How Pharmaceutical Products Differ From Tennis Balls

Stephen H. Unger
July 2, 2014

In addition to the fact that it is too big to swallow, there are a number of critical ways in which a tennis ball, viewed as a commercial product, is very different from any medication that one might buy in a drugstore. The differences are very important, and illuminate the pressing need to treat the manufacture and sale of pharmaceutical products very differently. Let's start by outlining what it takes to succeed as a tennis ball manufacturer.

The Tennis Ball as a Commercial Product

By far, the largest number of tennis balls are purchased by those who play the most, and are therefore the people most able to evaluate the quality of a ball. You don't have to be a tennis champion to notice that the X-brand tennis balls that you just played with for the first time didn't seem as lively as the Y-brand that you had been using previously. Or that, even if they were OK right out of the can, that they wore out much sooner. It is also, of course, immediately obvious if the price of ball X is higher than the price of ball Y.

There may be tradeoffs between price and quality. For various reasons, some players might sometimes be willing to accept lower quality balls (perhaps for use only in practicing serves) at a sufficiently lower price. Or be willing to pay a premium for balls that last longer.

Since it is not all that costly to go into the business of manufacturing tennis balls, there are a number of competing brands. Assuming no collusion, this ensures reasonable pricing. The result is a market with knowledgeable buyers able to choose freely among competing products. Under these circumstances, a tennis ball manufacturer has a real incentive to produce a good quality product that can be profitably sold at a minimal price. The seller is motivated by self interest to do what is also good for the buyer. (Note that this discussion concerns relations between buyers and sellers. Relations between sellers and their employees are not nearly as compatible [1], and will not be discussed here.) How does this compare with the pharmaceutical industry?

What affects the profitability of a pharmaceutical product?

Tennis balls are easily evaluated by consumers. This is seldom the case with medications. An exception would be where the purpose of the medication is to alleviate immediate pain or discomfort. Perhaps more important, even physicians are very often unable to determine with any degree of confidence whether or not a particular medication will do the job for a given patient. In many cases nobody can make such a determination, because adequate studies have not been made.

Unlike a tennis ball, a pharmaceutical product can do real harm. There are often open questions as to whether there exist harmful side effects of a medication, particularly after long term use, or use in combination with certain other medications. Note that it is seldom obvious what long term effects might be.

The extent to which a medication is profitable to the manufacturer depends on how many people need it, how often they need to use it, and how long they will need it. From the point of view of the company, a very widespread ailment represents an opportunity for big sales and therefore big profits. But equally important is the number of times a patient needs to be medicated. Consider a product that cures a very serious disease with a single dose. That sounds great! And it is great—for the patient. But, unless they could charge a truly huge amount for each dose (which they often can), it will not be a big moneymaker, unless the ailment is of epidemic proportions, affecting many tens, or even hundreds, of millions of people [2].

An ideal situation from the point of view of a pharmaceutical company would be a very widespread, incurable, chronic disease that is painful, disabling, or life threatening, for which the company has a patented medication that, when taken daily, staves off pain, disability, and death, but does not cure the disease. Such a product provides the company with a large, steady, income flow.

In general, the important parameters of a potentially profitable disease are the number of inflicted people, and the extent to which the disease is curable, life threatening, disabling, or painful (perhaps disfiguring). A medication is potentially profitable to the extent that it alleviates pain and disability, and keeps patients alive. Ability to cure a disease promptly is useful in that it may promote immediate sales, but is detrimental in that it does not lead to long sequences of purchases. The ideal medication is one that must be taken daily, for life, to alleviate the systems of a chronic, incurable, life-threatening disease. Medications for treating diabetes, are prime examples in this category.

In 2011, sales of Pfizer's Lipitor, used to lower cholesterol counts, totaled about $12.5 billion. There were about 30 other pharmaceutical "blockbuster" products with annual sales exceeding $1 billion that year. [3][4]

High prices can be charged for all these drugs because they are protected by active patents. Soon after patents expire, other manufacturers start producing and selling the products for much lower prices. The original producers often attempt to develop and sell newly patented variations, promoting them as "improved" versions.

Harmful side effects

A medication that has immediate, obvious, harmful side effects, such as pain, damage to organs, or death, affecting a substantial proportion of users is not going to sell well (unless it can cure, or alleviate, some serious illness, and all other medications that can do this have drawbacks at least as bad). Where harmful side effects are manifested only after years after use, and affect only a small fraction of users, the effect on sales is generally very small. This seems to be true even when the absolute number of people harmed is quite large, which might be the case where there are hundreds of millions of users.

Now consider a new pharmaceutical product. If there are no immediate ill effects, and no clear evidence indicating, with near certainty, that there are ill effects that will be manifested only years later, there will seldom be a problem in getting FDA (Food and Drug Administration) approval, and companies will not hesitate to market the product.

If reports of bad side effects (e.g., death) surface after marketing has begun, these are suppressed if possible, denied, or obscured. Companies, when pressed, call for more extensive studies—that take years. Every effort is made to delay removal from the market. The FDA is virtually toothless, partly due to legislation and partly due to inadequate budget [5][6].

