Views » February 22, 2011
A Spoonful of Subsidies for Big Pharma
Big Pharma boasts that it put $45.8 billion into research in 2009. But that figure is better cooked than high-grade meth.
Our “socialist” president is doling out welfare payments–unfortunately, to one of the world’s most profitable and socially corrupt industries: pharmaceuticals. Barack Obama’s administration is ponying up $1 billion to create a new branch of the National Institutes of Health (NIH) designed to help Big Pharma develop new drugs.
The story in The New York Times and other media failed to mention what mandates, if any, would ensure that drugs developed on the taxpayer’s dime would serve pressing public health needs and be subject to price limits and profit controls.
The new project “is outrageous,” says Marcia Angell, former editor of the New England Journal of Medicine. Public subsidies for drug research, she says, mean that “taxpayers pay twice, first for research and development [R&D], and then they pay high prices at drugstore.”
Funding for the NIH’s new National Center for Advancing Translational Sciences was needed, the Times article noted, “because companies have neither the will nor the resources to undertake the effort,” given the cost of developing new drugs.
“They do have resources,” says Angell, now at Harvard University’s Department of Global Health and Social Medicine. “The public is supporting drug companies that make obscene profits. Indeed, the pharmaceutical industry keeps more in profits than it spends on R&D [a tax-deductible expenditure]. “
Big Pharma boasts that it put $45.8 billion into research in 2009, but that figure is better cooked than high-grade meth, and possibly more deleterious to public health. In fact, much of the R&D budget flows not to new meds, but to drugs designed to capture market share and evade patent expirations by changing dosages, altering a few molecules, or adding a previously off-label use. Bottom-line priorities mean that the industry favors drugs that people take for years, like antidepressants, over one-course lifesavers.
Recently, for example, the NIH helped fund a trial of Lexapro, Forest Laboratories’ blockbuster antidepressant. Ellen W. Freeman, lead author of the study, announced to wide media coverage that women who took Lexapro “had many fewer hot flashes a day compared to those on placebo” –“55 percent experienced a 50 percent reduction in hot flashes,” the University of Pennsylvania School of Medicine researcher said. That “many fewer” translated to 1.41 fewer hot flashes a day for Lexapro-takers over sugar pill recipients. (Freeman and two of her 14 co-authors reported financial ties to Lexapro’s Forest Laboratories, Wyeth, Pfizer, Xanodyne Pharmaceuticals, Pherin Pharmaceuticals and Bayer Health Care.)
Therapy aside, the value in finding new uses for old Lexapro is twofold. First, with hormone replacement implicated in increased risk of cancers and heart disease, drug companies want new ways to treat the normal symptoms of menopause. Also, Lexapro’s patent will expire next year. Unless the FDA approves some new use, the market will be open to cheaper generics that will slash Forest Labs’ profits.
It’s hard to see how, without a really good marketing campaign, women would trade 1.4 hot flashes a day for Lexapro’s possible side effects, which include new or worsening depression; suicidal ideation; panic attacks; sleep disorders; aggressive behavior; frenzied abnormal excitement; nausea and diarrhea, among others.
It’s one thing to endure side effects when fighting cancer, but when it comes to lifestyle enhancers, the risk-benefit ratio can be untenable. Forest Laboratories is sanguine. “We are therapeutically agnostic,” CFO Frank Perier said during a November conference call. “We…really try and maximize what the product’s potential is in the market.”
Forest’s staffing also illuminates industry priorities. It employs 5,000 people, with 1,000 in its research institute –which devotes much of its curriculum to researching marketing and the regulatory process–3,000 in sales, and the remaining 1,000 filling management functions.
Unless the new NIH center sets new priorities and imposes restrictions on profits, drug companies will continue to tweak lifestyle enhancing drugs rather than do the hard work of developing life-saving meds. “Whenever a drug is sold that has been developed using public funds,” says Angell, “the government should have a role in setting the price.”
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Terry J. Allen
Terry J. Allen, an In These Times senior editor, has written the magazine's monthly investigative health and science column since 2006.