The New York Times Editorial Staff - Big Pharma: The Money Behind the Pills

The headquarters of Purdue Pharma in Stamford, Conn. Federal prosecutors said the company knew of significant abuse of OxyContin soon after it came on the market, but hid that information. States and cities have filed a wave of lawsuits against Purdue Pharma and other opioid manufacturers and distributors.

Additionally, publicly funded research dollars through the National Institutes of Health (N.I.H.) and its divisions, such as the National Cancer Institute (N.C.I.), encouraged many pharmaceutical companies to sit on the sidelines and let academia and taxpayers front the cost, essentially having the public do the heavy lifting of R&D.

Thus, with little risk, drug manufacturers have been capitalizing on acquiring new drugs and smaller manufacturers. They have been able to increase the prices of exclusive drugs because there is a captive market; the sick absolutely need them, and insurers and programs like Medicare are prevented from negotiating lower drug prices. Many Americans only see the low copay costs of prescriptions, while the system is sustained on taxpayer dollars and on insurance companies that need to raise premiums to cover their liability.

With the price of pills reaching an all-time high, people are turning to the U.S. government for solutions. As a result, the squeeze from Big Pharma became a top concern in the 2016 election and remains a stress point for the Trump administration today. The articles in this collection provide valuable coverage and insights into the practices of drug manufacturers, the driving forces behind the costs consumers face and what can be done to more effectively regulate Big Pharma.

CHAPTER 1

Big Pharmas New Deal: Acquisition and Little Innovation

Within the last two decades, one of the ways Big Pharma has made money is to not develop new drugs at all. Instead, big companies such as Pfizer and Valeant perfected a new model of acquiring smaller companies and funding academic research to mitigate the risks of bringing innovative medicines to the market. This chapter covers some of the biggest purchases of smaller companies by larger companies and demonstrates how publicly funded research generates more money for Big Pharma, but almost no innovation.

Blockbuster Drugs Are So Last Century

BY ALEX BERENSON | JULY 3, 2005

INDIANAPOLIS Drug companies do an awful job of finding new medicines. They rely too much on billion-dollar blockbuster drugs that are both overmarketed and overprescribed. And they have been too slow to disclose side effects of popular medicines.

Typical complaints from drug industry critics, right? Well, yes. Only this time they come from executives at Eli Lilly, the sixth-largest American drug maker and the company that invented Prozac.

From this placid Midwestern city, well removed from the Boston-to-Washington corridor that is the core of the pharmaceutical industry, Lilly is ambitiously rethinking the way drugs are discovered and sold. In a speech to shareholders in April, Sidney Taurel, Lillys chief executive, presented the companys new strategy in a pithy phrase: the right dose of the right drug to the right patient at the right time.

In other words, Lilly sees its future not in blockbuster medicines like Prozac that are meant for tens of millions of patients, but rather in drugs that are aimed at smaller groups and can be developed more quickly and cheaply, possibly with fewer side effects.

There is no guarantee, of course, that Lilly will succeed. And some Wall Street analysts complain about the recent track record of the company, saying that it has habitually overpromised the potential of its drugs and taken one-time charges that distort its reported profits. In the last year, Lillys stock has fallen 21 percent, while shares in the average big drug maker have been flat.