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| Wed, Nov. 25 - - Mobile - RSS | |
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Big Pharma finds miracle cures-for honest politics, fair pricing
Date published: 3/5/2002 By RICK MERCIER AMERICANS HAVE had the feeling for quite a while now that pharmaceutical companies are sticking it to them. Faced with accusations of price-gouging, Big Pharma’s refrain has been, We need to make huge profits because we spend so much on research and development. The industry tells us that were it not for its beneficent R&D, which they fund with those big profits, we might never have seen some of the drugs that have saved lives and improved our quality of life. What they don’t say is what a report a couple of years ago by the Congressional Joint Economic Committee pointed out: that several of the most important drugs developed since the mid-’60s-including Tamoxifin (for breast cancer), AZT (for AIDS), Taxol (for cancer), Prozac (for clinical depression) and Capoten (for hypertension)-were the products of federally funded research. They also don’t tell you what the health-care advocacy group Families USA reported last week: that drug manufacturers spend twice as much on advertising, marketing, and administration as they do on R&D. A close look at the 2000 annual reports of the nine leading pharmaceutical companies revealed information quite embarrassing to Big Pharma. Families USA discovered that industry giant Merck & Co., which had $40.4 billion in net sales last year, allocated 15 percent of its total revenue to advertising, marketing, and administration costs, and a mere 6 percent to R&D. Bristol-Myers Squibb Co., meanwhile, set aside 30 percent of total revenue for marketing, advertising, and administrative expenses, and 11 percent for developing new or improved medications. The two firms also racked up net profits that more than doubled their R&D budgets. The report caused the drug industry to once again repeat the argument that record-breaking profits actually serve the greater good. “When the pharmaceutical industry does well, patients do even better,” one PR flack said. No one can deny that Big Pharma is doing well these days. Pharmaceutical manufacturers represent the most profitable sector of U.S. industry, according to Families USA. Profit margins for drug makers were four times that of the average Fortune 500 company in 2000. But those fat profits aren’t doing much to help older Americans at a time when the prices of the 50 drugs they are most commonly prescribed are rising at more than twice the rate of inflation.
Date published: 3/5/2002
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