American taxpayers fund an enormous chunk of the research that leads to the development of new drugs, in the form of public universities, government grants, and the National Institute of Health.4, 5, 6 In fact, 84% of the initial basic research - the work that lays the foundation for clinical trials and applied research - for developing a new drug is funded by the government, and private universities provide additional, unspecified funding. 4, 5 And while drug companies do pay millions each year for development, that money largely goes to clinical trials (testing drugs that could never have been made without that initial basic research), and makes up a fraction of the billions of dollars in profit the pharma industry makes every year.
Drug corporations make money, not cures. Starting with corporate-friendly changes to patent law in 1980, the pharma industry has been increasingly making its biggest profits not off new cures or innovative treatments, but from “me too” drugs. 1, 2 “Me too” drugs are structurally similar to existing drugs, with minor tweaks; in the U.S., manufacturers can even patent their me-too drugs, even if their tweaks don’t affect the effectiveness of the drug. 1 These drugs allow maximum profit for minimum financial investment, and most pharma companies don’t even deny it: “Our duty is to our shareholders,” said a Valeant spokesperson after jacking up the price of a life-saving heart drug by 525%. 3
Angell, M. (2004). The Truth About the Drug Companies. The New York Review of Books. http://www.nybooks.com/articles/2004/07/15/the-truth-about-the-drug-companies/
Spector, R. (2005). Me-too drugs: Sometimes they’re just the same old, same old. Stanford Medicine Magazine. http://sm.stanford.edu/archive/stanmed/2005summer/drugs-metoo.html
Rockoff, J. and Silverman, E. (2015). Pharmaceutical Companies Buy Rivals’ Drugs, Then Jack Up the Prices. Wall Street Journal. http://www.wsj.com/articles/pharmaceutical-companies-buy-rivals-drugs-then-jack-up-the-prices-1430096431
Light, D.W. and Warburton, R. (2011). Demythologizing the high costs of pharmaceutical research. BioSocieties. http://www.pnhp.org/sites/default/files/docs/2011/Biosocieties_2011_Myths_of_High_Drug_Research_Costs.pdf
Light, D. (2006). Basic research funds to discover important new drugs: Who contributes how much? Monitoring the Financial Flows for Health Research 2005: Behind the Global Numbers. https://www.researchgate.net/publication/242636013_Basic_research_funds_to_discover_important_new_drugs_Who_contributes_how_much
Lexchin, J. (2011) Those Who Have the Gold Make the Evidence: How the Pharmaceutical Industry Biases the Outcomes of Clinical Trials of Medications. Science and Engineering Ethics. https://www.researchgate.net/publication/49842322_Those_Who_Have_the_Gold_Make_the_Evidence_How_the_Pharmaceutical_Industry_Biases_the_Outcomes_of_Clinical_Trials_of_Medications