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Medical Industrial Complex (The Underground Knowledge Series, #3)
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MEDICAL INDUSTRIAL COMPLEX > Do drug companies make drugs or money?

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message 1: by James, Group Founder (last edited Jun 10, 2017 01:53AM) (new) - rated it 5 stars

James Morcan | 11100 comments Another excerpt from MEDICAL INDUSTRIAL COMPLEX: The $ickness Industry, Big Pharma and Suppressed Cures which I'm co-authored with Lance Morcan and which has a forward by long-time pharmacist and medical establishment insider Denis Toovey...


“It is clear from the evidence presented…that the pharmaceutical industry does a biased job of disseminating evidence – to be surprised by this would be absurd – whether it is through advertising, drug reps, ghostwriting, hiding data, bribing people, or running educational programmes for doctors.” –Ben Goldacre, British psychiatrist, science writer and author

Many people are alive today because of prescription drugs, and many more are enjoying a better quality of life because of prescription drugs. Let us be clear and unequivocal about that. And unsubstantiated criticism of the pharmaceutical industry, or any industry for that matter, does no-one any good.

We kept all that front of mind when conducting our research for this book.

Unfortunately, the inescapable fact is that much of the good Big Pharma does is undone by mistakes, dubious business practices, (reported/confirmed cases of) fraud and, quite simply, by greed.

Much has been written about Big Pharma in recent years. One of the most informative books on the industry is The Truth About the Drug Companies: How They Deceive Us and What to Do About It, by Marcia Angell, M.D., former editor of the highly respected New England Journal of Medicine.

The Truth About the Drug Companies How They Deceive Us and What to Do About It by Marcia Angell

The book’s splurge reads (abridged):

“Currently Americans spend a staggering $200 billion each year on prescription drugs. As Dr. 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. Meanwhile, as profits soar, the companies brazenly use their wealth and power to push their agenda through Congress, the FDA, and academic medical centers.

“Zeroing in on hugely successful drugs like AZT (the first drug to treat HIV/AIDS), Taxol (the best-selling cancer drug in history), and the blockbuster allergy drug Claritin, Dr. Angell demonstrates exactly how new products are brought to market. Drug companies, she shows, routinely rely on publicly funded institutions for their basic research; they rig clinical trials to make their products look better than they are; and they use their legions of lawyers to stretch out government-granted exclusive marketing rights for years. They also flood the market with copycat drugs that cost a lot more than the drugs they mimic but are no more effective.

“The Truth About the Drug Companies is a searing indictment of an industry that has spun out of control”.

Within the book itself, Dr. Angell describes the unethical and at times inhumane pharmaceutical industry she witnessed first-hand in her 21 years spent as the first female editor-in-chief of The New England Journal of Medicine. She also gives numerous examples to prove beyond dispute that the world’s biggest drug companies have grown so powerful they are now able to pull the strings and call many of the shots in medical academia, health research and even the way doctors and nurses go about their work.

Meanwhile, the public, including more and more of the poor, invalid and elderly, are unable to meet the cost of rapidly increasing prescription drug prices.

In a 2014 video interview with the University of Utah Health Sciences-powered Algorithms for Innovation, Dr. Angell said the relationship between pharmaceutical companies, governments and medical academia has become far too symbiotic and cozy.

“They (drug companies) get government-granted monopoly rights, patents and exclusive marketing rights. So, they really are doing very well. Society is taking good care of them. It seems to me that society could ask for something in return. And to say, look, as a price of some of these goodies that we give you, you cannot stop making antibiotics or vaccines or important drugs. This is a part of what you have to do to be so richly rewarded in our society.”

“We actually have some shortages in important and even life-saving drugs,” Dr. Angell went on to state in the Algorithms for Innovation interview. “And why is that? Because the drug companies don’t find them particularly profitable.”

