Laying Siege to Empire; Big Pharma Edition

by Mary Logan

Before we leave the subject of health policy, I would be remiss if I didn’t take an equal opportunity swipe at the big pharmaceutical companies in the United States as some of the biggest profit-makers in healthcare. To quote a commenter from last week’s post on Healthcare for All in the US, our healthcare system is a nightmare. This companion piece exposes our mental models regarding the subsystem of the pharmaceutical industry in the United States as a component of the most expensive healthcare system in the world. Big Pharma has managed to capture feedback loops in order to control the drug-making, approval, and marketing process so thoroughly that the physicians, the regulators, and the insurance industry all appear to be dancing to the rhythm that Big Pharma sets as a primary producer who generates much of the supply for the wellness factory in the United States.

In the interest of financial disclosure, my only significant encounter with Big Pharma marketing techniques is a single drug rep dinner. A nurse practitioner friend was looking for company to attend a drug presentation on a Tuesday night about five years ago at a very nice steakhouse here in Anchorage. I went to see what wheedling looked like; we were wined and dined with the one of the most sumptuous feasts I have ever eaten. There were seven courses, including the cocktails, appetizers, dessert, and after dinner drinks with the lecture. So, in Anchorage, that was probably a $60 dinner. The powerpoint for the night concerning the joys of an asthma drug was presented by a local physician–who knows what he was paid for the speaking engagement. I can no longer remember the drug or company name, but the impression of gross excess and graft stays with me. Since I’ve been a critical care nurse for three decades, I have also encountered the occasional chickenfeed drug rep lunch at work in critical care, as well as sponsored break tables at conferences. But those nominal roast-beef sandwich and bagel expenditures were cursory sops to ancillary staff in hopes that we might influence physicians somehow, or perhaps to avoid the appearance of exclusivity on the part of the drug reps. Drug reps don’t waste a lot of time on the nurses since they don’t prescribe. As additional disclosure, I used to teach Pharmacology in Nursing to nursing students. The education that healthcare professionals other than pharmacists receive regarding pharmacology is cursory. Most of our drug education comes from self study or pharmaceutical reps, once we start to practice.

I am very disenchanted with healthcare in the US; not because I’m not in on the take and would like an all-paid trip to Hawaii, but because healthcare does not work anymore for me as either a patient or as a critical care nurse or as a professor of Nursing. I rarely engage with the healthcare system; but when I really need a prescription, the venture to a clinic and its associated costs may cost the system greatly. My last encounter as a patient cost the system $250 and costed me a day away from work and an encounter with an Alaskan gatekeeper in order to get a $2 generic antibiotic prescription. The administration involved in receiving that single antibiotic required 3 bills from the clinic, 2 callbacks, 3 bills from the insurance company, interactions with a pharmacist, a pharmacist tech, a medical tech, several physicians, and numerous unseen behind the scenes administrative billing agents. Much of the complexity involved in the administration of the healthcare system in the U.S. would no longer be possible in this country without computerization. If I lived in Mexico as an informed consumer, I would have simply bought the antibiotic off of the shelf of a pharmacy, without any gatekeepers. The common refrain about unregulated countries is that they overuse medications such as antibiotics. But since I see the same overprescription occurring in this country, I don’t agree with the argument. The difference is that in this country, I get my medication, but only after extensive encounters with bureaucracy. It is difficult to escape the physicians office without having a prescription foisted on me, and I am rarely offered any lifestyle counseling as a solution in place of the

Fish in a barrel . . . .

quicker, easier prescription that is marketed so heavily to physicians. The pigs, chickens and cows in our industrial agriculture system appear to have easier access antibiotics than I do.

The list of problems below is again an overview of problems with the system. Each problem has been written about extensively elsewhere, in peer-reviewed articles. I have cited some of the most interesting, but many supporting references for each point can be easily found using Google Scholar. Finding references for this post was like shooting fish in a barrel. For a more comprehensive overview of the problems, please refer to this report by the Union of Concerned Scientists.

