In this excerpt from the new book Crony Capitalism in America 2008-2012, Hunter Lewis exposes the incestuous relationship between government and the drug industry.
Lewis, who serves as president of ANH-USA’s board of directors, has written nine books on moral philosophy, psychology, and economics, including the widely acclaimed Are the Rich Necessary? (which the New York Times called “highly provocative and highly pleasurable”). He has contributed to the New York Times, the Times of London, the Washington Post, and the Atlantic Monthly, as well as numerous websites such as Forbes.com and RealClearMarkets.com.
In his new book, Lewis shows how private interests and politicians rely upon one another—political favors in exchange for money—a system known as crony capitalism. Where do private interests such as those on Wall Street or in the drug industry stop and Washington begins? It’s impossible to say anymore.
Chapter 15 is all about the FDA, and we thought our readers would enjoy this searing behind-the-scenes look at just how deeply the US Food and Drug Administration has enmeshed itself with the pharmaceutical industry:
Big Pharma and FDA:
A Marriage Not Made in Heaven
The drug industry at one time was called the patent medicine industry. This is still the more revealing name. Drug companies devote themselves to inventing non-natural molecules for use in medicine. Why non-natural? Because molecules previously occurring in nature cannot, as a rule, be patented. It is essential to develop a patentable medicine; only a medicine protected by a government patent can hope to recoup the enormous cost of taking a new drug through the government’s approval process.
Getting a new drug through the US Food and Drug Administration (FDA) is not just expensive ($1 billion on average). It also requires having the right people on your side. Drug companies know that they must hire former FDA employees to assist with the process. They also hire leading experts as consultants, some of the same experts who may be called on by the FDA to serve on its screening panels. Direct payments must also be made to support the FDA’s budget.
All these financial ties encourage a “wink and a nod” relationship between researchers working for drug companies and regulators, who are often the same people, thanks to the revolving door. As the Economist magazine writes:
Pharmaceutical companies bury clinical trials which show bad results for a drug and publish only those that show a benefit. The trials are often run on small numbers of unrepresentative patients, and the statistical analyses are massaged to give as rosy a picture as possible. Entire clinical trials are run not as trials at all, but as under-the-counter advertising campaigns designed to persuade doctors to prescribe a company’s drug.
The bad behavior extends far beyond the industry itself. Drug regulators, who do get access to some of the hidden results, often guard them jealously, even from academic researchers, seeming to serve the interests of the firms whose products they are supposed to police. The French journal Prescrire applied to Europe’s drug regulator for information on the diet drug rimonabant. The regulator sent back 68 pages in which virtually every sentence was blacked out. . . .
Medical journals frequently fail to perform basic checks on the papers they print, so all sorts of sharp practice goes uncorrected. Many published studies are not written by the academics whose names they bear, but by commercial ghostwriters paid by drug firms. Doctors are bombarded with advertising encouraging them to prescribe certain drugs. . . .
What the Economist calls “bad behavior” also spills over from the medical world to the financial world. Just since 2008, 75 people have been charged with trying to profit from inside information about drug approvals or company mergers related to patentable drugs. One of them, an FDA chemist named Cheng Yi Liang with access to the Agency’s approval database, pleaded guilty to insider trading on 25 companies for a total gain of $3.78 million over five years. Others with larger resources to invest have made much larger sums. Rod Rothstein, the US Attorney for Maryland who helped prosecute the FDA case, has noted that “healthcare is particularly attractive to criminals because so much turns on government regulatory approval.”
Dr. Ben Goldacre, author of Bad Pharma, summarizes the entire drug approval process as follows: “[It] is broken. . . . The people you should have been able to trust to fix [the] problems have failed you.”
Although the costs of drug approval keep growing, along with the related corruption, the financial payoff for those ultimately winning approval can be astronomical, because approval also brings with it a government-protected monopoly. Only FDA-approved drugs can be prescribed within government programs such as Medicare. Doctors may prescribe unapproved substances outside of Medicare, Medicaid, or the Veteran’s Administration, but by doing so risk losing their license to practice. Some approved drugs may be priced as high as $500,000 per year per patient.
