Report: Pharma industry a "market for lemons"

A new report is calling the pharmaceutical industry is a "market for lemons," in which the seller knows much more than the buyer about the product. In this market, the seller can profit, even if its products are less safe and effective than consumers are led to believe, Science Daily reports.

So says an analysis by Donald Light of the University of Medicine and Dentistry of New Jersey, who maintains that about 85 percent of new drugs offer few if any new benefits, according to independent reviewers. Furthermore, the side effects or misuse of meds make prescription drugs a significant cause of death in the U.S.

He maintains that drugmakers often downplay a product's serious side effects while touting its benefits to doctors, who in turn misinform patients about the risks of the products. He provides three reasons why the pharmaceutical market produces "lemons." First, the drugmakers themselves are in charge of testing new drugs. And they have "firewalls of legal protection behind which information about harms or effectiveness can be hidden." Finally, there is a low threshold set for proving efficacy before a drug can be approved.

Light singled out Avandia and Avastin, which he said were approved despite "biased, poor" clinical trials. He adds that orphan drugs are tested even less well.

"The result is that drugs get approved without anyone being able to know how effective they really are or how much serious harm they will cause," Light says. He presented his findings at the American Sociological Association's 105th Annual Meeting.

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