Book cover

Whenever someone wants to talk about how great our society is, one example that always seems to come up is our many innovative and powerful new drugs invented by the pharmaceutical companies. Perhaps it’s just the $54 billion a year the companies spend on marketing, much of it going to ads talking about how innovative and helpful drug companies are, bur it does seem like these life-saving wonder pills have really captured the public’s imagination.

But in her new book, The Truth About the Drug Companies, Marcia Angell, former editor-in-chief of the respected New England Journal of Medicine, shows that much of what we thought about the drug companies is wrong. For one thing, they’re not innovative. Believe it or not, drug companies simply do not do research into major new drugs. All the real research is done at universities and funded by the government.

Thanks to the Bayh-Dole Act, universities can then patent these medical discoveries made by their employees using public funding, which they then turn around and sell to the drug companies for a relative song. Often the universities have done all the work — including clinical trials — and drug companies just start up the manufacturing plants.

Because the drug companies have bought exclusive patent rights, they can now charge whatever they like for these drugs without fear of competition. And what little research the drug companies do mostly involves coming up with “me too” drugs — modifying an existing drug a little bit (even things as minor as changing the color or coating it) and then filing new patents on the result so that the exclusive profits keep rolling in. Thanks to armies of lawyers and various FDA patent loopholes, drug companies can use various patent tricks to keep generic competitors away for years.

Even when competitors do finally arrive, the drug company marketing campaigns start up, encouraging everyone to switch to their new, slightly-different-but-patented drug. For example, take AstroZeneca’s heartburn drug Prilosec ($6 billion in annual sales): when its patent ran out, AstroZeneca took the inactive half off of Prilosec, repatented it, and marketed as Nexium. It then ran clinical trials which compared 20mg of Prilosec with 20mg of Nexium, but since half of Prilosec was inactive, this was like comparing 10mg of the old drug and 20mg of the new drug. Somewhat surprisingly, Nexium’s double dose appeared to be only slightly more effective, but AstroZeneca touted these results in a massive marketing campaign involving tons of ads and gobs of free samples, enough to get doctors to switch most prescriptions before the Prilosec patent ran out.

These marketing campaigns are huge: $11 billion a year in free samples, over $6 billion on sales reps (one for every five doctors), $3 billion on vague ads to consumers. But on top of this are massive campaigns of deception: bribing doctors, bribing researchers, bribing universities, bribing HMOs, providing kickbacks, running “medical education courses” which state law requires doctors to attend, running in-hospital television networks which are one long drug ad, and funding deceptive studies (like the Nexium one) that wrongly make it appear that the company’s new drug has amazing beneficial properties.

These studies are so pervasive that when the rare honest study is done, the results are incredible. The US government funded a massive study called ALLHAT (8 years, 42,000 people, 600 clinics) to compare diffrent treatments for high blood pressure. It compared a series of different popular modern drugs (Norvasc, Cardura/doxazosin, Zestril/Prinivil/lisinopril) which worked in different ways and an “old time diuretic” or “water pill”. The results were stunning: the diuretic was more effective and had less side effects than the expensive fancy new drugs — less heart failure and fewer strokes, so much so that the Cardura part of the trial had to be stopped early since so many people were getting heart failure. These expensive new drugs weren’t just wasting people’s money (as much as $678 a year per person), they were seriously hurting them.

But nobody prescribed diuretics, perhaps in part because nobody marketed them to doctors. Drug companies aren’t required by the FDA to compare their new drugs to older treatments, so doctors had no way to know which was more effective. And drug companies aren’t even required to publish the studies the FDA does require. For example, the study that led the FDA to approve antidepressants (like Prozac, Paxil, Zoloft, Celexa, Serzone, and Effexor) found that placebos were 80% as effective. But these studies weren’t released until fifteen years later, when someone filed a Freedom of Information Act request against the FDA. There are even worse cases: for decades, women were prescribed estrogen and progesterone hormone replacement therapy because industry-sponsored studies said it would prevent heart disease. But a large NIH clinical trial found the therapy actually increases heart disease!

Our utopia of miracle pills is now beginning to look a bit like a nightmare. Drug companies use our tax money to pay for their research, turn around and sell the results to us at high prices, spend the resulting profits on massive campaigns to mislead us about their effects, which then encourage doctors to prescribe an expensive pill which may not help much and might even make things worse. Year after year, drug companies are by far the most successful industry. They use their stunning profits to buy off politicians and propagandize the public into maintaining this state of affairs. Only by learning the true state of affairs can we begin to fight back.

posted March 25, 2005 06:27 PM (Books) (2 comments) #


The Case Against Lawrence Summers
Blogshine Sunday: US Greenlights, Funds Genocide
Fraud in Science
How is Disney like the Soviet Union?
Summer Founders
The Truth About the Drug Companies
The Truth About Maryland
Stanford: Mr. Unincredible
Lessons in Capitalism #1: Division of Labor
Stanford: Out at the Movies
Stanford: Form Without Content


Aaron - you must read the New Yorker article to get the best recent analysis including some critical takes on the book you cite.

posted by Ben Casnocha at March 25, 2005 08:33 PM #

I see the New Yorker is still carrying water for their drug company advertisers. Gladwell’s facts don’t seem to rebut the things he says they do. His claim that we the drug companies are less guilty because they managed to hoodwink other people is absurd. And his claim that low generic prices justify high drug prices makes zero sense — there’s no financial connection between the two.

I don’t know anyone who claims the amount of money spent on drugs means drug prices are too high, but Gladwell’s entire article centers around this straw man, even though Angell clearly says: “[one third of] The increase in drug spending reflects … the fact that people are taking a lot more drugs than they used to” before going on to analyze the specific cost of drug prices.

Gladwell even piles more on, implying that Angell must really support taking drugs away from people who need them! And his complaint that Angell doesn’t mention his uncited study finding employers who used a PBM with two programs saw a decrease of less than five percent seems a bit much.

Gladwell, so locked into exonerating the drug companies, is puzzled when he’s faced with the fact that Americans keep picking expensive drugs. Never mind that Angell spends most of her book explaining why, he can only conclude that drug users are being irrational.

Stuck in this framework, he fails to mention any of Angell’s solutions, like not making us pay extra for drugs invented with our tax money and stopping companies from advertising more expensive drugs when there’s no evidence they work better, Both solutions would be far more effective than Gladwell’s proposals of more me-too drugs and PBM interference, but Gladwell doesn’t even hint at them. He’s too busy trying to get his readers to blame the people, not the drug companies.

posted by Aaron Swartz at March 25, 2005 09:17 PM #

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