Truths about 'Big Pharma'

December 26, 2004

Billy must have had a great Christmas. He just got this new job. For
the first year, all he has to do is pal around with his old buddies —
play some golf, go to their parties, and give them money on behalf of
his new employer. Best of all, he's going to make more than $2 million
a year. And it's all legal.

The Billy in question is William Joseph Tauzin, a 61-year-old
Republican from Louisiana who is retiring after 24 years in Congress.
He has just been named president of the Pharmaceutical Research and
Manufacturers of America — the major lobbying group for brand-name
drug companies.

It is not unusual for former members of Congress to join lobbying
firms when they step down. But what makes this case particularly
outlandish, is that Rep. Tauzin was the principal author of the
Medicare prescription drug benefits law passed last year. As chairman
of the House Committee on Energy and Commerce he wrote major parts of
the new law, one of the main features of which, explicitly forbids the
government from negotiating with drug manufacturers to secure lower
prices for Medicare beneficiaries. In other words, the government
can't negotiate a bulk discount the way health management
organizations and the Veterans Health Administration are able to do.

So the guy who wrote the bill that provides an enormous windfall for
the drug companies (tens of billions of dollars), is now going to
become their chief lobbyist. Federal law prohibits former members from
lobbying Congress for a one-year "cooling off period." But during that
year Tauzin will be able to "interact socially" with his former
colleagues as well as make campaign contributions, attend fund-raisers
and tell other people how to lobby.

In what struck me as one of the more ironic quotes of the week, Tauzin
told The New York Times, "This industry has a problem. It has to earn
the trust and confidence of consumers again."

One can't quarrel with that statement, but it's rather hard to see how
Tauzin's career move is going to fill us with more trust and
confidence in the drug companies.

Something else shaking public confidence is the recent series of drug
scares involving painkillers. This past week it was revealed that
over-the-counter drug naproxen known by the brand name Aleve, may
increase chances for heart disease or stroke. The week before, a
national drug trial was stopped when it was discovered that the
popular painkiller Celebrex, more than tripled the risk of heart
attacks and strokes among those taking high doses. Coming on the heels
of similar problems with Vioxx and Bextra, all members of a class of
drugs known as COX-2 inhibitors used to treat arthritis and other
pain, it was bad news for drug company stocks, which were pummeled by
investors.

But please forgive me if I do not shed a tear over a dip in the value
of pharmaceuticals. For the past two decades this industry has been
far and away the most profitable and greediest industry in the United
States.

Drug safety experts said the latest news about Celebrex demonstrated
that the U.S. Food and Drug Administration needs to improve its
systems for uncovering the dangerous side-effects of already approved
medications. True. But that is by no means the only problem involving
the nation's drug supply that needs to be fixed.

Evidence is now coming into the public domain — supporting suspicions
many consumers have had for some time — that the pharmaceutical
industry has been corrupted by its success.

One of the latest books to provide such evidence is titled, "The Truth
About the Drug Companies: How They Deceive Us and What To Do About
It."

This is not a book by some low-life reporter, skulking around drug
company garbage cans trying to discover marginal malpractices. The
author is Marcia Angell, a doctor trained in internal medicine, who
for two decades worked for and eventually became editor-in-chief of
the New England Journal of Medicine. She is now at Harvard Medical
School and is a nationally recognized authority in the field of health
policy and medical ethics. Time magazine named her as one of the 25
most influential people in America.Here are a few of the things the
publisher, Random House, says about Angell's book.

"Dr. Angell had a front-row seat on the growing corruption of the
pharmaceutical industry. … She saw them gain nearly limitless
influence over medical research, education and how doctors do their
jobs. … Angell powerfully demonstrates claims that high drug prices
are necessary to fund research and development are unfounded. The
truth is that drug companies funnel the bulk of their resources into
the marketing of products of dubious benefit. Meantime, as their
profits soar, the companies brazenly use their wealth and power to
push their agenda through Congress, the FDA and academic medical
centers."

Having read the book, I can tell you that Dr. Angell delivers the
goods.

For instance, did you know:

# That "basic" research — where studies are done to determine the
nature of the disease you want to treat, and then, at the molecular
level, scientists look for a drug that will safely and effectively
treat it — is almost always carried out at universities or government
research labs. In this country, most of this research is conducted or
financed by the National Institutes of Health — in other words, it's
paid for by your tax dollars and mine.

# That while "Big Pharma" (Angell's name for the major drug companies)
claims the average cost of developing a new drug is $800 million — the
actual cost after taxes could be less than $100 million.

# That the marketing costs for most big drug companies are more than
twice what is spent on research and development, even if we accept
their research and development figures which Angell claims are highly
inflated. Among those marketing costs are billions in advertising for
cures for "diseases" that a few years ago we didn't even know existed
(and most of us still don't though the TV pitchman is constantly at us
to "Ask your doctor if (drug X) is right for you.")

# That most "new drugs" being marketed are not new but are simply copy
cats or "me, too" drugs that are perhaps one molecule different from
the original. That's why we have six statins to lower cholesterol,
three erectile dysfunction treatments and countless acid reflex pills.
Having so many choices adds nothing at all to the state of American
health but certainly adds to overall costs of health care — not to
mention drug company profits.

That's just a small part of the case against "Big Pharma," as made by
Dr. Angell.

Her book also points out that the United States is the only developed
country that does not regulate drug prices. Other Western countries
have different ways of regulating prices, but whatever the system,
their prescription drug costs are much lower than ours. For those who
argue that the "free market" must be allowed to prevail, Dr. Angell
has this answer, "The (pharmaceutical) industry is hardly a model of
free enterprise. To be sure, it is free to decide which drugs to
develop (me-too drugs instead of innovative ones, for instance), and
it is free to price them as high as the traffic will bear, (but)
instead of being a free market success story, it lives off
government-funded research and (government-granted) monopoly rights."

And, she might have said, had she known soon-to-be-former congressman
Billy Tauzin would be the next president of the country's largest drug
lobby, the pharmaceutical industry has also been free to apparently
buy important members of Congress.

Barrie Dunsmore is a veteran diplomatic and foreign correspondent for
ABC News now living in Charlotte.