The Truth About Big Pharma

Drug prices have been explained by the need for the industry to have money for future drug developments. But marketing does not develop new drugs.

Angell disputes the industry’s reputation as an “engine of innovation,” arguing that the top U.S. drug makers spend 2.5 times as much on marketing and administration as they do on research. At least a third of the drugs marketed by industry leaders were discovered by universities or small biotech companies, writes Angell, but they’re sold to the public at inflated prices. She cites Taxol, the cancer drug discovered by the National Institutes of Health, but sold by Bristol-Myers Squibb for $20,000 a year, reportedly 20 times the manufacturing cost. The company agreed to pay the NIH only 0.5 percent in royalties for the drug.