Drug$ (2018) Script

We're just a regular, you know, middle class couple.

We both had good jobs, we both were making decent money.

Um, we had two cars, we had a nice house.

And then all of a sudden, I find out that I had this disease... and it's like that life is over, it's like all of a sudden a book got slammed shut.

I had neoadjuvant chemo.

I had a single right side mastectomy and then 37 rounds of radiation, after which I was placed on a drug called Tamoxifen, which is a maintenance drug, and, uh, certain other drugs.

Cystic fibrosis is a genetic illness, and, um, it is a terminal disease.

I worry about him feeling terrible, as if it's his fault that his family might have to go through, you know, some financial trauma or financial strain.

At three years old, my son looked at me and said, "Mommy, am I expensive?"

"Mommy, am I expensive?"

He was looking for a reason to blame himself at three.

I'm a HER2-positive breast cancer patient.

I was very lucky they have a great drug.

It's a targeted therapy.

And then of course the first bills appear, and then we started to calculate how long our saving would last.

I tell my children all the time that they better start saving money because sooner or later, you're gonna come to a point in your life where your health needs a prescription drug, and God forbid, because you will lose the things that you hold most dear.

C.S. Lewis says, "Education without values seems rather to make man a more clever devil."

Can the same be said for modern medicine?

By the time you finish watching this film, at least seven Americans will have died, not because of bad luck or genetics or tragedy, but because they couldn't pay what the market will bear.

If we're asking how much it costs to keep someone alive, maybe we are asking the wrong question.

An investigation into the cost of prescription drugs reveals huge price hikes over the past five years.

Several brand name medications more than doubled...

Now, let's turn to the rising price of prescription drugs and outcries to do something about it.

U.S. medical community is outraged after a life-saving drug saw a more than 5000% price hike.

Who raised prices by how much, and who are the biggest offenders?

-Everyone. -Why is this happening?

Well, the simple truth is they can do anything they want at any time they want to do it.

Let's not forget the drug industry is the most profitable industry in America.

No other industry is even close.

Shouldn't be surprised.

'Cause it's impossible to escape pharmaceutical ads.

Everything we were to do was about making Wall Street happy.

All the way over.

Seventy percent of Americans take at least one prescription drug.

Thousand dollars a pill.

Twenty thousand dollars every three weeks.

Seven hundred and fifty thousand dollars a year.

They really are a gatekeeper.

They determine, in many cases, who lives and who dies.

Call your doctor right away if you experience fever, tiredness, body aches, chills, nausea, vomiting, seizures, loss of vision, or weakness.

The livelihoods of Americans are being held captive by rising drug prices, and there's no discernible ceiling.

A lot of Americans are being hit by soaring prescription drug prices.

Americans spent an estimated $450 billion with a B on prescription drugs in 2016.

Imagine knowing your child has a rare disease that will slowly destroy all the muscles in their body.

Now imagine there's a new treatment for it, but it is so expensive you would never be able to afford it.

There's a fundamental problem when the price tag of contracting a disease is more dreadful than the disease itself.

In February, Valeant Pharmaceuticals raised prices for two newly purchased hard drugs, Isuprel and Nitropress, 212% and 525%.

Spinraza got FDA approval last December and a price tag: $125,000 per dose.

Many cases, the costs add up to a million dollars a year for a lifetime.

These drugs are priced at incredibly high levels, right, which are unaffordable to not only people in this country, but people around the world.

They know that the prices they charge for a lot of drugs exclude people from having access to those drugs.

It's not like they don't understand that, they do.

Insulin is a life or death medication.

Those high prices combined with rising insurance deductibles mean many people who rely on insulin are feeling sticker shock.

Assuming we are able to take the humanity and emotion out of the equation, we're still left with the question of economic sustainability.

Well, all you have to do is project the trends which are already off the charts.

You'd have to tape another piece of paper to the top of the chart and watch them go up some more.

It is ludicrous to think that the U.S. and healthcare in general can go on spending about 18% of our gross domestic product on health in general.

The percentages of our gross domestic product are swelling at an alarming rate.

If this trend continues, a crash is inevitable.

If the price of milk or bread or any other staple went up at the same rate that drug prices are going up, people would be rioting in the streets.

Uh, Mr. President, I rise to discuss one of the major crises facing our healthcare system today, and that is that the pharmaceutical industry itself has become a major health hazard to the American people.

Prices are going up outrageously.

No justification.

So you can walk into a drugstore tomorrow and find that the price that you're paying for the same medicine you've had for 20 years has been doubled.

And you ask the pharmacist why.

There's no reason, they can double it based on market needs.

So what you have is an incredibly powerful industry charging any price they want and the result of that is that one out of five Americans can't afford the medicine that they need.

Can you imagine that?

So they go to the doctor, doctor writes a prescription, but they can't afford to fill it.

But five major companies made $50 billion in profits last year.

Listen, you have an insane situation in which people are dying because they can't afford the medicine they need, or getting much sicker than they should just so these companies can make outrageous profits.

Yeah, you better give yourself a shot.

In 2007, Mylan Pharmaceuticals acquired EpiPen, a device used for injecting measured doses of epinephrine.

The call's growing louder for drug makers to lower the price of the EpiPen.

Since the acquisition, prices have risen continuously.

Pharmaceutical giant Mylan was at the center of criticism last year over rising drug prices.

Pressure mounting on EpiPen maker Mylan Pharmaceutical.

A trio of senators now calling for an explanation.

The auto-injector's price has risen by more than 480% since 2009.

My daughter Kennedy was diagnosed with food allergies when she was about 13 months old.

Kennedy also has asthma, she has reflux, and she has eosinophilic esophagitis.

So for Kennedy, she does have a medication regimen that she has to take every day.

She has to take maintenance meds for her asthma.

She also has to take a maintenance swallow medication for her EoE.

And then she carries around her EpiPen.

And Shane has a life-threatening allergy to blueberries.

He also has mild asthma.

But Shane also has what they call idiopathic anaphylaxis, whereas just out of the blue, there are times that things that we don't know yet could actually cause him to go into an anaphylactic reaction.

We are here with the CEO that is no doubt the center of a national firestorm-- I think that's fair to say.

Heather Bresch, CEO of Mylan Labs.

The price hike has been labeled "outrageous" by Hillary Clinton, "egregious" by Bernie Sanders, "greedy" by the White House, and parents all over the country are outraged that they've got to pay more for their EpiPen.

