by the FDA," said Chockley.
"And we found that most of the growth was really in drugs that did not show
any significant clinical improvement."

Extending the Patent Life
The patent system gives companies an exclusive monopoly for the length of
the patent ˜ meaning they can make huge profits. That is the incentive drug
companies have to continually invent new drugs. Then, when the patents on
those drugs expire, other companies can copy the drug, make a generic
version, and the new competition in the marketplace lowers the price. The
FDA says the generic drugs are just as good as the original drugs.
That’s the way the patent system is supposed to work, but that is not the
way it always works. The drug industry’s lawyers and lobbyists have created
or found so many loopholes in the laws that some generic drugs are often
delayed or never get to market.
BuSpar is an anti-anxiety drug manufactured by Bristol-Myers Squibb. After
the company had had a monopoly on the drug for years, the patent on BuSpar
was set to expire on Nov. 21, 2000, which meant a cheaper generic version
was supposed to be approved by the FDA and available to consumers the next

And then, just hours before its patent on BuSpar expired, Bristol-Myers
Squibb got a new patent on what the drug becomes after you swallow it. And
the law is written in such a way that Bristol-Myers was able to then keep
the generic drug off the market, claiming that it would violate its new
patent. There was no innovation involved ˜ only an innovative legal
Dr. Carol Ben-Maimon, who has worked in the drug industry for 15 years and
is chairwoman of the Generic Pharmaceutical Association, believes that
Bristol-Myers was in this for profit and not public health. "I don’t think
there’s any question," she said. "They didn’t do anything to the product to
improve it. "

Bristol-Myers was sued by the generic companies, which claimed that the
last-minute patent filed with the FDA should not keep the generic drug off
the market. It took four months for a court to rule in the generic
companies’ favor.
"During those four months, Bristol-Myers continued to have the exclusive
right to sell this product on the market, no generic competition, and I
believe this product is about, over a $700 million-a-year revenue product
for Bristol-Myers," said Rob Funston, an attorney for a company that
produced the generic version, Watson Labs. "So during those four months,
they made approximately $200 million."
When asked several times to discuss its strategy to extend the patents on
BuSpar and on other drugs, Bristol-Myers refused.

Less Innovation
Many experts believe the industry, in general, is producing fewer innovative
"If I’m a manufacturer and I can change one molecule and get another 20
years of patent rights, and convince physicians to prescribe and consumers
to demand the next form of Prilosec, or weekly Prozac, instead of daily
Prozac, just as my patent expires, then why would I be spending money on a
lot less-certain endeavor, which is looking for brand-new drugs," said Dr.
Sharon Levine, the associate executive director and a pediatrician for the
Kaiser Permanente Medical Group. She is responsible for assessing the best
resources for the medical group, including helping decide which drugs are

But with so many drugs for each of these conditions, how are consumers
supposed to know which drugs are the best? Surprisingly enough, the FDA says
a new drug does not have to be any better than what already exists. "All you
have to be able to prove is that the drug is better than nothing," said

The rules by which this hugely profitable industry operates do not always
serve customers adequately. The Federal Trade Commission is investigating
whether drug makers illegally delay generic competition. Some members of
Congress are trying to close the loopholes in the law to make it easier for
generic drugs to become available.
However, the drug industry has enormous influence in Washington. The
pharmaceutical industry has more registered lobbyists than the number of
senators and congressmen combined.

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