Martin Shkreli is commonly viewed as a pharmaceutical villain. He is remembered for his absolute disregard for the people his medications were designed to protect. He worshipped profit and profit alone.
But, Shkreli was not an outlier in an otherwise reasonable health care system. Rather, he is a symptom of the American epidemic known to many as Big Pharma.
Drug Costs by the Numbers
Today, medical debt is the top reason Americans file for bankruptcy. Among the many unreasonable healthcare costs in America, pharmaceutical drugs have earned a top spot. In 2014, 4.3 billion prescriptions were filled by Americans. That's approximately 3 prescriptions per person. All those drugs cost $374 billion.
In 2015, the American Association of Retired People (AARP) reported the annual costs of commonly prescribed medications in the United States to be roughly $53,000 a year. At the time, the median U.S. household income was $52,000. If the average American in 2015 spent every dime they had on medications - an impossibility given the necessary expenses for food and housing - they would lose $1,000 per year.
Specialty drugs - those designed for rarer or more serious diseases - bring costs to a whole new level. These drugs make up a third of all spending on medications. Sovaldi, a breakthrough drug that revolutionized treatment for Hepatitis C is a great example. It is effective, safe, and can be taken orally. It also costs $1,000 a day. A patient would pay up to $84,000 for a 12-week treatment course of Sovaldi.
The Drug Approval Process
Even as the cost of prescriptions are going up, pharmaceutical companies are trying to cut costs. One way to do this is by reducing the amount of time it takes to bring a medication to market. The faster a pharmaceutical company can bring a product to market, the more money they can make. Unfortunately, this has severe health and safety implications.
Clinical trials often take years to conduct and are a required component to gain approval from the U.S. Food and Drug Administration (FDA). New medications must be proven safe and effective in animals first, followed by humans, before an application can be submitted.
However, despite years of clinical trial requirements, the FDA approval process is faster than the drug approval process in many other countries. Furthermore, the FDA has "fast track" and expedited review options that allow certain drugs to receive approval more quickly.
Unfortunately, these faster approvals are not risk-free. Consumers continue to suffer from shortened trial times. About one-third of new drugs approved by the FDA encounter safety issues. Many of these issues were known by the drug manufacturers and hidden from the FDA and consumers.
Even when issues are unknown, they likely would have been caught during longer, more carefully designed trials. Bad science, rushed by those who want to make money, forfeits safety.
The Story of Pradaxa
Pradaxa is a blood thinner that caused severe bleeding in thousands of patients. It was fast-tracked when Boehringer paid to have it placed under Priority Review. The FDA had to provide a decision in under six months, and Boehringer was only required to submit one clinical trial instead of two.
Based on evidence from a later FDA investigation, the sole Pradaxa trial suffered from a number of problems that were only caught after the fact. In fact, the regulatory agency found issues with data at 5 out of 7 Pradaxa testing sites. Some of the mistakes were as elementary as numbers placed in the wrong columns or simply recorded inaccurately.
The trial also had issues with recording side effects. The researchers only tracked the side effects they expected. They ignored all other adverse effects that participants in the trial experienced. Furthermore, researchers only recorded side effects that occurred within six days of a dose. Bleeding risks were not mentioned in the trial's data at all.
Initially, the FDA refused to approve Pradaxa. But, the agency reversed its decision after a closed-door meeting with Boehringer in December 2010. There was no explanation given for the change.
Within three months of approval, the FDA received more reports of deaths and serious side effects due to Pradaxa than any other regularly monitored medication. Three years later, the FDA required a black box warning for Pradaxa, specifically highlighting fatal bleeding risks. These serious health risks eventually prompted about 4,000 Pradaxa lawsuits. The lawsuits were ultimately settled before going to trial in 2014. By this point, Boehringer had made hundreds of millions of dollars off of Pradaxa.
Marketing to the Doctors
Although pharmaceutical companies are looking to cut costs, they are nonetheless spending more than ever on marketing their medical products. Two of the most prevalent places Big Pharma advertises are in medical journals and doctor's offices.
There's a specific reason behind marketing to healthcare professionals. You can convince a consumer that your medication is the solution to his or her health problems. But without a prescription, there's no sale.
Advertising in Medical Journals
Medical journals today sometimes have more adverts than editorial material. It may seem contradictory to have ads in medical journals. Some editors have even tried to remove them for the integrity of their published works.
But, more than 97% of advertising revenue in medical journals come from Big Pharma advertising. Without funding from these pharmaceutical companies, many medical journals wouldn't survive.
This gives corporations a huge amount of leverage. Some drugmakers won't agree to buy ads unless the journal includes a favorable mention of their products. In other cases, pharmaceutical companies imply that they themselves would buy more copies of an issue that favored them.
Additionally, pharmaceutical companies fund many studies found in these journals. This further inserts these companies into medical journals by proxy of authorship.
Advertising in Doctor's Offices
Drug representatives personally market medications to physicians. Some representatives have prescription quotas for "selling" doctors on the benefits of their products.
Depending on the company, sales representatives may also have large budgets they can use to incentivize physicians to prescribe certain medications. These incentives include everything from knick-knacks like branded pens to "educational opportunities" taking place on tropical islands.
In 2000, drugmakers spent $6 billion on kickbacks to healthcare professionals. Consumers are paying ridiculously high prices for life-saving medication so that Big Pharma can incentivize more sales.
Ignoring Approved Drug Uses
Big Pharma advertising is manipulative. But, it's not the only issue at play.
It is common for the marketing materials of a drug to embellish the benefits and downplay negative side effects. Some marketing materials highlight drug uses that the medication isn't approved to treat.
One prominent example is Risperdal. Risperdal is indicated for schizophrenic adults only. However, the drugmaker Johnson & Johnson wanted to expand the market for the antipsychotic medication.
The company began to market the drug for both autistic children and elderly people with dementia. Both groups sometimes suffer from some violent tendencies similar to schizophrenics. One marketer went so far as to plan a "back to school" campaign for Risperdal. Samples of the drug included small toys.
Risperdal wasn't approved for these age groups for very serious reasons. Children who took the prescription entered premature puberty. Young girls taking the medication began to lactate. Young men began growing breasts because of the drug.
The drug can also cause insulin resistance, increasing a patient's risk for type 2 diabetes.
If that weren't enough, the use of the medication by elderly patients was associated with increases in strokes and heart attacks. The combination of side effects, deaths and off-label marketing has led many to file Risperdal lawsuits.
The Big Pharma Lobby Engine
Apart from doctors, the pharma industry spends a significant amount of money speaking with lawmakers and bureaucrats. Pharmaceutical companies have some of the most aggressive lobbyists on Capitol Hill.
In the first half of 2017, Big Pharma companies spent $145 million on lobbying. These companies gave $4.5 million to campaigns and spent another $28 million on ads depicting "heroic" researchers. Dozens of solutions have been proposed in Congress to help Americans battling high drug costs. The majority of these solutions have been struck down.
One solution on the table is to allow foreign drug imports. This would lower costs by allowing consumers to buy medications from outside the U.S., where they are sometimes a quarter of the price. But, the proposal was voted down. Lawmakers cited worries about the safety of foreign medications. This is a common argument pushed by lobbyists for U.S. pharmaceutical companies.
Why We Still Buy
Is there a price you wouldn't pay to save a loved one? For most Americans, the answer is no.
Pharmaceutical companies know this, and they use it to their advantage. A 6,000% increase in a drug price can happen because the law allows it to, and because people will pay anything to save a life.
The system is unethical at its core, built to put the needs and safety of the consumer last. In the question of wellness or wealth, Big Pharma's choice is clear.