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Is Big Pharma Bad? - Facts & Infographic

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What Makes ‘Big Pharma’ Big?

All pharmaceutical companies are collectively referred to as Big Pharma in the US. According to a 2012 study, 1 in 2 Americans are on prescription drugs. More and more Americans are taking medication with each passing year. Almost 25% of American women take prescription drugs for mental health conditions. Between 2000 and 2008, the number of Americans using more than one prescription drugs increased from 25.4% to more than 31%. The rise in number of people taking over 5 prescription drugs rose over 70% in the same period. Between 1995 and 2004, over 66% of the drugs released for use in the American market were very similar to existing ones and did not add any benefits. In 2008, the pharmaceutical industry was found to be spending twice as much on marketing than on research and development.

 

North America holds 41.8% share of the global pharmaceutical industry (as of 2011). The EU holds about 26.8% and the rest of the world about 31.4%.In the EU, the pharmaceutical industry is the fifth largest sector of the economy and accounts for about 3.5% of the total manufacturing production. The EU imports over 42.5 billion worth pharmaceutical products (2009) with Germany, Belgium, and France as the top importers. The biggest markets for pharmaceutical products manufactured in the EU are - the US, Switzerland, Russia, Japan, and Canada.

According to IMS Health reports for 2011, global expenditure on prescription drugs was over $954 billion. It is estimated that this will rise to US1.1 trillion by 2014. According to Genetic Engineering and Research News, Humira (adalimumab) from AbbVie (2012 sales: $9.265 billion), Remicade (infliximab) from Johnson & Johnson and Merck & Co. (2012 sales: $8.215 billion), Enbrel (etanercept) from Amgen and Pfizer (2012 sales: $7.963 billion), Advair (fluticasone and salmeterol) from GlaxoSmithKline (2012 sales: $7.904 billion), and Rituxan (rituximab, MabThera) from Roche (2012 sales: $7.285 billion) are the top 5 best-selling drugs world-wide.

 

The Titans

Top 10 American Pharmaceutical Companies (as of May 2012)

Company

Revenue ($ millions)

Profit ($ millions)

Pfizer

67,932.00

10,009.00

Johnson & Johnson

65,030.00

9,672.00

Merck

48,047.00

6,272.00

Abbott Laboratories

38,851.30

4,728.40

Eli Lilly

24,286.50

4,347.70

Bristol-Myers Squibb

21,244.00

3,709.00

Amgen

15,582.00

3,683.00

Gilead Sciences

8,385.40

2,803.60

Mylan

6,129.80

536.8

Allergan

5,419.10

934.5

Biogen Idec

5,048.60

1,234.40

Celgene

4,842.10

1,318.20

 

According to a World Health Organization (WHO) report, "it is predicted that North and South America, Europe and Japan will continue to account for a full 85% of the global pharmaceuticals market well into the 21st century". 4 of the top 10 pharmaceutical companies of 2011 are American corporations. According to recent reports, pharmaceutical companies from Brazil, China, and India are increasingly competing for dominance.

 

Top 10 Global Pharmaceutical Companies (2011)

Company

Country

Revenue ($ millions)

Pfizer

United States

$67.4 billion

Johnson & Johnson

United States

$65 billion

Novartis

Switzerland

$58.6 billion

Bayer

Germany

$50.76 billion

Hoffmann-La Roche

Switzerland

$48.09 billion

Merck & Co

United States

$48 billion

Sanofi-Aventis

France

$46.5 billion

GlaxoSmithKline

United Kingdom

$43.92 billion

Abbott Laboratories

United States

$38.8 billion

AstraZeneca

United Kingdom/Sweden

$33.6 billion

 

FDA - Big Pharma Ties

The ties between the FDA and the pharmaceutical industry in the US have been very close, raising concerns regarding public welfare.

In May 2013, US District Judge Edward Korman, said that FDA shared a “sweetheart arrangement” with pharmaceutical company Teva Pharmaceutical. The judge dissed the close ties shared between manufacturers and the public interest body authorized to approve the drugs. The judge placed his criticism of the relationship in the context of the FDA's defiance of his April verdict, in which he had instructed all brands of contraceptive pills to be made available to women of all ages. The FDA had only allowed a Teva product to be made available.

