The Dark Side of the Pharmaceutical Industry

The phrase “Big Pharma” evokes notions of a modern-day villain, referring to an industry that has perhaps become too powerful and too profitable to keep in check. America’s disdain for the pharmaceutical industry reached fever pitch in 2015, after Turing Pharmaceuticals raised the price of its HIV treatment medication from $13.50 to a shocking $750 per pill. Martin Shkreli, the company's unrepentant CEO, sparked outrage as he sat smirking during a congressional hearing in February 2016, refusing to answer legislators' questions.

High drug costs can sometimes be attributed to expensive and time-intensive research and development processes, but this was not the case with Turing Pharmaceuticals, as the HIV treatment had been sold at the lower price for more than 50 years prior.

In this piece, we will examine the industry’s influence and practices and explain how patients and providers—including nurse practitioners—can support efforts to improve regulation.

Pharma's Rise to Influence

Big Pharma’s roots date to the 19th century, when many of the larger pharmaceutical companies, including Bayer, were established. Several years after its founding, Bayer developed and launched the drug commonly known as aspirin. Although aspirin was deemed an essential medication by the World Health Organization, Bayer held the US patent on it for nearly 20 years. This gave the company the legal ability to monopolize production for nearly 2 decades—a hint at the drug monopolies to come.

The financial and political clout of pharmaceutical companies was intensified in 1958, when the Pharmaceutical Research and Manufacturers of America (PhRMA) was created. This trade group would grow to become the largest pharmaceutical lobby group in the country, spending over $285 million lobbying public officials between 1998 and 2015.

Today, newly developed drugs are still eligible for 20-year patents. While these are intended to help companies recoup the costs of research and development, there are loopholes. For example, drugmakers create "evergreen" products by making very slight changes to the medication in order to extend patent protections—with no benefit to the consumer. The industry also employees 90,000 sales representatives and spends $15 billion annually on selling activities. Representatives use all-expense-paid trips, cash payments, and other incentives to persuade physicians to prescribe particular drugs to their patients.

Big Pharma's abuses have been widely documented. However, when it comes to eliminating unfair practices, little action has been taken. Likely reasons include not only the influence of lobbyists, but also revolving-door politics, free-market ideologies, and regulators' financial dependence on the pharmaceutical industry. Even the FDA has been accused of being too lax in its regulation practices. It's no wonder: the pharmaceutical industry pays the FDA hefty fees to expedite the drug approval process.

Not a Victimless Crime

Big Pharma’s sizeable profits come at the expense of consumers, particularly low-income populations. When generic drugs cannot be brought to market due to patent laws, it can cost patients dearly. Moreover, provisions like those found in the Medicare Prescription Drug, Improvement, and Modernization Act bar the federal government from negotiating lower drug prices with drugmakers. The industry is trying to preserve its monopoly pricing protections overseas through the Trans-Pacific Partnership trade agreement, a move that could hurt impoverished communities in developing countries.

What Can Be Done?

Since Big Pharma has failed to make significant strides in self-regulation, the burden falls on the public to be vigilant. Consumers can and should look up their physicians on Open Payments, a database that details financial relationships between doctors and drugmakers covered by Medicare, Medicaid, and the State Children’s Health Insurance Program. Primary care providers such as nurse practitioners should also monitor Open Payments to ensure its information is accurate. Certain behaviors—such as multiple drugs prescribed for no reason—can indicate the potential influence of pharmaceutical sales representatives.

Patients who believe their care provider is overprescribing, or a provider who suspects this of a colleague, can bring awareness by reporting the person in question. Many healthcare facilities have policies in place regarding the relationships between providers and sales representatives.

There are a number of legislative efforts underway to restrict Big Pharma, including the Protecting American Talent and Entrepreneurship (PATENT) Act of 2015, which could help minimize patent lawsuits. At the state level, measures such as the California Drug Price Relief Act are helping to align state prescription costs with the prices set by the US Department of Veterans Affairs.

Despite some advances, progress toward tighter regulation of the drug industry is slow. Until more is done, patients and healthcare providers must do their part by staying vigilant, proactive, and engaged with the lawmakers who are on the front lines of legislative policy.