Why We Allow Big Pharma to Rip Us Off

According to a new federal database put online last week, pharmaceutical companies and device makers paid doctors some $380 million in speaking and consulting fees over a five-month period in 2013.

Some doctors received over half a million dollars each, and others got millions of dollars in royalties from products they helped develop.

Doctors claim these payments have no effect on what they prescribe. But why would drug companies shell out all this money if it didn’t provide them a healthy return on their investment?

America spends a fortune on drugs, more per person than any other nation on earth, even though Americans are no healthier than the citizens of other advanced nations.

Of the estimated $2.7 trillion America spends annually on health care, drugs account for 10 percent of the total.

Government pays some of this tab through Medicare, Medicaid, and subsidies under the Affordable Care Act.  But we pick up the tab indirectly through our taxes.

We pay the rest of it directly, through higher co-payments, deductibles, and premiums.

Drug company payments to doctors are a small part of a much larger strategy by Big Pharma to clean our pockets.

Another technique is called “product hopping” —making small and insignificant changes in a drug whose patent is about to expire, so it’s technically new.

For example, last February, before its patent expired on Namenda, its widely used drug to treat Alzheimer’s, Forest Laboratories announced it would stop selling the existing tablet form of in favor of new extended-release capsules called Namenda XR. 

The capsules were just a reformulated version of the tablet. But even the minor change prevented pharmacists from substituting generic versions of the tablet.

Result: Higher profits for Forest Labs and higher costs for you and me.  

Another technique is for drug companies to continue to aggressively advertise prescription brands long after their twenty-year patents have expired, so patients ask their doctors for them. Many doctors will comply.

America is one of few advanced nations that allow direct advertising of prescription drugs.

A fourth tactic is for drug companies to pay the makers of generic drugs to delay their cheaper versions. These so-called “pay-for-delay” agreements generate big profits for both the proprietary manufacturers and the generics. But here again, you and I pay. The tactic costs us an estimated $3.5 billion a year.

Europe doesn’t allow these sorts of payoffs, but they’re legal in the United States because the major drug makers and generics have fought off any legislative attempts to stop them.

Finally, while other nations set wholesale drug prices, the law prohibits the U.S. government from using its considerable bargaining power under Medicare and Medicaid to negotiate lower drug prices. This was part of the deal Big Pharma extracted for its support of the Affordable Care Act of 2010.

The drug companies say they need the additional profits to pay for researching and developing new drugs.

But the government supplies much of the research Big Pharma relies on, through the National Institutes of Health.

Meanwhile, Big Pharma is spending more on advertising and marketing than on research and development – often tens of millions to promote a single drug.

And it’s spending hundreds of millions more every year lobbying. Last year alone, the lobbying tab came to $225 million, according to the Center for Responsive Politics.

That’s more than the formidable lobbying expenditures of America’s military contractors.

In addition, Big Pharma is spending heavily on political campaigns. In 2012, it shelled out over $36 million, making it the biggest political contributor of all American industries.

Why do we put up with this? It’s too facile to say we have no choice given how much the industry is spending on politics. If the public were sufficiently outraged, politicians and regulatory agencies wouldn’t allow this giant ripoff.

But the public isn’t outraged. That’s partly because much of this strategy is hidden from public view.

But I think it’s also because we’ve bought the ideological claptrap of the “free market” being separate from and superior to government.

And since private property and freedom of contract are the core of the free market, we assume drug companies have every right to charge what they want for the property they sell.

Yet in reality the “free market” can’t be separated from government because government determines the rules of the game.

It determines, for example, what can be patented and for how long, what side payoffs create unlawful conflicts of interest, what basic research should be subsidized, and when government can negotiate low prices.

The critical question is not whether government should play a role in the market. Without such government decisions there would be no market, and no new drugs.

The issue is how government organizes the market. So long as big drug makers have a disproportionate say in these decisions, the rest of us pay through the nose. 


Hedy Lamarr’s Secret Communication System

Famed Austrian-American actress Hedy Lamarr would had turned 100 earlier this month on November 9. (Born Hedwig Eva Maria Kiesler, 11/09/1914 - 1/19/2000.)

Did you know the screen legend was also a patent holder?  Having fled Europe and an unhappy marriage to an Austrian munitions manufacturer, Lamarr relocated to the United States prior to the outbreak of World War II.  In collaboration with avant-garde composer George Antheil, the two used knowledge from their respective fields to patent a “secret communication system.”  Their invention was intended to guide a torpedo by remote control to an enemy target, utilizing a novel synchronized frequency-hopping radio signal to prevent any jamming or interference from the enemy.

Figure 7 above depicts the torpedo in action, controlled from a mother ship and spotter aircraft, adjusting course to account for the ocean current and the enemy ship’s evasive maneuvers.

