THE TRUTH ABOUT THE PHARMACEUTICAL INDUSTRY
The Pharmaceutical Industry is gradually becoming powerful and highly profitable, especially in the United States (U.S.). As a result, it is losing its conscious and is transforming into a commercial business, placing its private profits above people's health. Drug and pharmaceutical companies have flourished to research and manufacture medicines that could save millions of lives across the world. But are they really researching to produce and invent innovative drugs and discover the cure for killer diseases? Through the years, the industry which one would assume would work to benefit the public, is in fact deceiving and exploiting the public by capitalizing on the needs and the problems concerning the public health to gain market share and revenue. Big Pharma is a term given to major pharmaceutical companies in the industry, and it charges such exorbitant prices on their drugs that the profit margins surpass those of oil and entertainment companies (Greider, 2006, pp. 10 - 15).
The pharmaceutical industry is now concentrating on commercial gains and is employing various strategies to be able to set high prices on their medicines by producing profitable drugs over innovative ones, investing in direct-to-consumer advertisements, exploiting their patent rights, targeting those people who cannot afford medicines and bribing upstart competitors. This also results in the certain companies, most commonly known as giants, to guard their monopolies and maintain their consumer base within the industry. In a vicious cycle, these methods allow the companies to acquire the power to charge higher prices and control on their products.
The industry claims that high prices on prescription drugs are needed in order to compensate for the costs of research and development and produce innovative drugs. It asserts that in order for breakthrough drugs to be produced, it is only reasonable to invest heavily in research and development. And it is only possible through high prices. High profits create a "virtuous cycle" (Bandow, 2006, pp. 24). This means that higher the profits, higher the revenue, which in turn, encourages more research and development towards life saving medicine.
The industry also maintains that when judging from the benefits that the medicines provide to the people, the costs are not unwarranted. In fact, without high profit margins, it is not possible to achieve groundbreaking research in this field. Moreover, reduced profits and increased restrictions may threaten the incentive to research for drugs that could prove valuable. Price should not be considered when one sees how medicines have improved lives. Professor Frank Lichtenberg of the Graduate School of Business said that "on average...during the period 1970 - 91 is estimated to have saved 11,200 life- years..." (Bandow, 2006, pp. 24) and would continue to do so in the years that follow.
The truth is, the pharmaceutical industry seems to justify everything giving research and development costs as an excuse. Yet, do not reveal accurate details of the expenses. The argument that controlling drug prices would limit research to discover cures of harmful diseases appears to be more of a terror tactic of hinting that if the industry loses its profits, people may lose their lives. PhRMA's Richard Smith warned media representatives saying, "I can guarantee...If you aren't today, at some point in your lives every one in this room will be patient in need of medical care. The question is: Will the medicine be there for you?" (Greider, 2006, pp. 10 - 15).
Pharmaceutical companies receive millions for research and development from the government and National Institute of Health (NIH) in the form of subsidy every year. Moreover, research and development form a small part in their total budget. Low and affordable prices would not have adverse effects on research and development. Much of the money received for research and those generated from the sale of drugs is spent on marketing the drugs. According to a report generated by Bridges to Health, a project of Greenlining Institute that seeks individual and community health by promoting a socio-economic strategy that coordinates efforts between public, private and non-profit institutions and individuals only 14% of the revenue is actually invested in research and developing. More than twice this amount, around 33% goes in spending on "marketing, advertising and administration" (Bridges to Health, 2002).
Furthermore, the pharmaceutical has not produced many innovative drugs over the past few years for it to make such claims. New drugs are flooding the market everyday and they are merely alternatives to the ones already in the market. Pharmaceutical companies find it far more profitable to produce those drugs that are already in demand with the consumers and those that cure common ailments. As Grieder writes, "...it appears that Big Pharma is focused on commercial gain, developing cures for minor problems like baldness rather than cures for serious diseases like malaria, which kills thousands of people worldwide" (Greider, 2006, pp. 10 - 15). Drug companies are increasingly producing "me-too" drugs. These drugs are "variations" of the original drug already in the market. In order to keep a maintain a high market share and retain profits, companies can take an old medicine and resell it as a new drug, according to Larry Sasich, a pharmacy professor and a former "consumer advocator" for Public Citizen's Health Research Group. (Ridberg, 2006)....
And the argument of investing money into groundbreaking research and development that could produce life saving drugs is still questionable. Public health activists are advocating to gain access to expensive drugs for more than "forty million people" in developing countries who suffer from diseases like AIDs, Malaria and Tuberculosis. (Goozner, 2004, pp. 244). However, unlike AIDs which has many sufferers in the developed countries, diseases like Malaria and Tuberculosis are ignored by the pharmaceutical industry. They do not research into the cures for such diseases as the numbers of people inflicted are very small. Moreover, they do not research these diseases "not because there were no patients, but because the millions of sick people had no money" (Goozner, 2004, pp. 244).
Eight million people around the world are infected with Tuberculosis; out of which seventy-seven percent cannot afford or do have access to the drugs that could cure them. Due to this two million people die every year (Goozner, 2004, pp. 244). Although antibiotics are cheap and can treat this disease, there is a growing resistance to these drugs, and hence, the need to research and invent drugs that could combat this disease is vital, yet no new medicine had been produced. Malaria is one of the major diseases and kills around two million while infecting more than three hundred people per year (Goozner, 2004, pp. 244). Yet, just like Tuberculosis, no new medicine has come into the market since half a century.
Research and development costs are insignificant when compared to the amounts spent on advertisements and marketing of the research. Americans spend more than $200 billion per year now, before Medicare takes over. This is more than the federal government pays for education, agriculture, transportation and the environment combined.(pharmaceuticals are not people friendly
The pharmaceutical companies do not utilize all the money that they receive for research. They spend a major part of the money in marketing and promoting their products and sponsoring doctor's medical training and convince physicians to prescribe the company's medicines to their patients. Find out more about doctors medical training. Understandably, this would not only increase the pharmaceutical firm's share of the market, such tactics allow companies to create monopolies. Companies are investing heavily in advertising and marketing their products. This is a form of commercialization and is often used by private sector businesses that are profit-oriented. They main objective is to increase their profits and gain market share and in order to achieve it, businesses use marketing devices like clever advertisements and promotions to attract consumers to buy their products over their competitors. Advertisements can sometimes mislead people into buying the products. This is a form of marketing of "branding - creating name recognition by fabricating an emotional bond between consumer and product" (Ridberg, 2006). For example, consumers are shown advertisements portraying happy families, cute babies and good-looking couples frolicking in the sun and are very healthy looking. These adverts draw the consumer towards the products subconsciously thinking that they too would look the same and would be happy if they buy that medicine. What the advertisements fail to inform is that the reason everyone is happy and healthy is because they spent a lot of money on their medicines, and if the consumers wants to achieve that he/she should be willing to buy expensive drugs.
And people who can afford it do pay copious amounts on medicines.