Prescription drug companies are everywhere, so ubiquitous that you’ll probably soon realize how numb to them you’ve become. Their ads are plastered all over everything, their logos are instantly recognizable, their brand names are well-known. Prescription drugs have found their way into pop culture, stand-up comedy and every single medicine cabinet in America. The pharmaceutical industry is tasked with helping to heal the sick, but there’s a lot of darkness involved in this big business…and it’s actually better for them if you never get well.
Start uncovering the dark truths about the pharmaceutical industry, and you’ll start looking at the drugs in your medicine cabinet much differently. Find out where the money goes, how much of it you’re actually spending on prescription drugs, what the drug companies are lying about and where the U.S. fits in the global pharmaceutical picture. Once you do, you’ll begin to notice that big pharmaceutical companies are an everyday part of your life — for all the wrong reasons.
You definitely won’t like these true but dark facts about the pharmaceutical industry, but you definitely do need to know them. After all, haven’t you and every single other person you’ve ever known taken a prescription drug at some point in your life?
15. What It Costs
Currently, Americans spend about $320 billion — that’s billion — every single year on their prescription drugs. This isn’t just big business. This is one of the biggest businesses. The U.S. outspends every other country in the world when it comes to buying pharmaceutical drugs. The U.S. spends nearly one-third more than Japan, Greece and Canada, the next four highest-spending countries on the list. Altogether, more than 12 percent of all U.S. health spending goes toward prescription drugs. In 2016, big pharma was the biggest money-making industry in the country. It led tobacco, banks and biotechnology, along with every other industry in the U.S.
14. Popular Drugs Cost More…And More and More
The more a drug catches on with the public, the more expensive it’s going to become. Take Claritin, for example. Over the course of 5 years, the price of Claritin was raised 13 times. That was a cumulative increase of more than 50 percent of the drug’s original cost. Compare that to the general rate of inflation, and the price of Claritin went up by four times as much. That hardly seems reasonable, does it? This kind of thing happens with drugs all the time, and the public rarely finds out about price hikes until they’re standing at the pharmacy counter.
13. Not All Clinical Trials Are Published
Pharmaceutical companies can be selective about which information they release, and what they don’t. One example of this is the drug Paxil, a selective serotonin reuptake inhibitor used in the treatment of depression and anxiety, among other symptoms. Pharma giant GlaxoSmithKline kept the results of certain clinical trials of Paxil away from the public, because this data shows that the drug is less-than-effective in children and teens. Studies also showed a potential increased risk of suicide among this age group, information that GSK suppressed intentionally. They were forced to publish the results of their data after a lawsuit required them to reveal this information. However, this was an isolated lawsuit applying to one drug from one company. That leaves other pharmaceutical companies free to continue to hide their information and keep research away from the public.
12. The Pharmaceutical Industry is 200 Years Old
The U.S. pharmaceutical industry really began in 1818 with chemical manufacturers in Pennsylvania. Robert Shoemaker, a glycerin maker, was the first large-scale pharmaceutical maker in the country. Chemical companies of all types began to fill the market with medicines in the last half of the 1800s, and soon it was part of common culture to take manmade drugs to chase ailments away. None of these drugs or the drug-makers were regulated until the Food and Drug Administration (FDA) was formed in 1902 by Congress. The FDA has been overseeing the industry ever since. Since those early days, big pharma has become a monster industry that affects every single person in the U.S.
11. Drug Companies Spend More on Lobbying Than Anyone
The pharmaceutical companies in the U.S. spend more money to lobby Washington than any other industry, to the tune of about $234 million in 2012 alone. Big companies throw lots of money around to influence political elections and pave the way for the candidates who will support their agenda. The second-biggest influencer in American politics is the insurance companies, who spend about $150 million a year on lobbying efforts. In the first half of 2017, prescription drug companies have already spent almost $100 million in lobbying efforts. The biggest contributors are Novartis AG, Pfizer, Amgen and Teva Pharmaceutical Industries.
10. It Markets the Crap Out of Itself
Pharmaceutical companies spend a staggering amount of money on marketing, but you’ll never see most of it. In 2012, big pharma spent about $27 billion on marketing and advertising. Most of it, however, didn’t go toward swaying consumers. About $24 billion of the marketing pie went directly to marketing toward physicians. Around $15 billion of that chunk went toward face-to-face promotion and gifts to physicians. In 2012 alone, pharmaceutical companies spent about $5.7 billion just on free samples given to physicians who will promote their products for them. Marketing directly to physicians is like double marketing when drug companies can get the doctors to market right to their patients.
9. The U.S. Leads the Way
Though the U.S. is only the third-biggest country in the world, it accounts for 45 percent of the global pharmaceutical market. The U.S. market share of the global pharmaceutical market is valued at $339 million. China’s market share of the pharmaceutical industry is valued at $86 million. China’s population vastly exceeds the U.S.; more than 1 billion souls live there. The U.S. has a population of about 330 million. Six of the top 10 pharmaceutical companies in the world are U.S. brands. The largest U.S. pharma companies are Johnson & Johnson, Pfizer and Merck & Co.
