Original subtitles

Welcome to the Secrets of Big Pharma:

How to Be a Smarter Patient.

I think you will find some tips.

We're going to explore what I call

the hidden history of the drug industry.

Not that the drug industry is trying to keep it

all secret today,

but there are certain parts of their history

that they don't talk about that much.

So we're going to examine the origins

of this industry that affects so many lives.

And there's no doubt,

you're talking about the pharmaceutical industry,

talking about an industry that most of us

interact with, in one way or another.

We've taken a prescription at some point,

even if it's for an infection, for antibiotics.

Many, many people, millions,

tens of millions of Americans, over half of all

Americans, are on a daily pill for some condition.

There's always a new miracle pill, as I call it.

It depends on what the miracle pill is.

And today, of course,

it's GLP-1s and weight loss drugs.

And we do the same thing in the drug industry,

and you'll see this over the course of these

lectures as we talk about different drugs.

Something becomes popular.

It's pushed heavily and marketed heavily

by the drug industry in different ways to doctors

and through advertisements

and by sponsoring studies.

And then it catches with the public.

And once it does,

all of the different manufacturers try to come up

with their own version, so they can get a patent

on that particular drug and charge

as much as they can for it.

The public comes in, for the most part,

people using the drug, full-force.

They're enthusiastic about it.

At that point,

the industry is selling you not only just a drug

for a particular condition,

but it's also telling you, "Gee,

there may be side effects here that are good."

GLP-1s, weight-loss drugs,

might help put off dementia.

They may help people improve their heart.

They may help men with more vigor.

It's fantastic.

It's only as we start to get in the inevitable

list of side effects that the reports come in,

that eventually you find out, "Oh,

I wish we had known 5 or 10 years ago what we know

now." It's a process that plays out time and time

again, and I think you're going to see that.

What I want to talk to you in this first lecture

about are what I call the roots of the industry.

You plant it, you put the seeds in,

and then it sort of comes around.

And those roots are important because,

in my view, having

studied the pharmaceutical industry for a number

of years now, it sets the foundation

for what the industry becomes.

The start is the DNA.

It's the template for what you're dealing with.

I think that, snake oil to science,

there's no doubt it starts with snake oil,

and then it does move to science,

but the origins of the industry are addictive.

It's the selling of these potent narcotics we're

going to talk about as miracle cures

in the late 19th and early 20th century.

No national standards

when the industry gets going in the 1800s.

No prescription laws—don't exist—don't need

prescriptions, so nobody's filling

in a prescription at this time.

No safety requirements, which is pretty amazing.

And that era sets the tone

for what comes up in the future, which I call

profit-driven

products that aren't necessarily focused,

they're unregulated, and they're often dangerous.

So before "Big Pharma," as I like to say,

there was "big hype."

It's an unregulated marketplace,

19th and 20th centuries,

where anyone could call themselves a doctor.

No AMA, nothing else.

It's remarkable.

You could set up the—not many people were doing it

because they didn't think about it,

but they thought they could sell a concoction

of chemicals and call it a miracle cure.

We'll get into so-called patent

medicines, as they were called.

The most successful ones of these particular

products,

they weren't selling anything based upon evidence,

but they were selling what I call dreams.

They grew by selling exaggerated promises of false

claims about the efficacy of their products.

No scientific evidence, no clinical studies,

nothing like that required.

And in the beginning, lack of oversight,

nonexistence of oversight and accountability.

No government regulations or standards.

You could market the products.

You didn't have to disclose the ingredients,

and you didn't have to, of course,

list potential harms, because nobody

was talking about that at all.

So that unregulated

marketplace laid the foundation for the industry's

model of prioritizing profits over public health.

That's the era where it gets set.

Let's dig a little bit deeper into the unveiling

of what I call the pharmaceutical industry itself.

Marketing strategy shaped the development

of public image of the pharmaceutical

industry over time.

What they were worried about is how they were

selling it to you as a miracle cure,

not necessarily what it was doing,

and you'll see this time and time again,

when we get into some of the early examples.

The commercial interest in medicine,

the decision-making is affected by what I

call the bottom line, time and time again.

And a public perception,

the public views on medicine were influenced

entirely by what the industry was telling it

was doing, by these so-called miracle cures.

So this is a pattern that continues to influence

health care today as we go along,

so a marketplace of ignorance, as I call it.

In the 1800s, as I said a moment ago,

no prescription laws, nothing else.

I get it.

No medical licensing.

Any peddler could sell themselves a medical cure.

This is the unregulated marketplace.

The background of this

that is so interesting for the pharmaceutical

industry, is that doctors,

and there were some real doctors, but

society as a whole knew very little

about what caused disease and illness.

So they didn't know much about evidence.

Think of this.

We're talking about,

it had only been, when the first drugs start

to come out in the mid-1800s,

it's only a few decades since Louis Pasteur,

this French bacteriologist, had discovered,

on rotten meat and milk that had gone bad,

what he thought were

germs, microscopic small little germs, that were

there on the spoiled meat and the bad milk.

That was the beginning of germ theory,

the idea that maybe there are microbes

that could exist on the planet.

People thought that was just wrong.

They dismissed it time and time again.

They didn't believe

in the idea of the germ theory.

So what happens is, they didn't

know there were bacterial pathogens.

They didn't know what caused diseases.

Things like tuberculosis,

until a German bacteriologist in 1882 discovered

that you can actually get tuberculosis

from microorganisms.

They think that you inherit it.

That's the idea.

