How Big Pharma Gains While Everyday Americans are Hurt in the War on Drugs
While the typical American pays outrageous prices for prescription medications, the pharmaceutical industry benefits financially from Washington’s crooked culture.
President Trump has repeatedly vowed to take on the medical companies and lower the cost of prescription pharmaceuticals, and he has filled top roles in his administration with insiders from the pharmaceutical sector. He had resisted, though, taking any real action.
Additionally, the pharma industry charges exorbitant prices for drugs despite being given major tax breaks and publicly funded basic research from the U.S. government. However, the problem extends beyond the topic of cost, which we cover in today’s blog post.
1. How Pharma is on a War with Regular Tax-Paying People
Pharmaceutical firms continue to receive government benefits as Americans are Attempting to choose either paying the bills and receiving treatment. Changing Washington’s dysfunctional system will make it possible to lower medical costs and the costs that regular people must bear. Let us discuss saliently how Big Pharma is on the warpath with the health of regular joes.
2. American Taxpayers Fund Is Funding Basic Drug Research
The development and promotion of new medications are funded by billions of tax dollars(Finkelstein, 2002). The National Institutes of Health have contributed almost $900 billion since the 1930s to primary and research activities that gave rise to the pharmaceutical and biotechnology industries(Baldwin, 2022). Despite a critical federal investment, prescription medicine costs are rising for American patients.
The National Institutes of Health (NIH) contributed to “scientific literature linked to each of the 210 new medications authorized by the Food and Drug Administration during 2010-2016”, according to a 2018 study on the firm’s financial contributions to new treatment licenses (Cleary et al., 2018). The 210 medications approved over that six-year timeframe were the direct or indirect outcome of NIH injecting funding for research up to $100 billion in revenues.
3. Tax Credit and Deduction Perks for Big Pharma
Research and development tax credits, first implemented in 1981 to stimulate private sector investments in ground-breaking research (Holtzman, 2017), are also advantageous to the pharmaceutical industry.
Businesses that try to create new, enhanced, or sophisticated technology goods or business procedures are eligible for this tax credit, which President Obama signed into law in 2015.
Pharmaceutical companies can also deduct marketing and advertising costs from their taxes (Schwartz & Woloshin, 2019). Patient care saw rapid expansion from 1997 to 2016, “with expenditure going from $17.7 to $29.9 billion, with direct-to-consumer advertising for prescription pharmaceuticals and healthcare services” seeing the highest rise which is coming from pharmaceutical marketing to healthcare professionals (Donohue et al., 2007).
4. Maximum Profits Minimum Accountability
Despite these government subsidies, prescription medication costs are rising at a concerning rate. Increased prices impacted more than 3,400 medications from pharmaceutical manufacturers in 2019 (Wineinger et al., 2019).
The largest pharmaceutical medication producer in the world, Teva Pharmaceutical Industries Ltd., raised the cost of its products by more than 9% (Griffith, 2019).
Companies continue to declare sales in the millions of dollars, with Allergan reporting $15.8 million in revenue in 2018 and Teva Pharmaceuticals reporting $18.8 million (Investor Overview | AbbVie, 2018).
When the drug industry introduces new pharmaceuticals, particularly specialized drugs used to treat life-threatening disorders, their profit margins increase significantly. Most Americans cannot afford the high expense of these medications.
Patents let pharmaceutical corporations maintain high prices by eliminating competition. To extend a drug’s monopoly, pharmaceutical corporations have also used strategies like “evergreening” and “thicketing” and continued like this for decades (Hacohen, 2021; Holman, 2019).
As the most prominent 25 corporations, producers unfairly benefit significantly from their 15–20% annual average profit margin (GAO, 2017).
5. War by Big Pharma on Opioids and Heroin Epidemic Which They Help Create
The “war on drugs” waged by the government for many years aimed to halt the manufacturing of illegal drugs in nations including Bolivia, Peru, Mexico, and Afghanistan (King, 2008). More Americans now die from cigarettes, alcohol, and prescription medications than from all illicit drugs. The tobacco and alcohol industries generated record amounts of their goods domestically.
Our nation’s drug crisis, which the pharmaceutical business helped to create, is being addressed by increased drug production.
More drugs will not make a drug issue go away. Nevertheless, we are acting in that manner. , the pharmaceutical industry has developed medications, including methadone, buprenorphine, naltrexone, and Vivitrol, to treat opioid addiction(Veilleux et al., 2010).
Let us not overlook the numerous cessation aids, including nicotine patches, gum, Nicorette, and nasal spray. To cure alcoholics, two well-known drugs are currently available: disulfiram and naltrexone.
