US Kids Represent Psychiatric Drug Goldmine Saturday 12 December 2009 byEvelyn Pringle
Prescriptions for psychiatric drugs increased 50 percent with children
in the US, and 73 percent among adults, from 1996 to 2006, according to
a study in the May/June 2009 issue of the journal Health Affairs.
Another study in the same issue of Health Affairs found spending for
mental health care grew more than 30 percent over the same ten-year
period, with almost all of the increase due to psychiatric drug costs.
On April 22, 2009, the US Agency for Healthcare Research and Quality
reported that in 2006 more money was spent on treating mental disorders
in children aged 0 to 17 than for any other medical condition, with a
total of $8.9 billion. By comparison, the cost of treating
trauma-related disorders, including fractures, sprains, burns, and
other physical injuries, was only $6.1 billion.
In 2008, psychiatric drug makers had overall sales in the US of $14.6
billion from antipsychotics, $9.6 billion off antidepressants, $11.3
billion from antiseizure drugs and $4.8 billion in sales of ADHD drugs,
for a grand total of $40.3 billion.
The path to child drugging in the US started with providing adolescents
with stimulants for ADHD in the early 80s. That was followed by Prozac
in the late 80s, and in the mid-90s drug companies started claiming
that ADHD kids really had bipolar disorder, coinciding with the
marketing of epilepsy drugs as "mood stablizers" and the arrival of the
new atypical antipsychotics.
Parents can now have their kids declared disabled due to mental illness
and receive Social Security disability payments and free medical care,
and schools can get more money for disabled kids. The bounty for the
prescribing doctors and pharmacies is enormous and the CEOs of the drug
companies are laughing all the way into early retirement.
Psychiatric Drugs Explained
During an interview with Street Spirit in August 2005, investigative
journalist and author of "Mad in America," Robert Whitaker, described
the dangers of psychiatric drugs. "When you look at the research
literature, you find a clear pattern of outcomes with all these drugs,"
he said, "you see it with the antipsychotics, the antidepressants, the
anti-anxiety drugs and the stimulants like Ritalin used to treat ADHD."
"All these drugs may curb a target symptom slightly more effectively
than a placebo does for a short period of time, say six weeks,"
Whitaker said. However, what "you find with every class of these
psychiatric drugs is a worsening of the target symptom of depression or
psychosis or anxiety, over the long term, compared to placebo-treated
"So even on the target symptoms, there's greater chronicity and greater
severity of symptoms," he reports, "And you see a fairly significant
percentage of patients where new and more severe psychiatric symptoms
are triggered by the drug itself."
Whitaker told Street Spirit that the rate of Americans disabled by
mental illness has skyrocketed since Prozac came on the market in 1987,
and reports: (1) the number of mentally disabled people in the US has
been increasing at a rate of 150,000 people per year since 1987, (2)
that represents an increase of 410 new people per day and (3) the
disability rate has continued to increase and one in every 50 Americans
is disabled by mental illness.
The statistics above beg the question of how could this happen when the
so-called new generation of "wonder drugs" arrived on the market during
the exact same time period. The truth is, the "wonder drugs" cause most
of the bizarre behaviors listed by doctors to warrant a mental illness
Psychiatric Drug Goldmine
The CIA "World Factbook" estimate the world population to be about 6.8
billion and the US population to be a mere 307 million. In an April
2008 report, the market research firm Datamonitor reported that the "US
dominates the ADHD market with a 94 percent market share."
ADHD drug prices at a middle dose for 90 pills at DrugStore.com, are:
Adderall $278, Concerta $412, Desoxyn $366, Strattera $464 and Vyvanse
$385. Daytrana costs $437 for three boxes of 30 nine-hour patches.
The SSRI and SNRI antidepressants include GlaxoSmithKline's Paxil and
Wellbutrin, Pfizer's Zoloft, Celexa and Lexapro from Forest Labs, Luvox
by Solvay, Wyeth's Effexor and Pristiq and Lilly's Prozac and Cymbalta.
