This week Alan Johnson announced that he wasn’t going to stick by the Pharmaceutical Price Regulation Scheme that lines the pockets of the drugs industry. You only have to say those words to trigger to my favourite 3 minute dinner party package: how evil is big pharma?
In the UK, the pharmaceutical trade is the third most profitable activity after finance and – this will surprise you if you live here – tourism. We spend £7 billion a year on pharmaceutical drugs, and 80% of that goes on patented drugs, that is, medicines which were released in the last 10 years. In 2002, the 10 US drug companies on the Fortune 500 list had combined international sales of $217 billion, which is a lot of money. To people like you and me, that much money is probably just evil on its own terms.
They spent only 14% of that money on R&D, while spending 31% on marketing and administration. They are very careful not to let anyone see how much goes separately on marketing and on administration, because the reality is, they spend twice as much on marketing as they do on developing new drugs, and this is embarrassing for them to admit. Whenever you hear the drug companies explaining why they have to charge so much for their products – perhaps as they are denying their lifesaving AIDS drugs to the 20 million HIV positive people in Africa – the plea is that they need money to develop new drugs. That’s not true if they spend twice as much on marketing as they do on research and development. This unhappy collision of facts makes them look very evil indeed.
They also charge this money in slightly evil ways. When your drug comes out, you have ten years “on patent” as the only person who is allowed to make it. Loratadine is an effective antihistamine drug that does not cause the unpleasant antihistamine side effect of drowsiness. It was a pretty unique molecule for a while, and highly in demand. Before the patent ran out, the price of this drug, by Schering-Plough, was raised 13 times in the US in just 5 years, increasing by over 50%. This is not a price rise in keeping with inflation. This is evil.
But it’s also an industry in trouble. The golden age of medicine has creaked to a halt, and and the number of new drugs, or “new molecular entities” being registered has dwindled from 50 a year in the 1990s to about 20 now. At the same time, the number of “me-too” drugs has risen, making up to half of all new drugs.
Me-too drugs are an inevitable function of research driven by a market: they are rough copies of drugs that already exist, made by another company, but they are different enough that a manufacturer can claim its own patent. They take huge effort to produce, and need to be tested and trialled and refined and marketed just like a new drug; but for all that effort they generally don’t represent a significant breakthrough in human health. They are a merely a breakthrough in making money. Again, you have to admit, that is reasonably evil.
But what really interests me is what we do with our feelings about this evil: because it is entirely predictable, market driven venality, which can be found in every market sector, but we find it uniquely distressing when we are sick and needing healthcare. Somewhere, deep down, it’s as upsetting as thinking our parents were paid hard cash on a per diem sliding scale with performance bonuses to love and look after us.
This moral discomfort and resentment leaks out in delusional anti-MMR beliefs, or bizarre acts of faith in the vitamin pill industry, as acts of misguided and wasteful political rebellion. Why? Because everybody is a socialist when it comes to healthcare, but nobody knows what to do with those feelings any more.