Big Pharma is the nickname given to the world's vast and influential pharmaceutical industry and its trade group, the Pharmaceutical Research and Manufacturers of America or PhRMA. These powerful companies make billions of dollars every year by selling drugs and medical devices.
Big Pharma wields enormous influence over the prescription drug and medical device markets around the globe. In the U.S., the industry contributes heavily to the annual budget of the U.S. Food and Drug Administration (FDA), which is charged with regulating drugs and devices made by those same companies.
The industry demonstrates its power, political might and social influence over the nation’s governments and agencies, its health care systems, its doctors and hospitals, as well as the psyche of the American people.
The global market for pharmaceuticals topped $1 trillion in sales in 2014. The world’s 10 largest drug companies generated $429.4 billion of that revenue. Five of the top 10 companies are headquartered in the U.S.: Johnson & Johnson, Pfizer, Abbot Laboratories, Merck and Eli Lilly.
With the help of staggering profits and 1,100-plus paid lobbyists, the industry has gained powerful leverage on Capitol Hill. From 1998 to 2014, Big Pharma spent nearly $2.9 billion on lobbying expenses — more than any other industry. The industry also doled out more than $15 million in campaign contributions from 2013-14.
But the large amount of cash Big Pharma bestows on government representatives and regulatory bodies is small when compared with the billions it spends each year on direct-to-consumer advertising. The U.S. is one of only two countries in the world whose governments allow prescription drugs to be advertised on TV (the other is New Zealand).
A single manufacturer, Boehringer Ingelheim, spent $464 million advertising its blood thinner Pradaxa in 2011. The following year, the drug passed the $1 billion sales mark. The money in this business appears to be well-spent.
Critics contend that Big Pharma uses manipulative, ubiquitous and expensive advertising to sway lawmakers, the FDA and the public, which in turn spurs on hypochondria and raises consumers’ health fears.
The American public is not the only sector of society influenced by Big Pharma’s techniques. Doctors, scientists and research organizations, medical journals, teaching hospitals and university medical schools all exhibit disturbing conflicts of interest between their publicly stated missions and their financial and ideological subjection to Big Pharma.
Doctors conduct research with funds from Big Pharma. Private charities and foundations account for a mere five percent of the estimated $100 billion spent on biomedical research in the U.S. each year. Pharmaceutical and medical device companies contribute approximately 60 percent.
Big Pharma also has a track record of hiring former government workers with valuable connections to gain political clout. The trade group PhRMA has more than 50 current or former staff members who once served in the political arena, including:
Using these connections to pursue industry goals, Big Pharma has a significant competitive advantage over the public interest.
Americans pay more than any other country in the world for pharmaceuticals – in some cases, thousands of dollars more per prescription. Big Pharma says this can’t be helped because of the astronomical costs of developing a new drug.
The truth is U.S. law allows drug companies to set the prices for drugs and protects them from free-market competition. Other countries set a limit on what companies can charge based on the benefit of the drug. The true cost of developing a drug is shrouded in mystery with many unverifiable figures reported by Big Pharma. Donald Light, a professor and expert on the pharma business model, said that while companies claim each new drugs costs them $1.2 billion, the true cost is more like 60 million.
The industry also avoids talking about how much it spends on marketing, almost double what it spends on research.
Big Pharma markets directly to doctors, consumers, researchers and institutions.
The industry persuades doctors to allow ghostwriting, paying physicians to attach their names to positive articles about a particular drug with the goal of seeing it published in a reputable medical journal.
Often the commentary is little more than an advertisement penned by a company-paid copywriter showcasing a new product. Big Pharma used ghostwriting to promote numerous drugs, including the antidepressant Paxil, the recalled weight loss drug Fen-Phen, the anti-epilepsy drug Neurontin, the antidepressant Zoloft and painkiller Vioxx, to name a few.
In addition, even when a medical reviewer writes a comprehensive assessment of a new drug for a medical journal, it is common practice for those supposedly unbiased professionals to be on Big Pharma’s payroll.
These slanted studies appear in medical journals that are widely hailed as collections of unbiased scientific evaluation and separated from the long financial arm of pharmaceutical industry influence. Yet Richard Smith, former editor of the British Medical Journal, says, “All journals are bought – or at least cleverly used – by the pharmaceutical industry.”
