New Internationalist

BIG PHARMA THE FACTS

Issue 362

Prescription for profit

Business is booming for the big pharmaceutical companies. In 2002 their total drug sales reached $430 billion1 – a jump of $66 billion, nearly 20%, from the previous year. 2 Big Pharma’s profit margins are the highest of any industry, beating even the widely perceived thievery of the commercial banks.

Most profitable industries (ranked by percentage return on revenues, 2001)3

Top Dogs

  • In 2002 each of the Big Pharma top ten had sales over $11.5 billion.1
  • The world’s top five drug companies have a combined worth twice the Gross Domestic Product of sub-Saharan Africa.4
  • Mergers are leading to behemoths with ever-increasing power. In 1995, 25 companies controlled over half the global drugs market; by 2000, just 15 managed to do the same thing. 5

Carve up

Big Pharma’s got its market sussed – researching drugs that sell well for a decent price in the wealthy West.

  • Globally, of the 1,393 new drugs approved for sale between 1975 and 1999, only 16 (a little over 1%) targeted tropical diseases and tuberculosis, which between them account for 11.4% of the global disease burden. 6 The majority of these were developed outside the research labs of Big Pharma. 5
  • Funding for malaria research is 80 times lower than for hiv/aids and 20 times lower than for asthma – and malaria gets the most research funding of all tropical diseases.7 Malaria kills one child every 30 seconds. Only 10% of global health research (private and public combined) is devoted to diseases that account for 90% of the world’s disease burden. 6
  • Of the 10 best-selling drugs of 2002, the top two (worth $13.5 billion in sales) were aimed at reducing cholesterol, one tackled high blood pressure, one ulcers, and two were antidepressants. 1

Friends in high places

Big Pharma spends more on lobbying politicians and regulatory bodies than any other industry.

  • In the US in 2000, the industry spent $92.3 million on 625 lobbyists (more than one for every member of Congress).13
  • The Pharmaceutical Research and Manufacturers of America (PhRMA) have upped the proposed spend for 2004 to $150 million.14
  • Industry lobbyists from the rich world are pushing for wider patent protection under TRIPS (the Trade Related Intellectual Property Rights Agreement). If they get their way the costs of drugs in some countries could rise by up to 200%. 8

To market, to market

Big Pharma spends lavishly to push its wares.

  • Between 1997 and 2002, promotion to healthcare professionals in the US doubled to $18.5 billion. Direct-to-consumer advertising added another $3 billion.
  • In the past decade the number of sales reps has tripled to 90,000 in the US and 110,000 in Europe.10
  • In Australia drug companies spent more than $660,300 a day on promotion. But this is only about 1% of the figure spent each day by companies in the US.11
  • In 2001, leading US drug companies spent almost two-and-a-half times more on marketing, advertising and administration than they did on R&D.12

Can't pay, won't get9

  • Fully a third of the world’s people cannot afford essential drugs.
  • In the poorest countries of Africa and Asia, half the population does without.
  • In the rich world, under 40% of medicines are bought privately compared to 67% in sub-Saharan Africa and 81% in Asia and the Pacific.

Medicines as percentage of total health expenditure, 2000

  1. All monetary values are expressed in US dollars.
  2. Pharmaceutical Executive, May 2003.
  3. Bob Burton and Andy Rowell, ‘Disease Mongering’ in PR Watch, Vol 10, No 1, First Quarter 2003.
  4. The 2002 Fortune 500, http://www.fortune.com
  5. Julian Oram, ‘Addicted to profit’, 2002, http://www.rarie.org
  6. Jeffrey Robinson, Prescription Games (Simon & Schuster 2001).
  7. Rachel Cohen, ‘An Epidemic of Neglect: Neglected diseases and the health burden in poor countries’, Multinational Monitor, Vol 23, No 6, June 2002.
  8. ‘Drug development for neglected diseases: a deficient market and a public-health policy failure’, The Lancet, Vol 359, 22 June 2002.
  9. IMS World Review 2003, http://www.IMS-global.com
  10. Martin Foreman, Patents, pills and pubic health: Can TRIPS deliver? (The Panos Institute 2002).
  11. ‘US promotional spend for medicines doubles’, Scrip, No 2863, 2 July 2003.
  12. Ray Moynihan, ‘Sweetening the pill’, Good Weekend, 31 May 2003.
  13. Families USA, Profiting from pain: Where prescription drug dollars go, July 2002, http://www.familiesusa.org
  14. Public Citizen, http://old.citizen.org/congress/drugs/pharmadrugwar
  15. Dr Peter Mansfield

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