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Big Pharma and Crony Capitalism


A friend just experienced a terrible drug problem. Not with illegal drugs, but with a prescription from her doctor. Her eighty-year-old memory sometimes stumbles, and so, without diagnostic tests, the doctor prescribed a potent Alzheimer medication.

Within a week, I received phone calls from her about two men and a woman who were breaking into her house repeatedly despite carefully locked doors. In the morning, when she arose, they would be sitting at the dining room table, where they would remain for hours, mute and motionless. Panicked, my friend began to squirrel away her valuables, only to forget the hiding places and have to spend hours searching and searching.

The hallucinations and paranoia became so pronounced that relatives talked of institutionalization. From one week to the next, a fully functional human being (on whom another person relied for home care) was close to being yanked away from her own life.

I made a brief online search and discovered that hallucinations were a known side effect of the Alzheimer drug. A few days after discontinuing use, my forgetful friend was back to normal; the “intruders” had vanished.

A casually prescribed pill came close to destroying her.

Who is responsible for over-prescription?

The Kaiser Health Foundation tracked the number of retail drug prescriptions filled at American pharmacies in 2010. The statistics were broken down per capita and by age. Children age 0–8 averaged almost 4 prescriptions; Americans age 19–64 averaged 11; those over 65 years old averaged 31.

Undoubtedly, many prescriptions were for antibiotics or other relatively mundane medications. But every drug has possible side effects that constitute reasonable risks only if the drug offers genuine benefit. Reuters Health News (June 13, 2011) reported on an editorial that appeared in the prestigious Archives of Internal Medicine. Reuters stated that the “researchers describe how opioid painkillers like Vicodin and Percocet have become increasingly common without good evidence that they help patients in the long run.”

For example, in “2007 alone, for instance, there were nearly 11,500 deaths related to prescription opioids” which the researchers claimed was “a number greater than that of the combination of deaths from heroin and cocaine.”

It is common to blame both the medical profession and huge pharmaceutical companies (big pharma) for promoting drugs irresponsibly. MSNBC extended the blame to include patients themselves: “many doctors are quick to prescribe a drug, partly because they have limited time to deal with individual patients or because they and their patients have been bombarded with ads from the pharmaceutical industry.”

Certainly, all three play a role in creating an over-drugged society. Big pharma in particular reaps enormous profits by mass marketing drugs to cure everything from anxiety to erectile dysfunction. On February 2, 2004, a Time magazine article entitled “Why Drugs Cost So Much” stated, “the pharmaceutical industry is — and has been for years — the most profitable of all businesses in the U.S. In the annual Fortune 500 survey, the pharmaceutical industry topped the list of the most profitable industries, with a return of 17% on revenue.”

The role of the state in creating this drug culture is largely overlooked, however. Certainly, commentators blast individual politicians for being “in bed” with big pharma. The most recent assault is on Obama. In the article “Obama’s Backroom Big Pharma Deals Exposed,” Health Wire (June 13, 2012) reported on “a large amount of emails and other memos” between the Obama administration and “some of the country’s biggest pharmaceutical companies.”

The gist of the scandal is that Obama is accused of coordinating a $150 million pro-Obamacare ad campaign with huge pharmaceutical companies in exchange for granting them policy concessions worth billions.

What is not challenged, however, is the fundamental function of the state in defining drug use throughout society. To the extent the state’s role is acknowledged, it is usually defended as essential to control the quality of drugs and as a check on big pharma. And so all prescription drugs continue to require approval by the Food and Drug Administration (FDA). They continue to be dispensed only by state-licensed doctors and druggists who enjoy a monopoly privilege in medical care as the only legal drug dealers in America.

It is a privilege of which they are jealous. For example, the American Medical Association has a long history of persecuting competitors, such as midwives.

As with all monopolies, quality suffers even as the cost to consumers soars. This is particularly true of drug costs, because the government’s grant of a monopoly — namely, a drug patent — is such a long and expensive process that competitors to big pharma are shut out. This manufactures scarcity.

Meanwhile, the drug companies recoup their bureaucratic expenses by driving prices up precipitously. The government keeps these drug prices high by subsidizing the payment of prescriptions with seemingly infinite tax dollars.

But the FDA, medical licenses, and monopolies are only the most obvious ways in which the state controls drugs within society.

Other forms of state control

The government’s stance on drugs is so contradictory and extreme that no sane arguments occur on an official level. While SWAT teams break down the doors of adults who use recreational drugs in their own homes, the public school system acts as a pusher by placing millions of children on ritalin, a stimulant similar to cocaine.

The FDA periodically lashes out at small herbal and vitamin companies that compete with its monopoly, while mammoth drug companies that are found to have acted criminally continue to enjoy legal privileges.

