Wednesday, September 9, 2009

This will only hurt a little bit.

$2.3 billion = Fine against pharmaceutical giant Pfizer for improperly marketing prescription drugs -- the largest settlement of its kind in US history.

TIME Sept. 14, 2009 edition.

Shares of Pfizer (PFE 16.21, -0.18, -1.10%) were down a fraction Wednesday morning, after the Justice Department announced what it said was the largest health-care-fraud settlement in the agency's history. 9/2/09

Now, I don't know everything about stocks and investing, but if a company has to pay a nagging little fine of $2.3 billion (with a 'b') and the stock's value only drops a shade over 1%, that tells me that the investors realize that this is really only a drop in the bucket for Pfizer. For years, we have all been hearing that the high cost of pharmaceuticals in this country are because of the high cost of meeting federal drug safety standards and testing. Well, if that were true, how did Pfizer have so much money they could afford to pay this fine so easily? Those high prices they were collecting should have already been spent on that testing and regulation.

Maybe I'm going out on a limb here, but perhaps the high cost of drugs is so that the company can line its (and its investors' pockets)?

That issue of TIME I quoted above has 10 1/2 pages of ads for 5 prescription-only drugs from 4 different manufacturers (none of them Pfizer; they must be broke this week). TIME doesn't do that for pennies! Why advertise to the public? If I have to see a doctor to get these medicines, just tell HIM about them. That's what I pay him and the pharmacist for: to tell me what medicines are available for my particular condition and to prescribe what THEY feel is the best treatment for it.

I drive a train for a living. Yes, the company I work for handles only freight, but if I was running a passenger train, I really wouldn't want my doctor, who happened to be riding that day, give me suggestions as to how to run the train. In the same way, I'm not sure he would be real receptive to me 'asking my doctor' about Drug X or Treatment Y. So why do the pharmaceutical companies spend all this money on advertising in non-medical journals? To get more people to pressure their doctor to prescribe over-priced medicines! So they can line their pockets some more! So when they get caught doing something the FDA doesn't like, they can pay a fine without hurting the stockholders!

And one other thing. What line in the budget in Washington gets the $2.3b? I'll bet it would make a nice down payment on the proposed health plans Congress is supposed to be working on!


  1. Great post, just wanted to answer one question for you.

    The reason drug companies advertise in Time and other places is that in the last ten years or so, with the rise of the internet, there's been a shift in how patients interact with their doctors. The old fogies (like yourself, but that's a different post) go to the doctors and take what he prescribes. The younger people, on the other hand, tend to self-diagnose using the internet, and when the see the doctor, generally ask - by name - for the medications they've already researched online. The drug companies are quick to take advantage of this, and realize that its in their best interests to get their ads in front of as many potential customers as possible.

    Its these same people, incidentally, who are helping to drive up health care costs by insisting that they need CT scans, MRIs, flu shots and other expensive procedures, simply because they've already decided they suffer from acute monkeyitis and if their doctor can't see that, well, dammit, they need another test to be sure.

  2. I must see an old fogey doctor then, because he scolded me the one time I even inferred that I had done any self-diagnosing and self-recommended prescribing on-line.

  3. First of all, the laws were changed in the late '90s, I think, allowing for the advertisement of medications. It's a relatively recent phenomenon.

    Second, if you notice the drugs that are generally advertised, they trend towards the 'optional' type drugs. So, you have the reproductive drug ads (viagra, cialis, the pill), allergy drug ads, psych drugs (usually for 'less serious' illness like depression, not paranoid schizophrenia), and the preventative cardiac drugs (lipitor etc). So, the trend is to advertise drugs for afflictions that aren't generally life-threatening (the psych issues could be argued either way) and most of them could be worked around.

    But, the argument the drug companies are trying to make is "hey, there are literally thousands of drugs on the market. Your doctor can't stay on top of them, and YOU have a seriously debilitating case of ED/seasonal allergies/high cholesteral/sadness. You need to tell him about this new, new drug!"

    It's hard to make the argument that their are thousands of ways to drive a train and new ways invented every day!

    But, yes, drug ads are very, very annoying.