Legal Drug Pushers
News: The best argument for single-payer healthcare? Pharmaceutical company profiteering.
July 14, 1998
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Healthcare costs in the U.S. are the highest in the world because of an inefficient private system that ensures profits for hospitals, blood-sucking middlemen (insurance companies), and drug companies. Especially drug companies.
Pharmaceutical corporations are among the most profitable companies in the U.S. As an industry, they have the highest returns on revenue (their profits as a percentage of their total revenues), meaning that they take enormous markups on their products. Literally, they charge "what the market will bear," which is quite a lot if you have a severe illness and need pain killers, or better yet, a terminal illness that can be arrested with a pill (or lots of them). In other countries with national healthcare, governments have enacted price controls on drugs to limit skyrocketing costs, because the government has to pay for the drugs. Not so in the good ol' USA.
| Drug | Price | ||
| ... | U.K. 96* | U.S. 96** | U.S. 98*** |
| Zocor 10mg (Merck) | $1.06 | $1.95 | $2.10 |
| Claritin/Clarityn 10mg (Schering-Plough) | $0.41 | $1.94 | $2.14 |
| Zyrtec/Zirtek 10mg (Pfizer/UCB Pharma) | $0.48 | $1.71 | $1.81 |
| Pravachol/Lipostat 10mg (Bristol-Myers Squibb) | $0.95 | $1.76 | $1.92 |
| Ritalin 100mg (Ciba) | $0.31 | $0.47 | $0.53 |
| Retrovir [AZT] 100mg (Glaxo Wellcome) | $2.04 | $1.55 | $1.59 |
| Videx 25mg (Bristol-Myers Squibb) | $0.78 | $0.37 | $0.42 |
| Hytrin 2mg (Abbott Labs) | $0.73 | $1.27 | $1.45 |
| *From British National Formulary no. 32 1996 **From Drug Topics Red Book 1996 ***From Drug Topics Red Book 1998 Note: Prices listed are the pharmacist's wholesale cost per pill, and do not reflect what the consumer might pay. Research by Mat Honan | |||
How do pharmaceutical companies explain the high prices? They blame them on the cost to research and develop new drug therapies. R&D is expensive, but not as expensive as they want you to believe—certainly not as expensive as the cost to promote, market, and sell these drugs to hospitals, HMOs, and an estimated 600,000 prescribing physicians. On average, companies spend about $200 million to develop a new drug therapy (which includes all the tests and trials of drugs and chemical combinations that never prove useful). The last time Congress checked, back in 1991, annual R&D costs for U.S. pharmaceutical companies totaled $9 billion, yet drug companies spent more than $10 billion per year just to promote their products in the private marketplace—and that cost has only grown since then. In 1997, Bristol-Myers Squibb alone spent $1.4 billion on R&D, and a colossal $2.2 billion on advertising and promotion.
Why do drug companies need to spend so much money pushing their products? If the need is there, doctors will prescribe it, right? Not true. More than half of the new drugs developed every year are not designed to treat new or untreated conditions, but to compete with drugs that are already on the market. Called "me-too" drugs, these are easier and cheaper for companies to develop, because much of the basic research on how the drug should work in the human body has already been done—it's just a matter of finding a new, slightly different compound in the same class as the old drug. For the company to patent and market it, the new drug needs to be different, and if it is stronger and has different side-effects (hopefully fewer and less severe, but not always), so much the better.
The motive behind the "me-too" phenomenon is simple: as a drug that's been on the market for a number of years gets close the expiration of its patent, the company that owns the drug starts to panic. Once the patent expires, other companies can make generic versions of their best-selling, proprietary drug—thereby forcing the price down. The company has to find a new, different, more powerful drug to replace it. Of course, when the new drug hits the market, the company has to spend millions to persuade doctors to stop prescribing the old, cheaper medication and switch their patients to the new one. It's an endless cycle of skyrocketing costs fueled by the immoral, for-profit nature of the U.S. healthcare system.