The obvious implication in Dr. Angell’s expert assessment is that Big Pharma is no longer fixated on creating and manufacturing revolutionary drugs, but has instead become more focused on marketing existing products and maintaining control over the marketplace in order to continue to expand their vast fortunes.

Perhaps scarier still, Dr. Angell, who is currently Senior Lecturer in the Department of Social Medicine at Harvard Medical School, spoke in the same interview of the subservience academic medicine has toward the pharmaceutical industry. Subservience she suggested is mostly due to the fact that Big Pharma finances (either directly or indirectly) more and more research on drugs – especially their own products. For example, drug companies pay medical schools vast sums of money for royalties on their discoveries related to new drugs.

During her tenure overseeing the content of The New England Journal of Medicine, Dr. Angell said she eventually realized Big Pharma “were buying the hearts and minds of faculties and medical schools.”

Of course, Big Pharma would not have the ability to covertly pull the strings of so many interrelated facets of the medical establishment were it not for their vast financial empires.

For an insight into the profitability of the major pharmaceutical companies, take a gander at the top performers on the latest Fortune 500 list. (Fortune 500 being Fortune Magazine’s annual list of the top 500 US companies – publicly and privately listed – according to their gross revenues).

At the time of writing, the 2014 Fortune 500 list was the latest available. One of the best summaries of the pharmaceutical companies (drug wholesalers, chain pharmacies, pharmacy benefit managers (PBMs), and pharmaceutical manufacturers) we could find is on the very professional DrugChannels.net site. Compiled by Dr. Adam J. Fein, CEO of Drug Channels Institute, it’s an eye-opener for the uninformed.

As Dr. Fein informs the public, his data “will help you ‘follow the dollar’ and understand how drug channel intermediaries make money.”

The good doctor compares the fortunes of the eight listed drug channels companies (AmerisourceBergen, Cardinal Health, CVS Caremark, Express Scripts, McKesson, Omnicare, Rite Aid, and Walgreens) with Fortune 500’s 12 pharmaceutical manufacturers and a separate survey of independent pharmacies.

Dr. Fein reports “The 2013, median revenues for the eight drug channel companies were $95.1 billion, up 1.4% vs. 2012. Median revenues for the manufacturer group were $17.5 billion… The revenues of the 12 largest pharmaceutical manufacturers on the Fortune 500 list range from $67.2 billion (Pfizer) to $5.5 billion (Celgene)”.

In the report he quotes 2012 data supplied by the National Community Pharmacists Association’s 2013 NCPA Digest, which shows that independent pharmacies had higher profitability than the eight largest drug channels companies, including PBMs.

Dr. Fein also observes that, “In 2013...investment returns reflected last year's strong stock market performance”.

The median Total Return to Investors in 2013 as reported from Fortune's list is detailed as follows: 8 Drug Channels companies: +65.8% (range: +30.1% to +272.1%); 12 Drug Manufacturers: +34.8% (range: +7.3% to +115.3%).

Starting to get the picture? Big Pharma is mighty profitable.

So what’s the main modus operandi of these mighty profitable pharmaceutical companies? The New York Times kinda asks this same question in an article (dated June 2, 2014) headed ‘Do Drug Companies Make Drugs or Money?’

New York Times’ contributor Andrew Ross Sorkin quotes one Mike Pearson, chief executive of Valeant Pharmaceuticals International, whom he claims was “waxing poetic last week about the virtues of his company. He was doing so as he was trying to sell shareholders of Allergan, the maker of Botox, on his company’s $53 billion takeover bid”.

Sorkin continues, “Here’s what the investment firm Sterne Agee said in its recent research report: ‘The Allergan executive team is one of the best and most shareholder-focused in the pharmaceutical industry.’ The numbers tell the story: Allergan’s stock is up 290 percent over the last five years.

“And so what we’re left with isn’t a tale about a brilliantly innovative drug company trying to buy a mismanaged fixer-upper; it’s quite the opposite. Valeant, desperate for ways to increase its revenue, needs a cash cow to milk until it can find the next one”.

