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A pharmacist holds a package of EpiPens epinephrine auto-injector, a Mylan product, in Sacramento, Calif., last month. Mylan said it will make available a generic version of its EpiPen, as criticism mounts over the price of its injectable medicine. (Photo: Rich Pedroncelli/AP)

Five Deadly Sins of Big Pharma

Paul Buchheit

For Mylan, it was a perfect plan—diabolical, unstoppable. The company made changes in its anti-allergy EpiPen dispenser in 2009, enough to give it patent protection. Then, in 2012, it began to give away free pens to schools, gradually making school nurses at least partly dependent on them. Meanwhile the company was successfully lobbying for the "Emergency Epinephrine Act," commonly referred to as the "EpiPen Law," which encouraged the presence of epinephrine dispensers in schools. Most recently, after raising the price from $100 to $600, Mylan announced a half-price coupon, making itself appear generous even though the price had effectively jumped from $100 to $300.

This is capitalism at its worst, a greedy and disdainful profit-over-people system that leaves millions of Americans sick... or dead. These are the sins of the pharmaceutical industry.

1. Gouging Customers

The Mylan story is just one of many. An American with cancer will face bills up to $183,000 per year, even though it hasn't been established that the expensive treatments actually extend lives. A 12-week course of Sovaldi, for hepatitis, costs Gilead Sciences about $84 and is priced at $84,000.

This is an industry that can suddenly impose a 60,000% increase on desperately ill people. Yet the pharmaceutical industry's profit margin is matched only by the unscrupulous financial industry for the highest corporate profit margin.

2. Disposing of People Who Can't Afford Medication

A Forbes writer summarizes: "Somewhere, right now, a cash-strapped parent or budget-limited patient with a severe allergy will skip acquiring an EpiPen. And someday, they will need it in a life-threatening situation...and they won’t have it. And they will die."

A recent Health Affairs study concluded that since 2004 our medical dollars have been "increasingly concentrated on the wealthy." As a result the richest 1% of American males live nearly 15 years longer than the poorest 1% (10 years for women). The high cost of medication is one of the factors leading to early death.

3. Gouging Us a Second Time

We're paying twice for outrageously overpriced medications, both directly and with our tax dollars. The average medical insurance deductible has increased 67 percent since 2010, and most Medicare patients still face out-of-pocket costs of $7,000 or more a year.

Over $5 billion of our tax dollars was spent by Medicare and Medicaid in 2014 on just two drugs (Sovaldi and Harvoni). Pharmaceutical lobbyists have rigged the system to prevent Medicare from negotiating for lower drug prices.

Not satisfied with Medicare-related abuses, Purdue Pharmaceuticals began targeting troubled post-9/11 veterans with expensive and addicting opioid medications, and within ten years a third of the Army’s soldiers were hooked on prescription drugs.

4. Stealing Our Research

The pharmaceutical industry receives most of its basic research funding from the taxpayers, and 75 percent of the most innovative drugs were initially funded by the National Institutes of Health.

Dean Baker notes that the U.S. is unique in giving drug companies patent monopolies on drugs that are essential for people’s health and lives. An example is genetically engineered insulin, which due to patent protection cannot be made generically, and as a result can cost a patient up to $5,000 a year, many times more than a patent-expired version. Another example is the anti-parasite drug Daraprim, which has been on the market for 62 years, yet was appropriated by the now-infamous Martin Shkreli and price-hiked from $13.50 to $750.00.

A common excuse for pharmaceutical greed is the cost of research and development. But the industry spends almost $20 on marketing for every dollar spent on R&D. Meanwhile, Big Pharma has cut nearly 150,000 jobs since 2008, mostly in R&D.

5. Cheating on Taxes

Three of the world's largest pharmaceutical companies, with over $20 billion in combined profits last year, claimed nearly $9 billion in U.S. losses despite having nearly half their sales in the United States.

Other major drug companies use the notorious inversion procedure to skip out on taxes. AbbVie has done it. Pfizer tried. And Mylan, along with all its other transgressions, ditched the U.S. for the Netherlands, despite having its employees and facilities in West Virginia. Adding a further touch of hypocrisy, Mylan sought U.S. government help when another company tried to buy it out.

Patriotism is a beautiful thing to corporations when it protects their profits.


Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.
Paul Buchheit

Paul Buchheit

Paul Buchheit is an advocate for social and economic justice, and the author of numerous papers on economic inequality and cognitive science. He was recently named one of 300 Living Peace and Justice Leaders and Models. He is the author of "American Wars: Illusions and Realities" (2008) and "Disposable Americans: Extreme Capitalism and the Case for a Guaranteed Income" (2017). Contact email: paul (at) youdeservefacts.org.

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