How do you respond to all that?

As a mother, I can assure you the last thing that we would ever want is no one to have their EpiPen due to price.

The cost is more prohibitive than people realize.

Two kids, $600 for one set, and I need multiple sets.

The school that they go to, they have to have a set for themselves, a set for the nurse, and a set for the trainer if they go out for any sports, and we also have to have a set for our house.

So the cost is insane.

The American Medical Association has said this is basically the same product it was in 2009, and yet have raised the price 17 times.

If you follow the money, the reason for these price hikes comes into sharp focus.

What was your salary last year?

-About $18 million. -About $18 million...

Sounds like you're doing pretty well on this.

When Mylan acquired EpiPen in 2007, Heather Bresch's salary was $2.4 million.

As the price of EpiPen swelled, so did her salary, all the way to $18.9 million.

Heather, you understand the headlines, right, which is EpiPens, which are needed by millions of children, the price goes from 50 bucks ten years ago to 500 or 600 today, and you're making $18 million a year.

You understand how that looks?

Brian, look, I understand better than anyone that facts are inconvenient to headlines.

We have given out 700,000 free EpiPens.

We stock 65,000 public schools in this country with free EpiPens to ensure that they're there when needed.

Heather Bresch has been vocal about Mylan's free and discounted EpiPens, but those who are listening closely can hear the canary in the coalmine.

So I'm holding here a certification form where EpiPen, where Mylan has actually said that the school will hereby certify that it will not, in the next 12 months, purchase any products that are competitive to EpiPen Auto-Injectors.

So you actually put into practice forcing schools-- and you're so concerned about these kids, you've raised the price to $600, if you want it for the hundred buck price that it used to be at, you need to sign this and say that you can't buy this from anybody else.

Don't answer, I'm not asking you a question.

That's what you've done here.

Sometimes I do feel like a burden.

I sometimes think that maybe if I didn't have this allergy or maybe if I wasn't, per se, here then maybe my mother would have a little less stress.

Uh, she wouldn't have to carry the burden of having to come up with that extra money to pay for the EpiPens.

I feel bad because, like, I know it's not my fault, but they're so expensive, and it's, like, a lot, even though, like, my mom says that I'm worth it and everything.

Knowing that my kids feel like they're a burden to me, it actually hurts and it makes me angry.

I guess the anger comes from being hurt.

Because kids should never feel like that.

And I think it's just so unfair because it's unnecessary.

The medication inside the device is so cheap.

It does not warrant the cost.

When journalists and lawmakers ask pharmaceutical companies to justify their pricing, the same two words come up again and again: research and development.

There are a couple of myths that are out there about why drugs cost what they do.

One myth is that the company spends so much money on research that they need to recoup their research expenditures.

And if it wasn't for the drug company, we wouldn't have any new drugs because they're making all the discoveries.

We need to invest in innovation for cures and treatments for unmet medical need, and we need to charge a price for our medicines that allow us to invest in R&D.

The reality is that much of the research is not done by them at all.

We increase prices as part of that process of, you know, getting back our R&D costs.

Given the number of product candidates we have in development, our expenses will go up.

Almost all of the innovative products, the blockbuster drugs, are acquired from small start-ups, biotech companies, from university research.

We wake up every day trying to invent new medicines and get them to people who are sick.

And the system is complicated.

So for us it's all about innovation from R&D, and value for money.

The best way we can invest in our innovation and R&D is by growing the top line.

What makes one company a better innovator than another?

To actually come up with a drug takes a very sophisticated team that understands all aspects of drug development.

If I was a drug company, I might want to take credit for all of scientific discovery too, because it's a way of justifying those prices.

It just happens to not be true.

David Poole is the former director of government affairs at Gilead Sciences, one of the most profitable pharmaceutical companies in the world.

In the eight and a half years that I spent with Gilead Sciences, their investment in R&D and in the laboratories that I visited and toured seems very disproportionate to what the yield is.

It was more like here we have a showcase, and when visitors come, whether it was investors or patients or whomever might be touring Gilead's headquarters, they had these beautiful, large laboratories that they could present to people and say, "This is where we do all this grand research and development," when in fact we didn't see products that had been innovated by Gilead, they just were very strategic in the companies they purchased, then they would often take those products and in some cases combine drugs to make them an effective better therapy.

But from--as far as innovation from start to finish, I quite frankly don't think that occurred, perhaps maybe even only once in the 30-year history of Gilead Sciences.

So then the question is not how do you develop the next miracle drug but how do you get hold of it?

And that you can do through acquisitions.

So you acquire the company that is the developing the drug, and then try to exploit it as much as possible.

In 2011, Gilead Sciences positioned itself to acquire a company that was leading the field in the fight against the most deadly infectious disease in the United States: hepatitis C.

This merger between business and miracle drug triggered the most contentious industry move to date.

One of the biggest controversies that erupted in the pricing of new drugs occurred about two to three years ago.

Was around these drugs to treat hepatitis C.

And I wouldn't say Gilead is an outlier, it's just that they were able to get hold of a drug that is a miracle drug.

There is a new cure on the rise.

There is a new drug on the market that will help cure hepatitis C.

The drug has been called a miracle drug.

It actually cures hepatitis C.


Sofosbuvir was designed by a chemist called Mike Sofia at a company called Pharmasset.

Wait a minute, so this is a definite cure for hepatitis C?

This is a cure for hepatitis C.

-No kidding! -Yeah.

-No kidding! -I mean, that's amazing, right?

We did the original human studies of that drug.

I presented the data at the Berlin Liver meeting.

And I remember the meeting because the audience was in stunned silence.

This was perhaps the only time I've ever sat in a medical conference where everybody went, "Ah..."

They couldn't believe it.

For the first time, tablets had cured hepatitis C.

We're not talking about a drug with marginal benefits; we're talking about a drug that's a game changer for people's lives.

Gilead Sciences, making a big move into the world of hepatitis C treatment with its acquisition of Pharmasset, a deal in fact expected to close by the end of the day tomorrow.

Gilead Sciences is buying drug developer Pharmasset for $11 billion.

Gilead's chairman and CEO, John Martin, joins us.

What gives you the confidence that this is a company that was worth $11 billion of Gilead's money?

