In the days of ‘patent medicines,’ drug makers marketed tonics and pills that were both toxic and addictive. If they worked at all, it was usually only by virtue of a placebo effect. The creation of the FDA in 1906, and the passage of the Food, Drug and Cosmetic Act of 1938, addressed this situation, acknowledging that without regulation, medical products are generally hazardous to public health.

A century later, the public health is once again threatened by a runaway patent medicine industry that is driven by profi ts and acts with a near total disregard for human welfare. And the death statistics prove it. In 1998, Britain’s leading medical journal The Lancet published a report showing that adverse reactions to drugs “properly prescribed and administered” had become the fourth leading cause of death (accounting annually for 100,000 hospital deaths in the US). This finding was echoed in a JAMA report by five physicians from Harvard Medical School in 2002. A few drug company executives have also acknowledged the problem. A senior executive at drug maker Roche openly said in 2004 that the industry exaggerates the prevalence of psychiatric disorders to increase profits, and a year earlier a vice president at GlaxoSmithKline (GSK) admitted that “our drugs do not work on most patients.”

The crisis is also reflected in public opinion. A 2004 Harris Poll found that fewer than one in seven Americans believe that the pharmaceutical industry is “generally honest and trustworthy,” placing the industry’s credibility on par with Big Tobacco, Big Oil, and HMOs.

In contrast to these critical views is the singularly rosy view promoted by the industry itself. To disguise the fact that profi ts in their billions are prioritized far ahead of safety and effectiveness, the pharmaceutical industry touts itself as being an “engine of innovation.” And so we read, “Eli Lilly and Company is a leading, innovation-driven corporation committed to developing a growing portfolio of best-in-class and first-in-class pharmaceutical products that help people live longer, healthier and more active lives.” This “innovation” hype is absolutely correct, with one small caveat: the drug industry has demonstrated a phenomenal degree of innovation, only not in drug development, but in the creation of new marketing tactics.

Researchers in 2003 showed that in blind taste tests, people generally like Pepsi more than Coke. Using brain imaging technology, they also showed, however, that when Coke is associated with its brand name, brain activity surges and preference switches. In other words, the branding of the product can be more efficacious than what’s in it. This may be no surprise in the case of food, but it’s a radical idea when applied to drugs meant to save lives.

So: what to do if your company’s new, patented wonder drug is no better or safer than cheap generics, and much more expensive? Brand it by spending huge sums on its image, of course. In 2003, Big Pharma spent nearly as much on marketing ($25.3 billion) as it did in research and development ($33.2 billion).

Take Eli Lilly’s Prozac. In the 1980s, Lilly waged a successful campaign to get Prozac through the FDA even though not a single study submitted to the agency showed the drug to be effective for depression when taken alone (i.e., when not taken with other drugs that temporarily improve mood, such as antianxiety drugs). Once approved, Lilly marketed the drug as a revolutionary substance that selectively targeted the brain chemical serotonin: “This medicine works by bringing the level of serotonin in your brain back to normal.” Unlike the cheap generics on the market, the Prozac class of drugs does not affect norepinephrine, which was said to cause all the side effects of the older tricyclics. Thus began a marketing campaign that made Prozac and the other SSRI antidepressants worth billions.

Now jump ahead a dozen years. With the patent expired on Prozac, and annual sales down from billions to millions, Lilly brings out a new antidepressant, Cymbalta, again after heavily massaging the FDA. With its approval came a new and highly innovative marketing message: Cymbalta is better than Prozac because it has a dual action in the brain. It not only targets serotonin, it also impacts another important neurochemical, norepinephrine. As a Boston Globe story put it, Cymbalta will be a “better drug” because it is a “dual-action” agent. Never mind that this flatly contradicts the ‘serotonin/good, norepinephrine/bad’ story that launched the SSRI revolution. And never mind that Cymbalta is not even a new, or new kind, of drug: it works similarly to the tricyclics and has been on Lilly’s shelf since the 1980s.

If the Prozac-Cymbalta story seems like more the exception than the rule, consider Lilly’s more recent blockbuster, Zyprexa. When Yale psychiatrist Roger Rosenheck investigated the efficacy of this patented and expensive pill for schizophrenia, he found that it was in fact no better or safer than the older standard, Haldol. His findings, which appeared in 2003 in JAMA, were striking because Zyprexa costs several dollars per day (and had already raised several billion dollars for Lilly), whereas Haldol costs only six cents a day. Looking at the research that led to FDA approval, Rosenheck found a bias in the way researchers were investigating Lilly’s drug. When the bias was removed, as it was in everyday medical practice, Zyprexa’s advantage disappeared.

That Lilly and other companies are consistently able to place new, patented drugs in lucrative markets without demonstrating their superiority over existing generics is par for the course. Another example, taken from Marcia Angell’s book The Truth About Drug Companies is the cancer drug Taxol. Developed in the 1980s, Taxol was not developed “in house” by a drug company after years of costly research, but within the US National Institutes of Health (NIH) and then leased to Bristol-Myers Squibb, with the company paying the NIH a mere 0.5 percent in royalties and $20,000 a year.

With the public getting wind of stories like these, pressure is building for greater transparency. The book by Angell, a former editor of the New England Journal of Medicine, is one example. Another is New York Attorney General Eliot Spitzer’s suit against GSK, charging it with burying evidence showing its popular SSRI antidepressant Paxil doesn’t work in children and can promote suicide. A $2.5 million settlement followed, and GSK promised it will begin publishing the results of all its clinical trials on the internet.

But the latter move would have happened anyway. A group called the International Committee of Medical Journal Editors, representing prestigious publications like JAMA and The Lancet, has taken steps to bolster transparency in drug research. In contrast to the FDA, which failed to properly test the safety of the now-defunct arthritis drug Vioxx and suppressed negative data about SSRIs and children, the editors are requiring clinical trials to be listed in a public registry. If they are not, the results, however promising, will not be eligible for publication in any of these prominent journals.

This is all good. But greater transparency isn’t enough. What we’ve got with Big Pharma today is a real big problem – an almost unfathomably huge problem – that cannot be fixed with just a bit of tinkering. Unlike a century ago regulation is not the answer. An FDA already exists, but unfortunately, as one analyst remarked, it has “been captured by the industry it’s supposed to be regulating.”

So what to do?

The top 10 drug companies in the Fortune 500 generate more profits than the other 490 listed, so any solution will have to address the industry’s mighty financial power. As in the example of GSK’s $2.5 million settlement in New York, financial penalties to date have been just a slap on the wrist - Paxil generated a billion dollars its first year on the market. And as we also know from Big Pharma’s role model, Big Tobacco, such fines will not change the ways of a rogue industry.

What might be more effective is a system in which the different kinds of violations by the industry are ranked in terms of severity, with points then applied accordingly. Too many points, determined by a citizen-based watchdog group, would trigger very real consequences. Fines proportional to earnings could be levied, causing stockholders finally to feel some hurt. But this would not be the ultimate consequence, which would be to put the company on probation and, if necessary, take away its corporate charter. This is something that Eli Lilly should have experienced a long time ago.

Richard DeGrandpre