8. It Has a HUGE Profit Margin
Almost no business anywhere in the world is quite as good as big pharma at making money, and isn’t that the name of the game? Pharmaceutical companies enjoy an enormous profit margins, so all their big efforts bring in big payoffs. According to a 2013 piece from Forbes, big pharma has an average profit margin of 19 percent. That’s way ahead of the profit margin for other big industries in the U.S., including big oil and automakers. It’s a huge return on a very big investment. The pharmaceutical industry wants to keep this gigantic profit margin, and make it even bigger if possible.
7. They Get Fined Like, All the Time
Big pharmaceutical companies spend truly insane amounts of money to pay off their lawsuits and fines. GlaxoSmithKline pled guilty and shelled out $3 billion in fines for criminal charges in a 2013 case involving drugs, including big sellers like Paxil and Wellbutrin. Johnson & Johnson had to pay $2.2 billion in fines the same year for promoting off-label pharmaceuticals. And while these fines would be crippling to lots of companies, big pharma can earn money like this in just a few weeks. The billions spent on fines and litigation for Paxil are a mere fraction of the billions and billions Paxil has earned in revenue.
6. There Is No Limit to Price Hikes
Despite the fact that the entire pharmaceutical industry in the U.S. is regulated by the FDA, there’s no cap on how much companies can charge for the drugs you need. Use the drug Daraprim as an example. The price of this life-saving medication was driven up by a shocking 5,000 percent overnight when it was purchased by Turing Pharmaceuticals. In the blink of an eye, the cost of one of these pills went from $13.50 a piece to $750 each. That means the cost of a full bottle jumped from $1,700 to $75,000 — and the original price was already too much in the first place.
5. Where The Money Goes
The prescription drug business is a billion-dollar mega-industry, but how do the companies making the drugs spend all those big bucks? The biggest pharmaceutical companies in the world spend most of their money on marketing, not on drug research or developing new therapies. The bulk of the money pharmaceutical companies spend goes into promotion. For example, Johnson & Johnson spends about 13 percent of its total budget on research and development. Pfizer spends just a little more on R&D, about 16 percent. Both these big pharma companies, meanwhile, spend about 30 percent of their revenue on selling and marketing expenses. They’re spending twice as much on selling the drugs as they are on actually researching the drugs.
4. They Also Re-Brand
Big pharma will use rebranding to trick people into taking medications, if that’s what it takes. The drug Sarafem is one example. These pink pills were marketed as a cure for premenstrual dysphoric disorder. That’s basically a term for the symptoms of menstruation, along with panic attacks and mood swings. Here’s the thing: Sarafem is Prozac. It’s the exact same drug, rebranded and repackaged to appeal to a wide market of women. Who, as we know, make up 51 percent of the population. That makes them big pharma’s biggest customers. GlaxoSmithKline did something similar in 1997 by rebranding Wellbutrin as Zyban. This kind of rebranding happens with prescription drugs all the time.
3. They Create Fake Medical Groups
All those advertisements that say this pill is approved by so many people in so-and-so important-sounding group? Don’t believe them. Big pharma isn’t too big to create false medical groups and market incorrect information to you, the consumer. Look at the American Acne and Rosacea Society. It sounds like an important group of important physicians, but the group is funded almost completely by acne medications. The makers of the drug Galderma, which treats acne, has 13 out of 15 members of the American Acne and Rosacea Society on its payroll. That’s why this group was only too happy to recommend Galderma as an acne treatment. As a group of impartial professionals, of course.
2. And They’ve Bribed People
When there aren’t enough loopholes to slip through, big pharma might just go ahead and break the law outright. GlaxoSmithKline is under investigation right this minute for allegedly spending about $500 million in bribes that went to Chinese officials, doctors and medical professionals. These payments were used, presumably, to get the government to stop the flood of GSK knockoff drugs that took a bite out of the company’s profit margin. Pfizer was also caught bribing officials in several countries, including Russia and Serbia. Following the GlaxoSmithKline bribery scandal, pharmaceutical company Eli Lilly was also accused of bribing Chinese officials. Likewise, Swiss drug maker Novartis and French giant Sanofi are alleged to use bribes to pave the way for their products.
1. Direct-to-Consumer Ads Are Illegal Everywhere Else
There are only two countries in the entire world where pharmaceutical companies are allowed to create direct-to-consumer ads, and the U.S. is one of them. Only in America and New Zealand may big pharma reach out to the consumer, and they take advantage of it. In 2015, pharmaceutical companies set a record by spending a staggering $5.4 billion on ads that went directly to the consumers. That year, Americans spent more on prescription drugs than they ever did before: $457 billion. TV ad spots purchased by big pharma appear at a rate of about 80 ads per 1 hour of programming. That is a lot.
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