Thick as Thieves? Big Pharma Wields Its Power With the Help of Government Regulation

• Publication year: 2018

Thick as Thieves? Big Pharma Wields Its Power with the Help of Government Regulation

Leslie E. Sekerka

Lauren Benishek

THICK AS THIEVES? BIG PHARMA WIELDS ITS POWER WITH THE HELP OF GOVERNMENT REGULATION^†

Leslie E. Sekerka^* Lauren Benishek^**

Introduction

Americans are barraged by an endless flow of ads that claim to remedy medical maladies with prescribed drugs. The commercials depict productive and happy lives, with suggestive associations that human flourishing can be achieved via pharmaceutical intervention. The appeals are accompanied by an exhaustive inventory of potentially negative life-altering side effects. As ads end with this depiction of relational bliss through drug use, viewers hear a fast-paced listing of monotone non-segmented disclaimers, which can range from modest impacts (e.g., slight weight gain) to very serious implications (e.g., suicidal ideations). Research suggests that hearing about the risks of use may increase consumers' trust in the advertising.¹ Sufferers may also conclude that stronger means better (i.e., helping them more effectively manage their condition).² Patients may prefer a name-brand drug because the medicine may have a higher perceived quality due to advertising and promotional activities.³ American consumers are enculturated to reinforce their desire for convenience and accessibility, while also wanting their pains to go away. Moreover, they

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expect to view ads that compel them to want novel products or new applications. When it comes to health, consumers tend to mitigate the risk of taking drugs.⁴ Cognitive dissonance fuels a process of rationalizing side effects as part of the cost of wellbeing.⁵

Direct-to-consumer pharmaceutical advertising (DTCPA) refers to any promotional effort by a pharmaceutical company to present pharmaceutical drug information to the public in the lay media.⁶ Drug companies claim the ads are designed to educate patients, encourage doctor-patient dialogue, and move people to take more responsibility for their healthcare.⁷ Opponents suggest that this type of marketing tends to normalize obscure disorders, encourages people to believe they suffer from certain dysfunctions, and prompts framing uncommon diseases in a normal light.⁸ When pharmaceutical firms get U.S. Federal Drug Administration (FDA) approval for a new product, under the auspices of health communication, the government enables them to market the drug and create demand where none previously existed.

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Table 1. Top U.S. Drug Advertisement Expenditures (2016)⁹

Drug/Maker	Advertisement (in USD millions)	Purpose
Humira/AbbVie	$439	Anti-inflammatory
Lyrica/Pfizer	$392	Nerve pain management
Eliquis/Bristol-Myers Squibb	$296	Blood thinner
Xeljanz/Pfizer	$258	Anti-inflammatory
Opdivo/Bristol-Myers Squibb	$168	Cancer treatment
Chantix/Pfizer	$151	Smoking cessation
Cialis/Lilly	$150	Erectile dysfunction
Trulicity/Lilly	$142	Increase glucose (diabetes)
Prevnar/Pfizer	$142	Pneumonia vaccine

The pharmaceutical industry spends hundreds of millions of dollars annually to market its products. Direct-to-consumer prescription ads are the second-fastest growing ad category, competing with other top marketers stemming from automotive, fast food, insurance, and cable/wireless providers.¹⁰ ,¹¹ Ad spending for television by pharmaceutical companies has more than doubled in the last four years, representing a 65% increase in this genre since 2012. It is currently the seventh largest ad category in the U.S.,

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investing $6.4 billion in 2016.¹² Table 1 offers examples of top U.S. drug advertisement expenditures in 2016.¹³ Yet, greater ad spending does not necessarily correlate with product effectiveness. One of the most advertised drugs in 2016, Jublia (a toe fungus treatment),¹⁴ costs about $600 a bottle but is reported to work in fewer than 20% of users.¹⁵

In 2016, 80 prescription drug advertisements were televised every hour, totaling 1,920 drug ads directed at American viewers per day.¹⁶ Television networks—ABC, CBS, NBC—along with cable channels like CNN draw millions of dollars from pharmaceutical advertising, approximately 8% of their ad revenue.¹⁷ Given U.S. viewers watch about five hours of television daily,¹⁸ many citizens are likely to spend more time listening to pharmaceutical advertisements than talking with their physician (typically 15 minutes per visit, four times a year).¹⁹ ,²⁰ ,²¹

All this advertising can increase the cost of prescription drugs.²² Ironically, these ads actually serve as tax deductions for pharmaceutical firms.²³ Legislation to eliminate this deduction is currently being debated in the U.S. Congress but powerful lobby groups backed by the industry are challenging

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these reforms with tenacious veracity.²⁴ To better understand the interconnections between the U.S. government and the pharmaceutical industry, it is important to explain the industry's historical context. From there, issues can be discussed and ideas for systemic change considered.