And yet the FDA purports to provide an essential public service; it claims to act as a watchdog to ensure state-approved drugs are safe and effective. But even when government appears to act as a check on big pharma, the ultimate result comes down to a slap on one pharmaceutical wrist and permission for the other hand to pursue plunder.

The book Sex, Lies, and Pharmaceuticals: How Drug Companies Plan to Profit from Female Sexual Dysfunction, by Ray Moynihan and Barbara Mintzes, explores this point. Moynihan and Mintzes address

one of the biggest cases of healthcare fraud in United States history. At the centre of the case were allegations that a Pfizer subsidiary had illegally promoted an anti-arthritis drug for conditions for which it was not approved, creating safety risks to the many patients being targeted. Admitting to certain limited guilt surrounding these allegations, Pfizer agreed to pay the government US $1.2 billion.

(Other sources put the total penalty at $2.3 billion.)

This may seem to be a stiff penalty that indicates government’s determination to police drug companies. And yet not one executive was held personally responsible.

In rendering his verdict on October 16, 2009, judge Douglas Woodlock commented, “This is a case in which no human being, apparently, is going to be held responsible for substantial criminal activity by a corporation.” Earlier in the same day, Pfizer publicly announced its $68 billion acquisition of Wyeth Pharmaceuticals. Woodlock called the comparatively small court penalty

the cost of doing business … for some of these corporations to shed their skin like certain animals and leave the skin behind and move on to the future without ultimately giving the public what it is entitled to, which is the satisfaction of knowing that there has been full evaluation of the criminal responsibility of the individuals who occupied that skin.

Rather than viewing the Department of Justice or FDA as earnest watchdogs against Pfizer, it is plausible to explain the court case in entirely different terms: perhaps, given the high-profile nature of the case, complete with lawyered-up whistle-blowers, the government was under public pressure to pursue the matter.

Moreover, Pfizer had flaunted the FDA’s authority. It marketed the drug Bextra for “off-label” uses. That term refers to using a product in a manner that has not been approved by the FDA. The court case can be viewed as government agencies simply reasserting their authority.

Most of the time, the state and big pharma are in an uncomfortable partnership that benefits both of them. Adversarial events occur between them, but the bottom line is a partnership. They both act to suppress any drugs or people who compete with their monopolies.

Both the state and big pharma promote specific products, with the state pushing drugs through various social-services agencies and programs like Medicaid. Both of them victimize anyone who wishes to have choice over their own medical care and drug use. They also victimize those who blindly trust the almost mystical authority that the medical world creates for itself; my recovered friend was one such victim.

Buyer beware!

Extreme patient skepticism is necessary about the use of prescription drugs. This is particularly true because the studies and research being issued in support of drug benefits cannot be trusted. One reason is because so much of the data comes from drug companies who have a vested interest in skewing the results and little competition or independent oversight to keep them honest.

On June 29, a headline in the New Scientist declared, “Pharma Giant Failed to Report 80,000 Drug Files.” The lost files documented adverse drug reactions.

The article opened, “An investigation is under way after the discovery that 80,000 reports of patient reactions to drugs were not passed on to regulatory authorities by the Swiss-based pharmaceutical giant Roche and its US affiliate, Genentech.” The uninvestigated deaths of over 15,000 users of Roche’s drugs were among the non-reports. The purpose of the required reporting is to detect potential problems with a drug by notifying authorities whenever a patient taking it dies or suffers a setback.

Relying on government to check the results is dangerous to your health. Indeed, the FDA does not actually conduct drug trials. Instead, they review the trials and reports submitted to them by drug companies who pursue FDA approval. The Natural News article (March 1, 2012) “How FDA and Big Pharma Mislead Millions into Taking Dangerous Anti-depressants” explained,

A Harvard Medical School psychologist, Irving Kirsch, who has been studying placebo effects for three decades, recently came up with the documented conclusion that pharmaceutical anti-depressants don’t work….

Kirsch discovered that most anti-depressant trials showed no proof of efficacy. Those results were simply hidden from view. So if 12 tests were done, and only two showed any efficacy at all, those two would be submitted to the FDA, and the FDA would essentially say [to the drug company] “pay your fee and go to market.”

It is telling that Kirsch had to use the Freedom of Information Act to procure the results of the drug tests he examined. Neither government nor big pharma wanted the public scrutiny. While they may turn against each other when power or profits create separate interests, there is one point on which the state and big pharma are in accord: They want your blind acceptance. And your money.

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    Wendy McElroy is an author for The Future of Freedom Foundation, a fellow of the Independent Institute, and the author of The Reasonable Woman: A Guide to Intellectual Survival (Prometheus Books, 1998).