The Truth The Truth About the Drug About the Drug

Companies Companies

Marcia Angell, M.D.Marcia Angell, M.D.

WORLD’S TOP 10 DRUG COMPANIES WORLD’S TOP 10 DRUG COMPANIES

AND PRESCRIPTION DRUG SALES AND PRESCRIPTION DRUG SALES 20082008

Total: 5 Total: 5 American,American, 5 5 European,European, $310 billion$310 billion

Source: Source: IMS Health “Top 15 Global IMS Health “Top 15 Global Corporations” Corporations” www.IMSHealth.com, accessedwww.IMSHealth.com, accessed

8/27/09 8/27/09

*FORTUNE 500 U.S. DRUG *FORTUNE 500 U.S. DRUG COMPANIES 2008 SALES AND COMPANIES 2008 SALES AND

EXPENSESEXPENSES

Billions

Average drug company profits 18% v. 0.9% for all Fortune 500 industries

*Johnson&Johnson, Pfizer, Abbott, Merck, Wyeth, Bristol-Myers Squibb, Lilly, Schering-Plough, Amgen, Gilead Sciences

Source: Fortune 5/4/09; company annual reports

(31%)

(15%)

(18%)

New Drug Approvals 2000-New Drug Approvals 2000-2007 (8 years)2007 (8 years)

667 new drug approvalsOnly 75 (11%) were both NME’s and improvements

Innovation:Innovation:Published Research Leading to DrugsPublished Research Leading to Drugs

Sources: Internal NIH document available from Public Citizen; also Zinner, Health Affairs, Sept-Oct 2001; also Boston Globe 4/5/98

Source of picture: Cover of An Elephant in The Living Room: The Children’s Bookby Jill M. Hastings, M.S. and Marion H. Typpo, Ph.D.

$55 BILLION$55 BILLION

What’s The Elephant Up What’s The Elephant Up To?To?

LobbyingLobbying Political contributionsPolitical contributions Front groups (patient Front groups (patient

advocacy and policy advocacy and policy organizations)organizations)

Gifts to institutions Gifts to institutions (medical schools, (medical schools, community and community and cultural cultural organizations)organizations)

““Education” of doctorsEducation” of doctors CMECME Professional societiesProfessional societies Medical conferencesMedical conferences Educational materialsEducational materials Gifts, meals, and Gifts, meals, and

junketsjunkets What doctors learn:What doctors learn:

Drug-intensive Drug-intensive style of medicinestyle of medicine

Expensive new Expensive new drugs betterdrugs better

Expanded Expanded indicationsindications

Patients pay 20% mark-up on drug prices.

Mission of Academic Mission of Academic Medical CentersMedical Centers Educate the next Educate the next

generation of generation of physiciansphysicians

Perform cutting Perform cutting edge researchedge research

Care for the sickest Care for the sickest and neediest and neediest members of societymembers of society

Mission of investor-Mission of investor-owned companiesowned companies Maximize value of Maximize value of

shareholders’ stockshareholders’ stock

The Pharmaceutical Industry The Pharmaceutical Industry and Health Reformand Health Reform

Health reform will be a windfall – Health reform will be a windfall – more customersmore customers

Obama’s promise to PhRMA: Obama’s promise to PhRMA: Medicare will not regulate pricesMedicare will not regulate prices Importation from Canada will remain Importation from Canada will remain

illegalillegal PhRMA’s promise to Obama: $8 PhRMA’s promise to Obama: $8

billion perbillion per year in discountsyear in discounts