5 Ways Drug Companies Put Profits Before Patients

September 10, 2009

By Terry Smiljanich:

When it comes right down to it, drug companies don’t look at us as patients, they look at us as consumers. Their primary goal is not to discover new drugs to make us healthier, but rather to make their shareholders happy by keeping short term profits up.

Unfair, you say? But unfortunately, quite true. Let’s look at some big ways the major drug companies put profits ahead of patients.  Here are five drug industry tactics that serve to put their bottom lines above the country’s welfare:

1. Direct Advertising to Consumers

As we pointed out in our story last week (“Drug Ads on TV Are Bad For Your Health”), America is one of only two countries in the world (New Zealand being the other) which allow drug companies to advertise prescription drugs directly to the consumer.  The result is a daily avalanche of drug advertisements we all have to put up with.

And it’s big business. The three major cholesterol-lowering drugs – Lipitor, Crestor and Vytorin – alone accounted for hundreds of millions of dollars in television advertising in 2005. Lipitor, manufactured by drug giant Pfizer, accounted for $12.4 billion in sales last year.

These advertising costs drive up the cost of prescription drugs and suck money from research and development for better and more effective new drugs.  Major pharmaceutical companies spend about 25% of their budgets on advertising, while only about 13% on searching for new drugs.

By urging patients to “ask your doctor about our wonderful drug,” the industry pressures the medical profession to prescribe drugs patients may not need.

As for actually researching and coming up with new improved drugs, the drug companies are more interested in sticking to their current product line. When the “exclusivity” period of a name drug runs out (i.e., cheaper generic drugs can be sold instead), a drug company will often “re-brand” the same drug and find a new medical condition it can be used for, thus extending its exclusivity.

2. Payments to Doctors

It’s possible that part of the reason doctors go along so easily with drug company advertising is that they are lured by these companies with lucrative benefits. We’ve all been in a doctor’s waiting room and seen the drug company representative (often a very attractive young lady) with her bag of samples waiting to see the same doctor. Did you know the average family doctor receives 28 visits per week from these drug company sales reps?

They push their free samples and “educate” doctors about their company.  They share the results of sponsored tests (more about that later) which show how good their drug is compared to their competitors. It all adds up to a lobbying expenditure of $8,290 spent by drug companies per doctor in the U.S.

It’s not just about free samples, however. Thanks to recent lawsuits that opened up the records of some major drug companies, we can all see just how much doctors get in perks from being courted by drug companies. Eli Lilly, for example, spread $22 million among 3400 doctors in just the first three months of the year.

A pharmaceutical company will spend as much as $100,000 on a physician it considers influential (specialists such as psychiatrists and cardiologists). And for each dollar paid to physicians in promotional costs, the industry gets back $12 in additional prescription sales.

A Tampa neurologist, for example, received an extra $4000 per week from Eli Lilly for giving talks to other physicians about the benefits of Cymbalta, a Lilly anti-depressant. Not bad for supplemental income.

In addition to this, drug companies have provided physicians with trips to Hawaii, deep sea fishing trips, tickets to the Super Bowl, complete with first class lodgings and meals in the best restaurants.

Ask yourself whether you think all of this activity is to help improve the quality of your health care, or instead, to promote the quality of the pocketbooks of the doctors, drug companies and their shareholders.

3. Self-financed drug studies

Drug companies subject their new drugs to extensive testing in order to obtain approval from the FDA. Sounds good, but think about the potential conflict. In paying for their own tests, isn’t it possible the results will be overly rosy in predicting the future benefits of having their drug on the market? Recent studies have found that to be the case.

In reporting the results of these self-sponsored tests to medical journals, further investigation has shown suppression and manipulation of the data to maximize the potential benefits of the drugs in question. An investigation into drugs introduced into the market in 2000-2001, found that self-sponsored drug tests with positive results were five times more likely to make into print in such medical journals than other tests with negative results. Is such optimism fueled by the bottom line really in our best interests as patients? Hardly.

4. Politicians for Rent

While drug companies are busy flooding us with their advertising, heaping gifts on doctors, and misleading us with their product studies, they haven’t forgotten Congress. With the FDA watching over them and Congress pondering health care reform, they know politicians have to be pampered as well.

Since 2000, the pharmaceutical companies have made more than $125 million in political contributions, giving to both sides of the aisle, but always more to whomever is in power.

Last year, a Presidential election year, the candidates with the most contributions from drug companies were, in order: Obama, Clinton, and McCain.  Senator Chris Dodd (D-Conn), Acting Chairman of the influential Senate Health, Education and Labor Committee, was the fourth largest recipient of big pharmaceutical dollars.

Before becoming the pharmaceutical industry’s chief lobbyist in Washington, former Louisiana Congressman Billy Tauzin used to be chairman of the committee that pushed through President Bush’s prescription drug plan.  That plan prohibited Medicare from negotiating lower drug prices with the drug industry.

During President Obama’s campaign for office, he mentioned this as an example of the untoward influence of lobbyists. Since the election, however, lobbyist Tauzin has been a guest at the White House several times, and has extracted from Obama a pledge that any new health care reform bill will retain the Medicare negotiation prohibition.

Yes, the influence of the drug industry knows no party bounds.

5. Off-label marketing

When a new drug is approved by the FDA, its uses are carefully restricted. Often, the available patient population for the drug is quite small, and potential sales consequently limited. One way around this problem is to encourage use of the drug for problems not approved under the prescribed use. That creates a larger potential market, which means larger sales and bigger profits. As a result, drug companies often encourage doctors, subtly of course, to recommend the drug for such “off-label” use.

Take the Pfizer drug Neurontin. Originally approved for the treatment of epilepsy and seizure disorders (a relatively small market), Pfizer began encouraging its use for a wide variety of neuralgic disorders, including migraine headaches. Sales skyrocketed. The “off-label” use of the drug accounted for 90% of Neurontin sales.

Unfortunately, such widespread usage eventually revealed serious psychiatric side effects, including an increase in suicidal tendencies. In 2004, the company’s subsidiary plead guilty to criminal charges and agreed to pay a $430 million fine.

In addition to undisclosed potential side effects, off-label marketing can increase the unnecessary use of more expensive prescription drugs by consumers. The former Merck drug Vioxx, for example, was originally approved for treatment of osteoarthritis and dysmenorrhea (acute premenstrual pain).  It quickly gained prominence, however, as a prescribed drug for general pain relief.

As with Neurontin, widespread Vioxx use led to revelations of serious side effects. In addition, a study showed the expensive prescription drug was no more effective at pain relief than a much less expensive over-the-counter medication such as Tylenol.

So, there we have at least five ways drug companies work hard to increase their profits at our expense.

Edited by Angie Moreschi