The company that we're talking about, Pharmasset, made tremendous progress, especially over the last year, and it's already in Phase 3 studies, studies that lead to approval, so we expect 7977 to be the first to market.

Now this is 2011.

By 2014, we had combined drugs and done the clinical trials and presented the data that resulted in a treatment for hepatitis C that could cure 95% of patients with one tablet once a day that was simple, safe, and effective.

All of a sudden it changes to, "We have a med that works in three months, the side effects are minimal to none, it's there, and let's get everybody tested, let's get everybody cured."

There'd be no transmission of hepatitis C if everybody started on it immediately.

I mean, this is a virus that could be cleared.

We could clear it from the planet.

But we can't because it's too expensive.

The thousand-dollar-a-day pill.

That's a lot of money for a single tablet.

In fact, that makes one tablet of sofosbuvir, as it's called, the most expensive substance on Earth.

So Gilead brings a cure to market.

That didn't make the headlines.

What made the headlines was their price.

And so what you saw a few days later when it first launched, it was somebody holding up a pill, and it said, "The new face of the pharmaceutical industry, the thousand-dollar pill."

It's important to understand, you know, something about hepatitis C and the disease.

A thousand dollars a pill sounds outrageous, but, you know, the cost and the investment involved, we're talking billions of dollars were spent to, you know, to purchase this treatment or this drug.

A lot of that development happened at Emory University by a faculty member who received a lot of NIH grants.

There was also some work that happened in the Veterans Administration Hospital.

The faculty member set up a company called Pharmasset, which was going to monetize that discovery, and then Gilead Pharmaceuticals decided to buy the company that this faculty member had started.

They paid $11.2 billion for this product, at the time, a price that Wall Street viewed as excessive.

Down the road, it was proven by Gilead that they recouped that $11.2 billion in less than a year from the rollout of that product.

There's an interesting ethical and political and societal question of who should reap the benefits of initially that sale if the drug really was in large part developed with public funds, and the answer is it certainly doesn't end up in the pocket of the taxpayer.

They get to pay twice-- once for the discovery and once to buy the drug if they need it.

They lofty prices forced unprecedented levels of pharmaceutical rationing.

As demand for the life-saving drug swelled, access continued to diminish.

Health insurers and government payers said basically we're only gonna treat you if you already have liver damage.

So, no, we're not gonna give you this cure until you're already sick.

I had, um, ammonia on my brain, you know, from having the virus in my system.

Some of the side effects are, like, brain fog, is, like, not being able to think clearly, poor memory.

I knew that there was a new treatment that was gonna be available, and I was hoping that I'd be able to avail myself of that.

But it seemed like it was never gonna happen because of all of the restrictions that, um, that I had to go through to qualify.

And then even after I qualified, I wasn't able to afford or get the medication.

And the medication was obscenely expensive.

Now anybody looking at a single pill will say, "That couldn't possibly cost a thousand dollars," and they'd be right.

No way that pill costs a thousand dollars.

The cost of that drug is less than a dollar a day, and that includes the plastic bottle it comes in.

And the price to the consumer is a thousand dollars a day.

So I don't know, is that a reasonable profit margin?

That very question ripped through the industry and patient groups alike.

And the answer wasn't unanimous.

Now, I think the drug was priced very fairly.

The drug was priced cheaper than what existed, uh, safer than what existed, uh, and more effective than what existed.

I think that's a pretty powerful argument to say why that price should be where it was.

I was just so scared for my daughter because, you know, if something were to happen to me and I died...

...she wouldn't have me to be there for her.

And I wanted--I wanted her to be happy and to meet a man to love her and support her.

Go to her wedding.

See my grandchildren.

Things that I thought about a lot.

Gilead Sciences hit a home run yesterday with its earnings when it reported after the market closed.

Gilead delivered revenue of $5 billion.

That was almost double what it earned last year at this time because of its drug Sovaldi.

While hundreds of thousands of patients lingered on waiting lists hoping for their chance at the miracle drug, Gilead's stock prices soared.

If anything, it's now very clear.

Gilead dramatically underpaid for Pharmasset.

They were just visionaries.

Boy, it makes me like them even more.

When you talk about these new hepatitis C drugs, the system's working the way it's supposed to.

Gilead comes up with a new drug that literally cures hep C in 12 weeks.

It's expensive when it first comes out, but you're done, you're cured.

It turned out that a number of the people who I was in the group with did die before they were able to qualify or get the money together.

That made me angry and also feeling guilty.

You know, why was it that it was me and not one of those other people who I had befriended in the group?

Maybe, you know, why did they have to die and leave their families.

As someone in the industry, do you believe that people are only driven by massive profit?

I mean, is that the only reason why they get up in the morning?

There's a very cynical view of what motivates people, both in science and in medicine in particular.

And it must be very sad to be a person who believes that, that the only reason people get up out of bed and go to work in the morning is because they really want to make as much money as possible no matter what.

I have had the good fortune, as have most people who work in hospitals and universities, to be surrounded by people who get out of bed in the morning because they want to help other people.

And the idea that people would not do that anymore if they didn't become bazillionaires is a very cynical and probably incorrect view of human nature.

Using Gilead's own documents, the evidence shows that the company pursued a calculated scheme for pricing and marketing its hepatitis C drug based on one goal: maximizing revenue, regardless of the human consequences.

When you look at the way in which top executives in the United States are being paid, the vast majority of their pay is geared toward stock price performance.

Now, in this particular case, there's another dimension of executive pay which we've done research on, and the research we've done is kind of, as far as I'm concerned, is a breakthrough because other people have not noticed this, that almost every number you read in The Wall Street Journal, The New York Times, and the press, it's not what the CEOs actually get paid, it's an estimate of what they might make in the future from their stock options and stock awards.

But it's the buybacks that are the problem, and they're huge.

Stock buybacks are when a company buys back its own share from the stock market.

In 2014, after the huge profits of Sovaldi kicked in, Gilead spent $11 billion on these buybacks, and in doing so, they sent the company's stock price through the roof.

With such an intense spike in share values, this opened up a window for company executives to cash in on their stock options.

So in the case of John C. Martin, it was reported, if you use the estimated fair value, that he made $19 million in each year.

Now that sounds like a lot of money, and it is.

But that's not what he actually took home.

A close look at Gilead's publicly filed proxy statements from 2014 and 2015 reveal not only John C. Martin's estimated value of stock options but more importantly, the actual realized gains.

