When Some Get Sick, Some Hit The Jackpot
There's some industries that profit from the worst of human misery. Two of these leaders are the funeral industry and the pharmaceutical industry. In the case of the pharmaceutical industry, illness can be worst than death.
From 1995 to 2002, pharmaceutical companies rated as the most profitable corporations in America. The industry had an estimated net worth of $593 billion in 2003, and that same year the Kaiser Family Foundation reported that Americans spent $162.4 billion on prescription drugs. And two companies, Pfizer and Merck, alone have had four medications that have topped the $1 billion dollar sales level. Pfizer owns the blue chip drug league of Lipitor, Celebrex, Zoloft, Viagra and Zyrtec. With the strength of such drugs to market, Pfizer reported a $45.2 billion dollar profit in 2003, up a full 40% from the year earlier profits.
And drug companies like to claim that such big profits are needed for research and development of new drugs. Yet research and development often runs a weak third in many major pharmaceutical companies corporate plans. In 2003, for example, the drug companies spent $25.3 billion to lobby doctors with free samples of expensive drugs to promote prescription of newer high priced drugs which often have no low cost generic versions, when older drugs will usually work effectively for many conditions, and low cost generic versions are nearly always available. The pharmaceutical industries own trade organization, PhRMA has often sought to misled the public on the costs of research and development, which is usually no more than 12.5% of profits, whereas 18.5% simply goes into corporate profits, and the other large share is plowed into television advertising to promote a demand for the new high priced drugs from the public and the lobby of doctors with the new high priced drugs. This seems to work backwards of what should be expected. Instead of consumers going to a doctor and demanding a new drug they saw advertised on television, doctors were once supposed to make the diagnosis, now television ads are promoting the drug, fueling the consumer demand, are pressuring doctors to prescribe the medication.
And the power of the pharmaceutical industry to lobby not only the public and doctors, but also lawmakers is not to be taken for granted either. Senate Majority Leader, Dr. Bill Frist received over $161,000 from pharmaceutical and related medical lobby efforts in one five year period alone to a PAC he operates. And most every member of congress in an any committee that holds influence on regulations or policy involving pharmaceuticals has been touched by lobby money to influence their votes.
The American pharmaceutical industry in America also has several tax and financial advantages that it does not receive in other nations. For example, the taxpayer funds the National Institutes Of Health. This dramaticly cuts research costs by providing the biological basis of illnesses to the pharmaceutical companies, creating a huge research savings. And special tax breaks to the industry provide another 40% in additional tax benfits that other American corporations do not share, due to special tax laws voted by a Congress that was heavily lobbied to wrote such tax breaks into legislation.
Yet despite all these financial advantages, the American pharmaceutical industry charges very high prices for the American version of drugs. Tamoxifen, a breast cancer drug sells for about $300 in the U.S., but only about $40 in Canada. And Celebrex, the arthritis drug sells for about $78 in the U.S., but only about $46 in Canada. The pharmaceutical trade association, PhRMA has appealed to states and the Federal government to ban businesses that import the perfectly safe identical drugs from Canada, by holding up false safety claims. Yet Canada is not some terrible Third World nation where drugs are thrown together out of paint buckets. It has world class corporations with world class safety standards. It is mere profiteering by American pharmaceutical corporations that lower priced safe Canadian drugs are kept out of America. Even Bush has sided with the big pharmaceutical companies and echoed the phony safety claims of the American pharmaceutical corporations to keep drug prices very high for Americans. But for a President who has nearly a zero record on consumer issues, this is only to be expected. This White House is the most corporate pandering in the history of the republic.
The average American will spend $49 for each medication they require on an yearly average of 8.8 prescriptions. And with drug prices kept high by a Bush White House that sides with the big American pharmaceutical corporations, a congress that votes special tax breaks, special research funding advantages that are taxpayer paid, the American pharmaceutical industry is one of the very best businesses to be in. But for those hard pressed such as financially squeezed elderly or working poor families, illness is worst than death. Medications are difficult for some to afford, and the entire morality of a system where some hit the financial jackpot when some become ill should be called into question.
High pharmaceutical prices are another moral area where the American government fails to do the right thing, the moral thing. You cannot expect profit driven corporations to voluntarily be on their best behavior, it is the job of government to protect the public interests, not side with corporate greed. This is another area where the Bush Administration and congress fails a morality test.