The Superbug and Big Pharma

Government slams ‘alarmist’ superbug report:

Minister of State for Health Dinesh Trivedi strongly objected to the naming of the “superbug” after New Delhi. “It’s like HIV. As far as my information is, the first patient of HIV was in America. Can we say it originated in America? So, instead of HIV, can we say ‘America NMD’ or something like that?” he wondered aloud.

We have to find if there’s some ulterior motive of some pharmaceutical industry,” he told reporters.

The Big Pharma is rears its ugly head in India too. Though the government slammed it now, everyone knows that this government will sell the whole nation if offered right price.(remember Bhopal? Nuclear liability bill?)

Are Pharma Companies that bad? Yes. Read the article The Truth About the Drug Companies, in The NY Review of Books. Some excerpts:

As their profits skyrocketed during the 1980s and 1990s, so did the political power of drug companies...For example, if it didn’t like something about the FDA, the federal agency that is supposed to regulate the industry, it could change it through direct pressure or through its friends in Congress. The top ten drug companies..had profits of nearly 25 percent of sales in 1990...In 2001, the ten American drug companies in the Fortune 500 list ranked far above all other American industries in average net return, whether as a percentage of sales (18.5 percent), of assets (16.3 percent), or of shareholders’ equity (33.2 percent). These are astonishing margins. For comparison, the median net return for all other industries in the Fortune 500 was only 3.3 percent of sales.

[the price of]Claritin, was raised thirteen times over five years, for a cumulative increase of more than 50 percent—over four times the rate of general inflation.² As a spokeswoman for one company explained, “Price increases are not uncommon in the industry and this allows us to be able to invest in R&D.”

Research, really?

Drug industry expenditures for research and development, while large, were consistently far less than profits. For the top ten companies, they amounted to only 11 percent of sales in 1990, rising slightly to 14 percent in 2000. The biggest single item in the budget is neither R&D nor even profits but something usually called “marketing and administration”—a name that varies slightly from company to company. In 1990, a staggering 36 percent of sales revenues went into this category, and that proportion remained about the same for over a decade. Note that this is two and a half times the expenditures for R&D.

This “marketing and administration” money is what is used to buy government officials, doctors, and researchers(including, most probably, the ones who wrote New Delhi super-bug report). Note that these scientists are paid from R&D money too.

If you are not yet convinced that these companies have more than enough money to spend on research without increasing medicine prices:

The most startling fact about 2002 is that the combined profits for the ten drug companies in the Fortune 500 ($35.9 billion) were more than the profits for all the other 490 businesses put together ($33.7 billion)

WTF?