In 2014, he took home almost $193 million, and in 2015, $232 million.

That was the whole point of being the CEO of the company for this guy.

And the executive pay didn't stop at John Martin.

The top five executives combined took home over $400 million within one year of the drug's release.

To put that in perspective, if you apply the one-year salaries of these five individuals towards selling Sovaldi at the company's cost of a dollar a day, you could completely eradicate hepatitis C from France, Spain, Argentina, the United Kingdom, Canada, Australia, and the United States of America.

According to Jonas Salk, the reward for work well done is the opportunity to do more.

But our current culture seems to believe that the reward for work well done is the opportunity to take more.

Is this business as usual?

The price we pay for living in a free market?

Has it always been like this, or have we lost our way?

Also known as infantile paralysis because of its propensity to affect children, polio was pandemic.

Outbreaks ravaged Europe, North America, Australia, and New Zealand during the first half of the 20th century.

Polio was a terrifying disease.

Parents were afraid to send out their children to play, especially during the summer months where, uh, the U.S. went through a series of epidemics of the polio virus would spread and affect many children.

In extreme cases, it could lead to the death of children and also to paralysis, very serious respiratory defects.

Children could end up in what became famous as iron lungs.

These were mechanical devices that helped breathe children.

Without these devices, children would die.

So it was really terrifying and affected entire society.

There are a lot of parents whose children are healthy and happy now who live in fear.

I know I do.

The fear, my friends, is polio.

Mechanical respiratory aids temporarily do the work of the muscles required to breathe until those muscles can recover or until substitute muscles can be trained to replace them.

The uninfected lived in fear.

The infected struggled to breathe.

And both could only wait as medical professionals waged war against the disease.


A day which may well mark the most significant event in all of medical history.

The world will very soon know whether the battle against the disease that has twisted hundreds of thousands of young bodies has been won.

At just 40 years old, Dr. Jonas Salk, a New York born virologist, gathered with the rest of the world to hear the results from his latest research.

If the results from the observed study areas are employed, the vaccine could be considered 80% to 90% effective against paralytic poliomyelitis.

It was the end of polio.

And so when Jonas developed this drug and had a profound impact on society, it essentially eradicated the disease, and one of the major achievements of biomedical research of the last century.

Perhaps even more poignant and impactful than the work that led to the vaccine was the decision Salk make afterwards.

Who owns the patent on this vaccine?

Well, the people, I would say.

There is no patent.

Could you patent the sun?

The accessibility of the vaccine had a profound effect on the entire planet.

If Salk had patented the vaccine, he would have profited upwards of $7 billion.

What this answer reflect is his desire and passion to do work that benefits mankind without profit and personal benefit for himself.

Salk's pioneering legacy lit the way for modern medical innovation, and it ushered in a new energy for scientific and medical discovery.

The drug industry has always been dependent on scientific breakthroughs to really come up with innovative medicines.

And the whole first part of that process is really driven by basic science, the vast majority almost universally funded by the federal government.

The NIH plays a huge role in the development of basic science.

The United States has the largest federally funded science program in the world, with nearly $32.3 billion being invested annually.

NIH funds are essential in the earliest parts of research, which brings the basic knowledge of how the human body works.

And that research is done generally with support from the NIH and academic scientists.

The trek from basic science into the development of a pharmaceutical drug is called translational research.

Having the capital and infrastructure that many government and educational facilities lack, pharmaceutical companies often step in in the late stages of development and prep the drug for the market.

Lastly, the drugs must get approval from the FDA.

Food & Drug Administration Once the FDA gives its stamp of approval, the transformation is complete from science into a product.

And if there's one thing America knows how to do, it's sales.

I am ready.

Because today, there's Harvoni.

-Good afternoon. -Hi.

I'd like to get a prescription filled.

It's for brand name Abilify.


-Congratulations, you're down with Crestor. -Yes!

Prilosec OTC.

I got my first prescription free.

Ask your doctor about Farxiga.

-Tecfidera. -Viagra.

-Eliquis. -Otezla.

I feel better now--better now--better now.

Direct-to-consumer marketing is a public health disaster.

Consumers who know almost nothing about the scientific basis of their disease, for the most part, can only be convinced to put pressure on their doctor to prescribe something that they have no idea what the impact of that's going to be.

And I'm sure you'll talk to lots of doctors who say, "I have patients come in and ask all the time if they should be taking a drug for a disease they don't have."

I mean, you listen to that list of all the bad things that can happen to you.

The companies have tested this and they found out that saying all these scary things, people just think you're being more truthful.

It makes it seem like it's more-- you know, they have a higher degree of confidence.

But, you know, the television advertising's quite manipulative.

As a Brit, I do find it disconcerting when I'm in the States to see all the direct-to-consumer advertising.

I find that a little strange.

Every time I get surprised that, you know, you switch the TV on and there's people playing golf and hugging their grandchildren and it's beautiful.

So on British TV, you won't see adverts for medicines which are only available by prescription through doctors.

Pharmaceutical companies cannot market or advertise publicly branded drugs to the public.

On May 19th, 1983, the American public set eyes on a television commercial that would spark a debate that rages on still today.

If you're one of the many people who take the prescription drug Motrin, you should ask your physician or pharmacist about Rufen.

They will tell you that both Motrin 400 milligram tablets and Rufen 400 milligram tablets are different brand names for the same drug: ibuprofen.

There is only one important difference.

Rufen can cost you considerably less.

Boots Pharmaceutical aired the first broadcast television commercial in the United States for a prescription drug, and in doing so, sent the FDA reeling.

Within 48 hours, the federal government pulled the plug.

Pharmaceutical advertising regulations hadn't been addressed in over a decade, and at the time, no one had anticipated a pharmaceutical direct-to-consumer advertisement.

Ironically, even the industry was torn.

In a 1984 letter to the then-representative John Dingell of Michigan, vice president of Eli Lilly said direct-to-consumer advertisements would be "both unwise and inappropriate."

The Upjohn Company said it "would be detrimental to the pharmaceutical industry."

And Schering-Plough claimed that "in most cases, it cannot safely be accomplished."

The FDA responded with a set of rigid rules and requirements.

Ads weren't outright banned, but they had to list all applicable ingredients, safety information, warnings, precautions, adverse reactions, and the like.

This rendered TV ads nearly impossible to pull off.

