The Pharmaceutical Bubble

At my university, it is time for the annual open enrollment in health insurance. Every year I am astonished by the rates for prescription drug coverage. For family coverage, an employee’s cost is $79 a month, and the State of Maryland subsidizes the plan to the tune of $316 a month for a total cost of almost $400 a month. $400 a month! Just what are Americans popping?

Consider Lovaza. Lovaza is GlaxoSmithKline’s prescription fish oil, specially modified to provide high concentrations of omega-3 fatty acids. The cost for one year on Lovaza is an astonishing $3360. By the way, Lovaza—which is being marketed to reduce triglyceride levels—contains unhealthy, partially hydrogenated vegetable oils as a carrier base for the fish oils.

It is true, however, that the modern, Western diet generally lacks essential omega-3 fatty acids, particularly in relationship to an excess of omega-6 fatty acids.  Among other things, omega-3 fatty acids are essential for a healthy heart. But, simple modifications can easily restore omega-3 to your diet. There is no need for a pill. Wild salmon is omega-3 rich, as are vegetarian sources such as flax, walnuts, tofu, and leafy greens. (One caution: There are contradictory studies indicating that there may be an increased risk of prostate cancer with consumption of flax seed oil, but not flax seed meal.)

Modifying ones diet to increase the intake of omega-3 fatty acids costs but a tiny fraction of the $3360 a year price tag of Lovaza. Clearly, prescription drug insurance causes huge distortions in behavior. How many patients who do not have insurance for prescription drugs would consider buying Lovaza?

The marketing tactics of the drug companies, aided and abetted by the FDA (Food and Drug Administration), are truly unconscionable. We are told by GlaxoSmithKline that Lovaza “is approved by the FDA to reduce very high triglycerides” and that “unlike Lovaza, dietary supplements are not approved to treat any disease.”

This is misleading, since food and dietary supplements are not tested by the FDA concerning their power to prevent or cure disease. Recently the FDA made national headlines when they warned General Mills about their claim that Cheerios (an oats based cereal) is a means to help reduce cholesterol:

Based on claims made on your product’s label, we have determined that your Cheerios… is promoted for conditions that cause it to be a drug because the product is intended for use in the prevention, mitigation, and treatment of disease…[Cheerios] may not be legally marketed with the above claims in the United States without an approved new drug application.

What does the FDA announcement about Cheerios instill in the public? Perhaps the FDA announcement induces fear that only prescription drugs can maintain our health? Who benefits when such fears are promoted? How can a society of people expect to remain prosperous and free when collectively they are ignorant of how to maintain and restore health? How can any society afford drugs as wasteful as Lovaza?

I was able to find that sales of Lovaza were $102.8 million in January and February of 2008. Imputing from that, Lovaza sales were well over a half billion dollars for the year 2008.

On a pharmaceutical drug rep forum, Cafepharma, I found this post from a patient:

HEY DRUG DUDES, i’m a guy on disability. i take a shit load of drugs trying to beat cholsteral [sic] and trygiserides [sic]. cost is killin me. nothin cheap out there??? goin to canada for some . newest for me is lovasa. got any ideas where to shop for best price???? any help appreciated!!!

My advice to this patient: It is time to get some new advisors. First, your advice to yourself is very bad; resign as your own advisor. Next, fire your doctor. If the doctor you have is prescribing Lovasa, how much does he or she know about restoring and maintaining health? Instead of squandering your money on Lovasa, spend a small fraction of that on some natural foods cookbooks and change what you eat.

There is little doubt in my mind that the bubble in pill-popping will end as abruptly as did the bubbles in housing and in stock prices. For now, the pharmaceutical bubble is being sustained by market distortions caused by government privilege and government regulation. This bubble is destroying our health, teaching Americans to eschew responsibility, and helping to bankrupt our nation.


14 Responses to The Pharmaceutical Bubble

  1. Tesh says:

    So… it’s like any other bubble. 😉

    This is the first I’ve heard of Lovasa. It seems pretty silly to me. I’m no health food expert, but even I can see that it’s a waste. Then again, I *do* understand math, while so many people don’t. *shrug*

  2. igli1969 says:

    First, let me admit that I don’t eat as healthily as I should. I also understand how insanely expensive it is to jump through the FDA’s hoops (don’t get me started on and alphabet agency unless you have a few hours to spare).

    That being said, too many doctors take the easy (read: lazy) way out when it comes to their “cures.” Most won’t consider any course of action other than drugs or surgery. Yes, sometimes one of those is the proper prescription. But in many cases such as described above, there are alternatives. Much cheaper alternatives. Far be it from me to suggest that some physicians won’t consider those cheaper options because of lesser remuneration. (“Follow the money . . .”)

    And with the Web, almost anyone should be able to find out what alternatives there are, and which ones are actually effective (are you listening, Oprah?).

    But that would assume that many patients, like many doctors, are not lazy. (Hey, it’s Friday, so I have leave to be this cynical.)

    And, for those who enjoy conspriacy theories, how about Big Pharma buying enough congresscritters to support such pricing, make that part of a “right” to medical care, and further impoverish our descendants? Oh, that’s right, they’re already in the process of doing that. Silly me.