A spate of drug recalls over the past few years has increased the concern surrounding FDA-Pharma ties. In 2009, the number of drug recalls grew to a staggering 1742, an increase of about 309% over 2008.This indicates the health risks to the public. Apart from poor manufacturing regulations and controls, it is believed that FDA policies and leadership directly affects the rate of recalls. Drug makers compete fiercely for FDA approval and resultant financial gains. The first copycat drug to get the FDA go-ahead wins a 180-day marketing exclusivity resulting in a significant gain for the manufacturer. Closer ties between the pharmaceutical company and FDA could expedite the approval for new drugs.

Pharmaceutical companies have also increasingly started to rely on drugs manufactured and imported from countries such as China and India, where the manufacturing process is not monitored by the FDA. In 2007, US health officials were alerted to an allergic reaction in patients using the blood thinner, heparin. In the Chinese manufacture of the drug, an adulterant had been introduced, causing the reaction. According to FDA estimates, almost 40 % of the finished drugs used in the US are manufactured overseas and about 80 % of the active ingredients that go into the production of drugs in the US come from abroad bypassing American standards and regulations.

 

Big Pharma and Health Care

Healthcare in most countries is influenced by the marketing campaigns of pharmaceutical companies. Representative marketing influences treatment guidelines in many parts of the world. There were over 65,000 pharmaceutical sales representatives in the US in 2011. Each representative attempts to meet about 180 doctors each month to influence the prescription of drugs and treatments. The sales environment of a pharmaceutical representative is a unique one where the doctor is persuaded to prescribe a drug thereby attempting to influence the buying behavior at pharmacies.

Industry payments to doctors are another major concern in the world of healthcare. In a period of just over 2 years in 2009-2011, device and drug companies are reported to have paid over $76 million to physicians licensed in the state of Massachusetts alone, reported to a study published in the May 2013 edition of The New England Journal of Medicine. This does not include payments smaller than $50. Dr. Deborah R. Korenstein, Associate Professor at Mount Sinai, published a study in 2011, which suggested that a number of expert panels which were responsible for developing national guidelines for managing diabetes and high cholesterol were full of doctors who were receiving payments from manufacturers of drugs and devices meant to manage these diseases.

From time to time, doctors have been known to take up stands against drug makers. Dr. Peter C. Butler had initially declined Merck's request to test the diabetes drug Januvia. Later, he was persuaded into testing the changes induced by the drug in rats and, in 2008, he concluded that it caused changes that could lead to cancer in the rats. Dr. Butler turned into a crusader and led a campaign against Januvia and other drugs with sales which earn manufacturers about $9 billion a year.

 

Pharmaceutical Lobby

In the US, the pharmaceutical industry is one of the major lobbies, contributing consistently high amounts towards federal campaign contributions. Between 1998 and 2004, the top pharmaceutical companies along with Pharmaceutical Research and Manufacturers of America (PhRMA) and Biotechnology Industry Organization, lobbied on over 1,600 legislations. Traditionally, the Republican candidates have found much support and endorsement from the industry. Starting with the 2008 election cycle, however, Democrats have found an equal measure of campaign funding and support from the pharmaceutical manufacturers of America. Key players that form a significant part of the pharmaceutical lobby in the US include Amgen Inc., the PhRMA, and Pfizer Inc. Lobbying efforts are currently concentrated on legislations regarding research and patent reform, and healthcare policies. The Pharmaceutical Research and Manufacturers of America (PhRMA) alone spent over $101.2 million in 2009 on advocacy efforts. In 2010-11, the top pharmaceutical contributors towards election campaign funds were -

Contributor

Amount

Mutual Pharmaceutical

$2,332,500

DE Shaw Research

$2,007,054

Pfizer Inc

$1,814,766

Amgen Inc

$1,645,072

Pharmaceutical Product Development Inc

$1,512,000

Merck & Co

$1,297,771

Health Foods of America

$1,207,500

Abbott Laboratories

$1,198,107

McKesson Corp

$1,127,104

Ischemix

$1,065,600

AstraZeneca PLC

$1,055,162

Exoxemis Inc.