According to Forbes contributor John LaMattina, in an item (dated July 29, 2014) on Forbes.com, the title of Sorkin’s New York Times article “was taken from Harvard professor, Bill George, who asked: ‘Is the role of leading large pharmaceutical companies to discover lifesaving drugs or to make money for shareholders through financial engineering?’ ”

Good question!

LaMattina, who reports on developments in the pharmaceutical industry, says Professor George’s question was prompted by the spate of companies seeking to merge with foreign companies with the ultimate intent of lowering their corporate tax rates.

“However,” LaMattina asserts, “these comments play on the public’s concern that the pharmaceutical industry is primarily focused on making money – not drugs. This reinforces the notion that companies focus only on profits, and preferentially work on life-style enhancing drugs, or drugs that offer minimum improvements over existing therapies but for which companies charge exorbitant prices.

“The problem is that running a biopharmaceutical company is an expensive and high risk endeavor. If you cannot generate a very significant profit, you can’t survive”.

LaMattina concludes, “As crass as it may sound, the companies responsible for discovering and developing the next medical breakthroughs have to do so in a way that generates significant profits. If they don’t do that, investors will turn to other places to invest their money, and the companies will shrivel up and either be sold to another company or die.

“So the answer to the Sorkin/George question is ‘both’. A pharma company’s business is making drugs – and, in doing so it had better make profits”.

No-one can object to the drug companies making profits. Surely that’s the aim of all companies – to make profits.

But how much is too much?


MEDICAL INDUSTRIAL COMPLEX The $ickness Industry, Big Pharma and Suppressed Cures (The Underground Knowledge Series, #3) by James Morcan


message 2: by James, Group Founder (new) - rated it 5 stars

James Morcan | 11100 comments "Big Pharma Purposefully Stalling Medical Innovation" says Marcia Angell, M.D., former editor-in-chief of New England Journal of Medicine -- https://www.goodreads.com/videos/8303...


message 3: by K.P. (new) - added it

K.P. Merriweather (kp_merriweather) | 43 comments ooh :3


message 4: by James, Group Founder (last edited Jun 10, 2017 01:54AM) (new) - rated it 5 stars

James Morcan | 11100 comments Additional excerpt from MEDICAL INDUSTRIAL COMPLEX: The $ickness Industry, Big Pharma and Suppressed Cures:

Following from the preceding question: How much is too much?

Our criticism of Big Pharma is tempered by the knowledge that – as we acknowledge more than once elsewhere in this book – products developed, manufactured and marketed by the pharmaceutical companies save lives. (Some would argue they cost lives, too, but that’s another story).

However, we keep coming back to the questions that crop up whenever the pharmaceutical companies and their modus operandi are analyzed. Questions like: Why is so little money ploughed back into research? Why the continuing emphasis on treatments ahead of cures? And, regarding revenues and profits, how much is too much?

BBC News addresses this very issue in a report aired on November 6, 2014 under the title ‘Pharmaceutical industry gets high on fat profits.’ The report asks people to imagine an industry that generates higher profit margins than any other and is no stranger to multi-billion dollar fines for malpractice.

“Throw in widespread accusations of collusion and over-charging, and banking no doubt springs to mind. In fact, the industry described above is responsible for the development of medicines to save lives and alleviate suffering, not the generation of profit for its own sake”.

The BBC News report reminds us that pharmaceutical companies have, by far, developed most medicines known to Man, but have profited big-time in the process – “and not always by legitimate means”.

It continues, “Last year, US giant Pfizer, the world's largest drug company by pharmaceutical revenue, made an eye-watering 42% profit margin… five pharmaceutical companies made a profit margin of 20% or more…With some drugs costing upwards of $100,000 for a full course, and with the cost of manufacturing just a tiny fraction of this, it's not hard to see why…

“Drug companies justify the high prices they charge by arguing that their research and development (R&D) costs are huge. On average, only three in 10 drugs launched are profitable, with one of those going on to be a blockbuster with $1bn-plus revenues a year…

“But … drug companies spend far more on marketing drugs – in some cases twice as much – than on developing them. And besides, profit margins take into account R&D costs”.

