Big Pharma is the nickname given to the world’s vast and influential pharmaceutical industry and its trade and lobbying group, the Pharmaceutical Research and Manufacturers of America or PhRMA.
The industry wields enormous influence over the prescription drug and medical device markets around the globe. In fact, in the United States 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.
In addition, Big Pharma 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. Because of the industry’s 1,100-plus paid lobbyists on Capitol Hill, its $188 million annual lobbying budget and the $14 million or so it doles out to political candidates every year, the United States, which makes up 5 percent of the world’s population, accounts for 34 percent of the money spent on prescription drugs.
In 2009, the world’s 12 largest drug companies made a net profit of nearly $78 billion on revenues of $434 billion. (Seven of the 12 are headquartered in the United States: Johnson & Johnson, Pfizer, Abbot Laboratories, Merck, Wyeth, Bristol-Myers Squibb and Eli Lilly.) The next three dozen companies combined raked in $46 billion on revenues of $203 billion. By 2014, the global market for pharmaceuticals is expected to reach $1.1 trillion.
But the large amount of cash Big Pharma bestows on government representatives and on regulatory bodies is small when compared with the more than $4 billion it spends each year on direct-to-consumer advertising.
For example, a single manufacturer, Boehringer Ingelheim, spent $464 million to advertise its blood thinner Pradaxa in 2011. The following year, Pradaxa passed the $1 billion sales mark. The money in this business appears to be well-spent.
The United States is one of only two countries in the world whose governments allow prescription drugs to be advertised on TV (the other is New Zealand).
Who is Big Pharma?
When it comes to drugs taken and devices used by the American public, a handful of parent companies come into view: Pfizer, Johnson & Johnson, Merck, GlaxoSmithKline and Eli Lilly. A handful of other companies are also under a microscope because of recent drugs or devices whose effectiveness has come into question. Those companies include Bard, Stryker, Novartis and P&G.
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.
Operating in more than 150 different countries and employing 110,600 people, Pfizer is the world’s largest pharmaceutical company and manufactures products in five areas:
- Specialty care and oncology
- Animal health
- Primary care
- Consumer health care
In 2009, Pfizer faced both criminal and civil allegations over illegal marketing of drugs like Bextra, Geodon, Zyvox, Lyrica, Nuerontin, 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 birth defects when taken during pregnancy. As a result, many families have sued the pharmaceutical giant.
Johnson & Johnson
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 129,000 employees and generated $67 billion in sales in 2012. 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 is facing more than 1,800 lawsuits over the products, after patients suffered from organ perforation, mesh erosion or other complications.
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 have sued DePuy over its hip implants, and J&J has set aside $1 billion to cover the ASR recall and hip lawsuits.
J&J is expected to be involved in litigation again soon – this time over its blood thinner, Xarelto. Xarelty is similar to another blood thinner, Pradaxa, which is associated with bleeding accidents and heart problems. Since there is no way to control bleeding in patients taking Xarelto or Pradaxa, even minor accidents can be life threatening. Pradaxa lawsuits are mounting, and Xarelto lawsuits could follow.
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 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 has 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 suicidality.
Merck & Co.
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 2012 was $47.2 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 has resulted in devastating side effects for thousands of consumers. The Food and Drug Administration has spent time updating safety labels to communicate these dangers, and many people have filed lawsuits against Merck.
Stryker Orthopaedics, which controls about 25 percent of the U.S. hip and knee implant market, started as a small business with a single product: a mobile hospital bed. The orthopaedic division is one part of Stryker Corp., which employs 20,000 people and reached sales of $8.7 billion in 2012.
Some of Stryker’s hip and knee implants have 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.
Charles Russell Bard began a medical company in 1907 to help treat urinary discomfort. Today the business, known as C.R. Bard, employs 12,000 people and sells 8,000 products in the fields of oncology, urology and surgery. Operating in 90 countries, Bard brought in sales of 2.8 billion in 2011.
Unfortunately, not all of Bard’s ventures have been successful. Bard sold dangerous products such as heart catheters, mesh surgical patches and transvaginal mesh products. The transvaginal mesh products, which are used to treat incontinence and pelvic organ prolapse in women, have been associated with painful side effects, such as erosion and organ perforation.
