Praise Big Pharma

I appreciate all those who took the time to read and respond to my article.
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Elisheva,

You make some good points. In a free market, the only way to out-perform the competition is to offer a better product, or a better price, or better customer service, etc. When the government gets involved, it creates an Aristocracy of Pull, in which corporations are encouraged to lobby for government hand-outs in order to compete. This doesn't make it right for companies to use Big Brother to bash their competitors over the head, but it's important to identify the root cause of such a hostile environment: government intervention.

One can't fully blame Microsoft, for example, when they lobby the government to intervene in the search engine market. Microsoft's competitors have been using Big Brother as an attack dog for decades. Microsoft is working within an environment *created by the government*, acting to preserve its interests. The same goes for pharma companies that lobby for government funding and other advantages.

The answer here is not more regulation; the answer is to take the government out of the equation.
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Lisa,

I'm not allowed to disclose the amount of money I was paid by Big Pharma for writing this article, but I will tell you this: it's 100,000,000 times greater than the amount I'm paid to work for The Undercurrent. (100,000,000 x 0 = ?)
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Emily,

Your argument rests on the assumption that consumers are mindless sheep who believe whatever they hear on TV. I've been down in the dumps before, but I've never gotten a prescription for drugs to bring me back up. Why? Because in my judgment, I think it's unnecessary.

Each man has the responsibility to judge for himself what he needs. If one suspects that a company is asking him to "ignore [his] reason," then he ought to take their words with a grain of salt (or with a large pillar of salt, depending on the situation).

In your comment, you imply that it is possible to determine whether or not a pharma company is creating a worthwhile product. Else, how could you arrive at the conclusion that some pharma companies are hoodwinking people? Everyone must take on the responsibility of making these kinds of judgments for themselves. Do business with those companies that produce something of real value to you, and avoid those companies that ask you to "ignore [your] reason."
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Andrew,

I question several assumptions in your comments.

First, based on my research in preparation for this article, you are incorrect that governments spend more on pharmaceutical research than pharma companies do. Despite the eagerness of governments around the world to spend taxpayer dollars on health care, private companies still account for over 60% of the investment in pharmaceutical research. And the research conducted by Big Pharma tends to produce more results. This makes sense, because they're in business to make money. As always, private companies are much more productive and innovative than their governmental counterparts.

Second, you call our system a "mixture" of socialism and capitalism. This is a misnomer. A market that is heavily regulated and/or subsidized by the government is *not* a capitalist market in any sense of the word. Big Pharma does not benefit from government involvement, it suffers because of it. You make it sound as though Big Pharma is more profitable *because* of government intervention. This could not be further from the truth.

Finally, you point out that Big Pharma has lobbied to keep out reimported drugs. This is true. In some countries (like Canada), pharma companies are *forced* to sell their drugs at an artificially low rate because of governmental price controls. Big Pharma makes much less profit in these countries, and has to make up for it by charging higher prices here. If cheap, reimported drugs were brought into the US, then many Pharma Companies would start losing money fast.

As I wrote in my response to Elisheva's post, it's very important to identify the root cause of these kinds of problems: government intervention in the market. If other countries didn't impose price controls on pharmaceuticals, then there would be no benefit to reimporting drugs. The issue would never come up. Since Big Brother created this problem, one can't blame Big Pharma for lobbying the government to keep artificially low-priced drugs out of the US. Also, note that if other countries didn't impose price controls, then pharma companies wouldn't have to charge higher prices *here* in order to make up for lost potential profit. Everyone would benefit.
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Thanks again to everyone who commented on my article.

--Dan Edge

Most of the research conducted by drug companies is, in fact, funded by the NIH through universities and colleges. Independent estimates (because the drug companies will not release their costs) put the research budget of Big Pharma at less than 10% of revenue. An odd mix of capitalist-socialist philosophy. Socialist because the American taxpayer pays first for the research and then for the prescription (and anyone who is on government subsidized programs medicine as well), capitalist because Big Pharma reaps the rewards.
One of the many problems with Big Pharma. To say nothing of the fact that they lobby hard to keep drugs being REIMPORTED from other countries.

Your argument rests on the assumption that drugs companies make profits by finding needs and ways to fulfill them--new drugs that can cure human diseases. To the extent that this is what happens, they deserve every penny they make and are unfairly vilified.

However, the big markets in wealthy countries now are not in finding needs, but creating them. Through TV ads and the doctors themselves, many drugs are advertised to appeal to people's vices or laziness rather than their reason. Health and lifestyle problems that reason would just prevent (weight-related problems, insomnia, ADHD), drug companies now leap to let you buy away. Why address your personal issues with depression when you can just pop a pill?

Because they tend to treat symptoms instead of causes (blood pressure, not eating habits; sleeplessness, not stressful lifestyle; hyperactivity, not instability), their "fixes" frequently have their own side effects which, in turn, must be countered with additional drugs-- more profit!! This is not capitalism the way Rand liked to imagine it. This is greed without the accompanying pride in contributing something genuinely valuable. No one should make profits asking people to ignore their reason.

okay..how much did they pay you?

