Monday, February 03, 2020 12:00:28 PM
Thick as Thieves? Big Pharma Wields its Power with the Help of Government Regulation †
Leslie E. Sekerka, Lauren Benishek
https://law.emory.edu/ecgar/content/volume-5/issue-2/essays/thieves-pharma-power-help-government-regulation.html
Some excerpts:
The pharmaceutical industry spends hundreds of millions of dollars annually to market its products. Direct-to-consumer prescription ads are the second-fastest growing ad category, competing with other top marketers stemming from automotive, fast food, insurance, and cable/wireless providers. 10, 11 Ad spending for television by pharmaceutical companies has more than doubled in the last four years, representing a 65% increase in this genre since 2012. It is currently the seventh largest ad category in the U.S., investing $6.4 billion in 2016. 12 Table 1 offers examples of top U.S. drug advertisement expenditures in 2016. 13 Yet, greater ad spending does not necessarily correlate with product effectiveness. One of the most advertised drugs in 2016, Jublia (a toe fungus treatment), 14 costs about $600 a bottle but is reported to work in fewer than 20% of users.
In 2016, 80 prescription drug advertisements were televised every hour, totaling 1,920 drug ads directed at American viewers per day. 16 Television networks—ABC, CBS, NBC—along with cable channels like CNN draw millions of dollars from pharmaceutical advertising, approximately 8% of their ad revenue. 17 Given U.S. viewers watch about five hours of television daily, 18 many citizens are likely to spend more time listening to pharmaceutical advertisements than talking with their physician (typically 15 minutes per visit, four times a year).
All this advertising can increase the cost of prescription drugs. 22 Ironically, these ads actually serve as tax deductions for pharmaceutical firms. 23 Legislation to eliminate this deduction is currently being debated in the U.S. Congress but powerful lobby groups backed by the industry are challenging these reforms with tenacious veracity. . .
Today, the pharmaceutical industry contributes heavily to the FDA’s annual budget. Back in 1992, the (PDUFA) passed, making it the law for pharmaceutical companies to pay the FDA to review their applications for drug approvals. In response to a lethargic and burdensome process, this law was supposed to enable the FDA to work more efficiently and effectively, having more resources to conduct rigorous and timely reviews. In return, pharmaceutical firms would be able to send their products through the regulatory pipeline faster, and patients would receive new and potentially life-saving drugs more quickly. While the intent seemed to serve the greater good, many argued that PDUFA put the FDA into the pockets of the drug industry. 59 Avalere Health explored and reported how much pharma companies have actually paid the FDA through PDFUA, adding up the collected for different types of applications (e.g., for each prescription drug application with clinical data, the fee in 2016 was over $2 million). This report found that since PDUFA was passed in 1992, pharma companies have contributed $7.67 billion to the federal agency’s coffers. 60 This creates a interconnectedness between the two entities: a marriage between Big Pharma and the government can potentially blur the intent of government regulation and the role that it plays in protecting citizens.
Although interest groups have emerged to represent the rights of companies and patients alike (e.g., pharmaceutical manufacturers, governmental regulatory authorities, patent officers, academic and clinical researchers, attorneys, and political action committees [PACs]). With huge profits and a thousand paid lobbyists, Big Pharma often gains leverage in how legislation is crafted and/or abandoned. From 1998 to 2014, Big Pharma spent nearly $3 billion on lobbying, drowning out the voices of consumers and the interest groups that try to represent them. 61 While some stakeholder-driven activist groups, like Patients for Affordable Drugs, work to represent the voice of constituents, a number of powerful groups that claim to represent patient advocacy are tainted by special interest biases. One study shows that nearly all patient advocacy groups are manipulated or captured by the drug industry; over 80% of these groups take money from Big Pharma.
The (POGO) reports that at least 39 of 42 patient advocacy groups who participated in discussions with the FDA over agency review processes for prescription drugs received funding from pharmaceutical companies. 63 Additionally, at least 15 advocacy groups have representatives of drug or biotechnology companies on their governing boards. Congress recently passed the 21st Century Cures Act in 2016, authorizing $6.3 billion 64 in federal funding and weakening the FDA’s approval process. 65 worked on the bill, which served as a major financial boon to the drug and medical device industries. While patient advocacy groups were engaged, many were not independent. For example, the , a group that calls itself The United Patient Voice, has advocated before the FDA for faster drug approvals. Members of its board of directors include leaders from two of the main trade groups for the drug industry—Pharmaceutical Research and Manufacturers of America (PhRMA), and Biotechnology Innovation Organization (BIO)—along with executives from drug companies Sanofi, Johnson & Johnson, and Alkermes. PhRMA gave the National Health Council in 2014; in all, 77% of its funding came from the pharmaceutical and biotech industries, according to POGO. 66 The United Patient Voice Policy Action Team also has a PhMRA representative on it, along with an employee of Johnson & Johnson. . .
Big Pharma presents a disturbing ironic reality: the industry offers life-saving health benefits, and yet remains one of the least trusted. The reality is that “some of the largest drug companies in the world—the one’s that we rely on for life saving treatments—are convicted criminals.” 123 Are regulators enablers? Or, perhaps worse still, are they complicit in questionable or ethically unsound activities as a result of being driven by self-serving motives? Working to untie and address this Gordian knot of interrelated profiteering and motivated special interests will require increased stakeholder engagement and government activism. U.S. Senator Bernie Sanders (I-VT) asserts that “people must be prepared to stand up to powerful special interests like the pharmaceutical industry and like Wall Street.” 124 Before taking office, President Donald Trump said the pharmaceutical industry was “getting away with murder,” and vowed to do something about it. 125 The reality to date, however, is that Big Pharma has the power to continue to dictate the pricing of drugs in the U.S., where our legal platform continues to offer incentives for firms to extract exorbitant prices. Traditional common law remedies have not resulted in deterrence.
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