Big Pharma tends to weaken the objectivity of even the most honest health professionals while encouraging them to overprescribe medications. Consider the numbers:
Many medical journals, including the esteemed Journal of the American Medical Association, actively vie for the attention of Big Pharma advertising dollars, billing themselves as the best way for drug companies to reach their professional readership.
Then there are medical researchers, who are hardly immune to Big Pharma’s financial power. Because drug companies sponsor clinical trials that researchers are paid to administer, too often the academics and scientists are hired hands who supply human subjects and collect data according to the instructions from their corporate employers.
Sponsors keep the data, analyze it, write the papers and decide whether and when and where to submit them for publication. Drug companies also stage-manage trials to produce predetermined outcomes that will put their products in the best light.
Big Pharma has also infiltrated medical schools. Teachers, department chairs and deans are known to sit on drug companies’ boards of directors which in turn influences educational content. Money from Big Pharma supports programs within many medical schools and teaching hospitals, and company reps are given access to young doctors to promote their wares.
The result is doctors not only receive biased information but also learn a drug-intensive style of medicine. They come to believe that there is a drug for everything and that new drugs (of which they have many free samples) are always better than old ones.
In most states, doctors must also take accredited education courses, called continuing medical education (CME). The pharmaceutical industry provides a substantial proportion of the billions spent on CME annually and continues to use that support as a marketing tool.
In addition, academic centers are able to receive royalties from Big Pharma on any drug or technology they help to create and patent as a result of research, sometimes underwritten with government funds. Columbia University, for example, received nearly $790 million from licensing agreements with biotech and pharmaceutical companies during the 17-year life of its medical school’s patent on a method for synthesizing certain biological products.
The majority of drugs and medical devices have ties to a small group of parent companies. Prescription drugs and devices manufactured by these companies bring in billions in profits but may leave consumers with serious adverse side effects. The suffering experienced by users of the drugs and devices is hard to quantify.
In 2014, the top 10 pharmaceutical companies (by sales) are shown in the accompanying table.
|In 2014, the top 10 pharmaceutical companies (by sales):|
|Johnson & Johnson||$74.3 Billion||$71.3 Billion|
|Novartis||$57.9 Billion||$57.3 Billion|
|Roche||$49.8 Billion||$45.5 Billion|
|Pfizer||$49.6 Billion||$51.5 Billion|
|Sanofi||$43 Billion||$42 Billion|
|Merck||$42.2 Billion||$44.0 Billion|
|GlaxoSmithKline||$37.9 Billion||$41.6 Billion|
|AstraZeneca||$26.0 Billion||$25.7 Billion|
|Bayer||$25.4 Billion||$24.1 Billion|
|Gilead||$24.4 Billion||$10.8 Billion|
In 2009, Pfizer faced both criminal and civil allegations over illegal marketing of drugs like Bextra, Geodon, Zyvox, Lyrica, Neurontin, Detrol and Lipitor. Pfizer was accused of telling doctors that certain drugs could be used for unapproved uses and defrauding the Medicaid program. The case ended with Pfizer agreeing to a $2.3 billion settlement and a five-year integrity agreement with the Department of Health and Human Services.
Additionally, Pfizer is responsible for selling drugs that can have serious side effects. For example, Effexor, the best-selling antidepressant of 2007 that was used by 17.2 million people that year, and Zoloft, an antidepressant used by 35.7 million people in 2011, have led to a low risk of birth defects when taken during pregnancy. As a result, many families sued the pharmaceutical giant.
Sells and markets more than 330 drugs in the U.S.
Lyrica (nerve pain), Celebrex (arthritis pain), Lipitor (statin for cholesterol), Advil (pain relief), Viagra (erectile dysfunction), Chantix (smoking cessation), Zoloft (antidepressant), Eliquis (blood thinner)
Johnson & Johnson (J&J) is a family-centric pharmaceutical company that engenders trust by offering a variety of inexpensive but useful medical products like Band-Aids, Tylenol and Baby Shampoo. J&J is made up of around 250 subsidiaries and more than 129,000 employees and generated $74 billion in sales in 2014. Some of those subsidiaries, however, created products with disabling side effects.