The FDA will also discourage, and often ban, substances that might compete with approved drugs. When anti-depression drugs (based on extending the life of a hormone, serotonin, inside the body) were approved, the Agency promptly banned a natural substance, L-Tryptophan, that increased serotonin, even though the natural substance was much cheaper and had long been available. Many years later, after the anti-depression drugs were well established, Tryptophan was finally allowed back, but under restrictions that made it more expensive.
In general, the FDA maintains a resolutely hostile stance toward supplements. It will not allow any treatment claims to be made for them, no matter how much science there is to support it, unless they are brought through the FDA approval process and thus become drugs. The Agency understands that this is a classic “Catch-22.” Who can afford to spend up to a billion dollars to win FDA approval of a non-patented substance? The answer is obvious: no one. So the real FDA intent is simply to eliminate any competition for patented drugs, since these drugs pay the Agency’s bills.
This FDA policy prevents millions of Americans from hearing about food or supplement remedies that are safer and cheaper than drugs. It hurts the poor and the middle class. But, ironically, it also hurts the rich, even the crony capitalist rich. A national magazine ran a profile of a Wall Street billionaire sitting in his gigantic Connecticut mansion, popping acid blockers for a stomach problem that tormented him. He was totally unaware of research suggesting that most such ailments stemmed from too little acid, not too much, and that a few simple tablets containing hydrochloric acid, one of the cheapest supplements, would probably end his pain.
Why did the billionaire not know this? The answer could not be simpler: crony capitalist drug companies earn huge profits from acid blockers, and along with their friends in government at the FDA, succeed in keeping this information hidden. So there the billionaire sits in his great mansion, unable to enjoy it because of intense stomach pain.
Drug companies and the FDA are not alone in wishing to suppress supplement alternatives to hyper-expensive patented prescription drugs. They have allies among both politicians and doctors. For example, the Archives of Internal Medicine, run by the American Medical Association, and supported financially by drug companies, often publishes flimsy studies attacking supplements, and generally ignores the considerable scientific evidence in their favor.
One such study, published October 10, 2011, by University of Michigan researchers, purported to show that taking supplements could shorten your life. It caused a media feeding frenzy, with headlines everywhere. The problem was that this study, like its predecessors, was junk science. The women in the study were asked every six years what they had taken. They were supposed to remember what they had taken for the six-year period. The reports did not have to be specific: the word “multivitamin” could mean anything. Who knows what was taken or even it if was taken? It could also be synthetic or natural.
Those who reported taking “multivitamins” were found over time to be healthier on average than others and to live longer. But the authors of the study, who clearly had an anti-supplement agenda, made numerous “adjustments” attributing the good health to other factors. Once these arbitrary “adjustments” were made, they then concluded that supplements actually made these healthier than average and longer living people unhealthier. Even after the “adjustment,” the statistical evidence was weak to nonexistent, but that did not prevent media from all over the world reporting that supplements may hasten your death.
What was behind this? The AMA seems worried about competition for its brand of medicine, which focuses almost exclusively on conventional drugs and surgery. It is especially worried about competition from “integrative” doctors who include advice about food, supplements, and exercise in their practice. The AMA and its affiliates also have a tight relationship with drug companies, and depend on them for financial support in many forms, not just journal advertising. Both the AMA and drug companies thus seem determined to trash supplements and those giving advice on supplements.
Dr John Rengen Virapen (1/4) Big Pharma Whistleblower Speaks Out at the AZK in Germany (Full Edit)
Uploaded on Jul 9, 2009
Dr. John Rengen Virapen worked 35 years for Eli Lilly & Co as an executive. He now speaks out on the many crimes Big Pharma was and is responsible for and he himself also participated in. Unfortunately, many of its crimes go passed public awareness as it enjoys the unethical protection from its big allies, the mainstream media, the FDA and governments.
Check out accompanying blog carrying ample background material:
New interview dated 2009-07-27 on blogtalkradio: