U.S. senator slams 'parasitic' Canada over drug prices
An American legislator called Canada "parasitic" on Wednesday for siphoning U.S. dollars to Canada with low prescription drug prices while his country does "all the innovation."
Canada benefits financially from America's role as a world leader in medical advances, Republican Senator Bob Corker charged in an exchange with a Liberal MP as she testified before a U.S. Senate committee.
"One of the things that has troubled me greatly about our system is the fact that we pay more for pharmaceuticals and devices than other countries, and yet it's not really our country so much that's the problem, it's the parasitic relationship that Canada and France and other countries have towards us," the Tennessee lawmaker told Carolyn Bennett.
"Meaning that you set prices and unfortunately all the innovation, all the technological breakthroughs, just about, take place in our country .… You benefit from us, and we pay for that, and I resent that."
Bennett, a family doctor and one-time minister of state for public health, was one of five people testifying before the Senate special committee on aging. The panel, chaired by Democratic Sen. Herb Kohl and including newly minted Sen. Al Franken, was examining how successful health-care systems keep their costs low while maintaining quality care.
She seemed puzzled by Corker's remarks, reminding him that drug pricing was a global concern, not part of a plot by Canada.
"It's the drug companies, sir, and they're multinational — it's nothing about the United States of America," she told him.
If Corker wants to know why American drug prices are so high, maybe he should talk to some of his health care industry/pharma manufacturing campaign donors - not to mention his fellow senators who are also on the take.
While he's at it, he might want to learn about about how Big Pharma actually spends its money:
Former editor in chief, The New England Journal of Medicine
[The pharmaceutical companies'] R&D costs are very high, in absolute terms. But they're quite small relative to their other expenditures and profits. The drug companies spend on average, by their own figures, last year, 15 to 17 percent on R&D. And that's a lot of money. But their profits are higher. Their profits are 18.5 percent. And what's really interesting is what they spend on marketing and administration, by their own figures, is on average 35 percent. That's over twice as much as what they spend on R&D. So if they point to their R&D costs as some sort of justification for the high prices, what on earth can they say about their marketing costs, which are over twice that much? ...
Companies argue it's important to keep this a largely private market to protect innovation, and that's why drug companies in other countries are less innovative. Over half of all drugs are produced here.
This is like Holy Roman Empire: It's not holy, it's not Roman, it's not an empire. This question has many of the same problems. Almost every element of what you just said is wrong. Let's look at the big drug companies first. Of the 10 top drug companies, five are European and five are American. Their innovation is much the same. Their turnout of new drugs is much the same. Their marketing budgets are much the same. Their profits are much the same. This, in fact, is a global industry.
All of them have the lion's share of their sales here, because prices are so much higher in the United States than they are in Europe and Canada. So it's sort of good public relations to portray themselves as quintessentially American businesses. They're not. Even in countries where there are price controls, these companies are doing extremely well. So that's the first thing that's wrong with your question.
The second is the implication that these are innovative businesses. They are not innovative businesses. They are giant marketing and PR machines that turn out predominantly "me too" drugs, and whose truly innovative drugs are based mainly on taxpayer-funded work. So they are not innovative. ...
What is going on here, when the pharmaceutical industry insists that they should be essentially left alone, is a threat. It's a threat to the American public. They are saying, "Don't mess with us. Do nothing about our obscene profits. Do nothing about these unsustainable increases in prices, or else we will not give you your miracle cures." Well, guess what? They're not getting them the miracle cures in the first place. But that is their very successful PR pitch. "We are the source of all miracles. Don't mess with us." ...
One argument [is that] he Canadians don't invent the drugs. They're parasitic on our R&D. It's unfair.
In fact, the pharmaceutical industry is what's parasitic on publicly funded research. The pharmaceutical industry likes to depict itself as a research-based industry, as the source of innovative drugs. Nothing could be further from the truth. This is their incredible PR and their nerve.
In fact, if you look at where the original research comes from on which new drugs are based, it tends to be from the NIH [National Institutes of Health], from the academic medical centers, and from foreign academic medical centers. Studies of this, looking at the seminal research on which drug patents are based, have found that about 15 percent of the basic research papers, reporting the basic research, came from industry. That's just 15 percent.
The other 85 percent came from NIH-supported work carried out in American academic medical centers. In one study, 30 percent came from foreign academic medical centers. So what we know about the numbers indicates that the foreign academic medical centers are responsible for more new drug discoveries than the industry itself.