Why the Pharmaceutical Industry Could be a “Market for Lemons”

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A brand-new analysis calls the pharmaceutical industry a “market for lemons.” This means a market in which the seller knows far more than the buyer about the product. And this means that the sellers — drug companies, in this case — can make money by selling products that are less effective and less safe than consumers are led to believe.

What can happen, according to sociologist Donald Light who wrote the study, is that drug companies can hide or downplay information about serious side effects, or overstate the drug’s benefits. Then they funnel money into advertising to persuade doctors to prescribe them.

“Lemons” are produced because drug companies themselves are testing drugs and they have legal protection in place that allows them to potentially hide less-than-savory information about the drug, and because of the relative ease it takes for a new drug to be approved in the U.S.

The study proclaims that about 85% of new drugs offer few if any new benefits. At the same time, side effects or misused pharmaceuticals make for a significant health problem in the country. The study, done by independent reviewers, represents the core of a new book Light has written called “The Risk of Prescription Drugs” (Columbia University Press).

He documents how a lot of patients are being exposed to new drugs that aren’t overly effective, but have a high risk of side effects. Studies are undertaken, designed to limit evidence of harm and emphasize a drug’s advantages. Then, huge marketing campaigns are rolled out to sell the drug. Busy doctors begin prescribing them and, Light indicates, they are likely to dismiss patients’ concerns about side effects.

The problem is that drugs are getting approved without anyone truly knowing if they are actually effective, or how harmful they could be. Government officials are being swamped by large numbers of clinical trials, many of them incomplete and many not set up to a quality extent.

“A few basic changes could improve the quality of trials and evidence about the real risks and benefits of new drugs,” Light said. “We could also increase the percentage of new drugs that are really better for patients.”

Or, of course, we could put more money into studying alternative medicine for its abilities to treat and prevent the widest array of health conditions.

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