Big Pharma Tanks: Now at the Bottom of U.S. Industry Rankings

Americans view of Big Pharma now stands at the lowest ebb ever. According to a new Gallup poll, Americans rate pharmaceutical industry negatively at 58%, which is more than any of the 25 industries surveyed. The negative rating is twice as much as the positive rating of 27% that interviewees accorded the industry. The industries with highest weighted positives are the restaurant industry, computer industry and the grocery industry and farming and agriculture that tied in position three and four. The travel industry closed the top five with a total positive of 52% against 13% total negative rating.

The Federal government, which has consistently ranked at the bottom of the list was one position better than the pharmaceutical industry. The federal government has been lagging behind the rest of the industry for seven years since 2011. The other industries weighted poorly in the annual poll include advertising and public relations industry (33%) and the healthcare industry (38%). The poor rating of the pharmaceutical industry comes in the midst of public outcry over the prevailing high drug prices, anti-competition policies and the poorly managed opioid scandal.

The opioid scandal has left many Americans reeling with health, economic and social problems. Thousands of people have also lost their lives as a result of opioid epidemic. The effect of the epidemic is ongoing as evident in the number of lawsuits being filled, continued public protests and negative views of Pharmaceuticals. The high cost of drugs in the US is unprecedented since it is the highest in the world. An aggressive push to have the cost of drugs reduced is frustrated by lobbyist politicians who receive millions of dollars each year to shield the pharmaceutical industry.

Against all these odds, the Big Pharma faces a daunting task trying to convince a skeptical public that they stand for the common good. Research indicates the long held negative images of most industries turned for the better after the 2008 global economic crisis. The two industries that recorded remarkable improvements are the oil and gas industry and electric and gas utilities. The positive image by the energy industries was largely attributed to the reduction of gas prices. The prices have remained steady for the last 6 years and benefited many Americans.

Experts believe the long held negative opinion of pharmaceuticals will turn for the better if efforts are made to cap rising drug prices and address the opioid epidemic. Members of the public are also concerned about the massive profit subsidies the industry continues to receive. According to a report by StatNews, the pharmaceutical industry has lately been a subject of criticism from the Democratic Party presidential candidates and the usually cautious, AARP. The organization is specifically targeting a reduction in the cost of prescription drugs at the federal and state levels.

In Capitol Hill, AARP is supporting the overhaul the drug pricing and the entrenchment of new state drug pricing laws. The laws have seen drug makers and middlemen double-down the price of drugs in several states. The pharmaceutical industry through its lobbying arm, the Pharmaceutical Research and Manufacturers of America (PhRMA) is countering the AARP campaigns. PhRMA is specifically questioning AARP’s latest motivation and the millions of dollars it gets from selling private Medicare supplement insurance and Medicare Advantage plans to members.

Much More Is At Stake

Top on the heels of poor rating of Big Pharma are revelations that the global pharmaceutical industry is no longer investing in innovation. According to a report published by the Washington Post on October 2018, a research study show close to 80% of patents approved by the US Food and Drug Administration are an extension of existing medications that are already on the market. The failure to explore treatment for other diseases means little or no growth in innovation. The pharmaceuticals are instead circumventing the rigid patent system to their benefit.

The main strategy here is extending the patents of existing drugs at the expense of developing new drugs. The move has seen patents extending beyond the sanctioned 20-year window. Between 2000 to 2011, studies show only 4% of newly approved products around the world targeted treatment of ignored diseases affecting people in developing countries. R&D is the backbone of pharmaceutical operations, so massive investments are required to achieve the health objectives. Drug companies have also been accused of using US taxpayer’s money to fund drug research.

The Washington Post report shows taxpayers in the country funded as many as 210 drugs approved by the FDA between 2010 and 2016. Public disaffection is also drawn to the sentiments that Big Pharma is spending a lot of resources on boosting share prices through buybacks. Top pharmaceutical executives often get handsomely rewarded through lucrative share deals, which leave the R&D greatly underfunded. For those keen on stocks, the S&P Pharmaceutical Select Industry Index performed dismally in 2018 as it closed the year with a net negative return.

One of the solutions being forwarded to stop the negative turn by the pharmaceuticals is changing the business model that places too much emphasis on the pursuit of profit instead of focusing on responsive, public health objectives. However, the fundamental shift won’t be easy to achieve as it requires heavy investment in innovation and showcasing a positive public value. According to Pharmaceutical Technology, PhRMA has told its members of a new policy requiring them to set up a minimum research and development spending on their respective budgets and support for ongoing publicity campaign.

The campaigns aim to highlight the benefits of Pharma research and the commitment to the health and well-being of American patients. Patients for Affordable Drugs, a patient advocacy group based in D.C. has long been spearheading campaigns in support of R&D in the health sector. The organization is rooting for patient-friendly legislation that will reform the health sector in the hope of seeing a lasting reduction in drug prices and transparency in the pharmaceutical industry. Targeted campaigns sponsored by the lobby are underway in Washington and beyond.