This confined pharma companies primarily to print ads for nearly a decade until 1996, when Schering-Plough, the same company that condemned direct-to-consumer ads eight years earlier, ran a divisive ad for Claritin.

The plan was simple:

Make no mention that Claritin is a pharmaceutical drug.

-Claritin. -It's time, it's time.

Don't wait another minute for Claritin.

Claritin. I'll ask my doctor.

It's time to see your doctor.

Mr. Wilkin, the doctor will see you now.

At last, a clear day is here.

I want to know more about Claritin.

Yes, ask your doctor for a trial of Claritin.

In a clever marketing move, Schering-Plough used what was later coined the "ask your doctor" loophole.

They essentially shrugged off the required fine print, the bold print, and everything in between.

In its place, one clear message:

"Ask your doctor for details."

The whole purpose of that supports an overall marketing strategy which is to leave no stone unturned.

Make patients ask about drugs.

The Claritin campaign once again rocked the boat, forcing the FDA to reassess, and in 1997, during Bill Clinton's second term, direct-to-consumer ads were deregulated, giving way to the kind of pharmaceutical ads that now dominate the airwaves.

President Clinton agreed to have drugs advertised on television, newspapers, which had been prohibited previously.

So that just exploded the direct-to-consumer advertising.

So now, companies are spending more money on marketing than they're spending on research and development.

We don't know what companies are spending on research and development, but we have seen studies that show that many companies are spending 19 times as much money on the marketing and advertising part than they are on the research and development part.

Now, they like to argue that they need these high prices to cover R&D, but why do they need such high prices to cover all this marketing and promotion?

Now, don't forget, the consumer side that we see, direct-to-consumer advertising, has a whole other side which is direct-to-physician marketing that consumers never see.

Pharmaceutical companies spend a lot of money marketing their products to doctors.

I think one estimate suggested it was in the range of $60 billion a year.

Now, drugs, doctors, and the relationship with the pharmaceutical industry.

Those connections have long been the subject of ethical and business concerns, particularly when it comes to the financial ties between doctors and the drug companies.

But this is through the medical journals, this is through drug reps coming to their offices, this is through conferences when they go to their professional society meetings.

The industry has just run astray.

I mean, it's gone wild.

They are throwing money at doctors left and right, they're paying doctors to conduct studies, even to ghostwrite certain articles.

What that means is the pharmaceutical company actually writes the article and then slaps a doctor's name on it.

-For a medical journal? -That's right.

When I did some initial research on this a few years ago, there were many, many physicians receiving seven-figure supplements while they still conducted or managed a practice in their home.

So this is a disaster from a public health point of view.

It's a pressure point that just simply doesn't need to be there.

It serves no function whatsoever other than to cloud clinical judgment, and that's not good healthcare.

And in fact, if you look at recent settlements from the federal government, pretty much every major drug company in the United States has had a finding in recent years dealing with breaking the law regarding the marketing of drugs.

Who wants to be a millionaire?

You do the math.

There are people in this room who are going to make an ungodly sum of money selling Advair.

The last two decades have ushered in an era of unprecedented healthcare fraud.

GSK will plead guilty to criminal charges.

Janssen Pharmaceuticals will plead guilty.

Eli Lilly pleading guilty to criminal conduct after skating under the radar for years.

Off-label promotion, failure to disclose safety information, physician kickbacks.

Nearly every major pharmaceutical company has been caught over and over again.

For nearly a decade, Allergan illegally promoted Botox for uses that were not approved as safe and effective by the FDA.

That's the way it should be:

When GSK makes money, you make money.

The more you sell, the more you make.

GSK engaged in an illegal marketing campaign where drugs were promoted for disorders where there was no medical evidence they would help.

Put simply, the alleged conduct is shameful.

Um, we do occasionally make mistakes.

By pushing Seroquel for unapproved purposes, AstraZeneca made patients into guinea pigs in an unsupervised drug test.

The Virginia Attorney General announcing a $100 million settlement involving off-label marketing.

The settlement includes criminal fines totaling $485 million.

Pfizer has agreed to pay $2.3 billion, which makes it the largest criminal fine in history.

GlaxoSmithKline is paying a $3 billion fine.

Fraudulently marketing nine drugs off-label, including Advair, Lemictal, Imitrex.

The company's also accused of paying kickbacks to doctors to prescribe the drug.

So let me tell you some of the perks that they received.

They would give doctors basketball tickets, yacht trips.

Hawaiian vacations, tickets to Madonna.

They're paying doctors millions of dollars to go on speaking tours.

NASCAR races, Knicks games, Celtics games, tennis lessons, Crosby, Stills & Nash tickets, pheasant hunting!

Okay, all the ways they would bribe the doctors to do this to their own patients.

From the years 2009 to 2016, the Justice Department recovered $19.3 billion in settlements in judgments related to healthcare fraud.

In fact, just last year, the Justice Department reached an all-time high in the number of healthcare fraud defendants charged with more than 800 indictments and more than 580 convictions.

Whatever they're fined, they're just gonna charge it back to us.

It just becomes a cost of doing business.

God bless America, free enterprise is a wonderful concept.

Most people have no idea how much any drugs they take cost unless it's over the counter, basically-- because they have insurance, they have a copay, but it's not very big-- until the drug they're taking is $20,000, and then they look at the bill and they're like, "What?"

It's very strange to see money becoming so important for me because money has never been very important to me, but right now it's $20,000 for one drug, for one treatment, and I know that I have to take it every three weeks for the rest of my life.

How is that possible?

But if we can't pay for it, I wouldn't last very long.

The premium of everybody goes up too.

I mean, it's something that people don't see because it's not on their bill, but they're all complaining about the insurance premium going up.

Why is it going up?

It's because, yeah, it's because of people like me, because my drug is too expensive.

And then you get into anxiety, how do I pay for it, or am I worth it?

Should I resign myself?

I saw my mother die, so I know, I know what happens.

It's the ultimate side effect.

Mr. President, it is unacceptable that the monthly cost of cancer drugs has more than doubled over the last ten years.

In the United States of America, you should not be forced into bankruptcy because you are diagnosed with cancer.

When I first recurred to stage 4 metastatic breast cancer, within a couple of months, my insurance company started pushing me to apply for disability, so then in two years I'd have to go on Medicare, and they hired some third-party consulting firm that would call me at night and send me paperwork and push me to do this.