  3. Tesh and Chris,

    When the “Big Pharma” bubble collapses we will be left with a population that has little understanding of how to maintain their health without drugs and surgery. Given that inevitable event and combined with the rotten diet that many have grown up with (I have seen 4 year old siblings of players at little league baseball games drinking 20oz bottles of Coke), young people growing up today may be the first generation of Americans with declining life expectancies.

  4. Heather says:


    Healthcare reform and the burst of the pharmaceutical bubble will not occur until the infrastructure of our healthcare system changes from a medical model to a health and wellness model.

    The medical model is great to support acute episodes of illness, injury or conditions in which individuals need a respite to recover and become whole again. Whether it is through surgical means or medical regimens such as medications and treatments there will always be a place for these type of interventions and care. Sometimes individuals have become so emotionally and physically weakened that they are unable to experience benefits of complimentary and alternative medicine offerings to be enough.

    Where we have fallen down is our continued reliance on the medical model for the promotion of health and wellness. To expect those that have been trained in the medical model to be able to support health and wellness is an unrealistic expectation and sets the system up for failure as the medical model is the study of illness as opposed to health.

    In order to achieve a healthcare system that rewards health and wellness the entire infrastructure needs to change to support just that. This is not to say that the medical model does not have its place however in order for health and wellness to be supported the following changes to the existing healthcare system infrastructure needs to occur:

    1. Expansion of ICD coding or introduction of an entirely new diagnosis coding mechanism to capture of health and wellness activities NOT associated to an illness, injury or condition but as a result of an individuals age, overall health status and lifestyle
    2. Use of the new ICD coding or new coding mechanism by insurance plans and healthcare providers
    3. Reimbursement of ALL health and wellness activities regardless of healthcare provider type including nurse practitioners and complimentary/alternative medicine practitioners
    4. Federal and state licensure restrictions removal on those that are not physicians so that they can function independently and provide a comprehensive set of health and wellness services and receive full reimbursement reflective of their experience and value to the healthcare system
    5. Insurance companies switch from medical healthplans to health and wellness plans that are not restrictive like HMOs:
    a. Yearly exams and check ups for all insured regardless of age to include
    i. Vision
    ii. Dental
    iii. Physical
    b. Reimburse for vaccinations like influenza and pneumoncoccal
    c. Reimbursement for complimentary and alternative therapy like acupuncture, massage and chiropractor without having an illness or injury identified – for prevention of stress related conditions

    These are just some of the suggestions, the list could go on and on. But until the industry recognizes that the model needs to change the conversations and current dilemmas will continue to exist.

    You cannot have health and wellness promotion when everyone is focused on medical illnesses and the pills used to treat the conditions.

  5. Heather,

    Thanks for your thoughtful insights.

    Exactly about the medical model, which is why I would disagree with your recommendation for a yearly checkup for all “regardless of age.” Iatrogenic illness is a significant and growing problem. Shannon Brownlee’s Overtreated is a must read.

  6. Heather says:


    I can see how you would have that viewpoint if you were looking at the yearly checkup from a medical model perspective. What I am suggesting is an experience supportive of a health coach counseling session/encouraging individuals to implement and/or continue health practices as well as re-evaluate their current lifestyle to determine if changes have occurred that would have impacted their level of health and likelihood of experiencing an illness.

    It truly would be a check in since health and wellness at times can be difficult to achieve when there are so many temptations that for some, make them forget the hazards of straying from health practices.

    This type of session would not be done by a medical doctor – as physicians have been trained to identify and treat illnesses as opposed to strengthen health, wellness and immunity. The yearly physical would be performed by other healthcare professionals more attuned to preventive care.

    However this type of care is not widely accepted nor reimbursable and has only been implemented by insurance plans when they are trying to control costs for those plan members with skyrocketing chronic conditions not manageable by traditional medical treatments.

  7. Heather,

    Thanks, I understand your point now.

    I’m a big advocate of alternative health care and I don’t like paying out of pocket for it, yet once we expand insurance coverage hand-in-hand we will expand licensing (as opposed to certifications) which blocks competition. No easy answers here; other than begin to dismantle the huge role that government plays in distorting the choices of consumers and driving up costs.

    I’m glad that you are raising these questions; I will be reflecting on them further.

  8. jay says:


    Thanks for a great column. Here’s my $2 worth.
    The reason Big Pharma will never be the solution to healthcare is the same reason the Big Gov’t can never be the solution for our economy. Both are operating from a flawed paradigm. Big Pharma/medicine treats the body as a machine with parts to take away or stimulate with chemicals to manage, Big Gov’t treats the economy as a machine when it uses the same verbage of stimulation and fixes and jumpstarts etc.
    The body is an ecology just like the economy is. It is self healing, self governing, self regulating, self directing and self determining. It can be best served by intelligently leaving it alone and let it heal itself. We always create problems when we (with good intentions) intervene in a process that we deem as a “disease”
    One of the major tennants when you want to sell something is that you first create a perceived need, this can be done thru sex, peer pressure, fear and greed. Big Pharna’s classic ploy is to convince us that we are all difficient in something. They always happen to have the handy colored pill as the solution. We are told to fear daily about lack of vitamins, minerals, fatty acids etc. I dare say no one that reads your posts has ever met anyone that had a difficiency disease. Do you know anyone with rickets, scurvy, beri-beri. polegra, qwashikor? these are issues that come about by a lack of protein, vitamin C, etc. now turn the tables 180 degrees and we see the real issue. Have you ever met anyone with heart disease, diabetes, high blood pressure, obesity, arthritis? Just about everyone in the USA could fall into that category. These are all issues that arise from excess, salt, fat, cholesterol, acid, etc.
    I had a client the other day that went to the “foremost thyroid doctor in all the world” recently. Now mind you this guy is over 350# and has every risk factor known to medical kind. When he came back to town and I saw him I inquired about his appointment with the doc. He went on to tell me about how he was low in iron, magnesium, calcium, and had and underactive pituitary gland, he was given 5 prescriptions and 4 other tonics to take. Not a word about his diet and lifestyle. Now here’s the ironic part, this guy said “it was the best money I’ve ever spent with a doctor”. I almost fell to the floor.
    Just like this guy, our economy has been suffering from unbridled consumption and stimulation, the economy wisely knows it’s time to push back from the feed trough and loose some weight, tighten the belt, do without. Our Gov’t is showing up at everybodies door with a pizza and a beer.
    Our Creator could not have made a body so wanting as to need someone to get into a boat and go to Alaska and catch a salmon and process it and transport it 3000 miles to my door so that I might not be difficient in a fatty acid. That is how far removed our thought processes have gotten from logic. It is the same flawed thinking that leads to eating a banana because it has potasium in it, or a tomato for lycopene. Just eat the banana and tomato, the BODY will use what it needs and discard the rest, that’s the way we were designed. There is not some chemist in a lab in New Jersey that is smarter or has a better way than God /nature. As the other response said, the medical system is great for acute (single causal agent) issues, they haven’t a clue when it comes to health.

  9. Jay,

    Your comments are inspirational and wise! Thank you.

  10. Dr. Brownstein,

    Thank you for this post and everyone’s comments. I love how simple economics can be requiring all the basic ingredients. First we need a system of prices to tell us the relative and measurable value of products and services. Second, we need a means of a multitude of individuals setting and accepting those relative prices such that the production and distribution of such is coordinated seamlessly. Third, there needs to be a means of property protection such that those who produce those valuable entities of society may be duly rewarded for their risk.

    Health care fails at all three. First, there is no means of assessing the relative value of two products or services in health care. We have clinical trials but most only compared to placebo. And, even if two competing medications are compared in the best designed randomized clinical trial, it doesn’t always help us in real practice.

    Second, we do not have a price system in health care. We have a cost system. A price system is such that the unit of exchange is set by the multitude. A cost system is set by few. The consumer does not set the price like we do with other products that compete for our patronage. The price that the insurer pays is based on a contract between the pharmacy and the health plan. Therefore, the price of a given medication does not communicate its value. It is artificial based on the transaction of few.

    Finally, there is akin to a tragedy of the commons in health care. The consequence of pooling beneficiary premiums is such that no one owns their own risk. An employer or state pays the same insurance rate for one individual that assails their body with smoking and drinking as another who takes care of their health. But more contributory to moral hazard is the fact that a single health provider is not completely punished or rewarded for their care decisions. If a patient is healthier a health provider does not necessarily earn more profit.

    In conclusion, we live in a state of taxis in our health care system. The health care economy arises from the few that dictate for the whole, those products or services and at what cost and at what time they should be appropriated. God help us all.

  11. Damon,

    Thank you for adding your wisdom and expertise. All of your points are very well-taken. Most people don’t think about (or ignore) the points that you made and we do so at our peril.

    No doubt that the taxis (a planned order) in health care will strengthen in coming years with dire consequences.

  12. Ron Wilson says:

    Dr. B:

    I agree with Herb Stein – if something can’t go on forever, it won’t.

    Ron (’02)

  13. Lila L says:

    It’s sad that people are so poorly informed about food. There’s a lot of information out there, but you have to be motivated to get it. Every junior high school in America should start requiring kids to take a health food cooking class. They could learn the importance of a healthful diet, and get some training in which foods to choose, the right combinations, menu planning, and cooking instruction.

    It’s amazing that in the one of the most plentiful countries and times people eat so poorly, and know so little about healthy eating.

    We eat various kind of beans, seeds, Chinese vegetables, whole grains, fruits, etc., and are vegetarians. I’ve taken the time to research the right food combinations, and make sure that our children get enough iron, zinc and calcium in their diets. It takes a little practice, but it’s worth it. We bike regularly, walk to school, and haven’t been sick in over a year, except for the occasional sniffle.

  14. Thank you Lila. Yes, it is amazing how we have squandered our “wealth” in so many ways. The food lobby would fight vigorously against natural foods being taught in public schools. But the real problem is as you say that we don’t want to take the time to learn and experiment for ourselves.

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