We're always hearing about HMOs, hospitals, and insurance companies seeking ways to cut costs, and keeping down the cost of prescription medications is part of that process. But while it's becoming harder for drug companies to sell expensive new "me-too" drugs to doctors, there's a new promotional cost in the equation: They've started pushing their wares directly to consumers. In 1996, drug companies spent $600 million on direct advertising to consumers, which is twice what they spent in 1995 and almost ten times more than in 1991. Direct-to-consumer advertising of prescription drugs is banned in most other nations, and the World Health Organization's Ethical Criteria for Medicinal Drug Promotion expressly forbids it.
| Direct-to-Consumer Prescription Drug Advertising | |||
| Company | 1995 DTC advertising | 1997 DTC advertising | |
| Bristol-Myers Squibb | ... | 107.3 | |
| Merck & Co. | 26 | 122.0 | |
| Pfizer | ... | 90.0 | |
| Schering-Plough | 31 | 70.9 | |
| Johnson & Johnson | 23 | 56.5 | |
| American Home Products | 27 | 42.8 | |
| Pharmacia & Upjohn | 55 | ... | |
| Eli Lilly & Co. | ... | 25.6 | |
| Source: Competitive Media Reporting Note: All figures are in millions of dollars. Research by Mat Honan | |||
In addition to marketing costs, pharmaceutical companies take huge markups in devious ways. Most drug companies belong to a larger holding company that also owns a chemical company. The chemical company can make the drug chemicals in its own plant, then "sell" them to its sister division, the pharmaceutical company, at a high markup; this is called "transfer pricing." When consumers complain about prices, the pharmaceutical company then points to the high price it had to pay for "raw materials"—but they bought the chemicals from themselves and manufactured the high markup.
In addition to padding their own pockets, pharmaceutical companies still get a special tax credit (subsidy) from the U.S. government (U.S. taxpayers) when they manufacture the "raw materials" into pill form. The Section 936 tax credit applies to any company that sets up a manufacturing plant in Puerto Rico. Other industries have benefited from this tax credit too, but by the early '90s drug companies were collecting more than all other industries combined. This little loophole is being phased out, but it still saves the pharmaceutical industry over a billion dollars every year.
So beware of brand new, expensive drugs—the high cost is not an indication of efficacy. And when your doctor writes you a prescription, ask him how much it's going to cost you. Ask him if there's a generic drug that will do the same thing, or an alternative treatment that will be effective without the need for you to take a pill and support a drug company.
And remember that, for those of us who have serious conditions that need drug treatment on a continual basis, our private healthcare system really fails. Chronically ill people often can't afford high drug prices, and end up suffering needlessly when they ration their medication or are forced to stop taking it. For their sake, if for no other reason, we need a single-payer system and a limit on drug prices.
Maria Tomchick is co-editor of Seattle's shamelessly biased political weekly Eat The State!, as well as a self-proclaimed "pinko" and a perpetual student of kung-fu. She is not Xena but she wouldn't mind wearing some of that leather.
Additional reporting by Mat Honan.
For more on the delightful pharmaceutical industry, check out the source of many of the statistics in this article: "Bitter Pills: Inside the Hazardous World of Legal Drugs" (Bantam Books, 1998) by investigative journalist Stephen Fried.
Gov. Rod Blagojevich : Save Us From Pusher MDs
By Joseph Fosco
A note before proceeding:
This article contains material that is only suitable for a mature audience. Please be advised.
During the week of July 21, 2008, it was confirmed that the State of Illinois is investigating the purported medical misconduct of Dr. Joseph L. Giacchino, Jr. MD. The investigation relates to my article of April 27, 2008, published on The Keys to Faith Publication, titled ‘A Journey to Healing’. State of Illinois Inspector Dan Murphy, via email, asked me to meet with him on July 29, 2008, to discuss the Giacchino matter in detail. My immediate reply was that I will cooperate.
Recently revealed disturbing information about Dr. Giacchino has put me in this cooperative frame of mind. I am ever more worried about the safety of the young people in our community. I recently heard from an extremely reliable source that Dr. Giacchino has massively increased the amount of dangerous narcotic painkillers that he prescribes to his younger patients. In fact, I also heard from the same source that Dr. Giacchino is the mastermind of a diabolical and systematic procedure, requiring his ‘patients-in-pain’ to jump through certain hoops to keep Dr. Giacchino from losing his medical license for a second time. Sadly, the first time he lost his medical license for non-therapeutically prescribing controlled substance, the Illinois Department of Financial and Professional Regulation reinstated his medical license much sooner than most people could believe. The rapidity with which Dr. Giacchino recovered his lost license begs certain questions, particularly about any ‘connections’ he has with the review board. It would be nice to see a list of the names of the state employees involved in this process.