Things like the Immigration Act of 1882

really came in because of cholera.

They thought that cholera came from only

certain immigrants, and most likely Irish.

So, somehow, that had been

the way that we looked at it.

We didn't think there was

something that was infectious.

To show you where the thinking was in this

country, not just this country,

but in Europe as well,

in 1891, we passed the Immigration Act,

and I'm quoting from it here,

so I'll read you this precisely.

They think that cholera will be

ended by passing the Immigration Act.

The Immigration Act excludes, quote, "all idiots,

insane persons, paupers,

or persons likely to become public charges,

and persons suffering from a loathsome

or dangerous contagious disease."

It sounds like we think we can keep everybody out

who might be actually bringing a disease,

not understanding that it is

passed by microbes as well.

Until an American army general, Walter Reed,

in 1900, discovered that mosquitoes and others are

actually the cause of something like yellow fever,

that they spread yellow fever.

We think that you can only catch it if

you run into contact with somebody else.

That ignorance about medicine helps the people

who are selling what I call snake oil cures.

Because you don't know what's making you sick,

they play to your fear,

and they tell you that they have an absolute

cure for it, so it's easier to believe it.

Now, the one drug that was working,

that they didn't know quite how it worked in terms

of the body, but they knew

that the effect worked, was morphine.

That had been discovered only in 1804

by a German pharmaceutical apprentice, working,

he was 21 years old,

and he was able to extract from the opium poppy

an actual morphine alkaloid, the first time

you got a pure alkaloid from the poppy.

He is the one, this 21-year-old apprentice,

who names it morphine,

after the Greek god of dreams,

because morphine will sort of put you into this

out, dream state,

after the Greek god of dreams, Morpheus.

So that's how we get the name morphine.

Pretty quickly in the early 1800s,

people realized it also helps take away pain.

Two German companies ended up becoming

the morphine manufacturers in the early 1800s.

It's a guy called Friedrich Bayer, who founded

his company that you all know as Bayer.

And Friedrich, the Schering,

who founded Schering, later Schering & Plough.

Those two German companies, Schering & Bayer,

are manufacturing what I call quality morphine.

No American company is manufacturing.

And then what happens is you get into the

Mexican-American War,

1846 to 1848, a two-year war

in which it really picks up '46 and '48.

Eighty-seven percent—this is an astonishing figure

to me; I keep looking at this,

it's hard to imagine—87 % of the fatalities

for American troops in the Mexican-American War

were a failure to treat yellow fever,

dysentery infections, and cholera.

So not from being killed by the enemy,

but because of diseases that we couldn't treat.

And in that war, the morphine that arrived at the

front lines for soldiers was often adulterated.

So it was being made by mom-and-pops

in the United States.

Sometimes it was being imported from Europe.

By the time it was being imported from Europe,

it was coming through a distributor that was

taking the original morphine of high quality

and then diluting it a little bit to try to have

more morphine to sell at a different time.

When it arrived at the front lines, the soldiers

weren't getting the pain relief from it.

Interesting history, but why does it

matter for the pharmaceutical industry?

Because there were a number of people who said,

"There's a market there.

We can fill that market.

There's no American company,

no American manufacturer of morphine.

This war just proved that there should be." So,

you get, one year after the Mexican-American War,

a couple of German cousins in New York City

founded Charles Pfizer & Company.

They had $2,500 in savings of $1,000.

They ended up borrowing, and they set up a factory

on Bartlett Street, and they become the first

real sincere, what I call, company dedicated

to making morphine of high quality.

Their competition, soon afterwards,

is Edward Robinson Squibb.

We know it later as E. R. Squibb & Sons.

Squibb was a colonel

inside the Mexican-American War.

He saw the morphine arrive that was of bad

quality, that was often thrown over

the ship because it was so bad.

He goes into also in Brooklyn as competition,

essentially creating morphine there.

Something happens,

as you well know, unfortunately,

in this country goes into a civil war in 1861.

So bad for the country,

one of the worst parts of history,

but good for the morphine business because

there are more injuries on that battlefield

than at any other time in American history.

And as a result, there's a boom.

Charles Pfizer and E. R. Squibb

are absolutely set for it,

and they are booming.

But now, others come into the business,

seeing the opportunity for what they

think is this pharmaceutical boom.

One year into the Civil War,

two pharmacist brothers in Philadelphia,

John and Frank Wyeth, set up a pharmacy.

They have a small drug distributorship.

They land such a lucrative

contract with the Union Army.

They get rid of the pharmacy,

and they make just a manufacturing facility

for creating morphine to be able

to provide that contract to the Union Army.

A part of Detroit's healthcare system,

Samuel Duffield, has his own concoction.

Not everybody's just doing morphine.

He has an ether and alcohol solution

that alleviates some of the pain.

He also lands a union contract that's good.

And when he sells that business,

he sells it to a couple of guys called

Hervey Parke, who is a mining investor,

and a 26-year-old salesman, George Davis.

Parke-Davis, that's what they become,

and they are involved in that.

Eli Lilly missed the Civil War opportunity,

but he served,

and he knew about the demand for morphine,

and he formed his company afterwards as Eli Lilly.

The main products are all opium-based

and morphine-based products when Eli Lilly

gets going, just after the Civil War.

Two American pharmacists also missed the Civil War

by a couple of years:

Silas Burroughs and Henry Wellcome.

Wellcome and Burroughs went over to the UK,

and their main products were a whole bunch

of laxatives and opium-based creams as well.