So, I did it because they threatened to cancel my insurance.

And then in December, the Friday before Christmas, I was hooked up to an IV getting treatment, and my broker calls from my health insurance and tells me that the insurance company found a small little caveat and cancelled my policy.

Thank goodness I was able to apply for the ACA, but because of our insurance premiums and my copays for my drugs, now we have our house on the market because we really can't afford to live where we live anymore because my healthcare costs are just too high and devastating for us.

The only thing worse than finding out there's no cure for your disease is finding out there's a cure but you can't afford it.

They come back from having run your credit and say, "You don't have enough money to have this disease."

A lot of these drug companies will give you their drug, but you have to be within a certain income restriction for those plans.

So, for example, I don't work, I can't work, I'm sick, I've been sick.

My husband works, my husband works very hard to keep us in our home which we've had to remortgage because of my disease.

And your spouse's income now knocks you out of those programs, so you have to get divorced so that your income is the zero that it is, and that's usually referred to as involuntary divorce.

So now you're getting your copays kind of taken care of through these programs, but now you die.

Your spouse has to be left your assets and now has to pay tax on those assets, so it's like you end up paying one way or another.

Either way, the diagnosis comes with the price tag of losing everything, not just for you but whoever survives you.

Well, before we discuss whether a particular company is charging too much or making too much, let's remember that they're just playing the game that they're handed.

So, if a company charges a lot of money, they're basically just doing what the system is inviting them to do anyway.

It's basically capitalism.

So, are there other areas of the economy where we tell people, "You can't make that much"?

We have invited them to innovate these new therapies and then gouge the system, but it is the system that they were handed to work with.

The system needs to change.

The United States grants patents for inventions, which are essentially lawful monopolies that last up to 20 years.

This is absolutely in step with the American spirit to encourage and embolden innovation, but these patents become complicated when their management causes suffering or death.

Drug patents are a financing mechanism.

It's a way we finance research and development.

It's not working.

There's no question that brand name manufacturers engage in what are called evergreening techniques or life cycle management where they'll take a drug that is very profitable and they'll do everything they can to extend their patent.

So if you make a small tweak to a molecule or if you come up with a slightly different development process, then you can earn a new patent.

And that way, when a drug's patent is getting ready to expire, the company seeks patents not on the drug, but on all these externalities, and then gets another bunch of years of patent protection.

How is it okay that a drug company can take, instead of the right-handed version of the molecule, take the left-handed version of the molecule, which is basically a mirror image of the same molecule, get it patented as a brand new discovery, and then market it as a new drug?

And we saw when Prilosec became Nexium, the old purple pill became the new purple pill.

Essentially no clinical advantage, virtually no molecular difference of any consequence.

That type of evergreening strategy I think is inappropriate and wasteful.

And what governments have to realize is that companies have become so powerful through these monopolies that they can't even regulate them anymore.

Can the governments regulate legal monopolies on drugs in a way that benefits the public?

No. The evidence is no.

Insulin prices on the rise, and it could have a big impact on the growing number of people with diabetes.

A new report finds the price of insulin has tripled in ten years' time, a painful price for many of the 29 million people in the United States with diabetes.

Those high prices combined with rising insurance deductibles mean many people who rely on insulin are left facing impossible choices.

I always remember insulin being a very easy-to-obtain, cheap drug.

I remember my mom would pay $15 every three months.

Whereas, you know, fast forward to today, the most recent price I heard was $342.99 for a vial.

That's unheard of.

You know, I'll never have a choice not to buy insulin.

I'll always have to pay what they charge.

I have to have insulin every second of every day to stay alive.

I've calculated up the price of my life.

It will cost over $7.5 million, just in insulin, just for me, to keep me alive till I'm 70 years old.

Insulin is a life-or-death medication.

Between 2002 and 2013, the price of insulin more than tripled to more than $700 per patient.

Federal lawsuit accuses the three insulin manufacturers of conspiring to raise their prices.

Just coincidentally, it happens that the three major suppliers of insulin seem to be raising their prices at the same exact time at the same level.

So I think you have to be very naive not to believe that there is collusion.

Put a critical eye on the pricing history of two primary insulin drugs and you'll notice a pattern.

Since 2001, the cost of both drugs has risen simultaneously, making their price history nearly indistinguishable.

At least when it comes to insulin, where the original discoverers, Banting and Best, gave away the insulin patent for $3 so that this wouldn't happen.

In 1923, Frederick Banting, Charles Best, and James Collip, the team that first discovered and refined what is now known as insulin, made a move for the common good:

They sold the patent for insulin to the University of Toronto for just $1 each.

Much like Jonas Salk, their intent was to let the world benefit from their discovery, stating, "When the details of the method of preparation are published, anyone would be free to prepare the extract, but no one could secure a profitable monopoly."

Shortly after, the University of Toronto teamed up with Eli Lilly to mass-produce insulin under a royalty-free agreement.

The profits would then be put back into research and development at the university.

It wasn't long, however, before drug companies had figured out a way to turn a good profit on insulin.

By 1941, Eli Lilly and two other pharmaceutical companies were indicted for an alleged insulin price-fixing scheme.

It was a charge that Lilly would settle in a no-contest agreement.

Sadly, after the development of insulin, Eli Lilly would start to make small adjustments to the research in order to seek their own patents on the drug and completely undermine the intention of the inventors.

Somehow, with really no innovations, the same drug, insulin, the prices keep escalating.

That makes no sense at all, and yet this diabetes is an illness that we've seen that Americans suffer from young and old.

So what I see is, people all over my state, seniors that come up to me and say that they're saving the injectors from their insulin just so they have a few more drops in each tube.

That is happening right now.

This is the United States of America.

Our seniors shouldn't be having to do that.

What's even more shocking, to this day, there are still no low-priced generics on the market.

Somehow, these three manufacturers have figured out a way to extend their patent lives for nearly a century.

One of the things that is really distasteful is that the big pharmaceutical companies currently pay off generics to keep their products off the market.

It's called pay-for-delay, and it screws people all the time.

But I mean, how long can they keep doing that?

-Indefinitely? -It's just gonna keep escalating.

Look, if you're a company in any industry, and a monopoly is just put on your lap, you're gonna go for it, that's just the facts.

These evergreening techniques are becoming common practice.

If there's a loophole, the pharmaceutical industry will find it.