Ethicon, a subsidiary of J&J, makes sutures and other surgical items, including vaginal mesh implants like Gynecare Prosima, Gynecare TVT Secure and Gynecare Prolift. These products were designed to treat pelvic organ prolapse and stress urinary incontinence, but instead Ethicon faced more than 1,800 lawsuits over the products after patients suffered from organ perforation, mesh erosion or other complications. J&J settled more than 100 lawsuits for undisclosed amounts, but it has more than 1,000 remaining against it.
DePuy, another J&J subsidiary, also sold faulty products. DePuy’s ASR and Pinnacle hip implants contain metal components that can release metal debris into patients. More than 12,000 patients sued DePuy over its hip implants, and J&J set aside $1 billion to cover the ASR recall and hip lawsuits.
J&J’s also faces litigation involving its blood thinner, Xarelto. Since there is no way to control bleeding in patients taking Xarelto, even minor accidents can be life threatening. Hundreds of Xarelto lawsuits are pending in an MDL in Lousiana and a mass tort court in Philadelphia.
J&J’s other problematic products include the antipsychotic Risperdal and power morcellators, for which the company faces hundreds of lawsuits. Experts also believe J&J could face litigation over its Type 2 diabetes drug Invokana.
Sells and markets more than 180 drugs in the U.S. and hundreds of medical devices such as hip, knee, breast and transvaginal mesh implants.
Xarelto (blood thinner), Tylenol (pain killer), Benadryl (allergy medication), Risperdal (antipsychotic), Invokana (Type 2 diabetes), Ethicon Gynecare Prolift mesh implant, Gynecare TVT mesh implant, DePuy ASR and Pinnacle hip implant.
GlaxoSmithKline (GSK) is one of the world’s largest pharmaceutical companies. Based in Brentford, England, GSK was built through mergers of smaller companies that existed as early as the 1800s. It employs more than 97,000 people in three departments: pharmaceuticals, vaccines and consumer health care.
GSK’s once-popular diabetes pill, Avandia, is linked to an increased risk of heart attack, stroke and heart failure. The FDA estimates that the drug is responsible for 100,000 heart attacks and severely restricted use of the drug. Glaxo settled an estimated 50,000 Avandia lawsuits so far.
GSK faced scandal once again when certain drugs, including Paxil and Wellbutrin (antidepressants) and Advair (for asthma), were marketed illegally. The court held GSK responsible for marketing the antidepressants and asthma drug for unapproved uses and also hiding the side effects of Avandia. The case ended in July 2012 with GSK pleading guilty and paying a $3 billion fine – the largest health care fraud settlement to date. Paxil is also associated with serious side effects like birth defects and an increased risk of suicidal thoughts.
GSK now faces lawsuits claiming its drug Zofran, approved to prevent and treat nausea after chemotherapy and surgeries, caused birth defects when taken by women who were pregnant. The illegal promotion of Zofran was another one of the charges brought against GSK in its 2012 fraud settlement.
Markets or distributes more than 180 drugs in the U.S.
Avandia (Type 2 diabetes), Paxil (antidepressant), Wellbutrin (antidepressant), Advair (asthma and COPD), Abreva (cold sore treatment), Flonase (nasal spray for allergies), Levitra (erectile dysfunction), Valtrex (herpes), Zofran (nausea after chemotherapy or surgery)
Merck & Co., the second largest U.S. drug company, is a force to be reckoned with. Its parent company opened in Germany in 1668, and the U.S. company was established in 1891. Founded by Friedrich and George Merck, the company has 83,000 employees and its revenue for 2014 was $42.2 billion.
Vioxx brought scandal to the company, as thousands of users reported instances of cardiac side effects, including fatal outcomes. Tens of thousands of lawsuits targeted Merck. The company paid out billions of dollars in settlements.
Merck also faces litigation for Fosamax (to prevent bone loss), Januvia (for type 2 diabetes), NuvaRing (a birth control ring) and Propecia (to prevent male baldness). Using these products resulted in devastating side effects for thousands of consumers. The FDA released updated safety labels to communicate these dangers, and many people filed lawsuits against Merck.
Sells and markets more than 119 drugs in the U.S.
