The National Cancer Institute spent $183 million of taxpayer money over nearly thirty years discovering and developing Taxol, the bestselling cancer drug in history. In 1991, Bristol-Myers Squibb signed a cooperative agreement with the NCI, supplied seventeen kilograms of raw material, and received five years of exclusive marketing rights. The company priced the drug at $10,000 to $20,000 per year, a reported twentyfold markup over manufacturing costs, and generated $9 billion in sales. Its total royalty payment to the NIH came to $35 million. The Taxol story is one of dozens Marcia Angell lays out in The Truth About the Drug Companies: How They Deceive Us and What to Do About It (2004), each one dismantling the industry’s claim that high prices fund the research that produces new medicines. The research was already funded. The public paid for the drug twice.
Angell spent two decades at the New England Journal of Medicine, serving as editor-in-chief in her final years there before leaving in 2000. Trained in both internal medicine and pathology, she sat at the center of American academic medicine and watched the industry’s capture of medical research unfold firsthand. Companies in the 1980s began exercising levels of control over clinical trials that would have been unheard of when she started at the journal: dictating study design, requiring new drugs be compared only with placebo, withholding unfavorable data, suppressing publication altogether when results threatened a product. The book grew out of an article she wrote with her husband Arnold Reiman, also a former NEJM editor, which appeared in The New Republic in December 2002 and won the George Polk Award for magazine reporting. Her prior book, Science on Trial, examined the breast implant litigation. Time named her one of the twenty-five most influential people in America.
The book arrived in 2004, four years after Angell left the New England Journal of Medicine and one year after Congress passed the Medicare Prescription Drug Benefit, which explicitly prohibited Medicare from negotiating drug prices. The pharmaceutical industry had been the most profitable in the United States for more than two decades. Its public story remained constant: prices reflected the enormous costs of developing new medicines, the industry exemplified American free enterprise, and any attempt to regulate it would halt the flow of lifesaving drugs. The structure behind that story had been built in plain sight. The 1980 Bayh-Dole Act let universities patent NIH-funded discoveries and license them exclusively to drug companies. Hatch-Waxman followed in 1984, turning patent extensions into the industry’s most lucrative legal activity. By 1992, the Prescription Drug User Fee Act had put the FDA on the industry’s payroll, with user fees eventually funding more than half of the agency’s drug-approval staff. In 1997, the FDA Modernization Act loosened broadcast advertising rules, opening American airwaves to direct-to-consumer drug marketing that remains prohibited in every other developed country except New Zealand. By the time the book went to press, 675 pharmaceutical lobbyists worked Washington against 535 members of Congress, and the pipeline of genuinely new drugs had slowed to a trickle. The architecture Angell dissects was not hidden. It was simply unmentioned.
The book sits alongside Peter Gøtzsche’s Deadly Medicines and Organised Crime in the Lies are Unbekoming catalog of works that document, from inside the establishment, what the establishment denies in public. The full summary works through the mechanics in detail. The industry’s famous $802 million R&D cost figure was constructed by doubling actual out-of-pocket costs with theoretical “opportunity cost” and applied only to a tiny self-originated subset of drugs. AstraZeneca patented half of the Prilosec molecule, renamed it Nexium, priced it slightly below Prilosec, and switched patients over before the Prilosec patent expired. Parke-Davis paid medical education companies $12,000 per ghostwritten journal article plus $1,000 to academic researchers willing to sign them, driving Neurontin to $2.7 billion in annual sales with 80 percent of prescriptions written for uses the FDA never approved. Seventy-seven percent of all drugs the FDA approved over the five years Angell examined were variations of drugs already on the market, classified by the agency itself as no improvement over existing treatments.
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