The Pharmaceutical Industry: why you may not need the Purple Pill

We spend a lot of time talking about the cost of healthcare- but that conversation is usually limited to health insurance. Another major source of cost is pharmaceuticals, or drugs. And the cost has been increasing steadily- the average price of a monthly prescription nearly doubled between 1995 and 2005, from $30 to $68.  Over $450 billion were spent on prescription drugs in 2015 in the U.S. alone.

Is medication really getting that much better? Not quite. The pharmaceutical industry is, first and foremost, designed to make profit, and they have become very good at that. Maybe you heard about how expensive EpiPens are, or Martin Shkreli, who charged $750 a pill for a medication largely used by HIV+ patients- but the problems with “Big Pharma” are usually much subtler. Let’s talk about the pharmaceutical industry, and what you as a consumer should be aware of.


To be fair, the pharmaceutical industry has done some really important things for healthcare. They burden a significant part of the research and development (R&D) costs of new medications, pushing medical innovation forward. In 2016, the top 5 U.S. pharmaceutical companies spent anywhere from $4 billion to almost $10 billion each on new drug development. Many of them also have large charitable organizations, giving both money and free medications to people in need. Merk has donated billions of drugs for river blindness in Africa; GSK has committed to give WHO free albendazole until lymphatic filariasis has been eliminated worldwide. These initiatives give expensive medications to communities that would otherwise have little to no access to them. There are many compassionate, intelligent, giving people in the pharmaceutical industry, and they work hard every day towards a healthier world.

Now that we’ve talked about the good, it’s time for the bad & the ugly.

Clinical trials

To be approved by the FDA, drugs have to go through an extensive clinical trial process that shows whether they are safe and effective… or not. The issue is that if a study concludes that a drug is not safe and/or effective, the investigators may choose not to publish. This is known as publication bias, meaning that significant results (like a new useful drug) are more likely to be reported. If 1 out of 4 studies showed a drug was effective, would you want to take it? Me neither. But if that’s the only 1 that gets published, it looks like an awesome medication. Despite new FDA regulations, a recent study found that only half of approved drugs were compliant, and only 20% had reported all clinical trial data.

If you feel strongly about this issue, make sure to check out AllTrials, a group of scientists who believe that all clinical trial results should be publicly available in a unified database.


Direct to consumer advertising

In the past, pharmaceutical industries would spend most of their time advertising to doctors- from giving them branded pens for the office to taking them on free vacations. While this still happens, these practices have become more regulated as to how much providers can be given by companies; many medical centers have gone so far as to ban drug reps from going to their hospitals/clinics. They have now turned to the other half of the equation- the patient. While drug ads seem commonplace to many of us, the U.S. is only one of 4 countries that allows this (the others are New Zealand, Brazil, and Hong Kong). Advertising has gotten so out of hand, 90% of pharmaceutical companies spend more money on advertising than they do on new drug R&D.

When you see a drug ad, maybe you tune out- or maybe you hear them bring up symptoms you hadn’t really thought much of (are you fatigued? Do you have acid reflux? Do you have trouble sleeping?). This oftentimes spurs patients to approach their doctors about problems that don’t affect their life that much, and more dangerously, encourages them to ask for a medication. While your doctor may have lifestyle modifications for your complaints to try first, the ad you saw just made that medication seem so darn effective and easy. This affects your doctor’s recommendations- patients asking directly for a medication (even a dangerous one like a narcotic) makes doctors 19 times more likely to prescribe it. The drugs that are being advertised are the more expensive brand name ones, meaning this is increasing the cost even further. What are brand name drugs? Funny you should ask…


Brand name drugs

Brand name drugs are often thought of as better than generic drugs- but they are actually the same thing. When a drug first becomes available, the company that developed it has a patent, meaning only they are allowed to make the drug for a certain number of years, as an incentive to create new drugs. Since they’re the only ones who sell the drug, they can charge whatever they want for it. But when that patent expires, anybody can make the drug, creating competition and the drug sells for cheaper. Usually the brand name is something flashy or easy to say (and capitalized), and the generic name is a chemical name- for example, Lipitor is a brand name, and atorvastatin is the generic name. But through marketing, pharmaceutical companies try to trick people into thinking that brand name, or even a completely new medication, is better.

One example of this is Nexium- the Purple Pill. In 1989, the pharmaceutical company AstraZenica started selling Prilosec (generic name omeprazole), a drug for acid reflux; but in 2001, their patent was about to expire, and they were afraid of losing the profit. So, they created Nexium (generic name esomeprazole), but they didn’t start from scratch- instead of the two mirror-imaged molecules in Prilosec (one was inactive, the other was the therapeutic), they isolated only the therapeutic molecule in Nexium. They then spent millions of dollars on direct to consumer advertising to spread the news about “the Purple Pill” before Prilosec had even gone generic. People started asking their physicians for the Purple Pill without knowing what it was treating. While Nexium may be marginally better than Prilosec, that alone does not account for the price difference- Nexium costs $271 per month, while generic Prilosec/omeprazole costs $25 per month.


Focus on specific conditions

Profit also drives what diseases pharma companies decide to focus on. Ever wonder why there are seemingly endless options for antidepressants or blood pressure medications, but we are always talking about how we need more antibiotic options or vaccines? Pharma companies make a lot more money from a pill you have to take every day than they do for something that is only 1 shot or 7-10 days of treatment. Particularly with antibiotics, resistance also often quickly develops within bacteria, making a drug less profitable overtime (you can read more about antibiotic resistance HERE!) In 2016, 13 drug companies signed a commitment to decreasing antibiotic resistance, but we’re still waiting to see if this will change anything.

There are also so-called “orphan” diseases, or a disease that affects less than 200,000 people nationally. This includes diseases like Cystic Fibrosis, ALS, and the brain cancer glioblastoma (which affects John McCain). Because so few people have these diseases, they aren’t very profitable drug markets compared to more common conditions. In 1983, the Orphan Drug Act made financial incentives for companies to focus on these illnesses (like tax credits and longer patents), but it remains an ongoing issue.

What can you do

These are all really big problems, which can make it feel like there’s nothing you can do. But you can change your own practices- try not to pay attention to ads, or ask for specific therapies because they sound familiar to you. Keep an eye out for products or companies who are trying to lower drug costs, like the Liletta IUD, Imprimis Cares, and Drew Quality Group. By buying into the lower cost options, you will be putting market pressure on other companies to lower their prices. You can donate to foundations that support rare diseases, who can help fund drug development the pharmaceutical industry isn’t interested in.


If you have a high co-pay or are self-pay, let your doctor know. There are a lot of moving parts in medicine, and drug cost often gets forgotten. In my four years of medical school, I’ve had probably 7 conversations where we weighed the cost of different medications, most of them because the patient made it a priority. If you advocate for yourself and your economic stability, your physician should work with you to find an affordable option you’ll actually be able to take. You can also see general cost guides at

At the end of the day, pharma companies charge a lot because they can. The U.S. has no regulations about what can be charged for a medication; instead it’s decided by what health insurance is willing to pay. Call your representatives to tell them if you think that should become a priority.

I know this was a heavy article, so here’s a drug commercial I support.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s