In addition, I recently heard new information about Dr. Giacchino last week that suggests law enforcement seems extremely concerned about his prescription writing (specifically regarding controlled substances). Therefore, I pray to God that Dr. Giacchino’s alarming behavior does not take innocent lives. Some unfortunate drug addicts might be sending their sympathetic and/or ignorant friends or family members to take advantage of Dr. Giacchino’s (greed-motivated) willingness to write ‘anyone’ a prescription for narcotics. As long as someone can pass an instant drug test, claim to be in pain, promise not to share their medication with others and pay a $200.00 doctor’s fee (cash-only), anyone can receive narcotics from Dr. Giacchino. This behavior is not only despicable; it is extremely dangerous and can cost innocent lives.
Sadly, it is near impossible for law-enforcement to gather the necessary evidence to arrest these Pusher MDs, men and women who, under the guise of healer, unconscionably provide narcotics to drug addicts. It is outright evil when doctors are consumed with greed for money and become unconcerned with their patient’s wellbeing. This is not what God intended for his healers. In fact, this is clearly the work of the Devil on one of his most evil levels.
In one of my last civil conversations with Dr. Giacchino, which occurred in the summer of 2006, he told me that he had been claiming less than $290,000.00 a year in income over the last several years. Then he laughed as he told me that his property tax in River Forest on his new estate (1026 North Lathrop Avenue) was projected at roughly $50,000.00 a year. As I was listening to him, I was doing the math. I started to count his homes: the estate in California on Balboa Island, the Penthouse in downtown Chicago (that he briefly leased to Advantage Mortgage Company, otherwise is usually vacant), the condominium in the new Trump Towers in Las Vegas and the condominium in Miami. Then we can get into his bevy of personal belongings, such as the ‘his and her’ set of new Bentley automobiles and the several other luxury vehicles purchased for family members and friends, a vast network of people which spans from coast to coast. In addition there are the ‘Black’ American Express Cards (practically impossible to get) for his family members and friends. One might wonder, how does Dr. Giacchino do all of this on less than $290,000.00 per year? I suspect that he is living off the cash proceeds of an inappropriate drug empire.
Miami is the place that Dr. Giacchino’s convicted drug-dealing wife, Maria Luisa Gil, frequents, no doubt to maintain her old drug dealing and porn contacts. According to a Melrose Park, Illinois, Police report, Dr. Giacchino has recently claimed that thousands of narcotic painkillers mysteriously disappeared from his clinic. It would be reasonable to assume that his wife, like almost every other wife, could have access to her husband’s business, the Melrose Park Clinic. I trust the Melrose Park Police Department thoroughly interrogated Maria Luisa Gil-Giacchino. It hardly seems a stretch to suspect that Maria Luisa Gil is selling the thousands of stolen narcotic painkillers while she takes her frequent trips to Miami.
With all of these things on my mind, I gladly went to meet with Inspector Murphy, firm in my conviction that my testimony could help the state deal with Dr. Giacchino. Upon my arrival at the meeting with the Inspector at his office in Chicago, I quickly realized that he unnecessarily complicated our original plan. The Inspector presented a few of his ‘associates’ at our meeting in the hopes of surprising me. These associates are from a couple of different branches of the Federal Government, which struck me as a bit strange as Inspector Murphy works for the State of Illinois.
As the meeting was about to begin, I asked the group of investigators if we could record our meeting in order to keep the facts straight. Some of the investigators agreed to allow the meeting to be recorded, however others would not. Sadly enough this intransigence on the part of certain Federal officials prevented the meeting from taking place. When asked why I wanted a recording, I cited the Martha Stewart case as my reason. If even one word is misstated or misunderstood, this trivial error can result in an innocent witness being criminally charged for making false statements to government agents. However, if a record is established, such as a tape recording, all of the facts can be preserved without any difficulties. I learned of this safeguard-measure from our role model and brother-in-Christ, Mayor Richard M. Daley, who was interviewed by the government recently. The Mayor safeguarded the meeting with a recording (Mayor Daley thanks for the education).
While I sit back and watch Dr. Giacchino live the life of a rock star, I wonder what the IRS, DEA and every other pertinent law enforcement agency is doing these days. If only Al Capone were so lucky. Could Dr. Giacchino be smarter than the IRS? While Dr. Giacchino has not fooled anyone, it seems that he has not revealed any incriminating evidence, aside from what he has done to my family and me. Therefore, I believe that God has selected me to hold Dr. Giacchino responsible for his crimes against my family and me, in order to save the lives of all the young and desperate people that are endangered by the mass amounts of narcotics that Dr. Giacchino dispenses.
In my estimation, there are a small number of ways to stop doctors from violating the law, which in this case, jeopardizes many lives.
