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In 1950, George Merck, president of the company founded by his father and bearing his name, said, "We try never to forget that medicine is for the people. It is not for the profits."
If that was ever true, it is certainly not true now. Drug companies are hugely profitable enterprises, and they spent more on political lobbying than any other industry between 1998 and 2004. The transformation is owed in large measure to blockbuster drugs, meaning any medication that generates more than $1 billion in sales annually.
It might have begun with the selling of Zantac, an anti-ulcer drug that came on the market in 1983. GlaxoSmithKline priced it more expensively than the competitor drug Tagamet, to imply that it was superior. In reality, Zantac was chemically almost identical to Tagamet and no more effective.
But more importantly, the revenues from Zantac were spent not on research and development as was then customary, but on a massive marketing campaign for the drug. GlaxoSmithKline linked the drug to the relief of a common but minor condition, heartburn, then made consumers and doctors worry that the condition was a sign of a more worrisome disease, which the company dubbed Gastro-Esophageal Reflux Disease, or GERD. Soon, millions of Americans were using the expensive drug Zantac instead of the over-the-counter remedies which easily relieve most heartburn.
GlaxoSmithKline's strategy, novel in the 1980’s, has become standard operating procedure in the pharmaceutical industry. Most money goes into marketing, and research falls by the wayside; most “new” drugs are slight alterations of older ones.
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