THE BLOG

Big Pharma Fined £25bn - Profits Soar, Prices Soar!

13/04/2016 11:50

2016-04-12-1460448406-7935176-DrugFirmsGuiltyProfitsBeforePatients.jpg

A shocking new study has revealed that the world's largest pharmaceutical companies have been fined in excess of USD$35.7 (£25bn) over the last 25 years, for breaking the law to boost sales and profits.

Just to put the fines into perspective, £25bn is enough to pay for all the cancer drugs used by NHS England for 16 years!

pharmaceutical companies can treat fines like any other business cost and pass them on to customers by charging higher prices

Ultimately patients are paying the price for this, as a lack of regulations mean that pharmaceutical companies can treat fines like any other business cost and pass them on to customers by charging higher prices for any drugs where they have a legal monopoly under drug patents.

As many cancer drugs are subject to patent protection, this will be one of a number of factors contributing to the growing problem of cancer drugs becoming too expensive to offer on the NHS - over the last 12 months alone 18 cancer drugs previously offered have been withdrawn as the NHS can't afford them.

The study by Public Citizen looked at pharmaceutical company fines over the last 25 years. Fines were imposed for a range of illegal practices, including:

  • Overcharging government health programs
  • Unlawful promotion
  • Monopoly practices
  • Kickbacks
  • Concealing data
  • Poor manufacturing practices
  • Environmental violations
  • Financial violations
  • Illegal distribution

Fines Not Working As a Deterrent

The growing scale of these fines clearly indicates that they have failed to act as a deterrent and that illegal activity is still an ongoing problem within the industry.  The impact for patients is higher prices for medicines and sometimes treatments being offered that are either not not safe or not as effective as alternatives that may be available.

Pharmaceutical Company Fines 1991 to 20

Soaring Profits for Drug Companies

The imposition of these fines seems to have done little to dent the ever increasing revenues and profits generated by the pharmaceutical industry, so shareholders are certainly not picking up the tab. The following chart shows the sales and profit margins of the Health Technology sector, which is largely made up of pharmaceutical companies.  The biggest profit margins in this sector are being made by the pharmaceutical giants Pfizer (27.6%), Merck & Co (25.2%) and Johnson & Johnson (24.5%). We're up in arms when energy companies make profit margins of 5%, but seem happy to turn a blind eye to jaw-dropping profit margins like these!

Pharmaceutical Industry Sales and Profit Margin

For many years now, the pharmaceutical industry has been the most profitable in the world and the latest data from 2015 shows that it still has a commanding lead over all other major industries.  This is sickening news for patients with life-threatening illnesses, when the repercussion of higher profit margins is reduced access to medicines, leading to increased loss of life.

Most Profitable Industries

Soaring Prices for Patients

Meanwhile, prices for many common medicines, including cancer drugs, have been rising at alarming rates.

Rising Drug Prices

Is this our world now? A world where we make the biggest profits from human suffering? A world where we have the means to save lives but would rather let people die than sacrifice bigger profits?

Yet again it seem like it's the general public that suffer while those in privileged positions benefit.

A Market in Need of Reform

The explosion of illegal activity and profiteering within the pharmaceutical industry in the last 10 years, is part of a much bigger story about a booming industry set on achieving its ambitious aims at any cost, despite that fact that the consumer cost of this excess can be someone's life.

The industry is clearly out of control and we desperately need fundamental market reforms.

In September last year, the UK backed a European Parliament Resolution to introduce major reforms to the pharmaceutical industry to tackle issues like this, but over 6 month later the UK Government has done nothing to put this into action.

I lost my wife to cancer in October last year and was shocked to discover how cancer drugs were being developed and priced to maximise profits rather than the number of lives saved. We all know that R&D is expensive, but when you look at the numbers you don't need to be an economic genius to see that this devastating illness is being treated as a massive money-making opportunity instead of the humanitarian crisis it is.

I wanted to play a part in doing something about this, so I've set up a campaign called Dying for a Cure, to highlight how these issues are affecting people with cancer. The campaign is calling for the UK Government to completely overhaul the way cancer drugs are developed, so that it is driven first and foremost by the needs of patients not by the needs of corporate shareholders. A letter has been sent to the Secretary of State for Health, setting out the issues.

I'm only one person and can only do so much on my own, but I feel passionate about this and I'm doing all I can to raise awareness. I know that there are many other people like me who feel the same and around 1500 people have already signed the campaign's petition in just over a month since it was launched. So if, like me, you want to see change, please help me to spread the word and bring back some humanity.

Comments

CONVERSATIONS