Vioxx (pain killer), Fosamax (prevents bone loss), Januvia (Type 2 diabetes), NuvaRing (birth control), Propecia (prevent male hair loss)
The Bayer Group, which celebrated its 150th anniversary in 2013, is a leading global innovator with 280 subsidiaries worldwide in the fields of health care, agriculture, synthetic materials and business services. The company employs more than 118,000 people and had $25.4 billion in sales in 2014. Bayer HealthCare is responsible for pharmaceuticals, diagnostic imaging, and popular over-the-counter medications and supplements like aspirin, Aleve, Alka-Seltzer and One A Day vitamins.
Bayer HealthCare is also known for its focus on women’s health needs, including its popular birth control pills Yaz and Yasmin and its IUDs Mirena and Skyla. Unfortunately, these products have been linked to serious, life-threatening side effects. The FDA warns that the hormone used in Yaz and Yasmin significantly increases the risk of dangerous blood clots. Mirena can lead to problems like device migration or expulsion, pelvic inflammatory disease and ectopic pregnancy.
Bayer has already spent an estimated $1 billion settling 4,800 Yaz lawsuits over blood clot-related injuries. Bayer faces thousands more lawsuits and has reserved $1.5 billion for settlements. Mirena lawsuits blame Bayer for intentionally selling a defective product. They also claim the company’s advertising misled consumers by exaggerating the benefits and inadequately warning of its risks—something the FDA has warned Bayer about.
Bayer also faces hundreds of lawsuits claiming its blood thinner Xarelto caused internal bleeding.
Sells and markets about 60 drugs in the U.S.
Xarelto (co-markets with J&J, blood thinner), Avelox (antibiotic), Cipro (antibiotic), Levitra (co-markets with GlaxoSmithKline, erectile dysfunction), Mirena (IUD birth control), Yaz/Yasmin (birth control pill)
Eli Lilly & Co. is an international pharmaceutical manufacturer based in Indianapolis. Launched in 1876 by cotton-farmer-turned-pharmacist Colonel Eli Lilly, the company raked in total revenue of $19.6 billion in 2014. Eli Lilly employs more than 41,000 people worldwide, markets its products in 125 countries and has manufacturing plants in 13 countries. The company specializes in the areas of diabetes, bio-medicines, emerging markets, oncology and animal health.
While known for such advancements as selling the first commercially available insulin and being among the first to mass-produce penicillin in its early days, Eli Lilly has also been linked to a variety of drug-related controversies and lawsuits. One of its most popular drugs, Prozac, is the target of multiple lawsuits that claim it can lead to suicidal thoughts and birth defects if used during pregnancy. Eli Lilly also has helped to market controversial products, including the diabetes drugs Actos, Byetta, Tradjenta, and the SGLT2 inhibitors Jardiance and Glyxambi.
Sells and markets more than 40 drugs in the U.S.
Cymbalta (SSRI antidepressant), Prozac (SSRI antidepressant), Actos (Type 2 diabetes), Byetta (Type 2 diabetes), Tradjenta (Type 2 diabetes), Jardiance (Type 2 diabetes), Glyxambi (Type 2 diabetes), Zyprexa (antipsychotic)
Albert Boehringer founded the company in 1885, and its success continues to this day. Headquartered in Ingelheim, Germany, the drugmaker employs more than 47,000 people who operate its 145 branches worldwide. With the combined success of its top-selling drugs Pradaxa, Tradjenta and Spiriva, Boehringer achieved $15.1 billion in sales in 2014.
Litigation related to the safety of some of Boehringer’s drugs chipped away at the company’s impressive profits. After reports of thousands of injuries and more than 500 deaths among Pradaxa users over a two-year period, patients filed more than 4,000 lawsuits against Boehringer. The company settled allegations regarding Pradaxa’s bleeding risks for $650 million in 2014.
As Boehringer continues to struggle with regulatory fines over waste disposal and ongoing quality control issues at its factories, the company may also face lawsuits over Tradjenta, a diabetes medication Boehringer developed with Eli Lilly & Co.
Sells and markets more than 35 drugs in the U.S.
Spiriva (COPD inhaler), Pradaxa (blood thinner), Jentadueto (Type 2 diabetes), Tradjenta (Type 2 diabetes)
Some of Stryker’s hip and knee implants left patients needing costly and traumatic revision surgeries. Two of Stryker’s hip designs, the Rejuvenate and ABG II, come with metal parts that can corrode and cause metal poisoning and intense pain. An estimated 20,000 Americans received one of these devices before they were recalled in 2012. The number of hip lawsuits against Stryker continues to grow.