That's what I call the start of

the pharmaceutical industry.

You go over it, we're talking about Pfizer,

we're talking about Edward Robinson Squibb,

we're talking about the Wyeth brothers who become

Wyeth, the pharmaceutical company, Parke-Davis,

Eli Lilly, Burroughs and Wellcome,

not just companies, by the way,

that came and went,

but companies that survived and became some of the

biggest pharmaceutical companies on the planet.

This is their origin.

This is how they get going on an addictive product

that has no restrictions on how it's dispensed,

and they understand the power of that.

The last thing on this,

in the middle of all of this,

in this marketplace of what I call ignorance,

in 1859, a German doctoral student was

the first person to be able to pull a pure

alkaloid, which is the basis for a drug.

You can make it, you can synthesize

it from that, from the coca plant.

So now we're just at the point around

the Civil War period, afterwards,

you have the first bit of cocaine.

It's actually this doctoral student who writes his

dissertation on how he was able to go ahead

and get the alkaloid from the coca plant.

He's the one who calls it cocaine, for those

of you who wonder how it ever got that name.

Because ina, I-N-A, from Latin, means "from,"

and all he was saying is "from the coca

plant," cocaine, as we call it.

That becomes a stimulant that people understand

and becomes the second part of drugs

offered in America.

He, by the way, is a footnote,

smart student, he goes on to develop mustard gas,

not the greatest thing in the world,

which becomes the most deadly

chemical agent in all of World War I,

and is responsible for a lot of deaths.

So the inventor of cocaine is

also the inventor of nerve gas.

Now, cocaine and morphine, you won't be surprised,

were the first big blockbusters.

They were sold openly by Merck,

Bayer, Pfizer, Parke-Davis, Squibb.

Dentists sold cocaine-infused lozenges

for toothaches, asthma sufferers

bought pure cocaine inhalants, used as needed.

They were sold for just about every

ailment that you could imagine.

Safety, not a concern.

Cocaine boom.

I'm telling you that cocaine

is booming as a product.

I'll give you a figure that will

convince you that that's the case.

Merck's annual cocaine production:

in a two-year span,

after cocaine was first discovered,

they were selling products,

they were using up less than a pound of cocaine

in their products, and two years later,

they were using 180,000 pounds.

So the products are expanding.

The use for cocaine is expanding.

Parke-Davis—you have to love the ingenuity

of the American drug industry.

They are trying to patent a process to increase

the purity and extend the shelf

life of cocaine products.

So we'll take natural cocaine,

and maybe we can make it a little bit stronger,

and we can say we have the best and purest version

of this, and we can make it last longer

on the shelf because we have

to send it all around the country.

So there was this real type of what

I call hardcore competition.

Parke-Davis also introduced cocaine-infused

cigars—they called them these coca cheroots

and coca-leaf cigarettes—and cocaine

alcohol syrup marketed as true medicine.

I don't think Parke-Davis or Merck talk much about

that in their annual reports anymore,

but that's all right.

The rapid growth of cocaine,

the development of processes to refine the drug is

just the highlight of this early

19th and 20th century period.

Now,

opiate competition, don't think that they've all

turned to just cocaine products because they're

competing broadly with as much

as they can still with opiates.

They all got their start on this.

I think Merck had a powder of morphine.

They boasted and advertised at the time,

if you look back at some of their early material

newspapers, that their purity of their morphine

powder was absolutely the best, and they did have

one of the most popular opiate-based products.

One of Merck's most popular drugs

was opium-laced cough lozenges.

The opiates will

put a cough at bay without any doubt.

Squibb and Pfizer: opium tinctures,

nearly a dozen variations of opium tinctures.

All of this

was not just a handful of these companies

that we know today competing with each other.

Their real competition was coming from patent

medicines, over 50,000 patent medicines.

These were really the big sellers of the day.

Merck, Pfizer, Parke-Davis were making money,

but the patent medicine makers—we called them

patent medicines, but they

weren't actually patented.

It's unusual.

It just became the way—they

were nostrums, they were called.

They were put out by anybody with a clever idea.

They claimed all types of cures.

These people, these are the snake oils,

the real snake oil salesmen and saleswomen.

They were the ones who were cashing

in in a way that was unknown.

So, Lydia Pinkham had an item;

you knew nothing about the ingredients.

You just knew what the claim was.

So Kopp's Baby Friend,

one of the most successful patent drugs ever,

was marketed toward new parents so that you would

be able to stop the cough of your infant child,

and they could sleep through the night.

That company was so clever that they went through

the newspapers looking for birth announcements,

and then they would send

a mailing to the new family saying, "By the way,

don't forget Kopp's Baby Friend is the greatest

thing to help you through all the sleepless

nights." It was [one]-third pure opium—that's

what it turned out to be—and morphine.

There were deaths later of children

because too much was given.

But this was the market into which this first

started to come, the patent drugs, as I call them.

From a book that I did, Pharma, I say,

"Despite their aggressive narcotics expansion,

the major drug manufacturer still had a powerful

competitor: the patent medicine industry,

nearly fifty thousand branded remedies,

sold without prescription, disclosure,

or regulation." The tens of thousands of medicines

on the market, they marketed as miracle cures.

I'll tell you, they didn't underplay it.

If you look at the advertisements,

it's really rather remarkable.

Secret formulas, everybody competing with a secret

formula—boy, Coca-Cola wasn't the only one

that said, "We had a secret formula,

and we're not going to tell anyone." Or Heinz

ketchup, 57 ingredients,

and "we can't disclose them to everybody here."