I. The Genesis of Big Pharma

To understand what drives these ads, it is necessary to examine the trillion-dollar pharmaceutical industry known as Big Pharma. Big Pharma is the name ascribed to a consortium of the world's largest drug companies. The term is applied to the vast and influential pharmaceutical industry and its trade group in the U.S., known as the Pharmaceutical Research and Manufacturers of America (PhRMA). Given the astronomical amount of money made in the global prescription drug business, the industry has inordinate power and influence over consumers' lives. It is no surprise, then, that Big Pharma is the subject of heated debate amongst many stakeholder groups.²⁵

Drug companies like Merck, Eli Lilly, and Roche; and chemical firms like Bayer, ICI, Pfizer, and Sandoz, have been in business for more than 100 years, going back to a time when most medicines were sold without prescriptions and roughly half were provided by local druggists. The period between 1918 and 1939 was marked by the discovery and modest production of penicillin and insulin.²⁶ As demand for analgesics and antibiotics escalated during World War II, a government-supported international collaboration, including Merck, Pfizer, Squibb, and Lilly, sought to mass produce penicillin.²⁷ The unprecedented success of this effort signaled a new direction for drug development involving collaboration between companies and the government, forecasting the advent of the modern pharma industry.

The implementation of state healthcare systems in the post-war period created a more stable market for prescribing and reimbursement processes. For example, in 1957 the UK established a pricing scheme that enabled reasonable

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investment returns and incentivized commercial investment in the research and manufacture of new products.²⁸ In the ensuing years, consumers benefited from the introduction of over-the-counter products like acetaminophen and ibuprofen, complemented by completely new classes of pharmaceuticals such as oral contraceptives, betablockers, ACE inhibitors, benzodiazepines, and a range of cancer treatments.²⁹

Between 1980-2000, drug development was largely in the hands of multinationals, prompting the creation of "blockbuster drugs." These chemical compounds were designed to become consumer staples as treatments for common, chronic ailments. For example, the ulcer medication Tagamet quickly reached $1 billion in sales, followed by a succession of other blockbusters like Eli Lilly's Prozac (the first serotonin reuptake inhibitor) and Astra's Omeprazole (the first proton pump inhibitor). Pfizer's cholesterol drug Lipitor became the best-selling drug of all time, with $125 billion in sales over 15 years. Pharmaceuticals strategically promote products expected to become the most profitable. For example, in 2011 Boehringer Ingelheim spent $464 million advertising its blood thinner Pradaxa. The investment appears to have paid off: the drug passed the $1 billion sales mark the following year.

Today, prescription drugs are a massive market. Americans spent $325 billion in 2015 (equating to 1.8% of GDP and 10% of total national health expenditures) on retail prescriptions alone (not including drugs administered directly by healthcare providers).³⁰ Critics are concerned that pharmaceutical firms are driven more by financial self-interest than by their espoused values to serve society. Given today's legal environment, this industry is expected to reach $5.7 trillion by 2026, representing a 5/5% growth rate per year (2017-2026).³¹ Pharmaceuticals have an especially robust duty to society because they have the power to contribute to or deny the ability to live a healthy life.

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II. DIRECT-TO-CONSUMER PHARMACEUTICAL ADS

Ventola's research provides historical context for DTCPA practices today.³² The Division of Drug Marketing, Advertising, and Communications (DDMAC) within the FDA is responsible for DTCPA's regulation.³³ The FDA was given authority to approve pharmaceutical products for marketing in the U.S., as a result of the Federal Food, Drug, and Cosmetic Act, passed in 1938.³⁴ In 1962, the FDA was afforded statutory authority to regulate prescription drug labeling and advertising. Most recently, in 1969, the FDA stipulated that pharmaceutical ads must (1) not be false or misleading, (2) fairly represent a drugs risks and benefits, (3) include facts that are "material" to the product's advertised uses, and (4) briefly summarize every risk described in the product's labeling.³⁵ During the 1980s, the political climate became more favorable to the pharmaceutical industry. Patients also became more active participants in their medical decision-making, interacting with their healthcare providers.

With television introducing DTCPAs, the FDA had to consider new questions about how consumer drug...