In the last year, policy makers, the media and the public have focused new attention on the harmful practices of the pharmaceutical industry. This scrutiny provides an opportunity for health faculty, journalists and advocates to educate their students, readers and members about the near daily revelations around these practices and their policy solutions. Dividing these practices into specific categories, we have highlighted some of the industry’s egregious practices that have surfaced under society’s microscope. By engaging their constituencies in learning about harmful pharma industry practices and considering options for reducing such risks, health professionals and activists can lay the foundation for meaningful reform. By having our students read and critically analyze these sources, we prepare them to contribute to solutions.
Drug pricing has been a hot topic this year for both consumers and legislators. With as many as one in four of constituents reporting difficulty in paying for prescription medications, this issue has been brought to the forefront of American politics. For example, this past April, legislators in Maryland passed an Anti-Price-Gouging Law to protect its citizens and taxpayers from price increases within “…noncompetitive off-patent drug markets.” While this is a great first step for Maryland, there is still more to be done. This law does not affect specialty drug innovators or generic drug manufacturers. So specialty drugs like medications to treat cancer can still be priced exorbitantly high, much higher in fact than patients in the UK pay for the same medications.
If you are looking for more information on America’s fight against Big Pharma, consider watching Drug Short, a documentary in the Netflix Dirty Money video series that shows the rise and fall of Valeant Pharmaceuticals, led by a CEO who declared that his goal wasn’t to make new drugs but simply to “create stockholder value.”
Distribution of opioids
Another big ticket item taking the stage in American politics this year was the country’s current opioid epidemic and the role that pharmaceutical companies have played in the issue. A recent article from Reuters reported on a suit filed by Kentucky’s attorney general against drug distributor McKesson Corp. The suit claims that the distributor failed to flag large opioid orders being delivered different pharmacies in the state, fueling the current epidemic. While our country has seen a decrease in opioid prescriptions, according to a report from the CDC, the amount of currently prescribed opioids remains roughly three times the amount as was prescribed in 1999. What started off as a family business for the Sacklers, owners of Purdue Pharma and manufacturers of OxyContin, has generated billions of dollars for the family and company—and millions of addicts, as described in a recent New Yorker article.
Intellectual prosperity protections
Doctors Without Borders, Oxfam, the AFL-CIO and about 100 other groups focused on health standards and workers’ rights are urging NAFTA negotiators not to use the intellectual property chapter of the trade agreement to protect pharmaceutical companies and jeopardize affordable access to medicine. “It is vital that the NAFTA party governments reject any provisions that would expand or strengthen pharmaceutical monopolies and enforcement at the expense of access to affordable medicines,” the groups wrote in a letter to the top health and trade ministers of the U.S., Canada and Mexico.
In recent years, we have seen more examples of pharmaceutical monopolies and the powers that they hold come to light. Drug manufacturers like Celgene Corp., the makers of the cancer drug Revlimid have been able to extend their patent exclusivity for decades. This is especially problematic for consumers as generic medications are not developed and price gouging occurs.
Safety & Regulations
American consumers and patients rely on the FDA to approve and monitor safe prescription medications and medical devices. It’s common to see drug warning labels updated with newer side-effect information or even a black box warning if potentially adverse side-effects are known. These black box warnings often warn consumers of serious side-effects, as in the case of the blood thinner Xarelto which lacks an approved antidote causing serious bleeding incidents which have led patients to file thousands of lawsuits. Sometimes, however, this warning can hurt the drug manufacturer more than it benefits the consumers as shown in the case of varenicline, a prescription medication used to treat nicotine addiction.
For a more in-depth look into the medical device industry, consider the new book, The Danger Within Us: America’s Untested, Unregulated Medical Device Industry and One Man’s Battle to Survive It, an investigation of the products, practices and regulation of the medical device industry in the United States.
Tax Avoidance and Tax Evasion
A report from Americans for Tax Fairness examines the profits, taxes, and drug prices of the 10 biggest U.S. pharmaceutical companies: Johnson & Johnson, Pfizer, Merck & Co., Gilead Sciences, AbbVie, Amgen, Eli Lilly & Co., Bristol-Myers Squibb, Biogen and Celgene. The Pharma Big 10 had $506 billion in untaxed profits stashed offshore in 2016. These profits increased by 65% from 2011, as drug prices soared. U.S. tax law allows companies to indefinitely delay paying federal taxes on profits booked and kept offshore. The new US tax law could offer these companies a tax cut of up to $80 billion.
The late January US budget deal that reopened the federal government included a two-year delay of a proposed 2.3 percent tax on medical devices, originally included in the Affordable Care Act to help pay for the law’s health insurance subsidies. Industry had been demanding relief from the tax for months. The two-year suspension will cost the federal government about $3.7 billion. Medical device companies cheered the legislation.
Caitlin Hoff is a Health and Safety Investigator, aiming to educate people about consumer rights, and industries that seek to diminish them. Nicholas Freudenberg is founder and director of Corporations and Health Watch.