Because they didn't have

to tell you what was in it.

They just sold you what the product was.

It did play back to what I call the fears

and ignorance of the marketplace because

people didn't know what caused the illness.

You might think that you could cure everything

from a tumor to somebody that

suddenly had a stroke.

You weren't sure what the cause of the stroke was.

Lack of regulations around ingredients, purity,

and dosage—no controls over those, what went in.

Brand names, bottle shapes, and label designs,

they fought over that all the time.

It's fantastic.

I'm a lawyer, a non-practicing lawyer,

but I love legal cases,

and there were fights between the patent

medicine makers, the most successful ones.

One would say, "You copied the shape of my bottle

that I'm selling that elixir in,

so people are getting confused when they go out

to buy it because they think it's my product."

"Oh, no, you have the same type of label.

You have my print." They were fighting over

the way it looked, not over what

the ingredients were or what the cure was.

Rapid growth of these products,

combined with the proliferation of unregulated

[ones], highlights the need at this point

for stricter regulations in the industry

to protect public health,

but nobody's talking about that in the late 1800s,

leading into the beginning of the 20th century.

It's that business model that we've talked about

that says: if you sell a product,

you can make it work.

That business model, that DNA,

is what exists today.

Here's one of my favorite case studies.

There are so many great case studies in this

period, but is heroin a safe medicine?

From 1887 to 1903,

Bayer, the German pharmaceutical company,

they're doing research inside their labs,

and they have research team,

and they make four discoveries over

a few-year period, pretty big discoveries.

In 1887, this team develops phenacetin,

which is like Tylenol.

Never had it existed before.

They come up with it in the lab,

so they're doing it.

A year and a half later, they come

up with aspirin, also pretty amazing.

Aspirin, I never say a wonder drug because I

know it's overused, but almost a wonder drug.

It alleviates pain, is anti-inflammatory,

and everything else.

We know the downsides of aspirin because they're

bleeding in the stomach, but none of that's known,

but they come up with aspirin.

So two analgesics over a short amount of time.

In 1900, they developed heroin.

Now, you'd think heroin is

just another form of morphine.

It's 10-15 times more powerful, much stronger.

It acts faster, and they

decide to market it as heroin.

By the way, they also have, in 1903,

they developed the first barbiturates.

It comes under the brand name

Luminal; it's phenobarbital.

So, no barbiturates had existed before,

also very powerful drugs.

Acetaminophen, aspirin, heroin—which, by the way,

is named after the German word heroisch,

"heroic;" they give it the name heroin—you

wonder how these drugs get named.

And then, in 1903, we get barbiturates.

They didn't put out one of those drugs.

They market it.

By the way, these pharma companies

are marketing everything.

But Bayer doesn't market one of them because

inside their lab,

in the testing they're doing on animals,

they think one of them is causing all types of

effects at high doses, and so we'll keep it back.

You know what that was?

Acetaminophen.

They didn't put Tylenol out, but they put out

barbiturates, no prescription, over-the-counter.

They put out heroin over-the-counter,

and they put out aspirin over-the-counter.

Heroin goes on sale in the United States in 1900.

And let me tell you, it's offered,

sold, as a cough remedy,

even to children, hard to believe, for colds.

It's more effective than codeine,

with only a 10th, they said,

of codeine side effects, which is fantastic.

It's a miracle solution.

My favorite marketing technique for heroin

was that they marketed it as

a cure for morphine addiction.

True—hard to imagine—you will give up your

morphine addiction,

it's true, but you will have a heroin addiction.

It's the starkest example

to me of marketing triumphant science.

I don't think you see much about Bayer in their

annual reports talking about how they were

pioneers in the industry,

and heroin was one of their items.

When I said to you before—by the way,

the secret history of the pharmaceutical industry,

it's not as though these are secrets that I just

went down and found in an archive in Washington,

and by the way, I have a whistleblower,

and they're going to tell you something today.

Well, some of that will come,

maybe in later lectures, but it's

things that the industry will omit about itself.

You get to tell your own story at a certain point.

They spend millions and millions of dollars on PR

and on creating an image that they are coming up

with cures and treatments,

and that you should be having them.

This is part of their origins.

This isn't just by the way.

This isn't a point at which I

can say to you, "You know what?

They were selling heroin,

but they were also selling these six other drugs

that were helping people on a whole range

of things," because they didn't know what those

drugs were, and they didn't

know what was causing illnesses.

This is where the industry gets its start:

the barbiturates boom.

Discovered in 1903 by Bayer—how

do they market barbiturates?

I think barbiturates are

very, very powerful drugs.

Treatment for insomnia: I suppose that will

help you get to sleep if you take barbiturates.

Anxiety: will make you less anxious

because you'll be zoned out completely.

Nerves and depression.

Phenobarbital, sold as Luminal,

was marketed widely.

Without a prescription, by 1908,

it was a big seller in the US, and followed

the same pattern as cocaine and morphine.

Highly addictive substance,

minimizing its dangers and finding profits

in this, phenobarbital is the first one marketed.

Bayer comes out; the rest are copying it.

The same profitable pattern continues,

as I always say, as you find with the other,

if it's a moneymaker,

once one company comes out with it,

then other companies are chasing the same type

of drug because they want

to cut up part of that same pie.

Now, finally, regulation.

Oh, my goodness.

We've been waiting for a while for it.

One

thing to keep in mind

as we go through this history all the way up

to today, through the opioid crisis,

the government, the federal government,

has almost always reacted late.