1) Legislature should change the laws by limiting the number of painkillers that one single doctor could issue in a 12-month period, or limit the number of prescriptions that a medical center can issue.
2) The State of Illinois should simply allow people like me who are willing to cooperate, be able to have their meetings tape-recorded when various federal agents are present. If making a record of a meeting seems fit, there should not be any perceived harm in such request. It seems to me that stalling meetings that can produce helpful evidence against these sorts of doctors, while allowing the negligent doctors to continue risking many lives, is foolish and reckless.
3) The IRS can simply conduct a cost-of-living assessment and most likely indict Dr. Giacchino quite easily on tax evasion charges (in this case).
Several experts have told me, after reviewing the evidence relating to Dr. Giacchino’s abuse of my family and me, that his medical license will most likely be suspended very soon, perhaps indefinitely (possibly accompanied by a lengthy prison term with large fines). Dr. Giacchino has violated the most serious HIPPA laws by maliciously disclosing my personal medical information to the public, in conjunction with extortion attempts (some successful) against my family and me. Dr. Giacchino has also committed serious acts of medical malpractice against me. However, Inspector Murphy has yet to communicate with me since I requested to have my meeting recorded. In the meantime, Dr. Giacchino continues to escape justice as he dispenses mass quantities of narcotic painkillers to hundreds of young people in our community.
This situation has all the potential hallmarks of a great Chicago crime story, much like the tale of Elliot Ness and Al Capone. Capone was not convicted for being a gangster, a perpetrator of terrible crimes against the citizens of Chicago. Rather, he was convicted of tax evasion. While Dr. Giacchino may never be truly held accountable for dealing drugs, he is almost certainly a tax cheat, and that might be the punishment that ultimately sticks. One can hope that these acts against the IRS and the crimes perpetrated against me will be the final nails in the coffin of conviction.
Inspector Murphy, I have a question for you. How many more hapless victims will you allow to suffer because of your inaction on the matter of Dr. Giacchino, simply because a witness in your case wants his testimony to be recorded? Your 'cooperating witness', denied this reasonable request, sits and waits to hear from you while drug addicts most likely continue receiving their narcotic medication from a Pusher MD. How about this: can we proceed with at least part of our meeting (that you invited me to) via email while you figure out your next move? I am eagerly awaiting some answers.
Aside from the concerns pertaining to the recording of meetings that involve federal agents, Investigator Murphy, you could proceed with your meeting simply without the number of federal agents that are opposed to the recording. We can move forward and you can finally collect some vital facts pertaining to your investigation. As it stands, it seems as though you are not interested in obtaining any facts unless all of the various federal agents can be involved, without a record of the meeting being made available to your witness.
I wish to publicly appeal to the Illinois Department of Financial and Professional Regulation, via State of Illinois Governor Rod Blagojevich. Please hold your doctors accountable for all of their unlawful actions and help save many lives in the process. Time consuming issues of whether or not to allow witnesses to request to have their meetings recorded, in order to perfectly preserve the testimony, sadly wastes precious time in gathering simple facts. Once all of the facts are gathered, every law-enforcement agency known to humankind can easily review the material. Lengthy delays in matters such as these can very well mean the difference of life and death.
Now I wish to publicly appeal to Dr. Joseph L. Giacchino’s ‘patients-in-pain', their family members and friends, the doctors he employs and the various medical associates and other professionals who aid this malicious man (no matter the capacity in which they serve): please cease and desist in further aiding and abetting a well-disguised evildoer. Everyone who proudly associates with the likes of Dr. Joseph L. Giacchino Jr. M.D. should be ashamed of themselves. Unfortunately, while Dr. Giacchino’s State of Illinois Medical license hangs so proudly on his office wall, most people assume that it means Governor Blagojevich approves of the doctor's practices.
Governor Blagojevich, please, I beg you, do not repeat the mistakes of your predecessor by allowing a reckless Illinois State license holder, who does not deserve a license of any kind, to further subject so many innocent lives to such deadly possibilities.
Thank you for your time and interest,
Joseph Fosco
Editor-In Chief
The Keys To Faith Publication
As a post script, readers please know that you may contact Chuck Sullivan, Vice President of Development at St. Mary of the Angel’s School in Chicago, Illinois, if you are genuinely interested in aiding Mr. Sullivan’s new side-project in educating the children about the many dangers of prescription drugs and overdoses. You may email Mr. Sullivan at sullivan1001@comcast.net.
Thank you,
Joseph Fosco