Julie Rae

Julie Rae

Primary prevention evangelist
March 17, 2017

What price for our health?

What price for our health?

There is something seriously wrong with our health system. And I’m not talking about the shortfalls in Medicare (I’ll leave that for another day).

What’s concerning me right now are the huge profits being made by large pharmaceutical companies (or ‘Big Pharma’); and the tactics they’re employing to maintain these profits.

Those of us who need to take medications regularly can struggle to pay for them. For this reason, the Federal Government subsidises many medicines through the Pharmaceutical Benefits Scheme (PBS) – making many prescription drugs much more affordable.

But will it continue?

At the moment, the Australian Government is stalling on adding new drugs to the PBS due to the huge cost involved. Currently, we’re shelling-out almost $10 billion per year for the medications already listed on the PBS. And these costs are expected to rise.

Now, let’s take a look at this situation from the other end.

At the same time that the costs of adding new medicines to the PBS are ballooning, Big Pharma are enjoying record profits.

We’re talking profit margins of 20% or more – far outstripping the profit margins of many other industries.

And Big Pharma are so concerned with market share and profits that they’ve even lied to get sales.

In 2009, a paper published on OxyContin highlighted how the marketing of it by Purdue Pharma saw it become the prescribed drug of choice for chronic pain. Prescriptions increasing from 670,000 to 6.2 million1 between 1996 and 2004.

The advertising claims included OxyContin being actively marketed as “less addictive and less subject to abuse and diversion than other opioids”. This continued until 2007, at which point Purdue Pharma was found guilty of misbranding and fined $634 million.1

Compare this fine to the profits though. In 2010, profits were $3.1 billion. This more than accounted for the fine and effectively made it a slap on the wrist.

And the cherry on the top? More people became addicted to opioids.

Nine out of 10 pharmaceutical companies spend three times more on marketing than research and development.2 Reported in The Sydney Morning Herald, pharmaceutical companies in Australia have spent $43 million on health professionals in 6 months.  This is in the form of paying for doctors to attend conferences, speaking engagements and other education events. Amazingly, pharmaceutical companies have self-regulated when it comes to advertising to health professionals.

There is some good news though

In 2014, after the Australian Competition and Consumer Commission (ACCC) requested the mandatory reporting of all payments to healthcare professionals, Medicines Australia developed a code of conduct for its members.3

The code sets the standard for the ethical marketing and promotion of prescription medicines to the 80% of health professionals that are members of Medicines Australia.

We clearly have a lot more work to do though.

First, there’s the issue of the 20% still not covered by the code. And then there’s the question of the size of the fines being imposed for breaches of the code. Are they large enough to act as a deterrent and ensure that Big Pharma does the right thing?

You be the judge: here’s a list of the top ten fines.

The question for me is: “Is there an inherent conflict of interest in our health system?”  One between the wider health needs of us, the public, versus those of commercial pharmaceutical businesses?

So where to from here?

For starters, we should ensure that:

  • all pharmaceutical companies report their marketing expenditure – both for patented and generic products
  • pharmaceutical companies disclose their country-by-country pricing of pharmaceuticals so we can be sure we’re not paying more than other countries
  • all clinical trials of drugs are publically available — including both positive and negative results — so doctors can make informed choices

1. The Promotion and Marketing of OxyContin: Commercial Triumph, Public Health Tragedy. Van Zee, Art. 2, February 2009, HEALTH POLICY AND ETHICS, Vol. 99, pp. 221-227.

2. Markovitz, Leon. Dadaviz. [Online] 2015.

3. Medical Board of Australia. Good Medical Practice: A Code of Conduct for Doctors in Australia. s.l. : Medical Board of Australia, 2014. Code of practice.