It's not surprising, but there's a buildup.

There's such an outcry.

There's a crisis.

There's a lethal prescription crisis.

There's an abuse crisis.

Later, we'll talk about Valium

and amphetamines way down the road.

There's problems, and then the government

reacts to a public health crisis.

That's very much what happened here in 1906.

You end up getting Harvey Washington Wiley,

who is running the Bureau of Chemistry.

He is a government worker.

He's a real crusader.

He's fantastic.

His concern are preservatives.

He is worried about preservatives in food.

He's been trying for a number of years.

There are some members of Congress who are

submitting bills that say,

"We should really go ahead and get some

regulations on these preservatives."

But nobody could agree on which preservatives were

good or which ones were bad,

which ones were dangerous.

People were using a series of preservatives,

formaldehyde, for instance, to make sure

that meat could be sent across the country safely.

Not the safest type of preservative.

What Harvey Washington Wiley does is he creates

inside the Bureau of Chemistry an experiment

with people nicknamed the Poison Squad

by a local reporter, and it stuck.

Every night, those volunteers would eat different

meals that he would prepare with preservatives

that he wouldn't tell them what was in it,

and then they would see who got sick

and who didn't over the long term.

After one died, they stopped that,

but they had a pretty good idea

that they had to have regulations.

On top of that came a book called The Jungle,

and that book, although it was a novel,

had some stomach-wrenching pages

about the meat markets in Chicago.

That got politicians up in arms as well.

So they end up finally passing

in 1906 the Pure Food and Drug Act.

You think by its name,

it's going to be fantastic because "pure food

and drug"—we're going to finally regulate it.

Here's what happened.

The companies, the patent companies,

and what I call the ethical pharmacists—that's

what they called themselves, the Mercks

and the Pfizers—they fought over regulation.

They said, "We're a new industry.

We're helping people.

Don't overregulate us.

Don't create something where we

can't create all these great things."

This is the beginning.

This particular battle is what I call the first

successful lobbying effort by the drug industry.

They're unorganized.

They don't have a lobbying group

as they do today, called pharma.

They don't go through a central outfit.

They don't have Madison Avenue people,

but they know how to reach politicians,

and they're hitting away at it.

So the final, you see the law,

the proposed law for the 1906 Pure Food and Drug

Act, changes as it goes along in these drafts.

What comes out eventually pretty much leaves,

in some ways, the drug industry,

the patent drug industry alone.

Here's what I mean:

the same addictive products stayed on the market.

There was still no requirement for a prescription.

There was no requirement that you had to prove

that they were safe or effective

for what you were selling them for.

You didn't have to take any ingredient out.

Here was the change:

you had to list what the ingredients were.

For the first time,

if they're selling you a product,

they have to tell you what's on the label.

They don't have to tell you the amount,

but they have to tell you what's in it.

That's a big step forward.

I agree, no question about it,

but that really doesn't stop the industry.

I'll give you one example.

There was a very, very popular product

at the time called Vin Mariana.

It's a wine, a Bordeaux wine,

and it was extremely popular.

It was marketed as a wine

that would give you more vigor.

It would make you stronger,

it would make you more alert.

It had 7.6 milligrams of cocaine per ounce.

That's what it had.

So Vin Mariana was an unusual wine.

It had an endorsement, by the way,

and they would sell it from Pope Leo

13th, and thousands of doctors, not all of them

doctors, but they listed themselves as doctors.

So it really, really was popular.

Vin Mariana, afterward,

put on the label that it had cocaine in the wine,

and it didn't affect its sales at all.

So the disclosure

of that, it wasn't as though the public said, "Oh,

my goodness, cocaine in the wine,

we're not going to have it." Maybe it actually

brought more customers to them because

they said, "That's really a good item."

So the Pure Food and Drug Act doesn't have

the effect that you think it might have.

One of the things is this

lobbying in what I call regulatory capture.

In the early 20th century,

the successful effort to lobby and weaken,

undermine regulatory and safety standards

in the industry,

is going to be part of the DNA going forward.

You're going to see this time and time again.

The government gets involved, says,

"Maybe we should do something." The industry

fights back and pushes and says,

"Don't overregulate.

Don't stop innovation and science."

Somebody comes up with that line.

I've never found the first person who developed it

at which company, but they should give that person

a special medal in the pharmaceutical industry

because it's the best line they've ever had,

which is: "we're science and cures and medicine,

so don't hurt that by overregulating."

That's what you see here.

By the way, the first case,

Harvey Washington Wiley, was a fantastic guy.

He's one of the heroes in terms of getting this

passed and doing everything in the government.

He decides to go ahead and bring a suit

by the federal government against a manufacturer

to show the power of this new law.

Who does he choose?

You've got a lot of companies

out there: Merck, everybody else.

He goes against Coca-Cola.

He decides to sue Coca-Cola because he says,

"You didn't disclose that there's part of the coca

leaf in there and that there's caffeine.

You didn't put that on the label." Coca-Cola

fought back and said, "We took the coca leaf out

like 40 years ago, and the caffeine,

we'll put it on." Government lost the suit, but it

ended up taking over a year of government time.

Not the best way to start

in the Pure Food and Drug Act.

It didn't scare anybody at all.

So the real rival now,

even after this, becomes these what I call

two main areas: patent medicine makers—the wild,

Lydia Pinkham and Kopp's Baby Friend and all

of those—versus the drug manufacturers

of Pfizer, Merck, and the rest.

