Book Review

The Truth About the Drug Companies

Marcia Angell, M.D.
Random House

A chilling account of corruption, greed and politics. This book should be required reading for everyone in the medical profession.

This eye-opener is written by Marcia Angell, M.D., former editor for the New England Journal of Medicine. Dr. Angell presents well-referenced facts which help us to understand how the pharmaceutical industry, PhRMA (Pharmaceutical Research and Manufacturers of America), has strayed from their former goal of cutting edge research and producing unique new drugs to a primary goal of financial success and billion dollar profits. This book clearly documents how greed in this industry has led to blatant abuse and infiltration into our political system.

Americans spend $200 billion each year on prescription drugs and that figure is growing. In 2004, Pfizer had a profit margin of 22 percent of sales which was $53 billion dollars. It spent 32 percent of sales ($77 billion) on marketing and administration and less than half of that amount, 15 percent ($36 billion), on research and development. Of the top Fortune 500 companies, the top ten drug companies’ profits were more that all the other 490 companies combined.

In Washington there are more lobbyists for the pharmaceutical industry than there are members of Congress. PhRMA, the industry’s trade association has 675 lobbyists and a full time staff of 120 in its Washington office. Many of the lobbyists hired by the drug companies are former politicians.

In 2003, the New York Times obtained documents which showed PhRMA would spend $73 million for lobbying at the Federal level and an additional $49 million for lobbying at the state level, $5 million to lobby the FDA, $12 million would subsidize “like-minded” physicians, another $1 million for economists and thought leaders to speak against Federal price control, $18 million to fight price controls and protect patent rights in foreign countries, $1 million “to change the Canadian health care system,” and $500,000 to block the influx of drugs from Canada.

The FDA (Federal Drug Administration) is paid hundreds of thousands of dollars as fees to approve drugs. Employees who work for the FDA are given bonuses based on how many drugs they approve. The United Sates is the only industrialized nation that does not have price regulation for pharmaceutical drugs. Pharmaceutical companies in other countries are still able to make profits.

In a speech in Mexico in 2003, former FDA commissioner Dr. Mark McClellan commented on the disparity of drug prices between the United States and other advanced countries by stating that the prices should be increased in the other countries. The Medicare Reform Bill set aside billions of taxpayer dollars for prescription drug coverage for Medicare patients. However, the law forbids Medicare to use its purchasing power to negotiate with the pharmaceutical companies.

Knowledge is power. Reading this book will give you enough information so that you can be pro-active. There is hope, Dr. Angell gives some specific suggestions on what each of us can do to make a change. This book will open your eyes to the reality of a billion dollar business. You will not be the same person after reading this.

Reviewed By:  Betty Jo Grajeda, MD
In:  Nov 2005