I was having a conversation today about world problems (what's new, eh?) and came upon the topic of Pharmaceutical companies. I didn't really know many facts on the topic, so was left with a few examples of why I feel they are souless monsters (along with HMOs and weapon makers). So I went on the web to try to get some more facts, here are some tidbits:
-the price of commonly-used drugs has risen at more than twice the rate of inflation for over ten years
-the absence of pharmaceutical price containment in the US leaves consumers paying two to three times as much as consumers in other countries, including neighbors Canada and Mexico
-the prescription drug industry is America’s most profitable industry, with taxable income increasing from $16 billion to nearly $25 billion from 1990 to 1996
-17 percent of pharmaceutical industry sales translate to after-tax profit, compared to an average of 5 percent for other industries
-from 1993-1996 drug compaines paid an effective tax rate of 16.2 percent compared to a 27.3 percent average paid by other major industrial categories.
-total pharmaceutical lobbying expenditures for 1998 exceeded $73 million, and for 1997 were more than $74 million
-campaign contributions favor republicans over democrats almost 2:1

-mass media advertising for prescription drugs has risen steadily and sharply — from $1.1 billion in 1997 to $2.5 billion in 2000.
-because of patent protection laws, which delay the entry of far less expensive generics, 90% of drugs sold are brand name (intellectual property rights on drugs can now extend to almost twenty years, up from about eight years in 1980)
-Two-thirds of new drugs approved in 1989–2000 used active ingredients already on the market (translation: R&D money is being spent not on making new drugs but on 'tweaking' already existing drugs or adding other ingredients in order to extend the life of the patent (up to three add. years), and to avoid long delays testing safety and efficacy)
-Taxpayer dollars have funded the basic research, as well as the preclinical and clinical research, for many of the cancer and
all of the important AIDS drugs on the market (drug companies received $27.4 billion in income tax credits, including the research and experimentation credit, from 1990 - 1996)
-drug company advertising spending is outpacing R&D spending by as much as three times
-most R&D money is budgeted towards developing so-called "blockbuster" drugs (Viagra for example) whose profit margin is up to ten times higher than other drugs
-here's something recent: "the pipeline of new treatments is drying up as drug firms -citing poor financial returns- focus instead on chronic conditions, such as high cholesterol, where medicines are taken for years rather than curing patients in one or two weeks."
In short, making medicine is about making money. Drug companies are bound by the same rules as the rest of corporate America, revenues must rise continuously. Because it's categorized in a different manner than other companies it reaps tax breaks and subsidies that make it ridiculously profitable. Too bad this profit comes at the cost of our health.
Sources include:
Open Secrets.org

National Institue for Health Care Management

NY Senior.org