Sickening, Indeed: the Horrors of Big Pharma

Eli Lilly HQ, Indianapolis. Photo: Jeffrey St. Clair.

John Abramson has done much to expose the abuses of the pharmaceutical industry over the years. He played a key role in the investigation of Vioxx and the litigation that eventually led the drug to be pulled from the market, as well as billions of dollars to paid in settlements by Merck, its manufacturer. He has also helped to expose numerous conflicts of interest between regulators and medical journals and drug companies. His 2008 book Overdosed America, helped to call these and other abuses to the attention of a larger audience.

For this reason, there is good cause to expect that his new book, Sickening: How Big Pharma Broke American Health Care and How We Can Repair It, would make a substantial contribution to the current debate over controlling drug prices. (Unfortunately, its publication date is not until February.) The book is indeed useful in documenting the failures of the pharmaceutical industry, but it comes up painfully short in the remedies.

The first part of the book goes over some of the major scandals of the pharmaceutical industry over the last three decades. It notes the overuse of statins, a drug designed to lower cholesterol. Abramson points out that statins are often prescribed for women, based on clinical trials showing their effectiveness for men. In spite of the lack of evidence of benefit, expensive statins have been prescribed for millions of women over the last three decades.

He also recounts the history of insulin, where a simple and cheap drug, invented almost a hundred years ago, has been repeatedly modified in ways that make it hugely more expensive, with limited, if any, benefit for most diabetes patients. He also goes over the story of Vioxx, where the issue was that Merck deliberately withheld evidence that its new arthritis drug could increase the risk of heart attacks and strokes for people with heart conditions. And, he goes through the accounts of how the drug companies misrepresented the evidence on the addictiveness of the new generation of opioids, contributing to the opioid crisis the country has experienced over the last quarter century.

The second part of the book gives an account of how the drug companies are able to deceive doctors about the safety and effectiveness of their drugs. The gist of the story is that the sources that doctors rely on for information are effectively compromised by their ties to the industry. For example, the FDA committees that make recommendations on a drug’s approval typically include members who have received payments from the company whose drug they are evaluating.

This turns out to be the same for medical journals, which often run articles where the referees and editors do not have full access to the clinical trial data on which they are based. And, researchers at universities and other non-profit institutions are heavily dependent on grants from the pharmaceutical industry.

All the sources that doctors may turn to for reliable information turn out to face considerable pressure to push the industry line. As a result, they routinely end up prescribing expensive new drugs for conditions where they may not be useful and may in any case be no more effective than older cheaper drugs.

The first two parts of the book are very useful and important, it is the third part, giving remedies, that falls short. Abramson repeatedly blames the pharmaceutical companies’ pursuit of profit for the industry’s problems and sees increased government regulation as the solution.

While all of his proposals would be positive changes, he somehow misses the real story. We should take it as a given that drug companies, like other companies, will pursue profit. The issue is how the government has structured the industry and its ability to make profits.

Specifically, it is government-granted patent monopolies that allow the industry to make large profits by promoting drugs that are ineffective or even dangerous. As long as we leave this structure intact, we will be fighting an uphill battle in containing abuses. We can think of the effort as being analogous to the war on drugs or prohibition. If there is a lot of money to be made by getting around the law, creative and highly motivated people will find ways to do so.

The obvious alternative to patent monopoly financing of research is public financing. It’s not as though the idea of publicly financing of research is alien to Abramson, he talks about the massive contribution of publicly funded research to the development of the mRNA vaccines against Covid in his introduction. But for some reason, the public alternative to patent monopoly financed research is missing from his list of remedies.

There are better and worse ways to structure a system of publicly financed research, but it should be easy to see that this route would eliminate pretty much all of the problems identified in the book. (My preferred route is a system of long-term contracts, similar to the way the Pentagon pays for the development of weapons systems. I discuss this in chapter 5 of Rigged [it’s free].)[1]

If the research is paid for by the government, a condition of the funding should be that everything is fully public as soon as practical. A great model here is the Bermuda Principles researchers adopted in the Human Genome Project. All results were posted nightly.

This one is very simple and straightforward, if a researcher took the money, the public owns the results. This means both findings from pre-clinical research, as well as results from clinical trials. And, these results mean not just summary data on trial outcomes, but anonymized data on individual participants, so that other researchers can freely examine the results and come to their own assessments.

In this world, since all drugs would be available as generics from the day they are approved, no one would have any incentive to make false claims about the benefits of specific drugs. Doctors could be confident that the articles they are reading in medical journals are not biased by financial interests. Similarly, the FDA would not be facing pressure to approve drugs by someone with money on the line. Manufacturers of generic drugs make profits, but they have little stake in pushing one drug rather than another.

Finally, drugs would be cheap. It’s very rare that a drug is expensive to manufacture and distribute. If all drugs were being sold as generics, we would likely be spending less than 20 percent of the $500 billion we now pay for drugs each year. The savings come to roughly $3,000 a year for every family in the country. Also, patients would not be in a situation where their finances prevented them from getting a drug that was needed for their health.

It is frustrating that someone who has spent so much time researching the pharmaceutical industry, and is so aware of its problems, as John Abramson, backs away from the obvious solution. The horrors of the pharmaceutical industry are the predictable result of how we have chosen to structure the market. The solution is to structure the market differently and take away the patent monopolies.


[1] For those who are thinking of abuses in military contracting, let me make two quick points. While secrecy in military contracts is excessive, there are legitimate grounds for not posting the plans for our latest weapon systems on the web. There are no legitimate grounds for not sharing research on cancer or AIDS drugs. The other point is that we do actually get good weapons systems. So we may pay too much for the latest fighter or tank, but the research does produce the desired outcome.

This article first appeared on Dean Baker’s Beat the Press blog.


Dean Baker is the senior economist at the Center for Economic and Policy Research in Washington, DC.