Prescription drug kickbacks and kabuki dancing
June 29, 2006
Economist Dean Baker wrote a good short piece on the greedcluster that is the American health care industry:
The New York Times had an excellent story this week about how drug and medical supply companies make large contributions to charitable foundations run by physicians. To the casual observer, these contributions look like kickbacks, given in exchange for doctors writing prescriptions for their products and also publishing favorable research findings.
This is not the first instance of corruption in the prescription drug industry. The stories of corruption in the drug industry could fill the Manhattan phone book. For starters, this is not the first time the industry has been associated with kickback schemes. It used be standard practice to hold expense-paid "seminars" at lavish vacation resorts. Of course, there also have been instances of straight out bribes to prescribe the right drugs.
The research process has also been corrupted. The industry frequently pays prominent researchers to submit journal articles that were drafted in the company's PR office touting the benefits of their drugs. In their own research, drug companies will often attempt to conceal evidence that their drugs are ineffective or even harmful, as is alleged in the Vioxx lawsuits.