Check out shares of Allergan.

They've been rising higher this afternoon on an announcement about patents around one of their big eye drugs, Restasis.

Now, this is a bit of a complicated story, but it's absolutely amazing when you really dig into it.

So what they've done, somewhat incredibly, is they've transferred the patent to an Indian tribe in northern New York, and then the tribe is licensing the patent back to Allergan, and then the tribe is arguing that, as a sovereign nation, as a sovereign entity, the patent office no longer has the right to be involved in a patent dispute because it can't override the sovereignty of the Indian tribe.

This strategy potentially allows Allergan to dodge patent challenges from rival companies.

I just spoke with Allergan CEO Brent Saunders.

He says he thinks this is the first time this system has ever been used in this way.

I think there's a lot of misunderstanding on why we did it.

It wasn't desperation, it was tenacity.

You describe this as offensive behavior.

I think it's terribly offensive.

I think it violates the spirit of the law, I think it really sticks it to American consumers, and I think in particular, Allergan is a company that talks a good game about wanting to be good to consumers and they have a social contract, yadda-yadda-yadda, and then they do things like this.

I solemnly pledge to dedicate my life in the service of humanity.

I will practice medicine with conscience and dignity.

The health and life of my patient will be my first consideration.

Doctors swear the Hippocratic Oath, a pledge that they will uphold a certain morality when it comes to their practice.

Is it reasonable to expect pharmaceutical companies to be held to the same standards?

Do you think pharmaceutical companies should operate under a different moral code compared to other companies?


Should pharmaceutical companies be guided by a moral compass?

Should pharmaceutical companies have a moral compass?

That's a good question.

Pharmaceutical companies absolutely should have a moral compass.

Absolutely, pharmaceutical companies should act with moral integrity when they are dealing with drugs that make the difference between life and death for patients.

The notion of a moral code governing what they do doesn't make much sense to me.

I think companies should have some morals.

I mean, there are some lines that they shouldn't cross.

I think all of healthcare is a right, okay.

There's a long discussion behind that.

They are not like medicine.

They are a company.

They are no different than big oil, Coca-Cola, maybe the tobacco industry.

The sad reality is that they are corporations, and they are answerable to their shareholders, and that doesn't make it right or good, but it's a little naive to think that a company that makes drugs is somehow gonna have a different set of morals than a company that makes gasoline or computers or cars.

Corporations are nothing more than a conglomeration of individuals, and those individuals have their own moral compasses, and oftentimes we see that, for some reason, people check those at the door when they walk into their offices and they're making decisions because they put something else ahead of what is right.

Imagine, for a moment, popping a pill before bed that costs about $13.50.

Now imagine waking up the next morning to find that the price of the exact same pill jumped to $750 overnight.

When Shkreli increased Daraprim's price 5000%, he complained that he was being unfairly vilified.

There are literally a dozen companies just like ours that raise prices dramatically, and higher, might I add, than our company, and I don't see those companies getting the criticism that I got.

Why do they keep coming after you?

You know, I just can't fathom.

I guess it might have something to do with me being very handsome, very wealthy, and very funny.

Last time you heard the name Martin Shkreli on this broadcast, he drastically raised the price of a life-saving drug.

Tonight, the head of a drug company, who's accused of gouging patients, says he should be thanked.

There's no doubt I'm a capitalist, I'm trying to create a big drug company, a profitable drug company.

I now walk down the streets of Manhattan, people ask me for autographs, they want selfies, I have a lot of fans.

He is a brash self-promoter who's called himself the world's most eligible bachelor.

This is a city where success is prized.

It is a city if you make it here, you can make it anywhere.

I wonder if you would do anything differently.

I probably would have raised the price higher is probably what I would have done.

I'm a child of immigrants that are janitors from Brooklyn.

I've made myself into an enormous fortune.

In response to all of this attention, and doctors and patient groups saying they can't access this drug, are you gonna change the price?


When Martin Shkreli, the infamous "Pharma Bro" who took a one-dollar-a-day pill and raised that pill to $750 for no rationale other than he could because he was the only manufacturer, or provided the only source, that's not illegal, but it is immoral.

People's lives are at stake because of the price increases you impose and the access problems that have been created.

You've been viewed as a so-called bad boy of pharma.

Are you listening?


The way I see it, you can go down in history as the poster boy for greedy drug company executives, or you can change the system.

In this industry, sadly, they say something like this:

"Yeah, we'll go in and we will take the blows of the Congress because they'll be upset for a little while, but all we gotta do is basically rope-a-dope."

A 30% discount on a 500% price increase hardly makes a dent.

Does that sound like a good deal to you?

What we try to do is address the issue from a portfolio point of view.

Let's talk about R&D.

How much did Mylan spend on research and development products in 2015?

Actually, we've spent, over the years, trying to do several things that failed and trying to--

That's not what I asked you, I said how much did you spend on R&D in 2015?

I mean, I feel like you're just-- you're not giving me answers, ma'am.

That's pharma's philosophy.

They know they're gonna take the blow, so they'll come in and the chief executive will get hit a few times, and then they'll leave and say...

Then we can go right back and just continue to do what we've been doing.

I think when people look back in 10 or 20 or 30 years and write the history of drug pricing in the early 21st century, they're gonna be struck by two remarkable and often inexcusable trends.

Between the gaming of the patent system or the exclusivity and licensing system for the old drugs, which is unconscionable, and the charging of hundreds of thousands of dollars a year for a new drug that's still on patent, which is also very, very troubling, people will look back and say, "That is where the industry began slitting its own throat and basically begging to be regulated because people are just fed up with those kinds of prices."

Be it a single-payer system, collective bargaining, or pricing committees, there are many ways government can regulate drug prices.

The United States is the only industrialized country in the world that operates on a system of whatever the traffic will bear.

Aside from everything else, the government just doesn't negotiate for prices.

I mean, some people know that, for example, that Medicare is forbidden to negotiate, but I don't think the majority of people understand that.

I mean, that would be such an easy fix.

The reason we pay more is because all the other countries negotiate with the drug companies and we don't.

Canada, Britain, Germany, Switzerland.

Pick any developed country, they all negotiate.

Take the hepatitis C drug, sofosbuvir, for example.

In 2016, the same drug cost 37% less in the U.K., 66% less in Spain, and 99% less in Egypt and India.