Pursuit of Profit
  • The primary goal and stated mission of Big Pharma is corporate profit for shareholders, but an unstated additional goal is managerial gain; the pharmaceutical industry is able to deliver higher shareholder value than most other industries (Angell, 2005)
  • The direct, primary customer of Big Pharma is the physician gatekeeper who is writing the prescriptions. Patients, hospitals, and insurers are indirect customers. There is a systems incentive to overtreat insured patients, and to undertreat uninsured patients
  • The dictum “first do no harm” does not appear to apply to medications; medication is estimated to be responsible for over 200,000 deaths a year in the US. This number probably underestimates the problem; much of adverse drug events are unrecognized and/or unreported; there is no incentive to report medication adverse events. In fact, there are strong incentives not to report medication errors
  • Criteria for free markets are not met
    1. Enough Competitors: Pharmaceutical companies are highly regulated and monopolistic. Big Pharma is powerful enough to control the research, marketing, and regulation pipeline, to the point that healthcare commodities (diseases) are created through medicalization or disease-mongering (Illich, 1976, Payer, 1992). Over the past 3 decades we’ve shifted from a holistic to a biological basis for disease, and mental illness in particular. How many new disorders have we created that are subjective, expandable, and treatable with medication? Think about it? Baldness, obesity, sexual function and dysfunction (many types), aging, menstruation, newly defined ugliness of all sorts, the size of our body parts, the color of our skin, forgetfulness, normal social behaviors such as shyness or introversion, winter (seasonal affective disorder), crooked teeth, pain of any sort, even imagined pain, general impacts of aging, sleep, behavior (ADD, personality disorders), bowel expectations, and normal bone reduction of aging. Is anything normal anymore? We’ve even expanded our profit basis by medicalizing these same processes in our pets. In a strange double standard, pets of the wealthy may receive heroic healthcare, while other animals are killed in research, since the protection of human subjects does not apply to pets undergoing pharmaceutical research. Instead, pharmaceutical profits are prioritized ahead of humane treatment of animals in research, unless regulated. As our empire expands in complexity, inequities appear in many subsystems, even for our pets. In my Pharmacology course, I would brainstorm medicalized diagnoses with my class. Sometimes the list surpassed 40 or 50 diagnoses.
    2. Effective pricing that impacts producers and consumers: Pharmaceutical companies pursue drugs that wealthy first world patients will buy, so third world diseases and public health are neglected (Peukert & Fuggenthaler, 2009). Two-tiered drug pricing and cost shifting exists for the insured versus the uninsured, resulting in sometimes arbitrary-seeming pricing. Lengthy drug patents coupled with abstruse research information and heavy marketing pressure to uninformed consumers creates unfair markets. Drug costs are not available until the patient has left the physician’s office and is standing at the drug counter.
    3. Freedom of competitors to enter or leave market:  Access to drugs is controlled by physicians, who are manipulated by Big Pharma. Big Pharma has mastered the physician payout through sumptuous educational junkets and fancy dinners. Check out Docs for Dollars; what Big Pharma is paying your own personal doctor (or not) here from ProPublica. Competition is limited by size of monopolistic corporations and long drug research pipeline and laws about patents. Payments for drugs are primarily provided indirectly through insurance companies who are also making obscene profits. Drug costs for those with insurance are far lower than costs for those without insurance; uninsured and/or unemployed patients may lack access to needed drugs, since insurance is linked to employment. If one is uninsured, access requires private payment, trips to Canada or reliance on the internet for access to cheaper drugs, or reliance on samples from physicians (which are actually gifts to physicians from Big Pharma–thus the poor receive trickle-down pharmaceuticals). Disenfranchised groups such as lesbian/gay couples are excluded from family coverage. The aged have to remain working for large corporations who provide insurance long after they might want to work shorter hours, thus perpetuating full-time corporate employment in our flywheel economy.
    4. No collusion among competitors: Rates of price increase suggest collusion among competitors—6.6-8.3% recently for brand name drugs as compared to a 2.6% decrease for generic drugs.
    5. Informed choice for consumers: Information about markets (pharmaceutical research) is controlled by insurance companies; information primarily consists of drug marketing for problems of aging on the nightly news. Drug representatives are trained to mislead and indoctrinate; prescriber profiling is used to target and influence physician prescribing habits. Lifestyle changes have no boosters—pharmaceutical companies, on the other hand, have significant marketing budgets. Likewise, pharmaceuticals oriented towards the public good are not profit-makers and research programs typically languish. For example, high development costs and barriers to entry create supply and demand problems in the vaccine industry (Muzumdar & Cline, 2009).