6. Lucrative Lobbying Tactics
Medicare Part D was established by legislation signed by President Bush in 2003, but one of its clauses forbade Medicare from negotiating prescription pricing. For drug business to offer their medicines, Congress and President Bush established a new market that was assured, protected by government-granted monopolies, and expressly forbade price-bargaining.
Anti-price-gouging legislation has received resounding popular support due to the industry’s ever-rising prices for both traditional and novel medications. So why does it keep getting stuck in Congress? Because the pharmaceutical sector influences both political parties. Industry spending on influencing in Washington has totaled $2.7 billion since 2008, with 44% of that amount going to Congressional Republicans and 56% to Congressional Democrats (Fields, 2013).
Critical Information that the Pharma Does Not Want Public to Know
The pharmaceutical industry worldwide has promoted a false narrative for many years to explain away the constantly rising, excessive costs of medications, vaccinations, and diagnostics as being necessary and unavoidable.
To defend their profit-maximizing business practices, pharmaceutical corporations continue to spread several fallacies regarding the expenses associated with the creation and price of medications and other health supplements. These fallacies are done at the cost of the lives of people.
Do the common masses want to know how these big pharma companies are deceiving an ordinary man? Following is some critical information everyone should know.
Developing Drugs is Not THAT Expensive
Big Pharma exaggerates the price of research and development (R&D) for new medications to support their steep prices, including arguments such as the cost of purchasing another firm as R&D expenditures. Big Pharma frequently claims that it costs US$2–3 billion to create a new drug (Light & Lexchin, 2012); however, other reliable estimates place the expense at least ten times cheaper, in the range of $100–200 million (DiMasi et al., 2003).
7. Patients Get Charged Twice for Life-Saving Medicine
Most new pharmaceuticals and medical innovations are developed in government and university laboratories, which get public funding from taxpayers. They receive tax subsidies and other financial incentives to mitigate the risk of their research efforts and privatize and patent the outcomes. Then they impose high fees on governments and taxpayers (Holtzman, 2017).
8. Little Innovation and More Iterations
The trade receives about two-thirds of new medications that are no better than what is already available (Dranove et al., 2014). Pharma companies spend more time creating iterative medications than discovering novel treatments (Light & Warburton, 2011).
9. More Profits for Big Pharma but Little Re-investment
Big Pharma claims that they require enormous profits to finance R&D and innovation. However, they spend more on sales, marketing, and share buybacks to raise their stock values than on R&D (Light & Warburton, 2011).
10. Big Pharma Bullies and Pressurizes Developing Countries for its Interests
Big Pharma repeatedly targets low- and middle-income nations like India, South Africa, Thailand, Brazil, Colombia, and Malaysia with coercive legal lawsuits for putting the interests of the public under those of the pharmaceutical industry (Melrose, 1983). Pharma works aggressively to sway international trade laws in its favor, along with some wealthy nations, even at the expense of public health.
11. Extending Patents to Prolong Monopolies
Patent “evergreening,” a well-known pharma strategy, involves companies applying for patents on minor modifications to already-approved medications to extend their monopoly and prevent the availability of low-cost generic alternatives (Hacohen, 2021; Holman, 2019).
12. Doctor Kickbacks
It has frequently been claimed that big Pharma pays off physicians. In actuality, there is no difference between them in terms of price, quality, or any other factor. Instead, the business that can sell to doctors the best will be the one that makes the most money (Stowell et al., 2018).
Several consumer advocacy organizations have called this dishonest. To help patients determine whether their doctors’ advice may be skewed, a proposed regulation would require doctors to report all bribes to them and proper, correct prescriptions without bias.
13. Disease Mongering
Pharmaceutical firms are infamous for exaggerating diagnoses. This means they have created several diseases that do not exist (Brody & Light, 2011). Addictive medicines are sold to treat mental problems like moodiness and restlessness and are given fancy labels like ADHD.
Most of the time, the treatment only worsens the condition and leads to drug addiction in the patients. The fact that these people can no longer live regular lives after ingesting the medications intended to treat them is a severe moral failing for these pharmaceutical companies.
14. Defaming Alternate Therapies
The practice of medicine is not limited to allopathy. There are several additional care applications. They are known as alternative therapies presently and cover disciplines like acupuncture, homeopathy, and Ayurveda, among others. In actuality, many chronic diseases may respond better to these treatments (Ernst, 2019).
Allopathic medical professionals, however, will disparage these treatments by giving false and deceptive information.
Ending Notes
In conclusion, pharmaceutical companies are making much money. These earnings come at a high human cost, in any case. These pharmaceutical businesses are quickly turned into targets of widespread hostility due to their highly dubious ethical practices.
References
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