In the public's mind,

these elixirs, tonics, remedies,

what the Mercks, Pfizers, Lillys had

was that they were saying already to the public,

"We're better than the mom-and-pops.

We're purer.

We have standards.

We have manufacturing facilities.

We can do it a little bit better than they can."

Transition to ethical pharmaceuticals—Dr.

Winslow's, by the way, was a big opium-based

cough syrup that was very, very popular.

The Harrison Act was passed in 1914.

The Harrison Act is one of those footnote

laws in American history, but a major law.

It's the law that says, "Hey, no more.

We're not having cocaine and opiates and morphine.

We're trying to control these addictive

drugs," and it essentially bans them.

That came in out of left field to the drug

industry because they're

worried about the 1906 Act.

They're worried about the disclosures.

They're not focusing as much on this effort inside

of Congress that might ban

these addictive products.

And so when that comes in,

and they essentially ban it,

you have the pharmaceutical industry, including

the patent drug manufacturers, go cold turkey.

They have to go overnight.

They have to say, "What do we do?

What do we do with our opium-based products?

What do we do with all our tinctures?

What do we do with our elixirs?" What about

the fact they can no longer sell heroin?

All of that happens.

You literally have an industry that was heavily

relying on these addictive products that now has

to focus on how they come out of that

and sell products that are different.

That is where the traditional companies,

the Pfizers, the Lillys, the Burroughs & Wellcome,

emerge stronger because

they don't really have many products to sell.

They have to get rid of a lot of their own.

But the patent drug manufacturers are wiped out.

They had single products.

They were one-hit wonders.

That's pretty much the end of them.

You start to see them after the Harrison Act

lose their strength.

Now you have an industry that is looking for—

By the way, you should also know that

we talked before about the discovery of cocaine,

the discovery of heroin,

the discovery of morphine.

The industry is also attempting,

once they realize that these are very addictive

products, to come up with less addictive products.

In 1916, they had a synthetic version,

a different variation: oxycodone.

They thought, "Oh, that's better.

That's better than morphine,

heroin, and everything else.

Oxycodone.

We can really market that,

and it'll be better." We know about

that in OxyContin, that hydrocodone,

1920, a variation of heroin.

So, they're looking always for what I call

the "me-too" versions of addiction to see if they

can come up with something new that might get

around the Harrison Act

and still be new to market.

But as a practical matter,

they have very few products.

The products after the Harrison Act

until World War II and penicillin really become

a series of laxatives, malt, headache adjustments.

It almost is like a list of an industry

looking for a real product.

There was a real product.

In 1922,

one of the greatest discoveries in medical history

takes place in Canada: two

researchers come up with insulin.

Boy, you talk about a game-saving drug.

Now, a sidelight on the pharmaceutical

end of this, we talk about this.

Those two researchers, they said, "You know what?

This is such a great product.

It's so important.

We should essentially give it away." You come up

with medicine that changes people's lives,

you shouldn't really make money on it.

So they licensed it for a dollar

to Lilly, to Eli Lilly.

Lilly taught them a lesson.

Lilly kept the patent on that,

and we'll talk about it later, for 40 years.

The patent is only good for 17 [years] in America,

but companies learn how to game their role,

how to make slight adjustments,

therapeutic dosages, evergreening,

make a difference on how it's done,

and you keep that pattern for 40 years.

Insulin prices—we've been talking in the last few

years in this country about making insulin less

expensive and more affordable.

Administration is talking

about $35 a cap, for instance.

We're talking about insulin prices today

on a product invented in 1922,

given away for a dollar by its inventors.

And an American company said, "Oh, yeah,

we'll figure out how to lock that up."

Lilly didn't have the patent on the item.

It had the exclusive distribution

and worked that into a moneymaker.

I understand.

I'm a capitalist.

I appreciate companies that make money,

but we are talking about the drug industry,

and I say always that it's an unusual industry

because it's at the intersection of public health.

So it raises these uncomfortable moments sometimes

about always maximizing the bottom line

at the cost of public health.

Insulin is a perfect example.

When I say that they had nothing to sell,

and insulin was their one big product at this

point, I'll give you the best evidence of that.

In 1909, Moody's, which is the company that ranks

American companies; it gives you

the size of companies and industries.

1909 is when Moody's started to do that.

They put out their first

listing of American companies by category,

and size and influence in the American economy.

You know where the pharmaceutical company was?

The industry?

It didn't exist.

Moody's didn't even list the drug industry as

a separate industry because it wasn't big enough.

It was a subset of the chemical industry.

That's what they thought of it.

It was 20 years until

1929 before the pharmaceutical industry

had even broken out as a separate industry.

So it's hard to imagine today,

we look at Big Pharma,

and we think of it as this monster, this Goliath,

and it is, but hard to believe that just 100

years ago,

it was this group of mom-and-pop and small stores

and manufacturers with a few addictive products

who weren't even considered a real industry.

The growth has been spectacularly large.

With the drug industry,

going into the future, time and time again,

we get a product that turns out to have a problem,

and then people will say, "Well,

we've got to come up with a better version

of that product, not give it away." So when Valium

becomes the most popular drug,

and we'll talk about this in another lecture,

for 15 years in a row,

and then it is heavily abused, everyone says, "Oh,

benzodiazepines, we have to get away with that.

Let's come up with something else.

Xanax, that'll be better." So you don't

necessarily come up with a different alternative.

You come up with something that looks better

at first, and that's what

they were trying to do here.