The report concludes that the industry also argues that the wider value of the drug needs to be considered. However, it (BBC News) rightly points out that just because you can charge a high price for something does not necessarily mean you should. Especially when one factors in the lives at stake in the healthcare field.

The problem with that is – as we see it – the pharmaceutical companies and the shareholders they answer to would quickly dismiss such a rationale. They’re solely focused on the bottom line: profit.
Profit is not necessarily a dirty word when it comes to healthcare. We happen to believe capitalism, if managed properly, can actually work in medicine.
Profit incentives can spark imaginations in pharmacists and healthcare entrepreneurs and doctors as there's the reward aspect in capitalism which motivates people to find medical cures.

Otherwise, as evidenced in the past in places like Eastern Europe, when things go to the other extreme and there’s too much government interference it can be just as crippling and corrupting to necessities like healthcare. With little to no financial rewards on offer under communism or even some forms of socialism, most workers are less motivated and that even includes those in medicine.

So somehow there needs to be a balance between governments and non-profit review committees ensuring a medicine has a social conscience whilst also still allowing the free market work its magic.

Criticism of pharmaceutical companies has been taken a step further by internal medicine specialist-turned author Professor Peter C. Gøtzsche whose hard-hitting book Deadly Medicines and Organised Crime: How Big Pharma Has Corrupted Healthcare basically equates the drug companies to organized crime.

Deadly Medicines and Organised Crime How Big Pharma Has Corrupted Healthcare by Peter C. Gøtzsche

The book’s introduction states that Gøtzsche exposes the pharmaceutical industries and their charade of fraudulent behavior, both in research and marketing where the morally repugnant disregard for human lives is the norm. “He convincingly draws close comparisons with the tobacco conglomerates, revealing the extraordinary truth behind efforts to confuse and distract the public and their politicians.

“The book addresses, in evidence-based detail, an extraordinary system failure caused by widespread crime, corruption, bribery and impotent drug regulation in need of radical reforms”.

Professor Gøtzsche himself states the main reason we take so many drugs is that drug companies don’t sell drugs, they sell lies about drugs. “This is what makes drugs so different from anything else in life... Virtually everything we know about drugs is what the companies have chosen to tell us and our doctors... the reason patients trust their medicine is that they extrapolate the trust they have in their doctors into the medicines they prescribe. The patients don’t realize that, although their doctors may know a lot about diseases and human physiology and psychology, they know very, very little about drugs that hasn’t been carefully concocted and dressed up by the drug industry”.

Professor Gøtzsche, incidentally, graduated as a Master of Science in biology and chemistry in 1974 and as a physician in 1984 – so he’s well qualified to speak out on such matters. A Danish physician turned medical researcher, he worked with clinical trials and regulatory affairs in the drug industry from 1975 to 1983, and at hospitals in Copenhagen from 1984 to 1995.

The professor continues, “If you don’t think the system is out of control, please email me and explain why drugs are the third leading cause of death... If such a hugely lethal epidemic had been caused by a new bacterium or a virus, or even one-hundredth of it, we would have done everything we could to get it under control”.

In the pharmaceutical industry’s haste to get drugs to market, critics say safety usually comes a distance second to profits. Little wonder then that mistakes occur and the line between legitimate and spurious business practices is oftentimes blurred.


MEDICAL INDUSTRIAL COMPLEX The $ickness Industry, Big Pharma and Suppressed Cures (The Underground Knowledge Series, #3) by James Morcan


message 5: by David (new)

David Elkin | 507 comments A story from WSJ that makes you sick about the drug industry:

http://www.wsj.com/articles/pharmaceu...

