(CAUTION: If you don’t want to get angry, don’t read this. If you’re not mad now, after reading it you will be mad. If you are already mad – reading it will make you absolutely furious.)

Previous commentaries have reviewed the illicit, unethical, possibly illegal practices of many pharmacy PBMs – especially the big ones that the government now proposes to spoon-feed the anticipated Medicare Rx Benefit. Others have focused on the international drug-manufacturing cartel and (a) how drug manufacturers use their excessive US profits and Americans’ tax money to buy influence with US elected officials and bureaucrats; (b) how they use deceptive advertising, front-groups, and scare-tactics to intimidate sick people; and (c) how they try to conspire with the US government to force other nations to reduce the cost-effectiveness of their healthcare policies to conform with America’s less economical ones. The following supports and validates these contentions.

Minnesota Attorney General Mike Hatch has filed a report exposing the pharmaceutical industry’s undue influence over the US legislative process at both the State and federal levels. Titled "Follow the Money. The Pharmaceutical Industry: The Other Drug Cartel," the report documents many of these claims. The AG’s paper concludes "that the undue influence of the pharmaceutical industry on lawmakers is responsible for the current prescription drug crisis. The inaction of lawmakers, who campaign on pharmaceutical reform but repeatedly fail to implement it, is a scandal that will only be addressed when the media and other public commentators expose the issue." Below are some of that report’s findings:

(1) The pharmaceutical industry has been the most profitable industry in the United States in each of the past ten years. It is approximately 5-1/2 times more profitable than the average Fortune 500 company.

(2) Experts estimate that up to 85 percent of (the drug industry’s) research and development funding comes from the National Institutes of Health (NIH), public tax credits, private foundations, and academia. …one (US income) tax credit alone allows a 50 cent tax credit for each dollar spent by a pharmaceutical company on R&D - …reward(ing) the pharmaceutical industry with the lowest effective tax bracket of any industry -- roughly half that of other corporations and half that of the average family.)

(3) A substantial amount of profit comes from new drugs which are discovered and formulated through public foundations and universities, which then license the drugs to a pharmaceutical company for a small fraction of the company’s ultimate profits.

(4) For each dollar received by the pharmaceutical industry, approximately 37 percent is spent on administration and marketing - almost three times the amount allocated to research and development.

(5) In 1996 the U.S. Food and Drug Administration relaxed regulation of "direct-to-customer" ("DTC") advertising. As a result, the industry spent $2.5 billion in DTC advertising in 2001.

(6) Unlike most other industrialized countries that have laws to regulate the price of prescription drugs, the United States implements laws to protect the (drug) industry from competition.

(7) The political influence of the pharmaceutical industry is unprecedented. PhRMA (the drug manufacturer association) alone is expected to spend $150 million in lobbying, political contributions and issue advertising in 2003. PhRMA and the 17 pharmaceutical companies also disclosed lobbyist expenditures of $129.9 million for the 2001-2002 election cycle. In addition to this, they often use "Stealth PACs" - committees whose names are intended to connote an affiliation with a particular constituency when the committee’s mission is, in fact, adverse to the constituency. Stealth PAC groups include Citizens for a Better Medicare, United Seniors Association, the 60 Plus Association, and the Seniors Coalition. All of these Stealth PACs are funded by pharmaceutical companies. The above Stealth PACs expended over $25 million in lobbying expenses during the 2001-2002 election cycle.

As the Minnesota Attorney General says, one just needs to simply "follow the money" to discover why Americans pay so much for their medicine.