Refining dependency—they're still not discovering

cures, but they are refining and profiting from

what I call this chemical dependence by people.

Best example, barbiturates like Phenobarbital.

That's the business model.

In the 1920s, we're getting a pretty good idea

of it's firmly established.

You sell potent medicine, it's often addictive,

miracle solutions, and you don't have

to disclose harms, nothing about cures.

You don't have to prove it,

and the regulations are still pretty weak.

So sell the potent psychoactive substances as

miracle cures,

avoid disclosing ingredients or harms whenever

possible—they did that time and time

again—and exploit the regulatory gaps.

This is one of the things that I think

any industry has become good at this.

I understand this.

But the drug industry was good from the start,

which is they look at the law that's passed,

and then they figure out

how they can go around it.

That's what happened here in this.

The use of advertising to shape public belief—long

before there was direct to consumer ads,

which we are bombarded with billions of dollars

of TV ads in the drug industry since 1997 and on,

in this era, there's no limitation on advertising.

Here you go in, and you advertise.

It was basically newspapers because

people actually used to read newspapers.

There were billboards.

There's a British writer who came to America

around 1900, who wrote a book later

about travels through America.

One of the things I loved that he talked about was

the billboards that he would see

for miles on end about patent drugs.

They didn't have that in Britain at the time.

They had patent drugs,

but they didn't have the billboards because they

didn't have—and he would see them

forever around the cities and that.

They were advertising heavily.

Focus on the symptoms,

not the cures—you're treating dependencies.

So somebody has pain,

they have asthma, they have a cough.

You're giving them something that you think might

be able to alleviate that,

not necessarily cure it.

Would you have trusted these medicines?

Would I have trusted these medicines?

I ask myself that sometimes.

I don't know.

If I had a hacking, terrible cough

and I couldn't get rid of it,

and I tried one of these elixirs that got rid

of the cough, and I didn't know that it

was morphine, would I be worried about it?

Maybe not if I didn't know what the downside was.

We look back at it now,

and we're shocked and thinking,

"How is that possible?" But it's hard, and that's

why I say to put your minds back into that.

It's not as though these companies were selling

to a public that had to be forced to buy them.

The public was enthusiastic and had loyal

followers often to each of these medications.

Modern parallels—just

as a patient in 1900 might have avoided some

cocaine-laced topics, I think today

that as consumers, we are the ultimate,

we're the patients and consumers, we have to have

this critical eye about medicines involving.

It's important to remember the historical

part of the profit-driven business.

They will always exaggerate the benefits

while downplaying the risk.

That's part of the industry.

I understand that.

That's not to say that there won't be,

as we go through this,

some really important life-saving drugs

that have changed the course of human history.

I know that may sound dramatic,

but penicillin is one of them,

with all the downsides afterwards,

but it saves lives across the board.

So, there are some really important discoveries.

For that, the industry is to be

rewarded and congratulated.

Then what happens is, I say,

we have people working inside laboratories who are

really dedicated, often scientists, working

on trying to find a cure or better medicine.

They are the real nerds of science.

Then they invent it.

It goes on.

The people, by the way,

who invented some of the biggest drugs that were

used later, like Valium,

which made Hoffmann-La Roche so much money over

a period of time, the scientists who invented it

got a few thousand dollars as a bonus, won an

award from the company, but they got nothing else.

That never bothered them.

Those scientists are working as

employees to try to create the product.

Then, it goes over to the marketing

department and the sales department.

That's where a little bit

of the over-exaggeration comes in.

They know what they can push it for,

but they're pushing it for even more.

Remember, back here,

they don't even have to prove that it works.

Not yet.

Nobody's telling them that they have to prove

that what they sell it for is accurate.

Nobody is telling them yet

that they have to tell you what the harms are.

They just have to tell you the ingredients.

This, in some ways, for an industry that is

selling things to patients, is the golden age.

The real golden age comes later, but this is a

golden age in terms of not having to do something.

What are the summaries

and takeaways from this lecture?

The roots of Big Pharma are unregulated,

profit-driven, often dangerous

medicines with little or no regulation.

We know that.

The business model is profitable for public

health, but you will see later,

as we talk about this, that this persists today.

Understanding this history,

I believe, is the first step to becoming a smarter

patient, because

if you can recognize the historical patterns

of what I call the deception or exploitation,

you're a little bit more attuned.

Don't become cynical.

I always tell myself, "Don't become cynical about

it." I'm going to have to take some of these

medications as I go along, and hopefully,

we'll live long enough that at some point I'm

going to need some medication,

but I don't want to become cynical and say,

"It's all bad." But at the same time,

you have to be a discerning consumer.

You have to take control

of your own health in this way.

By grasping those early origins,

I do think we understand a little

bit more about the industry today.

Profit, power, marketing, and shaping

American medicine are the highlights of it.

Profit-driven motives

start from the very beginning of the industry.

Strategic marketing campaigns and impact

on patient welfare—the focus is

often on: how much are we selling?

What's the profit margin?

What are we taking in?

Patient welfare becomes important if it starts

to hurt sales, no question about it,

but it isn't always the first item on the agenda.

The roots lie in these addictive substances.

I also think there's something else on this.

It's not a coincidence

that the industry grew up on addictive products.

Addictive products, if you are the seller,

the manufacturer, are good products to sell.

I don't mean good in terms of the effect,

but good in that you get a patient, a consumer,

that's going to be there for your product.

The drug dealers know that.

I'm not talking legal drug dealers;

illegal drug dealers, cartels know that.

There's a power to that addictive product.