Sometimes, unpleasant or harmful side effect of a medication can be profitable. Consider atypical antipsychotic drugs such as Risperdal, used to treat such ailments such as schizophrenia, or anxiety. A common side effect is dystonia, which involves involuntary and uncontrollable muscle spasms that can force affected parts of the body into abnormal, sometimes painful, movements or postures. This ailment can be treated with another medication, trihexyphenidyl [7]. So, many profitable drugs contribute to the sales of other profitable drugs.

There are many cases where pharmaceutical companies have suppressed information about dangerous side effects of their products, and sometimes this has led to the deaths of thousands of people [8]. Altho such behavior has resulted in many law suits, and fines amounting to many millions of dollars, I know of no case where a corporate executive guilty of such behavior has been imprisoned. Even a very large fine is not much of a deterrent when the behavior penalized brings in several billion dollars in one year.

Selling the product

Physicians are central to sales, directly thru prescriptions, or indirectly thru recommendations. Recognizing this, the pharmaceutical industry, in addition to major advertising campaigns aimed directly at the general public, devotes a great deal of effort toward persuading physicians to prescribe and recommend their medications.

There is a large force of sales representatives (reps) who regularly visit physicians offices, distributing samples and literature. They ingratiate themselves with the physicians and their staffs by distributing small gifts such as T-shirts and coffee mugs. Doctors, and often nurses and secretaries, are taken to lunch, or meals are brought in to them [9].

Physicians are invited to attend "educational sessions" at luxurious resort hotels, all expenses paid, at which, among other things they learn about the latest pharmaceutical products. Prominent specialists are paid generously to give lectures to other doctors, or to sign ghost-written articles in prestigious medical journals, promoting medical products [10]. Other well known physicians who endorse certain products are paid as consultants. A company might buy, from a medical journal, tens of thousands of reprints of an article that views one of its products favorably.

When the FDA approves a medical product, it specifies the diseases, and the class of patients (e.g., adults over 18) for which it is appropriate. Physicians, however, are free to prescribe these drugs as they see fit. A common practice is for pharmaceutical companies to subtly encourage the use of their products to treat additional diseases and for broader classes of patients. Sometimes these so-called "off-label" uses exceed the specified use [11]. Occasionally, companies are fined when their encouraging of off-label use is too blatant. But, even when these fines are quite large, they generally don't exceed the added profits resulting from increased sales.

The companies spend a great deal of money lobbying legislators, and regulatory agencies, principally the FDA. They are also liberal with campaign contributions to influence key politicians, which goes far in explaining the weakness of regulation.

New and profitable diseases

Another way in which big pharmaceutical companies have upped their profits is by encouraging the definition of new diseases, that they can sell drugs to treat. This is often done in the area of psychiatry, where the criteria for diagnoses are usually fuzzy. There are no X-ray images associated with mental conditions such as depression. Examples of such ailments are Attention Deficit Hyperactivity Disorder (ADHD), Social Anxiety Disorder [12], Oppositional Defiant Disorder, and Binge Eating Disorder [13][14]. Companies often fund patient support groups for new diseases.

There has been an enormous increase over the past two decades in the number of Americans, particularly children, diagnosed as suffering from mental illnesses requiring medication, many of which are of recent vintage [ 15]. E.g., 19% of American boys have been diagnosed as having ADHD, and about two thirds of this group are taking daily doses of drugs such as Ritalin or Adderall [16][17]. Some children under the age of 5 are now being medicated for this ailment.

Research and Development

When defending themselves against charges of gross profiteering at the expense of sick people, the pharmaceutical industry's defense is that they are spending huge amounts of money pushing the boundaries of knowledge to create ever more effective remedies for human ailments. This claim is unfounded. Far more money is spent by the companies on advertising, public relations (PR), and lobbying than on advancing technology [18].

Furthermore, even what they do spend on research is heavily biased toward tweaking the compositions of existing products whose patents are expiring, to make it possible to replace them with siblings that can start with fresh patents. Their PR apparatus then focuses on what are claimed to be some advantages of the "improved" medication—often of questionable value.

Really new advances in medical research generally emanate from work done at university or government laboratories.

The existence of this wealthy, aggressive industry, constantly seeking ever-more profitable drugs, exerts an influence on medical research in general. Since they are an important source of employment for scientists, and a source of research funds, they surely are part of the reason why so little research is done on simple factors that can promote good health and reduce the likelihood of various diseases [19].

Testing pharmaceutical products

Before a medication can be marketed, the FDA must approve it as being safe and efficacious. But, because the FDA is not adequately funded, it is incapable of testing products in the laboratory, or of carrying out large scale tests on animals and humans, or of carrying out epidemiological surveys. So pharmaceutical companies are required to have this done privately, and to submit the results to the FDA.

This is done by contracting out the work to private testing companies, who report back to the pharmaceutical companies. If the results of a test are not satisfactory, they are kept confidential, and additional tests are ordered. This can be repeated, as necessary, until positive results are found in two surveys.