Dan,

If there was a free market for prescription drugs in the US you would be right. Getting a drug from lab to market is expensive and the companies in a free market deserve every penny they earn.

In a truly capitalist economy drug companies would own their products and assume the legal risks of peddling harmful goods. But the drug companies, unfortunately, are not particularly good capitalists, either. Executives of drug companies are frequently in bed with the FDA, and a berth at the FDA is often a revolving door back to very lucrative positions in the big drug companies or as lobbyists.

Often, the original discoveries that lead to the development of new drugs happen at tax-payer supported universities and laboratories. In such cases, it gets very murky as to who actually owns the patent. Can it exclusively belong to a company, when taxes contributed to the discovery? Shouldn't the person whose high taxes support the development of certain drugs get them at reasonable prices that reflect his or her involuntary contribution?

In societies like ours, which does not operate on clearly capitalist principles, corporations choose to buy government protection in the form of regulations that favor them and hurt the competition and gain ascendency that way, and deliver shoddy products as a result of having no competition. Drug companies in particular also petition the government for protection against tort lawsuits by those who have been harmed by drugs in which research results showed either little effectiveness or outright harmful outcomes which the companies clearly knew about.

There is no free market for drugs in the United States and I don't think that the companies labeled here as'big pharma' are much interested in having one.
Unfortunately, being in business is necessary but not sufficient to being free-market capitalists.

These are the kind of crazy-making consequences of government-sponsored and protected science that Ayn Rand warned you about in the character Robert Stadler in Atlas Shrugged.

One of the most sinister attacks against “big pharma” and on individual liberty has come from opposition to drug advertisements. “Should we allow drug companies educate the public about conditions when they could potentially benefit from people treating such conditions?” pharma-attackers ask. The answer is a resounding YES! As you point out in your article, people benefit from treating their conditions. Even if they don’t buy the prescription drug they see in a commercial a viewer benefits by simply recognizing that he has a condition and that treatment options exist.
The FDA doesn’t think so—they think we are automatons or sheep, unable to resist the pull of flashing colors and moving pictures and that it is its duty to stick its blood-stained hands further into our lives.
http://www.usatoday.com/money/industries/health/drugs/2008-02-24-drug-ad...

Also, on the “hostage” position—at root it implies a deterministic world view that implicitly states: these drugs and cures would have been discovered eventually, it’s simply an accident or luck that this specific company succeeded. Now they are profiting off of their good luck and cancer patients’ bad luck!
Thinking like this completely obliterates the human mind, self directed action and long-term planning. Because this deterministic world view is their premise, their position that companies don’t own the product of their effort makes some kind of (insane) sense.

Good points, for its parts.

Working in pharma development and research lets you see a bit beyond the horror of "Oh no, they charge a lot of money for these drugs." Screw that. The cost of getting a novel drug to Phase 2 trials is approximately $800 million.

They've got to make that money back, plus make up cost of all the drugs that do not make it. Fine. They do that. They make a lot of money and that's respectable. That's good business. It's when they pull crap like this:

Gabapentin: Marketed illegally and sold to consumers for conditions it had never been studied for, wasn't safe for and had never been approved for.

Xigris: Rumors of a false shortage to try to increase sales. Messy. Still in progress.

Zyprexa: An antipsychotic medication. The government spends a lot of money on these, as they're by and large the only people who will treat schizophrenics. Eli Lily covered up massive research data concerning metabolic side effects of the drug. Serious metabolic side effects, people getting dysregulation of sugar and fat metabolism, gaining hundreds of pounds and becoming diabetic in a matter of months.

The pharma companies get shit for charging for drugs. Admittedly, they waste a lot of money, but they bring something we desperately need in the face of massive legal difficulties. But at the same time they turn around. When you say that drug companies wouldn't last five minutes if they disregarded the health of patients, I can't disagree more. They do. They do frequently, they have done so in the past. They are still here. We need them, and we need what they make so very badly.

There's a certain form of infantile epilepsy. Untreated, it results in profound mental and physical retardation. Treated, the child can grow up and have a relatively normal life. There was one drug produced to treat this under orphan drug protection. It cost about 1000 dollars per year to treat a child. This is by no means unreasonable. When the manufacturer gets bought out, and the price gets jacked up to 17500 a year... well. You see parents who are forced to choose between their child's future health, and keeping their home. In the popular press, they get a bad rap for charging high prices for new meds. In the medical world, they get bad rap for doing stuff like the above.

[...] article in the latest issue of the Undercurrent examines the cultural vilification of Big Pharma. The piece [...]

Thank you. The bashing of Big Pharma is so prevalent that drug companies contribute to it themselves -- apologizing for the profits they make by offering "goodwill" programs of free drugs for the poor, which only draw further criticism (why can't we ALL have free drugs?).

Pharmaceutical companies are not entirely innocent -- they need to stop trying to get the government to buy their drugs (which is a long-term strategy for suicide, as this can only lead to demands for price controls in the future) -- but on the whole, the value they create is far greater than the sins they commit. Particularly considering that they have to produce that value in the face of the heaviest government regulations of any industry.