The average price of these drugs is about $300 for 90 pills at
The prices for anticonvulsants can run as high as $929 for 180 tablets
of Glaxo's Lamictal, and $1170 for 180 tablets of Johnson &
In 2008, the atypical antipsychotics took over the slot as the top
revenue earners in the US, and include Seroquel by AstraZeneca;
Risperdal and Invega marketed by Janssen, a division of J&J; Geodon
by Pfizer; Abilify from Bristol-Myers Squibb; Novartis' Clozaril and
Eli Lilly's Zyprexa. The average price on these drugs for 100 pills at
DrugStore.com is about $1,000. Lilly also sells Symbyax, a drug with
Zyprexa and Prozac combined, at a cost $1,564 for 90 capsules at
DrugStore.com in May 2009.
The briefing material submitted to an FDA advisory panel in April 2009
reported that an estimated 25.9 million patients worldwide had been
exposed to Seroquel since its launch in 1997 through July 31, 2007, in
the US, and the second quarter of 2007 for countries outside the US. Of
that number, an estimated nearly 15.9 million took Seroquel in the US,
compared to only ten million patients in the rest of the world. In
2008, the US accounted for roughly $3 billion of Seroquel's $4.5
billion in worldwide sales.
For the full-year of 2008, Eli Lilly reported worldwide Zyprexa sales
of about $4.7 billion, with US sales of $2.2 billion and only $2.5
billion for the rest of the world.
FDA as Promotional Tool
On June 12, 2009, an FDA advisory panel gave the green light to expand
the marketing of Zyprexa, Seroquel and Geodon for use with 13 to 17
year-olds diagnosed with schizophrenia and 10 to 17 year-olds diagnosed
with bipolar disorder. The FDA usually follows its advisers'
"Such approval gives manufacturers a shield from liability - for
illegally promoting the drugs for off-label use," said Vera Hassner
Sharav, president of the Alliance for Human Research Protection.
"And such approval ensures increased use of these drugs," she warned.
"Manufacturers and mental health providers will profit while children's
physical and mental health will be sacrificed."
"The body of evidence showing these drugs to be harmful is
irrefutable," she said, "it is documented in FDA's postmarketing
database, and in secret internal company documents uncovered during
According to Dr. Stefan Kruszewski, a Harvard-trained psychiatrist from
Harrisburg, Pennsylvania, the atypicals increase the risk of obesity,
type II diabetes, hypertension, heart attacks and stroke.
He said the drugs were marketed as safer and easier to tolerate than
the older, cheaper antipsychotics because they would cause fewer
neurological injuries like tardive dyskinesia and akathisia.
Those claims turned out to be totally false, he said, and "they
continue to cause same neurological side-effects as the older
"Children are known to be compliant patients and that makes them a
highly desirable market for drugs, especially when it pertains to
large-profit-margin psychiatric drugs, which can be wrought with issues
of non-compliance because of their horrendous side effect profiles,"
according to a June 29, 2009 paper titled, "Drugging Our Children to
Death," in Health News Digest.com, by Gwen Olsen, who spent over a
decade as a pharmaceutical sales rep, and authored the book,
"Confessions of an Rx Drug Pusher."
Children are forced to take their drugs by doctors, parents and school
personnel, she said. "So, children are the ideal patient-type because
they represent refilled prescription compliance and 'longevity.'"
"In other words," Olsen noted, "they will be lifelong patients and repeat customers for Pharma!"
"The initiative to drug our children for profit has exceeded all common
sense boundaries and is threatening the welfare of every American
child," she stated, and it "is up to each and every one of us to stop
Drug Makers Busted
Most all of the psychiatric drug companies have come under
investigation over the past several years for promoting their drugs for
off-label use, especially with children. However, the fines they end up
paying are trivial compared to the profits earned through the illegal
In September 2007, Bristol-Myers Squibb entered into a $515 million
civil settlement with the US Department of Justice for illegally
marketing drugs, including Abilify, for off-label uses. In the first
six months of 2009, Abilify had sales of $1.9 billion. In 2008, the
salary and compensation package of Bristol-Myers' CEO, James Cornelius,
was $23,150,236, according to the AFL-CIO's Executive PayWatch Database.