$1,043,500

Johnson & Johnson

$990,251

Eli Lilly & Co

$872,426

GlaxoSmithKline

$775,210

 

According to the EU Transparency Register, lobbying activities in the European Union by the pharmaceutical industry adds up to over EUR 40 million every year. These, however, are only reported figures. Estimates are, that the actual spends surpass EUR 90 million a year. Over half of this is spent on local lobbyists who attempt to influence legislators, lawmakers, and other key decision makers in the EU.

In China, the Pharmaceutical Association Committee (RDPAC) under the China Association of Enterprises with Foreign Investment undertakes lobbying activities.

 

Research – To Do Or Not To Do

Pharmaceutical research is one of the most widely debated issues in the healthcare world. Pharmaceutical companies are often accused of suppressing clinical trial data that show harmful effects of the drug. Till April 2013, Roche had refused to release the results of the 74 clinical trials for its influenza medicine Tamiflu, fuelling concerns that it is merely a placebo and does not provide actual relief. The refusal led to the establishment of AllTrials.net – a campaign calling for “all trials registered, all results reported”. While such campaigns have earned the support of the European Medicines Agency (EMA), while organizations such as the European Federation of Pharmaceutical Industries and Associations (EFPIA) caution that taking an indiscriminate approach to transparency could severely cramp innovation in pharmaceutical research.

Pharmaceutical companies also spend millions on promotion and marketing while research remains a grossly neglected area. According to the WHO, "Even in the United Kingdom, where the medical profession receives more independent, publicly-funded information than in many other countries, promotional spending by pharmaceuticals companies is 50 times greater than spending on public information on health".

The offshore research trials conducted by American pharmaceutical corporations, beyond the reach of the FDA or the government, is another contentious issue. India and about 105 other developing nations allow clinical trials to be conducted on anyone willing to sign up. The countries’ poor are exploited by these corporations. According to the National Institutes of Health, in 2000, 58,788 such trials were conducted in 173 countries outside the United States. In 2008, over 80% of the new drugs applications submitted to the FDA included data from foreign clinical trials.

In 1988, the World Health Assembly adopted the WHO Ethical Criteria for Medicinal Drug Promotion. It is a common observation, however, that these guidelines are largely disregarded. In the US, the voluntary Code of Pharmaceutical Practices developed by International Federation of Pharmaceutical Manufacturers' Association (PharMA) is also a matter of heated debate.

 

Examining Big Pharma

In the past decade, a number of books and documentaries have examined the workings of the pharmaceutical industry, and the relationship between the industry and lawmakers, doctors, and other medical institutions.

In the book, Big Pharma: How the World's Biggest Drug Companies Control Illness, Jacky Law looks at the different ways that the pharmaceutical business influences regulations and the health care system, how straying from strict adherence to public interests may result in terrible regulatory failures and may have high costs attached.

Side Effects: A Prosecutor, a Whistleblower, and a Bestselling Antidepressant on Trial by Alison Bass explores the drama and deception surrounding the production, marketing, and distribution of Paxil, an antidepressant GlaxoSmithKline. The compromises involved eventually affected the health of innumerable children.

Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients is British physician Ben Godacre's book which exposes the routine concealment of negative data from doctors and medical practitioners creating a "murderous disaster".

Big Bucks, Big Pharma: Marketing Disease and Pushing Drugs, the documentary released in 2006 became a leading vehicle in exposing the pharmaceutical industry’s workings and in the ways health issues are manipulated for the gains of these companies.

Making A Killing: The Untold Story of Psychotropic Drugging, the 2008 documentary, explores the dark side of psychotropic drugs. Imbibers get addicted to these drugs and the suicide rates among those put on these drugs are very high, says the documentary.

 

Sources:

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http://www.worldpharmaceuticals.net/editorials/21/Top%20ten%20global%20pharma.pdf

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http://www.tokeofthetown.com/2012/02/over-medicated_america_how_big_pharma_greed_hooked.php

http://www.imshealth.com/portal/site/ims/menuitem.d248e29c86589c9c30e81c033208c22a/?vgnextoid=4b8c410b6c718210VgnVCM100000ed152ca2RCRD

http://www.genengnews.com/insight-and-intelligenceand153/top-20-best-selling-drugs-of-2012/77899775/?page=2

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Is Big Pharma Bad


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