Dancing To Big Pharma’s Tune

Two researchers writing in the British Medical Journal have concluded that despite what they say, Big Pharma is putting peanuts into developing new drugs. Joel Lexchin, MD, York University Toronto, and Donald Light, PhD, University of Medicine and Dentistry Cherry Hill, N.J. claim that most of the big drug makers put the bulk of their bucks into “tweaking” their big sellers in an effort to stretch their patent rights out as far as possible and that, much more, the real big bucks go into marketing. 

Additional research published by Dr. Lexchin along with Marc-André Gagnon, Université du Québec, Montreal, adds to the evidence that the drug makers’ claims that they spend more, on developing new drugs than in pushing existing best selling drugs are nonsense. The oft quoted $1.3 billion cost to bring a new drug to market breaks down quickly under the researchers’ lens. Half of that figure is what the drug company could have earned had they invested their bucks in a high flying index fund over a 15-year period. Tax deductions and credits make up another quarter (that’s our money), whittling the cost down to $330 million. Wait, even that figure is based on the most expensive new drugs, the top twenty percent. When you figure in all new drugs they come in at about $90 million a pop; a lot of money but a long way from $1.3 billion dollars. 

Meanwhile the real money goes into marketing. While the big drug companies make it really hard to come up with any numbers, Lexchin and Gagnon dug deep into multiple sources and concluded that the most modest estimate they could come up with had the drug companies spending twice as much on promotion as on R&D. This shell game behavior is nothing new; fifty years ago Senator Estes Kefauver came to roughly the same conclusions at the end of his Senate hearings. 

The tons of cash Big Pharma’s “K” Street agents pour into the pockets of the Congress have road-blocked any progress. A House Committee recently blamed FDA regulations for crucial drug shortages. A survey of doctors put the blame on the drug companies. These people are playing with our lives and driving up the cost of healthcare. Senator Bernie Sanders has a great idea; instead of the tax breaks we give the drug companies, offer grants to companies that develop new drugs. The drug companies would score big profits immediately; an incentive to keep working on more new drugs. Drugs that would be available in generic form immediately.

As opposed to a system that now has the drug companies making deals with generic manufacturers that end up holding generics off the market for years. The so-called "pay-for-delay" scheme has generic makers challenging the name brand Pharmas’ patents in court. Then settling for a deal that keeps the patent holder out of the generic market once the patent does expire. The FTC has been fighting this scam for years. Congress even tried to bar the practice, but the “K” Street types cut those efforts off at the pass. And in the end the alley cat ethics of Big Pharma leave us with the bill.                                                                                                 © 2012 GLG