The Black Hole in The Cost of Healthcare: Big Pharma and Transparency

It’s no secret that Big Pharma has been providing doctors with special perks in return for prescribing their products. This has been going on for ages. But to get a better grip on why the costs of healthcare have been increasing dramatically we need to understand about the massive networks that Big Pharma is involved in. Believe it or not, Big Pharma is connected to everything. The AMA, the FDA, the financial markets/big business, the insurance industry, law and politics; these are all affected by Big Pharma.

Recently it was reported that there are more Americans addicted to prescription drugs than illegal drugs. An article in The New York Times stated that ‘An analysis of autopsies in 2007 released this week by the Florida Medical Examiners Commission found that the rate of deaths caused by prescription drugs was three times the rate of deaths caused by all illicit drugs combined.’ That’s a pretty hefty number. I know quite a few people who became addicted to prescription drugs. Some said tranquilizers and painkillers were harder to quit than illegal drugs. Prescription pain killers have become the ‘new heroin’, and are increasingly becoming a major problem in the school system.

Not only are the doctors getting ‘perks’ from the drug companies, but the professors and the research facilities of major universities have been the recipient of ‘special benefits’ as well. Recently ‘three influential psychiatrists from Harvard Medical School seem to have been caught with their hands in the drug-laced cookie jar, and now they’re in big trouble. Two days after it was alleged that the three doctors failed to report a collective $4.2 million in payments from pharmaceutical companies, Harvard and the affiliated Massachusetts General Hospital have launched an investigation into the doctors’ behavior.’ Big Pharma = Big Money.

Let me just state for the record that I think research and development in pharmaceuticals is an important factor in saving lives. Not all prescription drugs are addictive or deadly. Many are necessary to keep people alive. But let me also state that many side effects from certain drugs are not discovered until many years later. This can be a ‘Catch-22’. Also more money is spent on advertising than on R&D. In an article by Science Daily it was reported that ‘the U.S. pharmaceutical industry spent 24.4% of the sales dollar on promotion, versus 13.4% for research and development, as a percentage of US domestic sales of US$235.4 billion.’ Instead of prolonging or enhancing life, getting the word out about their products is of priority.

Senator Charles Grassley (R-Iowa) is proposing legislation for reporting any payments over $500 paid by pharmaceutical companies to doctors or academic research to be on public record. ‘If they are being paid, it ought to be reported,’ said Sen. Charles Grassley, R-Iowa. Grassley is also looking at the money drug companies pay doctors for academic research. He is investigating some 20 top medical schools – including Harvard, Stanford and the University of Cincinnati, for under-reporting the income top researchers are getting from the drug industry. Grassley wants to learn if the money is influencing research.”

I think transparency on this is issue is way overdue. When the absurd ‘war on illegal drugs’ becomes part of a cover for the pharmaceutical companies’ desire to line their pockets, then something needs to be done.

(References: Discover Magazine-“Psychiatrists Who Hid Big Pharma Money Now Face Inquiry”, New York Times-“Legal Drugs Kill Far More Than Illegal”, Science Daily-“Big Pharma Spends More on Advertising Than Research and Development, Study Finds”, Weeks MD “Are Perks Compromising MD Ethics?”, The Providence Journal- “CVS Trial: Celona Tells of Becoming Point Man For CVS” , Campus Progress-” A New Kind Of Addiction”, Wired-“Prescription Drugs: Rock’s New Coke and Heroin?” and a h/t to Dr. Peter Rost’s Pharma Law Blog.)


  1. This was a really beautiful post, man, lots of MEAT…you transcended the blog format in a big way with this one. Thank you.

  2. I appreciate the feedback, Justin. Recently, there’s been more news to add to this:

    “More than 900 cases alleging that government contractors and drugmakers have defrauded taxpayers out of billions of dollars are languishing in a backlog that has built up over the past decade because the Justice Department cannot keep pace with the surge in charges brought by whistle-blowers, according to lawyers involved in the disputes.”

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