Skip to main content
The Keckley Report

The Integrity of Prescription Drug Companies is on Trial in the Court of U.S. Public Opinion

By September 3, 2019March 1st, 2023No Comments

Drug company brands Turing, Valeant, Mylan and most recently Purdue, are tarnished because the public saw evidence their leaders put profits above all else. Last week, Purdue Pharma and its primary owners, the Sackler family, agreed to a $10-12 billion settlement to resolve more than 2000 lawsuits about their role in promoting OxyContin. According to the Washington Post, the settlement will leave the net worth of the family fortune largely intact though their control of the company will be suspended. (1)

Though not as dramatic as Purdue Pharma, even established names like Pfizer, Johnson & Johnson, Merck, Abbott, Lilly, AbbVie Amgen, Gilead and others are increasingly targeted for criticism about their pricing and business practices. In sum, the integrity of the entire prescription drug industry is on trial in the court of public opinion and its manufacturers are taking the biggest hits.

In the U.S., the drug industry is big, influential and complicated. It consists of manufacturers, distributors, pharmaceutical benefits managers, prescribers and retailers along with armies of consultants, lawyers, advisors and accountants. It recorded $344 billion in revenues last year based on 5.8 billion scripts written: that’s 29% of the entire global market, 9.8% of total health spending in the U.S. and $1044 per capita in the U.S. (2) Like insurers and hospitals, the entire prescription drug industry under pressure to be more transparent and cost effective but singled out because it appears impervious to growing public disdain about its prices. The manufacturers bear the brunt of criticism but others in the industry’s supply chain are also culpable. Here’s why:

The public believes the drugs prescribed by their physicians are safe and effective but they think the manufacturers put their profits before everything else

62% of U.S. adults use prescription medications and 59% say they have made their lives better. (3) But 54% believe that high health costs are a serious problem and blame think drug makers (80%) more than insurance companies (75%) and hospitals (74%). (4) They view manufacturers negatively: per Gallup, (53%) of Americans say they view the pharmaceutical industry somewhat or very negatively—the most negative view Gallup has recorded for the industry since 2001 and up markedly since 2014. (5) Recent Kaiser Family Foundation polling found 72% think drug companies have too much influence in Washington, second only to Big Business (76%) and higher than insurance companies (66%), the NRA (52%), hospital groups (36%) and doctors (30%). (6) 80% think drug company profits contribute to high costs. 63% think additional regulation is needed. (7)

Physicians think drug companies are intruding in patient care inappropriately

Since 2015, the American Medical Association has advocated against direct-to-consumer TV ads promoting specific brands citing their intrusion in physician-patient care coordination. But direct-to-consumer ads for branded prescriptions works: 14% of patients say they talked to their physician about the drug they saw in an ad and 55% said the physician prescribed the drug about which they had inquired. (8) Physician concerns are understandable: a robust study in the Annals of Family Medicine showed drug ads were misleading in 6 of the 8 drug classes they studied often over-emphasizing benefits and under-emphasizing risks and limitations. (9) And physicians increasingly bear the brunt of patient complaints about the out of pocket costs for their drugs so they’re concerned.

Politicians think drug makers abuse the system to maximize their profits

The industry uses its influence effectively: it spends $6 billion in 2018 to advertise its brands to consumers on TV. It spends millions in its advocacy efforts including significant investments in 501C4 organizations that operate under names like the American Action Network to protect their legislative interests. It contributes directly to campaign organizations for candidates pledged to their bidding. And it aggressively protects its products through a complicated patent system and business practices that thwart competition in key product classes.

The reality is that running for office as a defender of the prescription drug industry these days is a risky proposition. Though the majority accept campaign funds from the industry’s coffers, overt alignment with drug makers is tough sledding. It doesn’t matter if Blue or Red: drug manufacturers and to a growing extent its distributors and benefits managers, are fair game.


A unique characteristic of the U.S. health system is its dependence on and faith in the prescription drugs we use. The majority (62%) of American adults take at least one prescription and one in four (24%) takes 4 or more. (10) It’s a staple in our allopathic scheme of care delivery and firmly embedded in U.S. medical education wherein natural health and non-conventional methodologies are shunned.