Sub-headed thus: List prices soar on Valeant’s heart medications and other firm’s drugs, driving up costs


message 7: by David (new)

David Elkin | 507 comments I do not have an issue with profits. I do have an issue with price gouging.


message 8: by James, Group Founder (new) - rated it 5 stars

James Morcan | 11100 comments I agree capitalism can work for the people, but it needs to be regulated by our governments.

I would also argue what we have no is more cronyism or corporatocracy rather than capitalism and free market economics.


message 9: by David (new)

David Elkin | 507 comments Don't disagree James. Finding the middle always seems to be the best possible solution for most of the people.


message 10: by Lance, Group Founder (new) - rated it 5 stars

Lance Morcan | 2731 comments A world without antibiotics? Global push needed to avoid going back to the future http://www.abc.net.au/news/2017-01-14...

"The answer probably does not lie in rewarding Big Pharma, but instead in genuine cooperation from international agencies and national governments to work together to develop new antibiotics."


message 11: by Lynne (new)

Lynne Macdonald | 1 comments They make money. I feel there are cures for many "incurable" diseases but the companies make more money by giving them pills to take. Moral wrong but economically right for them. May they burn in hell.


message 12: by James, Group Founder (last edited Jun 11, 2017 10:44AM) (new) - rated it 5 stars

James Morcan | 11100 comments Lynne wrote: "Moral wrong but economically right for them..."

Bingo.
It's just sound business. That's all.
So we need honest governments who monitor these things and work hard to fight for the rights of individuals, not corporations.
There is nothing wrong with capitalism, BUT there is something wrong with unregulated capitalism where Big Business has almost no restrictions.
Thanks for posting, Lynne.


message 13: by Asli (last edited Jun 11, 2017 05:39PM) (new) - added it

Asli Theobald | 21 comments The Lancet is the world’s second most influential journal in general and internal medicine, according to the latest Journal Citation Reports of Thomson Reuters. In 2015, Horton published a much talked about editorial admitting how much fake research The Lancet publishes (http://www.thelancet.com/pdfs/journal...). Horton states:
The case against science is straightforward: much of the scientific literature, perhaps half, may simply be untrue. Afflicted by studies with small sample sizes, tiny effects, invalid exploratory analyses, and flagrant conflicts of interest, together with an obsession for pursuing fashionable trends of dubious importance, science has taken a turn towards darkness.

The drug manufacturers fund most of the research studies, they are also legally allowed to pay influential experts to promote the biased results of these studies... Who would have expected anything different from what Horton admits?


message 14: by James, Group Founder (last edited Jun 11, 2017 04:41PM) (new) - rated it 5 stars

James Morcan | 11100 comments I agree Asli, and also the other thing is it's been estimated that half of Big Pharma research is thrown out and not only can the public not study it but also doctors cannot either... Some say it's just miscellaneous research that's thrown out, while others suspect the other half is research that didn't generate the results Big Pharma wanted for their products...


message 15: by Asli (last edited Jun 11, 2017 05:48PM) (new) - added it

Asli Theobald | 21 comments More about the consequences of letting studies get funding by the drug manufacturers and allowing the industry to legally pay influential experts to promote these biased studies:

In 2005, Greek researcher John P. A. Ioannidis first announced that “much of what medical researchers conclude in their studies is misleading, exaggerated, or flat-out wrong," as reported by The Atlantic. (https://www.theatlantic.com/magazine/...) About Dr. Ioannidis and his research, The Atlantic also writes:
He’s what’s known as a meta-researcher, and he’s become one of the world’s foremost experts on the credibility of medical research. … His work has been widely accepted by the medical community; it has been published in the field’s top journals, where it is heavily cited; and he is a big draw at conferences. … Ioannidis may be one of the most influential scientists alive.