On January 29, 2009, Paxil and Wellbutrin maker, GlaxoSmithKline,
announced that it would record a legal charge in the fourth quarter of
2008 of $400 million relating to an ongoing investigation initiated by
the US attorney's office in Colorado into the US marketing and
promotional practices for several products for the period 1997 to 2004.
The government inquired about alleged off-label marketing as well as
medical education programs for doctors, "other speaker events, special
issue boards, advisory boards, speaker training programmes, clinical
studies, and related grants, fees, travel and entertainment," according
to a Glaxo annual report.
In January 2009, Eli Lilly settled with the DOJ and more than 30 states
for $1.4 billion over the off-label marketing of Zyprexa. The agreement
included a $615 million fine for a federal criminal charge. But $1.4
billion was chump change considering that Zyprexa was still Lilly's
best seller in 2008, with sales of $4.69 billion. Lilly also has paid
over $1 billion to settle lawsuits filed by Zyprexa patients. In the
first six months of 2009, Zyprexa sales were $1.5 billion. In 2008,
Lilly's CEO, John Lechleiter, had a pay package worth $12,856,882
In September 2009, the DOJ reached a $2.3 billion settlement with
Pfizer related to the off-label promotion of several drugs, including
the psychiatric drugs, Geodon, Zoloft and Lyrica, in the largest
health-care fraud settlement in history. But even though Pfizer took
the entire $2.3 billion as an earnings charge for the fourth quarter of
2008, the drug maker was still able to post a fourth quarter profit of
$268 million. Pfizer's CEO in 2008, Jeffrey Kindler, had a salary and
pay package of $15,547,600.
Johnson & Johnson is also dealing with the DOJ and state-level
investigations into the off-label marketing of Risperdal. The company's
latest SEC filing lists nine subpoenas received by the company
involving promotions of Risperdal, including one "seeking information
regarding the Company's financial relationship with several
psychiatrists." In the first six months of 2009, Risperdal earned $660
million. J&J's CEO, William Weldon, had a pay package worth
$29,127,432 in 2008.
AstraZeneca's third quarter SEC filing lists a $520 million tentative
settlement agreement with the US attorney's office in Philadelphia to
resolve allegations related to the off-label marketing of Seroquel. At
"least 34 states are pursuing separate investigations of AstraZeneca's
marketing practices as part of a joint investigation and others may be
conducting their own probes," according to Ed Silverman on Pharmalot.
"A half a billion dollar one-time settlement is just a small cost of
doing business for a company that sold $17 billion worth of the
offending drug in the last five years," Dr. Roy Poses points out on the
Health Care Renewal web site. In 2008 alone, Seroquel had world-wide
sales of more than $4.4 billion.
As of July 13, 2009, AstraZeneca was also defending approximately
10,381 served or answered personal injury lawsuits and approximately
19,391 plaintiff groups involving Seroquel, according to SEC filings.
Some of the cases also include claims against other drug makers such as
Eli Lilly, Janssen Pharmaceutica and/or Bristol-Myers Squibb, the
On September 23, 2009, Shire Pharmaceuticals received a subpoena from
the US Department of Health and Human Services Office of Inspector
General in coordination with the US attorney for the Eastern District
of Pennsylvania, seeking production of documents related to the sales
and marketing of Adderall XR, Daytrana and Vyvanse, according to
Shire's third quarter report for 2009.
In a November 6, 2009, SEC filing, Abbott Labs said the federal
prosecutor for the Western District of Virginia was conducting an
investigation for the US Justice Department of whether the company's
sales and marketing of Depakote violated civil or criminal laws,
including the Federal False Claims Act and an anti-kickback statute
related to reimbursement by Medicare and Medicaid programs to third
In 2008, Depakote had sales of $1.36 billion and Abbott CEO, Miles White, had a salary and compensation package of $28,253,387.