  • Marketization pursues efficiency and profit rather than quality (Hsiao, 1994). Pharmaceutical companies have a primary goal to provide profits for shareholders and to restrict costs to their companies; costs are shifted over time resulting in larger marketing departments and smaller research units, and profits are go increasingly to upper levels of management, resulting in a winnowing out of research
  • Most research on pharmaceuticals is corporate funded; unless trials are registered centrally, negative research disappears into a black hole. Positive research is published much more often than research that is negative to a drug. Negative results are suppressed or research is terminated. For an interesting statistician’s view of publication bias, view Ben Goldacre’s 14 minute TED talk on the subject of Battling Bad Science
  • Research is repeated and statistics are flogged until positive significant results emerge; drug trial researchers mine the data for favorable results. Designs and research protocols are manipulated. Drug trial methods are gamed by comparing drugs to a placebo, or a competitor’s medication in the wrong strength, or by truncating a trial or testing in very small groups (Washington, 2011, American Scholar)
  • “Today, medical-journal editors estimate that 95 percent of the academic-medicine specialists who assess patented treatments have financial relationships with pharmaceutical companies, and even the prestigious NEJM gave up its search for objective reviewers in June 1992, announcing that it could find no reviewers that did not accept industry funds”  (Washington, 2011, American Scholar). Many articles are ghostwritten by corporate sponsors (Gøtzsche et al., 2009).
  • Most pharmaceutical research is short term, relying on drug rollout for tertiary testing. Drug safety of new drugs less than 10 years out old may be tenuous
  • Medical journals that publish research are reliant on pharmaceutical advertising, which can provide 97 to 99% of their advertising revenue (Washington, 2011, American Scholar)
  • Many medical journals omit financial disclosure (Goozner, 2004)
  • National Insitute of Health researchers have financial conflicts. Advisory panels are often corrupted
  • Academic medical schools turn a blind eye to Pharma payments to faculty physicians for speaking engagements
  • Statistically significant results are touted as clinically significant when they are not
  • Negative results are suppressed, even when outcomes such as death are occurring
  • Unregulated and ethically questionable trials are undertaken overseas in Africa (HIV) and South America where ethical review may be less thorough

Indications Creep

  • Indications for potentially dangerous medications such as cortisone injections have been expanded over the years
    Psychiatric disease criteria are being expanded; 400% increase in antidepressant prescriptions to adults in US in only 3 years
  • Off Label promotion of drugs is common; for example, there have been recent exponential increases in the use of antidepressants in children. Psychotropics including antidepressants and ADHD medications are also being prescribed to younger and younger children
  • ADHD drug usage has been expanded to preschool children age 5 and younger
  • Conflict of interest for panels for the Diagnostic Standards Manual (DSM) is present
  • Cholesterol drugs are being proposed for younger and younger healthy adults, and even for children
  • Many physicians who sit on boards and set practice guidelines receive remuneration from pharmaceutical companies
  • Hormone replacement therapy became standard custom for many years, while damaging negative research regarding associated increased risk of cancer was suppressed
  • Polypharmacy is a poorly researched and rarely considered problem
Adbusters How do we value well-being instead of wealth?