Stryker also marketed knee implants associated with disabling side effects. The Duracon, Scorpio and EIUS Unicompartmental Knee Systems have all been partially or completely recalled to protect patients. Stryker is facing lawsuits over EIUS implants.
Manufactures several medical devices, including hip and knee implants
Rejuvenate hip implant, ABG II hip implant, EIUS Unicompartmental Knee Systems
Bard lost mesh lawsuits for $5.5 million and $2 million in 2012 and 2013. The company settled more than 500 cases for $21 million in 2014 and an additional 3,000 cases for about $200 million in 2015 to resolve the majority of its remaining mesh lawsuits.
Now Bard is facing a growing number of lawsuits in a multidistrict litigation (MDL) court regarding the high failure rates of its Recovery, G2 and G2 Express IVC filters.
Manufactures cardiovascular, urological and surgical products, including surgical mesh
Avaulta (transvaginal mesh implant), Pelvilace (transvaginal mesh implant), Recovery (IVC) filter, G2 (IVC) filter, G2 Express (IVC) filter
From 2010 through 2013, the manufacturer was wrapped up in patent infringement lawsuits with competitors Johnson & Johnson and OrbusNeich over its heart stent products. In 2014, Boston Scientific began defending the first of 6,000 lawsuits filed over health complications with Pinnacle and Obtryx, two of the manufacturer’s mesh products. It settled 3,000 cases for $119 million in 2015.
Manufactures medical devices for several health needs, including cardiovascular, digestive and gynecological diseases.
Obtryx Sling System (bladder sling, transvaginal mesh implant), Pinnacle Pelvic Floor Repair Kit (prolapse repair, transvaginal mesh implant), Advantage Fit Transvaginal Mid-Urethral Sling System (transvaginal mesh implant)
Humira treats rheumatoid arthritis, psoriasis, Crohn’s disease, ulcerative colitis and other autoimmune diseases. It was the world’s No. 1 drug in 2013, bringing in $10.7 billion. AndroGel generated more than $1.4 billion in 2013, and controlled 60 percent of the TRT market. Those numbers will likely fall in 2015, when a generic testosterone gel is set to enter the market.
However, the company’s prized testosterone product could end up costing it a lot of money in court. AbbVie is fighting allegations that it failed to warn consumers about AndroGel’s heart risks for men, which led to lawsuits against the drugmaker.
Sells and markets more than 40 drugs in the U.S.
Humira (arthritis, Crohn’s Disease), AndroGel (testosterone replacement therapy), Depakote (seizures, bi-polar disorder), Vicodin (pain relief)
Personal injury lawsuits over Cook Medical’s Biodesign and Surgisis transvaginal mesh products are pending in multidistrict litigation. While the company’s surgical grafts are made with biological materials and not synthetic mesh, women have experienced a similar range of side effects, including severe pain, infection and tissue erosion.
Manufactures medical devices in a number of areas from oncology to women’s health.
Biodesign Urethral Sling (transvaginal mesh implant), Surgisis Urethral Sling (transvaginal mesh implant), Celect IVC Filter, Gunther Tulip IVC Filter
Bristol-Myers Squibb (BMS) is one of the largest drug companies in the world, with nearly 30,000 employees and 2014 sales of $15.9 billion. The company is known for innovation in biological and pharmaceutical research, including the antipsychotic Abilify (which it helps market) and its blood thinners: Plavix and Eliquis.
BMS faces growing litigation over two of its diabetes products, Byetta and Bydureon. The injectable drugs are linked to pancreatitis and pancreatic cancer. With $517.7 million in sales in 2011, Byetta was a tremendous success for its developer, Amylin Pharmaceuticals. When Bristol-Myers Squibb acquired Amylin in August 2012, it gained control of its blockbuster diabetes medications – and possibly liability for the drugs.
Two of its newer products, the Type 2 diabetes drug Farxiga and the blood thinner Eliquis, could cause the company problems as well. SGLT2 inhibitors like Farxiga have been linked to a deadly condition called ketoacidosis and a lawsuit was filed against BMS claiming Eilqiuis caused irreversible bleeding leading to a death.
