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3 reasons to be wary of pharmaceutical firms

Veterinarian giving medical advice to client
Veterinarian giving medical advice to client
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It may be difficult to understand exactly how much power big pharmaceutical companies have — but Martin Shkreli may be the poster boy for everything wrong with Big Pharma.

Shkreli became infamous for raising the price of a rarely used drug, Daraprim, by 5,000 percent overnight.

His infamy has increased as he's been active on social media insulting members of Congress, asserting dominance by buying exclusive hip hop albums, and earning himself the designation "Pharma Bro."

Shkreli's recently offered Kanye West $10 million for his new album — which would have prevented anyone else from hearing it.

But sometimes people rally around a villain as much as a hero.

Business Insider says that Shkreli's behaviour is villainous yet transparent, leading to greater discussion about the very real problems with the pharmaceutical industry and the medical system at large.

Here are some of the ways that pharmaceutical companies have power in the U.S.

Price gouging

In some countries, like England, the government has power to negotiate drug prices with drug companies — but not in the U.S., reports Business Insider.

Often, drug companies go unregulated in determining the price of drugs, and the free market can do little to interfere.

As we see in the case of Shkreli and Daraprim, companies often own the exclusive rights to manufacture a drug and cannot be undercut by competitors.

As drugs grow older and patents lapse, it is possible for other companies to enter the market, but with less popular (yet vital) drugs such as Daraprim, it is not worth it for companies to begin production, and prices remain unchecked.

Shkreli isn't the only one to profit from rising drug prices.

According to Forbes, drug companies such as Pfizer, Merck and Abbvie have all seen tremendous revenues from raising prices, including a 112 percent increase in revenue over three years for Abbvie, a pharmaceutical company, just from raising drug prices.

One company, GlaxoSmithKline Plc, has claimed to take a stand against price gouging.

“The days of unfettered pricing are long gone,” Glaxo's U.S. pharmaceutical president Jack Bailey told Bloomberg Business. “There is still price being taken, but in all likelihood it’s going to continue to come under deep, deep scrutiny."

Political influence

Part of the reason for Glaxo's statement is that Big Pharma has come under fire from politicians this election cycle.

Shortly after Shkreli raised the price of Daraprim, Hillary Clinton released a plan on how to fight high prescription drug costs, reports CNN.

But this election cycle has also given particular emphasis to how presidential candidates receive their funding, thanks to candidates like Donald Trump and Bernie Sanders, who have brought up the issue. And not surprisingly, Big Pharma is one of the main contributors.

According to CNN, Big Pharma has donated almost $1 million to presidential campaigns so far this cycle.

Clinton has received the greatest portion of this money. She has pulled $336,416 in donations from pharmaceutical companies, constituting one-third of their total campaign contributions.

Other candidates who have profited considerably from Big Pharma are Jeb Bush and Marco Rubio.

Bernie Sanders criticized Big Pharma contributions during the recent Democratic debate in Milwaukee, saying that companies were buying political influence with their donations.

"Why does the pharmaceutical industry make huge campaign contributions? Any connection maybe to the fact that our people pay the highest prices in the world for prescription drugs?" said Sanders.

"Let's not insult the intelligence of the American people," he said.

Prescription drug addiction

Perhaps the scariest of Big Pharma's impacts is its contribution to prescription drug abuse.

According to Time, pharmaceutical companies share blame in America's opioid epidemic.

Opioid use more than doubled between 2000 and 2014, according to the CDC, and the rate of opioid overdose deaths also doubled.

Time points to recent Super Bowl advertisements that show Big Pharma's interest in selling more opioids. These ads cost about $5 million for a 30-second slot, so of course you would expect them to increase sales. But advertising for drugs raises ethical questions.

In fact, the United States is one of only two countries in the world where it is legal to advertise prescription drugs directly to consumers, says the World Health Organization.

Vox describes how one company, Purdue Pharma, propagated false claims and even funded medical groups to endorse their new product, Oxycontin, in the 1990s.

Purdue Pharma provided support for the American Pain Society, the American Academy of Pain Medicine, the Federation of State Medical Boards, and other groups, who in turn aggressively advocated pain treatment through opioids.

Purdue Pharma was later fined over $600 million for false information about addiction and overdose capacity, reports Vox.

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