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Archives | (October 2002)
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DRUG RESEARCH A CORPORATE CON PART TWO
------------------------------------------------------------------ Page 1 of 4 In the movie "Wall Street" corporate raider Gordon Gekko proclaims "Greed is good!" much to the chagrin of his young protégé. Gekko's rapacious avarice however, pales in comparison with the real-life greed of Big Pharma's multinational drug behemoths. In a time of stagnant growth for most industries, pharmaceutical firms are posting record profits. Indeed, their return on investment - around 18.5 percent - is from three to five times the average of other industrial sectors. Taken together, the over $20 billion drug companies earned last year is more that the total of the airline, entertainment, construction and railroad industries combined. Of course, whenever their profits are questioned, the drug companies are quick to say they are necessary to fund research. Otherwise, Big Pharma asserts, we would never have the miracle cures for life-threatening disease created in their laboratories. On the surface if makes sense, except for one thing: it's all a lie. TAXPAYER SUBSIDIES OF DRUG RESEARCHLobbyists for "Big Pharma" claim that it now costs $802 million dollars to win approval of a new drug. These enormous costs, they argue, are why drug company profits have to be so high. Without them there might never be new treatments for cancer, AIDS and a host of other terrible diseases. What they don't say, however, is that the $802 million figure is derived in a way that defies any reasonable accounting standard. More important, what they don't say is that in a vast majority of the cases what was spent on research came largely from the government! To illustrate, of the 77 anticancer drugs approved between 1949 and 1996, 50 - that's right 50 - were the product of research sponsored by the National Cancer Institute (NCI). Included among them were such widely used drugs as Taxol, Zoladex and Interleukin-2. But it's not just cancer drugs that benefit from government largesse. A study funded by the National Institutes of Health found that the agency had "played a critical role" in the development of the top five selling drugs of 1995. These included such familiar products as the antidepressant Prozac, the antiulcerant Zantac, the herpes drug Zovarix and the antihypertensives Capoten and Vasotec. In another case, NIH provided Colombia University with a $4 million grant that led to the development of Xalatan, a medicine to treat glaucoma. The University sold the patent rights to the drug to the multinational drug giant Pharmacia for $150,000. In 1999, the most recent year for which figures are available, Xalatan generated $507 million in sales revenues for Pharmacia. Yet the taxpayers whose money funded the NIH grant did not get a single penny in royalties! Moreover, the raid on U.S. taxpayers isn't limited to domestic firms. A drug used to treat Multiple Sclerosis called Copaxone was developed with the assistance of some $5 million in NIH and FDA money and then licensed to Teva Pharmaceutical Industries, an Israeli manufacturer. In the first three quarters of 2000, the company had sales totaling some $175 million for the drug. To its credit, Teva has said it would be willing to reimburse the taxpayer investment in Copaxone's development, something U.S. firms have failed to do. |
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