In one of his most famous papers published in 2005 in Plos Medicine, (http://journals.plos.org/plosmedicine...) Dr. Ioannidis spells out why his analysis made him reach his following conclusion summarized by The Atalantic:
80 percent of non-randomized studies (by far the most common type) turn out to be wrong, as do 25 percent of supposedly gold-standard randomized trials, and as much as 10 percent of the platinum-standard large randomized trials.

In another famous 2005 paper, Dr. Ioannidis has analyzed:
49 of the most highly regarded research findings in medicine over the previous 13 years … Of the 49 articles, 45 claimed to have uncovered effective interventions. Thirty-four of these claims had been retested, and 14 of these, or 41 percent, had been convincingly shown to be wrong or significantly exaggerated.(https://www.theatlantic.com/magazine/...)

The medical research literature is nothing less than a cesspool of misleading lies (if sounds like a rant, let it be one).


message 16: by Asli (last edited Jun 12, 2017 12:13PM) (new) - added it

Asli Theobald | 21 comments Researchers need to get published to build 'status' and keep publishing to become recognized, they are expected to bring grant money into their universities or private organizations. The drug companies provide the solution to both problems by funding studies for them. My researcher friend (who shall stay anonymous) says it is difficult for a researcher to survive if he does not learn to suck up to the drug companies. If his results are not in favor of drug company profits, his work would not be promoted with industry funds and he may have trouble getting another grant. Risk failure or sell your soul?


message 17: by James, Group Founder (new) - rated it 5 stars

James Morcan | 11100 comments Asli wrote: "Researchers need to keep publishing to stay afloat, they need to bring grant money into their universities, the drug companies provide the funds for studies. My researcher friend (who shall stay anonymous) says it is difficult for a researcher to survive if he does not learn to suck up to the drug companies. ..."

Yep, academia is part of the problem in many ways.


message 18: by James, Group Founder (new) - rated it 5 stars

James Morcan | 11100 comments Academic researchers and independent researchers in private organizations, as well.


message 19: by Asli (last edited Jun 13, 2017 02:32PM) (new) - added it

Asli Theobald | 21 comments Sure, both college teachers and private researchers.

This 2009 article in Dermatologic Therapy,
(http://onlinelibrary.wiley.com/wol1/d...) explains how the drug manufacturers use advanced analytics programs to identify the researchers who are most susceptible to corruption, then promote their biased and flawed research results to increase these researchers' influence and "status." ALL influential ADHD researchers are only these type of scientists who have sold their souls, literally, in exchange for influence and status. The "esteemed" Dr. Hallowell, Br. Biederman, Dr. Barkley Dr. Dodson and many more liars who were nothing before they started publishing ADHD research conducted and aggressively promoted with drug industry funds. I don't mean to sound like a Southern preacher (ha!) but these people have helped the Father of Lies the most by literally selling their souls. I know this sounds funny, but it is so PURELY and classically evil it fascinates me.


message 20: by James, Group Founder (new) - rated it 5 stars

James Morcan | 11100 comments Asli wrote: "I know this sounds funny, but it is so PURELY and classically evil it fascinates me. ..."

I agree Asli - that level of evil is fascinating.

Thanks for providing the info from your ADHD research.


message 21: by Asli (new) - added it

Asli Theobald | 21 comments Thank you James for your interest. Do you have any suggestions to what I can do to raise more awareness to all this?


message 22: by James, Group Founder (new) - rated it 5 stars

James Morcan | 11100 comments Asli wrote: "Thank you James for your interest. Do you have any suggestions to what I can do to raise more awareness to all this?"

There are no easy answers, Asli, as everyone is quite busy these days and information is coming at them from all directions.
So I would say just speak your truth loudly wherever you can - in books, in person and on social media or interviews. Often in this era, unless backed by a major publishing house, authors need to keep writing more books to get noticed and to attract a wide spectrum of readers by writing about different topics.
Best of luck with it all,
James


message 23: by Asli (new) - added it

Asli Theobald | 21 comments Thanks again. I'm in the process of learning how to market. Studying, studying! :)


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