Lies Drug Companies Tell Us
As anyone who who does much fishing can tell you, sometimes you can get snagged by your own hook.
This has recently happened to America's big drug makers, who have long tried to justify the outrageous prices they charge by hooking those prices to their need to do a lot of research and development work. Oh, wail the pharmaceutical executives to those of us who want to curb these soaring prices, if you do that we'll have to slash our research budgets and then there'll be epidemics and people will die and you'll be to blame.
The consumer watchdog group, Families USA, however, decided to examine the industry's hook up close, checking to see if the high prices really are attached to R & D. In a word, "uh-uh."
Based on the drug corporations' own annual reports, the group found that the firms that market the 50 most-prescribed drugs to seniors actually spend twice as much on advertising, marketing, and corporate bureaucracy than they do on research and development. Moreover, the net profits of such giants as Merck, Bristol-Myers Squibb, Abbott Labs, and Eli Lilly dwarf their expenditures for R & D. Indeed the drug industry by far reaps the highest rate of profit of any U.S. industry, with margins that are four times greater than the average Fortune 500 company.
And while the CEOs of these outfits pretend to worry about their research budgets, they are personally hauling millions of dollars out of their companies. Just in stock payments -- not counting their multimillion-dollar salaries and bonuses -- these guys are making a killing, including $130 million worth of stock compensation to Pfizer's chief, $181 million to the honcho of Merck, and $227 million to the head of Bristol-Myers. They're raking in these paychecks while their rip-off pricing policies force seniors across the country to have to choose between medicine and food.
This is Jim Hightower saying ... Surely there's a special place in hell reserved for these profiteers. To get a copy of the full report, go to