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How much of our tax dollars go to Big Pharma? A lot.

Member Story

How much of our tax dollars go to Big Pharma? A lot.

Picture of Martha Rosenberg
Saturday, February 20, 2016

 After an 18 month investigation into the high cost of Gilead’s hepatitis C drug Sovaldi--initially listed at $84,000 for a course of treatment or $1,000 per pill--the Senate Finance Committee said the prices did not reflect the cost of research and development and that Gilead cared about “revenue” not “affordability and accessibility.” That sounds like an understatement. Sovaldi and the related pill Harvoni cost Medicare and Medicaid more than $5 billion in 2014 charged senators.

But Gilead is far from the only drug company camping out on our tax dollars. In the 2000's, atypical antipsychotics were widely prescribed to children with behavior problems enrolled in Medicaid programs provoking lawsuits from states as their budgets were sacked.

In 2008, the Texas attorney general’s office charged Risperdal maker Janssen (Johnson & Johnson’s psychiatric drug unit) with defrauding the state of millions  “with [its] sophisticated and fraudulent marketing scheme,” to “secure a spot for the drug, Risperdal, on the state’s Medicaid preferred drug list and on controversial medical protocols that determine which drugs are given to adults and children in state custody.” The same year Alaska won a $15 million settlement from Eli Lilly in a suit to recoup medical costs generated by Medicaid patients who developed diabetes while taking Zyprexa.

Taxpayer dollars are also churned by drug companies in military health programs. The Department of Veterans Affairs spent $717 million on five million prescriptions of Risperdal to treat posttraumatic stress disorder in troops deployed to Afghanistan and Iraq only to discover after nine years that the drug worked no better than a placebo reported the Journal of the American Medical Association (JAMA) in 2011.

Drug companies have devised elaborate schemes for drug sales to states. The Texas attorney general’s office charged Janssen with bribing Texas’s mental health officials with trips, perks, and kickbacks. Janssen also paid drug company funded front groups, disguised to look like patients, to "give state mental health officials and lawmakers the perception that the drug had widespread support," reported Bloomberg. Many alleged patient groups agitating for approval of expensive new drugs or fighting so-called "barriers" to treatment and mental illness "stigma" are actually slick drug company marketing creations. Many are entrenched in schools and on college campuses to capture "psychiatric patients" at an early age, often ensuring decades of sales.

In Texas, a Medicaid “decision tree” called the Texas Medical Algorithm Project was instituted that mandates that doctors prescribe the newest and most expensive psychiatric drugs first. The program was funded, not surprisingly, by the Johnson & Johnson-linked Robert Wood Johnson Foundation.

Another tactic that drug companies use is “helping” states buy their own, brand name drugs. No conflict of interest there! An Eli Lilly–backed company named Comprehensive Neuroscience “helped” 24 states use Zyprexa “properly,” reported the New York Times. “Doctors who veer from guidelines on dosage strengths and combinations of medications for Medicaid patients are sent ‘Dear Doctor’ letters pointing out that their prescribing patterns fall outside the norm,” it reports. Doctors are also notified if patients “are renewing prescriptions,” lest they have “setbacks in their condition.” One such program sends registered nurses to the homes of patients who are on expensive brand drugs to ensure “compliance”—that they have not stopped taking the drugs.

According to New York Times columnist Nicholas Kristof, the drug industry spent $272,000 in campaign donations per member of Congress last year. He reports that there are more drug company lobbyists than members of Congress. Even before Gilead’s $1000 a pill hepatitis drug, the result of this unsavory lobbying is a $50 billion annual taxpayer gift to the drug industry—a fact that should outrage every taxpayer.