Patent Case File 2,292,387; Patent Case Files, 1836-1993; Records of the Patent and Trademark Office, Record Group 241; National Archives

Their innovative system was never adopted during the war, and neither would ever profit from their patent, but their ideas in frequency shifting would later prove instrumental in modern cellular and WiFi communications methods. Both Lamarr and Antheil were later inducted into the National Inventors Hall of Fame in 2014.

via the National Archives at Kansas City on Twitter:

Hedy Lamarr would have turned 100 on Nov. 9. #DYK the actress received a #patent for a secret comm. system? #USPTO

— Kansas City Archives (@KCArchives)

November 20, 2014


Expired patents turned into design files for 3D printers

"If you look at the figures in older patents, the 19th century patents are really beautiful. They’re really works of art," said Galese to New York Times. Now with 3D printing these items can be brought to life showing the brilliant ideas of the past.

Galese has posted some of these forgotten inventions on Tumblr, called "Patent-able", with drawings and CAD models of objects. He has also uploaded them to Thingiverse community where you can download them and print your own.”  ~

In 1876, Thomas Edison patented the Electric Stencil-Pen, an invention intended to help clerks reproduce documents. It featured a sharp vibrating needle that could puncture a sheet of paper 50 times per second. Users dragged it along lines of text to create tiny holes in the paper that allowed ink to sink through to papers underneath. The Electric Stencil-Pen is a relatively unknown invention, but if the process sounds familiar, that’s because it helped revolutionize the modern tattoo industry. In 1891, New York tattoo artist Samuel F. O’Reilly produced an electric tattoo needle based on the design. The speed and precision of the tool made getting inked quicker and more efficient than ever before. 


Patent of the Month: Tucker “Torpedo”

During World War II, the South Side of Chicago was home to one of the largest war plants in the country, used by Dodge-Chrysler to build bomber plane engines. After the war, Preston Tucker leased two of the buildings to build his “Torpedo” car. This site is now the home of the National Archives at Chicago! 

Read the full post on the AOTUS blog.

Image: Tucker “Torpedo” Patent Drawing, 06/14/1949. National Archives Identifier 594674


Making innovation count—7,534 times over.

Breaking geek news: Who’s the top U.S. patent earner for the 22nd year in a row? And the first group to be awarded over 7,000 in a year? IBM on both counts.  7,534 is a heck of a lot of patents, so to help us wrap our heads around the tally, we grabbed our Sharpies. High-fives to the more than 8,500 IBMers who made this improbable feat of innovation possible.   

The Communist Manifesto, As a Patent Application

Great books—books that change the way we see the world, books that spur us along our paths as people and cultures—are, in their way, patents. They are innovations made manifest. They are ideas that are claimed by an author on behalf of the rest of us. They are cultural products that concern themselves, when they are at their very best, with hammocks

The artist and developer Sam Lavigne has taken these connections to a delightfully logical conclusion. Over at github, he posted a program that renders texts—literary, philosophical—as patent applications. “In short,” Lavigne explains, “it reframes texts as inventions or machines.” 

So! Kafka’s The Hunger Artist becomes “An apparatus and device for staring into vacancy.” Heidegger’s The Question Concerning Technology becomes “A device and system for belonging to bringing-forth.” And—my personal favorite—​The Communist Manifesto becomes “A method and device for comprehending theoretically the historical movement.”

Read more. [Image: Sam Lavigne]

You did it, friend. You helped discover the cure for cancer. Pretty big deal, that. Just imagine: Within 20 years, leukemia and lymphoma could end up being nothing more than trendy baby names - alongside yours.

Understandably, your first impulse might be to share your discovery. Tell the world! But not so fast, professor. Your holier-than-thou plan for sainthood has one big flaw: that fancy little cure of yours is worth a pretty little penny. And divulging that cure before someone can patent it is likely to land you in a prison cell for crimes against economic disparity. Quarterly profits are people too, you know. And the reality is whether you want to be a saint or not, the economic considerations that govern academic research in the United States almost give one no choice but to be a scoundrel.

It doesn’t matter if you start out working for a university. Scientists are given two choices for getting their research funded, academia or not: go to work for the Pentagon or start making something you can patent. And the government and its corporations want it that way.

Of the $140bn in research and development funding requested by President Barack Obama for 2013, according to the Congressional Research Service, more than half goes through the Department of Defense; less than $30bn through the National Institutes of Health (NIH). That invariably leads to a shift in resources, with scientists going to where the money is: instead of finding ways to cure, finding high-tech ways to kill or otherwise aid the war effort. Researchers at the University of Arizona, for instance, received a $1.5m grant to “adapt their breast cancer imaging research for detection of embedded explosives”, which speaks rather well to the US government’s priorities and the toll it takes on research that has the general public in mind. [READ]