The fact is that access to the latest and best prescription drugs is important to Americans. We like our drugs. But a consequence of our dependence on medications is the potential for their abuse: at least half of the 47,600 opioid-addiction related deaths last year began as a prescription years ago that later enslaved individuals to addiction. (11)

In the current environment, federal lawmakers and administrators are making progress toward changes that hold promise for lower costs and improved medication management: in addition to continued requirements that providers use electronic medical records to coordinate care more effectively, policy initiatives include streamlining the approval process for generics and bio-similars; innovations in clinical research processes using artificial intelligence, adaptive clinical trials, real-world evidence and others; pressuring drug makers and distributors to be transparent and control price increases (blame and shame) and others. And efforts to remove gag clauses so the 312,000 pharmacists in the U.S. are able to advise patients without constraint are promising.

States are augmenting these efforts, or in some cases, going further: as of August 1, 2019, 47 states had filed 272 bills to control health prescription drug prices per the National Academy for Health Care Policy; the Florida legislature passed legislation permitting drug importation from Canada; in Maine and North Carolina, educational activity for prescribers about new drugs must now be provided by clinicians/pharmacists who do not have a financial relationship with the manufacturer and Vermont bans most gifts and requires that all free samples of pharmaceutical products and medical devices be reported to the State Attorney General’s Office.

Combined, the states and feds seem serious about addressing drug manufacturers head on. Voters seem inclined to go even further: The majority favor regulations requiring drug companies to advertise their prices (88%), allowing Medicare to negotiate directly with drug companies (86%), allowing importation from Canada (80%) and capping out-of-pocket costs for Medicare enrollees (76%). Even price controls imposed by the federal government is gaining momentum among voters. (12)

More regulation is certain. But private sector and grassroots efforts might be ahead of the legislative process. Consider the growing acceptance of over-the-counter medications and natural remedies including functional food (food as medicine) as substitutes for prescription drugs. And investors are making big bets on technologies, analytics and decision-support to equip consumers to understand, assess and monitor their medications.

In one sense, the public’s disdain for drug manufacturers is understandable: they are the most visible face of the industry. But others in its supply chain are also complicit though less visible to most voters: Physicians who prescribe medicines and take inducements from drug makers responsible. The directors on the boards of the drug companies who approve price strategies. Wholesalers and distributors that contribute to price gauging. Academic medical centers who depend on drug companies for financial support. Politicians who take donations from drug company PACs. All play a role.

The entire prescription drug industry and drug manufacturers especially face a daunting challenge to establish and protect the integrity of their businesses. In the court of public opinion, they seem to be losing ground.



The Global Market: in 2018: $1,204.8 billion USD (48.9% in North America, 11.4% China). Global growth is forecast to increase 4.5% annually through 2023—less than the annual growth of 6.2% from 2014-2018 Statistica, IQVIA Institute for Human Data Science

The US Market: 2018 spending was $344 billion (29.2% of global market)– up 5.2% vs.2017. It is forecast to increase 5.5% to $625-655 billion by 2023. IQVIA Institute for Human Data Science R&D Spending

Global R&D spending was $165 billion in 2018 of which $71.4 billion (43.2% of global) was spent by U.S. companies. U.S. R&D investment is forecast to increase 3.1%/year through 2024 compared to annual increases of 3.6% between 2010 and 2017 EvaluatePharma, PwC

R&D Results: The top 12 pharma companies observed the lowest R&D ROI in 9 years, at 1.9%, down from 10.1% in 2010. The cost of bringing a new drug to the market has almost doubled to around $2.1 USD billion as compared to $1.1 USD billion in 2010. Deloitte


1-Berstein et al “Sacklers could hold on to most of personal fortune in proposed Purdue settlement” Washington Post August 31, 2019

2- CMS

3- Kaiser Family Foundation Health Tracking Poll February 2019

4- POLITICO/Harvard T.H. Chan School of Public Health, The Public and High U.S. Health Care Costs, February 26 – March 3, 2019.

5-Gallup” Bipartisan Negativity in Views of the Healthcare Industry” September 14, 2018

6-Kaiser Family Foundation Health Tracking Poll March 2019

7- Kaiser Family Foundation Health Tracking Poll June 2018

8-Kaiser Family Foundation Health Tracking Poll February 2019

9- Applequist et al “An Updated Analysis of Direct-to-Consumer Television Advertisements for Prescription Drugs” Annals of Family Medicine May/June 2018vol. 16 no. 3 211-216

10- Kaiser Family Foundation Health Tracking Poll February 2019

11-Centers for Disease Control and Prevention

12-Kaiser Family Foundation Health Tracking Poll February 2019