Companies are strongly motivated to get new products approved, and on the market, as soon as possible, so that they can start start bringing in money. The companies argue that minimal testing is adequate to demonstrate efficacy and safety. Now suppose that, after a new product has been used for a few years, reports begin appearing that the medication is causing a disturbing number of people to suffer significant harmful side effects, perhaps even including death. The company's view on the topic of how much experimental data is needed to draw conclusions about the properties of a medication suddenly changes drastically. Before agreeing to suspend sales, it will insist that there be extensive studies made—studies that will take years. Every effort is made to delay suspension of sales.

When a new medication is tested for its ability to alleviate the effects of a particular disease, the standard practice is to compare it with placebos, substances that look to the patient just like the medication, but which are actually inert, and have no biological effect. In such double-blind drug tests, usually half the subjects are given placebos. Neither the subjects, nor the experimenters know which people are getting the placebos—this information is encoded, and revealed only at the end, after the condition of each subject has been evaluated.

An important point is that, if the recipients believe that it is the real medication, even a placebo can have a positive effect. This is called "the placebo effect". If the medication is useless, then its curative effect will be no different from that of the placebo, i.e., entirely due to the placebo effect. Consider now what happens if the subject realizes that he or she has received a placebo. Then that subject will not benefit from the placebo effect, and the medication, even if actually useless, will benefit from the placebo effect.

So, we have the strange situation that a medication under test might look better than a placebo because of the placebo effect! This can happen if the placebo is not designed to have side effects recognized by subjects as resembling those they were told are those of the real medication. It is one of the explanations for why some almost useless medications are on the market. Tests in which the placebo does not produce obvious symptoms similar to those of the product being tested, should not be taken seriously.

What Can be Done?

The problems sketched above reflect the natural behavior of enormously wealthy corporations, acting, as one would expect, to maximize profit. Unfortunately, unlike the tennis ball case, what maximizes profits for the manufacturer of pharmaceutical products is not what benefits the customer.

This problem can't be fixed by fiddling with a few regulations or laws. The pharmaceutical area is simply not appropriate for private enterprise [20]. People in need of medication will be properly served only if the development and production of pharmaceutical products is treated as a public function. Those involved should be well paid to act in the interests of individuals needing medical help, rather than acting to boost the profits of giant corporations.

Unfortunately, as long as political power remains firmly in the hands of those controlling the big corporations, the likelihood of a dramatic change along such lines is nil.


[1] Stephen H. Unger, "The Demise of Unions and Why We Need to Revive Them", Ends and Means, September 11, 2013

[2] Dara Mayers, "Would You Cure a Profitable Disease?", Diabetes Health, October, 2003

[3] Wikipidia, "Leading blockbuster drugs as of 2011"

[4] Susan Dana Jones, Dawn M. Ecke, "Using Genomic Analysis to Improve Mammalian Cell Culture for Biopharmaceutical Production", Pharmaceutical Processing, 9/25/2013

[5] Rita Rubin, "How did Vioxx debacle happen?", USA Today, 10/12/2004

[6] Stephen H. Unger, "Reckless Use of Technology", Ends and Means, February 20, 2013

[7] Jane Collingwood, "Coping with Atypical Antipsychotic Side Effects", Psych Central, January, 2013

[8] John Fauber, "Advair: How Safe Is This Drug?", Milwaukee Journal Sentinel/MedPage Today, Nov 18, 2012

[9] Adriane Fugh-Berman, Shahram Ahari, "Following the Script: How Drug Reps Make Friends and Influence Doctors", PLOS Medicine , April 24, 2007

[10] Tracy Weber, Charles Ornstein, "Dollars for Docs Mints a Millionaire", ProPublica, March 11, 2013

[11] Sydney Spiesel, "Prozac on the Playground: The dangers of off-label use of psychiatric medications in children.", Slate, Oct. 15, 2008

[12] John M. Grohol, "Social Anxiety Disorder Treatment", Psych Central, 1/30/2013

[13] Marcia Angell, "The Epidemic of Mental Illness: Why?", The New York Review of Books, June 23, 2011

[14] Marcia Angell, "The Illusions of Psychiatry", The New York Review of Books, July 14, 2011

[15] Joanna Moncrieff, "Is Psychiatry For Sale?", Maudsley Discussion Paper, June 2003

[16] Ryan D'Agostino, "The Drugging of the American Boy", Esquire, March 27, 2014

[17] Hester Plumridge, "Another ADHD Drug For Pre-Schoolers?", The Wall Street Journal, Pharmalot, Jun 12, 2014

[18] Alexander Eichler, "Pharmaceutical Companies Spent 19 Times More On Self-Promotion Than Basic Research", The Huffington Post, 8/9/2012

[19] Stephen H. Unger, "The Need for People-Friendly Research & Development", Ends and Means, May 4, 2009

[20] Mayer Brezis, "Big Pharma and Health Care: Unsolvable Conflict of Interests between Private Enterprise and Public Health", Israel Journal of Psychiatry & Related Sciences, Vol 45 No. 2 (2008) 83-94

Comments are welcomed and can be sent to me at unger(at)cs(dot)columbia(dot)edu

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