Pharmaceutical companies and device makers paid doctors about $380 million in speaking and consulting fees over a five-month period in 2013, according to a new federal database put online last week.
Some doctors received over half a million dollars each, and others got millions of dollars in royalties from products they helped develop.
Doctors claim these payments have no effect on what they prescribe. But why would drug companies shell out all this money if it didn’t provide them a healthy return on their investment?
America spends a fortune on drugs, more per person than any other nation on earth, even though Americans are no healthier than the citizens of other advanced nations, said Robert Reich, professor of public policy at the University of California at Berkeley.
Of the estimated $2.7 trillion America spends annually on health care, drugs account for 10 percent of the total.
Government pays some of this amount through Medicare, Medicaid, and subsidies under the Affordable Care Act. But consumers pick up the tab indirectly through taxes, Reich said. They pay the rest of it directly, through higher co-payments, deductibles, and premiums.
Drug company payments to doctors are a small part of a much larger strategy by Big Pharma to clean our pockets, he said.
Other tactics include:
- Use of “product hopping” – making small and insignificant changes in a drug whose patent is about to expire, so it’s technically new.
- Continue to aggressively advertise prescription brands long after their 20-year patents have expired, so patients ask their doctors for them.
- Pay the makers of generic drugs to delay their cheaper versions.
- Oppose the establishment of wholesale drug prices, a practice used in other countries.
- Argue they need money for research while the government supplies much of the research Big Pharma relies on, through the National Institutes of Health.
Big Pharma is spending more on advertising and marketing than on research and development – often tens of millions to promote a single drug, Reich said.
And it’s spending hundreds of millions more every year lobbying. Last year, the lobbying costs came to $225 million, according to the Center for Responsive Politics.
That’s more than the huge lobbying expenditures of America’s military contractors, he said.
In addition, Big Pharma is spending heavily on political campaigns. In 2012, it spent more than $36 million, making it the biggest political contributor of all American industries.
Reich thinks the public isn’t outraged partly because much of this strategy is hidden from public view.
But he also think it’s because Americans bought the notion of the “free market” being separate from and superior to government.
The issue, Reich said, is how government organizes the market. “So long as big drug makers have a disproportionate say in these decisions, the rest of us pay through the nose.”
See Reich’s article “Why We Allow Big Pharma to Rip Us Off” for more information.
