By Ed Silverman
August 23, 2010
The lemon, of course, is a metaphor and is not a pretty one. But Donald Light, a sociologist and professor of comparative health policy at the University of Medicine and Dentistry of New Jersey, contends that the spate of instances in which drugmakers hid or downplayed info about serious side effects – or overstated benefits – has transformed the market for medicines into one for lemons.
“The basic idea is simple but arresting: just as there are hidden dangers and flaws in used cars, so there are in drugs. And just as used car salesmen have an incentive to profit from not disclosing risks the consumer cannot see under the shiny exterior, so drug companies and their reps have an incentive to profit from not disclosing risks the physician and patient cannot see inside a shiny new pill. In a number of ways, however, drug markets differ from used car markets. One way is that bad drugs do not drive good drugs out of the market, as Akerlof famously predicted in the article that helped him win the Nobel Prize. Rather, they stay in, mixed with higher risk drugs,” Light tells us, after presenting a paper on the subject at the American Sociological Association annual meeting last week.
According to his study, which is not yet published, independent reviewers found that about 85 percent of new drugs offer few if any new benefits. At the same time, though, prescription drugs are now a significant cause of death in the US due to toxic side effects or misuse. He notes that drugmakers spend “two to three times more on marketing than on research,” which are dollars used to persuade docs to prescribe new drugs. But the docs, he maintains, may get misleading info and then pass along the same info to patients. In his view, this is a “two-tier market” for lemons.
And in his study, Light says drugmakers have taken advantage of this two-tier system information market and monopoly rights to create what can he calls “the risk proliferation syndrome,” which consists of corporate, government, and medical practices that maximize the number of drugs put on the market with risks of adverse reactions and then maximize the number of people induced to take them.
Read entire article here: http://www.pharmalot.com/2010/08/drugmakers-actually-make-lemons-not-medicines/