Christine Scott filed a lawsuit after receiving a Bard Avaulta mesh product and suffering irreversible injuries. In July 1012, a jury held Bard responsible for $3.6 million in damages. That was the first of around 2,000 Bard mesh lawsuits to go to trial. Federal lawsuits have been consolidated into multidistrict legislation (MDL) in West Virginia.
How Does Big Pharma Work?
Critics contend that Big Pharma uses manipulative, ubiquitous and expensive advertising to sway lawmakers, the FDA and the public. Drug companies spend substantially more on marketing than they do on research and development, 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 subservience to Big Pharma.
Doctors are still some of the most trusted people in our society. They study for many years, take an oath to “do no harm” and vow to depend only on accepted medical science to guide and support their professional conduct and decisions they make on behalf of patients.
But doctors complete some of their expert research with funds from Big Pharma. For instance, in 2007 the industry paid for more than half of the $100 billion that went into research.
Big Pharma Sways Opinions
Doctors may be persuaded to allow ghostwriting, which involves Big Pharma paying physicians to attach their names to positive article 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 newer product. Ghostwriting was used 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, who is an expert in the field, 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. In 1998, a study of the prestigious New England Journal of Medicine found that out of 75 published articles, nearly half were written by authors with financial conflicts. And, worse than this, only two of the articles disclosed interests.
Those medical journals 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 over-prescribe medications. Consider the numbers:
- Advertising instead of research: For every $1 spent on “basic research,” Big Pharma spends $19 on promotions and advertising.
- Distribution of free drug samples: The United States has 1 pharmaceutical sales representative for every 5 office-based physicians .
- Sponsorship of symposiums and medical conventions: Drug and medical device makers spend lavishly on doctors, including covering meals, travel, seminars and conventions that may look more like vacations .
It is not uncommon for Big Pharma to pull its ads when those same journals question the accuracy of an advertisement, or run an article contrary to Big Pharma’s agenda. That kind of hardball intimidation has a chilling effect on editors and publishers who must weigh their scientific objectivity with the requirements of running a business, especially when Big Pharma can make up the vast bulk of a journal’s advertising revenue.
Indeed, 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.
Big Pharma and Researchers
Then there are medical researchers, who are hardly immune to Big Pharma’s financial power. Because drug companies are the principal sponsors of the 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 have discovered ways to stage-manage trials to produce predetermined outcomes that will put their products in the best light.
Bad drugs can be made to look good by:
- Comparing them to a placebo
- Comparing them to a competitor’s medication in the wrong strength
- Pairing them with a drug that is known to work well
- Shortening a trial before any bad results surface
- Testing in groups too small to provide valid evidence
Another popular research trick is the technique of “data mining,” wherein small subgroups of an unsuccessful trial are scrutinized in search of any group for whom a benefit does emerge, or seems to.
Finally there is selective presentation. A company may conduct 1,000 trials. If two are positive, they get FDA approval and are published. The other 998 never see the light of day.
Medical Schools and Big Pharma
Big Pharma also infiltrated medical schools. Teachers, department chairs and deans are known to sit on drug companies’ boards of directors, and that 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 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 $300 million from more than 30 biotech companies during the 17-year life of its medical school’s patent on a method for synthesizing certain biological products.
There are hopes that the future of Big Pharma will change, since President Obama’s Affordable Care Act requires that starting in September 2013, companies will need to collect data and openly report information on payments, investment interests, ownership and items of value given to doctors and hospitals – but this is only a small step.
Lawsuits also reveal monetary persuasion offered to doctors. For example, two patients receiving faulty hips made by Stryker discovered that the surgeon who implanted the devices had been given $225,000 to $250,000 from the manufacturer for “consultation services.”
Big Pharma appears less interested in the health of the American public than it is in fulfilling its fiduciary responsibility to its shareholders. And because Big Pharma’s influence is so extensive, and self-interest is the motive of its giant network, the well-being of society may be in serious jeopardy.