Political Lobbying

  • PhRMA is the 4th ranked top lobbyist between 1998-2011. During that same time period, health was the top ranked lobby, and pharmaceuticals/health products were the top ranked industry lobby. Health issues were the 3rd largest lobby issue, with 6,210 clients (ranked after federal budget/appropriations and defense). Healthcare is Big Business (Center for Responsive Politics, 2012)
  • There is evidence of regulatory capture of the FDA by PhRMA; the FDA is dependent in part on Big Pharma funding for their regulatory process. A revolving door exists on the Hill between lobbying pharmaceutical groups and Congress
  • Big Pharma pursues extensive legal action to extend patents on drugs. There is evidence of increasing judicial influence through lobbying
  • “The Agency for Healthcare Research and Quality’s (AHRQ) mission is to improve the quality, safety, efficiency, and effectiveness of health care for all Americans.” Yet medication safety is generally gone missing from their website. Is this a studious avoidance of asking the right question? Sometimes one can parse more from the absence of content that the presence. It is the questions that we ask rather than the answers that we seek that are important (Goozner CSPI on Vioxx)

Peak Oil issues

  • Decreasing resources will lead to increasing environmental stressors and decreasing population health, putting further stress on our just-in-time, profit-oriented healthcare system
  • Shortages in critical medications are beginning to occur, and bogus drugs are showing up in markets. Should drug availability be left to our “free market” system?
  • Complexity of high tech healthcare and its associated administration may soon be difficult to sustain
  • Current rates of profit expansion are unsustainable
  • US prescription expenditures in 2009 totaled $250 billion, which is not much compared to war expenditures. The good news is that if the current healthcare and patent system collapses, maintaining current drug lines in a non-profit system would not be that hard to do for much cheaper cost
  • A collapsing public health system can be argued as a good thing or a bad thing in terms of peak oil, depending on what you think of die-off
TRFriedenApril 2010, 100(4)Am Jo Public Health

So what do we do about all of this?

Meadows (2008) suggested several policies:

  • Reorient feedback loops around new goals for feedback systems
  • Go for the good of the whole
  • Listen to the wisdom of the system (self-organization)
  • Locate responsibility in the system
  • Expand time horizons
  • Defy the disciplines (silos)
  • Expand the boundary of caring; don’t erode the goal of goodness

In the companion post on the overall healthcare system, I suggested that we need to reconsider our goals of expansion of capitalism-driven wealth as the system loses its surplus energy. Instead we need to consider the sustainable good of the entire country during the contraction of the economy. We need justice in terms of basic needs for all, with more attention to the equities in socioeconomic status health of entire communities rather than individual rights. Our current, clinically and technologically oriented healthcare system will not be sustainable in a future with increasing environmental stressors and diminishing resources. Victor Fuchs, one of the grand old men of health policy, suggested that healthcare policy reform would have to wait until a war, epidemic, or other major “major economic, social, political, or health crisis,” reorganized the system (Fuchs and Emanuel, 2012). Perhaps our expectations regarding the level of bureaucratic complexity that we can achieve will be the last straw, as we add layers of bureaucracy until the system is finally inoperable without internet functionality–at which point, the internet will flicker, throwing us immediately back into pre-insurance fee for service healthcare. Or perhaps we’ll just have to wait until the old health care system in the U.S. becomes so clearly unpleasant, unworkable, or unavailable to most that the mandate for change seems like the obvious choice.

Our strategy should be not only to confront empire, but to lay siege to it. To deprive it of oxygen. To shame it. To mock it. With our art, our music, our literature, our stubbornness, our joy, our brilliance, our sheer relentlessness: and our ability to tell our own stories. Stories that are different from the ones we’re being brainwashed to believe.

The corporate revolution will collapse if we refuse to buy what they are selling: their ideas, their version of history, their wars, their weapons, their notion of inevitability.

Remember this: We be many and they be few. They need us more than we need them.

Another world is not only possible, she is on her way. On a quiet day, I can hear her breathing. –Arundhati Roy, Porto Alegre, 2003