These companies, in the very, very beginning,

without any doubt, underestimated,

pushed aside, were in denial

about the addiction for things like morphine.

It took years for them to realize that morphine

was, in fact, addictive and that people who

stopped using it for pain went into withdrawals.

That's why they developed things like heroin.

Then, they realized that heroin was addictive.

So then, they came up with oxycodone,

maybe hydrocodone.

Those could be better.

So they realized it.

But when they realized they were addictive,

cocaine with physiological and physical

addiction—not the same as heroin, but

different—when they realized it, they didn't stop.

It's not like they said, "Oh,

my God, an addictive product.

We can't market that.

We don't want people taking barbiturates all

the time with that." They just said,

"Oh, yeah, addictive.

What do you know?" They kept doing the same thing.

That's that origin of it in terms of that.

Always question the marketing story behind a drug.

Don't take the pharmaceutical

company's claims at face value.

You're going to hear them in America

and in New Zealand, the only other country

on Earth that allow direct to consumer ads.

We're going to hear them in ads all the time.

Examine if there's motivations behind the tactics,

the promotional efforts.

Remember, promotion is being had here.

Read the labels carefully.

Review the ingredients,

the warnings, the disclosure.

That sounds like common sense,

but at a later point,

you will see in another lecture that when

companies had to disclose the side effects or

the harms, then they had to put in a packet,

a warning packet of what side effects might be,

they fought with the government to make sure

that initially,

those packets would go to the pharmacist

who was dispensing the drug, not to the patient.

The idea was that this drug company said, "Oh,

by the way, you know, you're going

to force us to give these disclosures out.

Okay, we'll send them to the pharmacist.

The pharmacist will do what

the pharmacist should do.

They'll read this list of side effects,

and then every time it's dispensed to a patient,

they'll tell the patient all those side

effects." Well, that didn't happen.

Maybe there are a few pharmacists who did

that the right way, but for the most part,

even when they had to do labeling and include

those initially, they didn't do it.

Then, when they had to give labels, finally,

when you picked up a prescription of patients,

they decided,

"You know what?"—clever marketing—"let's not just

tell them the four or five

things that might go wrong.

Let's give them copies of backgrounds

of the studies and everything else.

Let's make them these little foldouts that when

you fold them out, they're like

four feet long and in little tiny print,

the smallest font possible for the human eye

to see, and people will say, 'Oh,

forget that,' and they'll just take

the pill." But that's the sidelight.

Here, you didn't have to even do that.

Ask what evidence supports any claimed benefit.

All right.

Now, I understand you're not going to be able

to do this all the time,

but if your doctor ever tells you that they have

a brand new pill that's going to treat a condition

you have, whether it's migraines or whatever else,

can you say—if you do, your doctor I don't think

you're probably very strange—but,

"Can you point me to the clinical studies

that show that or some studies that show it might

benefit me or back up this new

drug?" It's always nice to know.

Investigate whether a drug treats the underlying

disease or just manages the symptoms.

This is a problem.

If you have terrible symptoms,

you have migraines, let's say,

you may take a drug that alleviates

those migraines but isn't treating the underlying

cause because we don't know

what's causing the migraine.

You know what?

If that's helping get rid

of your migraines, that's fine.

But you just want to be able to ask the doctor,

"Are you actually treating the cause of what's

happening with me,

or is this just treating the symptoms?"

Sometimes treating the symptoms will be fine.

That's all you need to do.

But you need to understand it because I think

a lot of people take drugs from doctors,

prescribed, thinking that they're getting rid

of the underlying cause of their It's a problem.

Not necessarily so.

Be wary of medications positioned

as quick emotional fixes.

Boy, I'll tell you,

mental health, stress, and mood issues,

it's a wide open area, and we'll talk about this

at another lecture, but

if you're marketing a drug for high blood

pressure, you can do a test to see

if somebody has hypertension.

You can see if their blood pressure is high.

During diabetes, you can do a sugar test to see

what their glucose scores are and everything else.

With mental health, it's observational.

People are determining,

doctors are making decisions on your mental

health, whether you're clinically depressed or

whether somebody has an anxiety

that needs medication.

Think of this: pharmaceutical companies are

selling products to alleviate those conditions.

So there's a tendency to overprescribe.

Do we have an increased incidence of children

with attention deficit, anxiety disorder?

I'm sure.

So, it's being diagnosed more.

But is the drug Ritalin and others

to treat it being overprescribed?

Absolutely.

Do the drug companies say, "Oh, God,

we've got this product Ritalin.

It's being overprescribed.

We don't want to sell more." No,

they always want to sell more.

Note

the ingredient,

what I call opacity and exaggerated claims,

the fact that they weren't opaque,

that they didn't have full disclosure,

none of that disappeared.

It evolved.

That's what we're talking about with the

side list of things that are so long.

Preview of Lecture 2: The Penicillin Project.

You think going from morphine and heroin

to penicillin, it's a good move.

We're moving in the right direction.

I tell you, it's groundbreaking.

The antibiotic revolution.

It's the 1950s.

It's golden age, another golden age.

There are a lot of golden ages

of the pharmaceutical company,

another golden age of the pharmaceutical company,

the 1950s and antibiotics, and the birth

of the modern pharmaceutical empire.

Now you think I've misled you because I told you

the birth was morphine

and heroin and everything else.

The birth of the industry as we know it

really takes place in this era coming up.

We'll get insights into how pharmaceutical

industry was transformed in World War II by that.

Thank you very much.