It appears that there's an opinion in the U.S. that medicines made overseas are inferior or even dangerous.

Well, all of the factories that are manufacturing these generics are licensed by the FDA and the World Health Organization, and in the case of hep C meds, they're licensed by Gilead anyway, so they're absolutely identical in every way to the expensive product, and the reality is that probably 50% of the prescription medicines in the U.S. are made in India anyway.

Is it that somehow we're carrying a greater load because we're richer or because we're financing R&D for the rest of the world?

No. We're carrying a greater load because the drug companies built a system that precludes us from negotiating over prices in this country.

Everybody else does, so we pay more.

As a rule, pharmaceutical industry always wins.

Last November in 2016, we had an initiative on the ballot in California, Prop 61, that said they could negotiate for prices.

Do you have any idea what the pharmaceutical industry is spending against Proposition 61?

They are spending $126 million!

$126 million to defeat a proposal that will lower drug costs for the people of California.

It is incomprehensible!

The time is long overdue for the American people to stand up to the greed of the pharmaceutical industry.

We should be doing it here in Washington, but they own Washington, unfortunately.

Well, they have spent, since 1998, over $3 billion in lobbying.

$3 billion in lobbying, not to mention enormous amounts of money in campaign contributions.

Not only are they the top lobbying industry, but they outspend every other American industry by at least 44%.

This gives them unparalleled lobbying power.

Donald Trump got elected to drain the swamp in Washington.

If anybody ever did drain the swamp, what they would find lying around the bottom is four or five drug industry lobbyists for every representative in Washington.

The New York Times sort of intimated this morning in their op-ed that Congress yells a lot but does nothing.

I couldn't agree more.

Because the lobbying, and you guys lobby too.

You lobby.

Is Congress too close to the biotech and pharma industry?

They've got lobbyists everywhere pushing for what they want.

The unfortunate realities of politics in America is that the larger your lobbying trade group is and the more money you can wield, and they often call it dark money, the dark money goes to support electing politicians, and that money absolutely influences decisions that are made.

The reach of pharma's financial contributions is staggering.

In 2016, out of the 100 members of the Senate, 93 senators accepted money from pharma.

A lobbyist has a lot of money at their disposal.

First of all, you can give contributions, which is really the mother's milk of politics, to virtually every congressman you need to impact, and not just contributions, you can raise significant sums of money for them if you have a lot of resources.

You can, in essence, buy your way through your issue if you do it carefully.

The Congress of the United States of America should be put up for malpractice for not addressing this issue.

Mr. President, let us be frank, let us be honest.

The current political campaign finance system is corrupt and amounts to legalized bribery.

The pharmaceutical industry has prevailed for almost a decade here in Washington in just wiping this issue off the agenda.

There's no discussion, there are no votes, we have not really done anything to even try to act on pharmaceutical prices with a vote on the floor of the House since 2007.

Last month, federal lawmakers from both parties helped the industry block Senate legislation to let Americans purchase lower-priced FDA-approved medicines from Canada.

Right, so, that is absurd, and by the way, again, let's emphasize that it wasn't just Republicans, it was Democrats as well.

Pharma's gone back and forth as to whether or not they want to be partisan.

So in some eras, you see pharma weighing in very much for the Republican Party.

In other years, it was more equal between the Democrats and the Republicans.

The reality is, if you're a congressman, they let you know that if you do things that they like, they will give you money; if you do things they don't like, they will give money to your opponent.

Just the threat of a campaign contribution to an opponent is all that's necessary to be able to control a politician, and it's why it's so difficult to get any meaningful legislation advanced at either the state or federal level is because of all the money.

We have members here who just love free trade.

We can bring any product you want in from China, you can get lettuce and tomato coming from farms in Mexico, but for some strange reason, we cannot bring in brand-name drugs from Canada.

Just can't do it, can't figure out how to do it.

And everybody here knows what the reason is.

So you have a very wrong system, a very immoral, at some level, system that really, in essence, comes down to bribery that is legal, and that's what's gotta be changed, but to change it, you've gotta get the very members of Congress who benefit from these bribes to agree not to take them.

It's very, very hard because of the reach and influence and the money that the drug corporations have to do this work, but there is enough anger and there is enough energy that we are making progress.

The era of modern medical research has brought us undeniable breakthroughs that have curbed illness and extended lifespans, but at what cost?

Everyone looks gorgeous!

I feel like it's my calling-- if you want to call it that--

I feel like it's my job to effect change because I think it's really unfair to have to be your own advocate to this level.

The drug companies are almost holding people that are sick or chronically ill or have some sort of a disease or cancer or whatever, they're holding us hostage.

Somewhere along the way, the pharmaceutical industry turned its back on the very society that it serves, pledging its loyalty to profit, corrupting our political system, and testing the breaking point of our economy.

I'm not sure what a revolution for sick people would look like, but I do know that we need one.

If the healthy and well could stand up with the sick, we could get a lot done, and we need to figure this one out together.

It can't go on.

It's not just that our healthcare is way more expensive than any other country on earth, it's that there is no good end to this path that we're on.

We have Stockholm syndrome, we're just sort of like, people are accepting horrible consequences from the current system because they think there's no alternative.

The important thing is there is an alternative.

The alternative is to do something different than what we're doing right now.

Something has to change.

Price regulation, patent reform, industry transparency, single-payer system, negotiation reform, marketing regulations, anything has to change.

We are exposing to the world just how greedy this pharmaceutical industry is.

Somebody has to say no.

Somebody has to react and say, "It's not acceptable.

We can do better. As a society, we can do better."

Everyone knows somebody who's sick, who's been sick.

They want that person to have better treatment options, as I do, but it can't be a conversation about what's that person worth to you?

It can't be that kind of conversation.

They will fight it, they will try to buy our Congress, they will stifle legislation, and they will spend billions of dollars to hang onto the system that has given them their power.

Do not concentrate on, so much, who you're fighting against; concentrate on what you're fighting for.

One person can make a difference.

I think people need to get on the phone, call their congressman, and say, "Look, I want something done about this drug pricing.

It's ridiculous."

They can be beaten.

They will be beaten if patients and consumers stand up and say, "No more, we're not gonna do this anymore."

It's the only way we have a chance to push back against all the money and influence that the drug companies have.

We have lost control of the industry that holds our lives in the palm of their hand.

What, then, are we willing to do to get it back?

The answer can't be nothing!