Drugmakers Blackmail the Public

Author Marica Angell says her research shows their huge influence over Congress, the FDA, and doctors is harming Americans. After she stepped down in June, 2000, as interim editor-in-chief of the New England Journal of Medicine ( NEJM ), Dr. Marcia Angell decided to write a book about biases in clinical trials. As she was doing her research and writing, she realized that “all roads led back to drug companies.” Angell decided there was a bigger story to tell — about the vast influence the pharmaceutical industry has over how medicine is practiced today.
During her 20-year career at NEJM , Angell had watched drugmakers expand their sway. They became the main sponsors of clinical testing and physician education and are also a critical source of funding for the Food & Drug Administration. “I finally decided just to bite the bullet and write about [the industry].” The result is The Truth about Drug Companies: How They Deceive Us and What to Do About It , which arrives in bookstores in late August.

The book provides a detailed account of the intimate interconnections between drug companies and every other player in the health field — including medical journals, doctors, government agencies, Congress, universities — and how such relationships harm the public. Dr. Angell recently spoke with BusinessWeek Online reporter Amy Tsao . Edited excerpts of their conversation follow:

Q: You give a very troubling account of the drug industry’s practices. What, in your view, are the big truths that it doesn’t want the public to understand?

A: I would say they’re threefold. One, they spend relatively little on R&D — less than they make in profits and far less than they spend on marketing and administration. What the industry does is essentially to blackmail the public. It says: “We’re the source of your miracles, of your innovative drugs, and therefore don’t mess with us.”

The second truth is that they’re not particularly innovative. Their major product is “me-too” drugs — and even the innovative drugs that they do produce are almost always based on research that has been done at taxpayer expense [and] funded by the NIH [National Institutes of Health].

The third truth is that they have pretty much had their own way because of their control and influence over the institutions in society that really ought to be checking them. They have pretty much bought and paid for Congress. They have a lot of influence over the FDA through user fees they pay [to have their drugs reviewed by the agency], and they have way too much influence over doctors and the medical profession generally.

Q: You mentioned that in other countries drug companies can sell medication for a profit, [but] there are price controls. What’s the difference between the profit margins in the U.S. vs. countries where there are price controls?

A: I don’t know the answer to that. That’s another way they’re very secretive. We do know that they make a profit in other countries because they aren’t charities. They don’t give drugs away. But let’s assume that they did.

Look at the year 2002 , when the profit margin for the 10 [drug] companies on the Fortune 500 list was 17% of sales, and sales in this country amounted to about half of their worldwide sales. You can calculate even if they made no profit whatsoever in the rest of the world, they would still come out with at least an 8.5% profit margin. And that would be higher than the median of the other Fortune 500 companies that year, which was 3.1%.