Sells and markets about 44 drugs in the U.S.
Abilify (antipsychotic), Plavix (blood thinner), Eliquis (blood thinner), Byetta (Type 2 diabetes), Farxiga (Type 2 diabetes)
Endo International is a small, specialty health care company with a global headquarters in Dublin, Ireland, and a U.S. headquarters in Malvern, Pennsylvania. The company employs several thousand employees worldwide. Endo develops manufactures, markets and distributes pharmaceutical products and medical devices through its four operating companies: American Medical Systems (AMS), Endo Pharmaceuticals, Paladin Labs and Qualitest.
In May 2014, American Medical Systems settled 20,000 federal and state lawsuits over its transvaginal mesh implants for $830 million. A year earlier, the company settled a number of claims for $54.5 million. An estimated 5,000 mesh lawsuits against AMS remain.
Endo Pharmaceuticals, which is known for the narcotic painkiller Percocet, makes three testosterone products: Delatestryl, Fortesta and Aveed. Lawsuits over controversial testosterone replacement therapy are mounting, and the company faces several in multidistrict litigation court.
Sells and markets about 60 drugs and a number of medical devices in the U.S.
Percocet (pain killer), Fortesta (testosterone replacement), Aveed (testosterone replacement)
Coloplast is a Denmark-based company that supplies “intimate health care products” — including catheters, ostomy bags, wound dressings, skin cleansers, antifungal products and vaginal mesh — to hospitals, retailers and directly to consumers in some markets. The headquarters is in Humlebaek, Denmark, and the U.S. headquarters is in Minneapolis. The company employs 8,500 people in 55 countries.Coloplast’s image took a hit in recent years because of litigation involving its transvaginal mesh products and reports of injuries caused by the implants. The company and several other mesh manufacturers face lawsuits in U.S. federal and state courts from women who report significant injuries from the devices.
In 2014, the company settled 400 mesh cases for $16 million, amounting to $40,000 for each woman. The company has set aside DKK 3 billion ($455 million) to cover mesh lawsuits.
Sells and markets a number of health products including catheters and transvaginal mesh.
Ristorelle Flat Mesh (transvaginal mesh implant)
Daiichi Sankyo is a global pharmaceutical holding company and the second largest drug company in Japan. It makes pharmaceuticals for people and animals and manufactures medical tools and equipment. It also produces food, food additives, livestock feeds and agrochemicals.
Its top-selling blood pressure drug, Benicar (olmesartan medoxomil), brought in $3.1 billion worldwide in 2013 and $2.4 billion in 2014, making up more than a quarter of the group’s sales. The patent expires in 2016, but the drug is already causing legal headaches for the company.
The company claims the drug is superior to other drugs in the angiotensin receptor blocker (ARB) class. However, according to research and the FDA, no other drugs in this class cause severe intestinal issues known as sprue-like enteropathy. Symptoms include chronic diarrhea and weight loss. More than 900 patients who suffered from these side effects filed lawsuits against Daiichi Sankyo, claiming they were not warned about the risk.
Sells and markets 8 drugs in the U.S.
Benicar (blood pressure)
AstraZeneca is a biopharmaceutical company that develops and markets drugs in areas ranging from cardiovascular and metabolic diseases to oncology. The company grew from the merger of Astra AB and Zeneca Group PLC in 1999 to bring in more than $26 billion in revenue in 2014. The company bought partner Bristol-Myers Squibb’s diabetes division in 2014.
AstraZeneca developed blockbuster drugs like Prilosec and Symbicort, but some of its drugs may cause unintended side effects. Crestor may cause liver damage and Type 2 diabetes. Onglyza may increase the risk of pancreatitis and heart failure. Farxiga may cause kidney problems, and Nexium was linked to an increase in heart attack risks.
AstraZeneca has a history of legal trouble too. The company paid a fine of $520 million to the U.S. Department of Justice for illegally promoting Seroquel and settled thousands of lawsuits involving Seroquel for $647 million.
Develops and markets more than 45 drugs in the U.S.
Nexium (acid reflux), Onglyza (Type 2 diabetes), Crestor (heart disease) and Farxiga (Type 2 diabetes)