Pharmaceutical Companies and Drug Costs

In the movie, “The Constant Gardener,” the beautiful Rachel Weisz plays the wife of a British diplomat in Africa. She discovers that a pharmaceutical company has been testing a new drug on unknowing African people and that the drug has been causing deaths. The drug company is covering-up the deaths, and it has the wife murdered. When the husband takes-up the cause, he is hounded by the company and by his government and is finally murdered. After the credits in the movie are shown, there is the usual disclaimer by John Le Carre, who wrote the book, that none of the characters in the story are based upon actual persons; but then he goes on to say, “as my journey through the pharmaceutical jungle progressed, I came to realize that, by comparison with the reality, my story was as tame as a holiday postcard.”

It turns out that there are some similarities to the movie in the testing on African children by Pfizer of a drug for meningitis called “Trovan.” Apparently, Pfizer failed to obtain informed written consent from the parents of the children tested, and obtained a back-dated approval for the testing by the Nigerian ethics board. The medical group, Doctors Without Borders, harshly criticized the testing. There have arisen questions of whether the drug was linked to a number of deaths from liver damage. Families of the children who died have filed suits. A documentary called “Dying for Drugs” has been made describing this incident as well as other predatory behavior by big pharmaceutical companies carrying out testing in Africa. The drug companies have been able to test drugs in Africa without complying with FDA regulations. They also attempted to stop the manufacture and shipping of cheap AIDS drugs into Africa .

The picture of a rapacious pharmaceutical company painted in “The Constant Gardener” is reflected in the activities of the rich, powerful, and avaricious drug companies in America. These companies have, by constantly raising the prices on their most needed drugs and by the exertion of enormous lobbying power in Washington, brought-on a crisis for people, particularly older people, who cannot afford critical medications. It is hard to believe that this suffering of Americans is being inflicted by fellow Americans in greedy drug companies.

In 2002, the average price of the fifty drugs most used by senior citizens was nearly $1,500 for a year’s supply of a single drug. Many seniors use from six to ten medications a day, and the prices for their drugs are higher than for other drugs. As a result, for the past few years, nearly one in four seniors reported that they skipped doses or did not fill prescriptions because of the cost.

Pharmaceutical companies justify the high cost of medications by the claim that they must engage in Research and Development (R & D) of new drugs. In fact, R & D is a very small part of drug companies’ costs. Much of the R & D for new drugs is done by taxpayer-funded research at academic institutions, small biotechnology companies, or the National Institutes of Health (NIH). These organizations license the medications to the drug companies. Most of the drugs developed by the pharmaceutical companies are slight variations of older drugs already on the market. These new drugs are manufactured in order to cash-in on already profitable drugs. For example, we now have six statins (Mevacor, Lipitor, Zocor, LPravachol, Lescol, and Crestor) which all do basically the same thing.

The real reason for the high cost of drugs is profits. The pharmaceutical industry is by far the most profitable industry in America. According to Fortune, in 2002 the combined profits ($35.9 billion) for the ten top drug companies on the Fortune 500 list were more than half the profits of all of the other Fortune 500 businesses put together. Drug companies increase prices on drugs several times a year, and during 2002 the drug companies increased prices by almost double the rate of inflation. The non-profit group, Families USA, stated that the former chairman and CEO of Bristol-Myers Squibb, Charles A. Heimbold Jr., made $74,890,918 in 2001, plus $76,095,611 worth of unexercised stock options. The chairman of Wyeth made $40,521,011 plus $40,629,459 in stock options. Meanwhile, millions of Americans have been forgoing their necessary drugs because the costs are so high.

Needless to say, the pharmaceutical industry has enormous clout in Washington, particularly among Republicans. Drug companies contributed $17 million to candidates for office in 2004, two-thirds of it going to Republicans and one-third to Democrats. They have bought themselves considerable power. Since 1998, the drug companies have spent $758 million on lobbying—more than any other industry. In Washington, the drug industry has 1,274 lobbyists, more than two for every member of congress.

The pharmaceutical industry had a direct hand in writing the Medicare prescription drug benefit enacted in 2003. The law provides only limited coverage for seniors, but promises a windfall for the drug companies. The drug lobbyists were able to insert a provision in the bill that the government could not negotiate with drug companies on the price of the drugs. They also made Congress provide that less expensive drugs could not be imported from Canada or other countries, even if they were American-made drugs which were being re-imported. There were rumors that congressmen were either bribed or threatened in order to pass the bill. After the new law was enacted with the help of Rep. Billy Tauzin (R. La.), the chairman of the House Energy and Commerce Committee, which had jurisdiction over the bill, Tauzin became head of the Pharmaceutical Research and Manufacturers of America (PhRMA), the drug industry’s major lobbying group. His salary is reportedly $1 million a year.

The pharmaceutical industry is a disgrace to America. The Senators and congressmen from both parties who play footsie with them are a disgrace. It is time the American people woke up and spoke up.