In February 2009, the DOJ unsealed a lawsuit alleging that Forest
Laboratories marketed the antidepressants Celexa and Lexapro for
unapproved uses in children, and paid kickbacks to induce doctors to
promote the drugs, including Dr. Jeffrey Bostic at Harvard University.
In its latest SEC filing, Forest disclosed that it reached an agreement
in principle in May 2009 to settle the civil aspects of US federal and
state probes. "Penalties in the civil settlement are covered by a $170
million reserve Forest created in April," according to a November 9
report by Dow Jones.
Forest also disclosed that the agreement "does not resolve the
government's ongoing investigation into potential criminal law
violations" related to Celexa and Lexapro, and thyroid drug Levothroid,
Dow Jones notes. In 2008, the salary and compensation for Forest CEO,
Howard Solomon, was $6,565,324.
Over the past year and a half, a large number of so-called "Key Opinion
Leaders" in the field of psychiatry have been exposed for not fully
disclosing money received from many of the drug companies above through
an investigation by the US Senate Finance Committee under the
leadership of Iowa Republican Sen. Chuck Grassley.
The list so far includes Harvard University's Joseph Biederman, Thomas
Spencer and Timothy Wilens; Charles Nemeroff and Zackery Stowe from
Emory; Melissa DelBello at the University of Cincinnati; Alan
Schatzberg, president of the American Psychiatric Association from
Stanford; Martin Keller at Brown University; Karen Wagner and Augustus
John Rush from the University of Texas and Fred Goodwin, the former
host of a radio show called "Infinite Minds," broadcast by National
The fraud settlements are "merely a cost of doing business to these
pharmaceutical Goliaths and, in fact, caps their liability for these
crimes," said Alaskan attorney Jim Gottstein, the leader of the Law
Project for Psychiatric Rights (PsychRights), a public interest law
"Most importantly," he noted, "these settlements have not stopped the
practice of psychiatrists and other prescribers giving these drugs to
children and youth and Medicaid continuing to pay for these fraudulent
"Because of the massive, harmful, increase in the psychiatric drugging
of America's children and youth, who are inherently forced, PsychRights
has made addressing the problem a priority," he said.
Gottstein conducted an investigation and determined that the vast
majority of off-label psychotropic drug prescriptions for children and
youth that are paid for by Medicaid constitute Medicaid fraud.
PsychRights now has a national "Medicaid Fraud Initiative Against
Psychiatric Drugging of Children & Youth," designed to address this
problem by "having lawsuits brought against the doctors prescribing
these harmful, ineffective drugs, their employers, and the pharmacies
filling these prescriptions and submitting them to Medicaid for
reimbursement," according to its web site.
"Anyone who submits or causes claims to be submitted to Medicaid for
drugs that are not for a 'medically accepted indication' is committing
Medicaid Fraud," said Gottstein, in a July 27, 2009 press release
announcing the launch of the national campaign.
"Those guilty of this Medicaid Fraud include psychiatrists and other
physicians prescribing these drugs, their employers, and pharmacies
submitting the false claims to Medicaid," he pointed out.
PsychRights estimates that over $2 billion in such fraudulent Medicaid claims are being paid by the government each year.
"Once one sues over specific offending prescriptions, all of such
prescriptions can be brought in, which means that any psychiatrist on
the losing end of such a lawsuit will almost certainly be bankrupted,
because each offending prescription carries a penalty of between $5,500
and $11,000," PsychRights explained.
It is hoped that once the doctors and pharmacies realize they are
subject to financially ruinous Medicaid fraud judgments, the practice
will be stopped or substantially reduced.
"Each prescriber may have a million dollars or few, at most, to lose,
but the pharmacies' financial exposure can run into the hundreds of
millions of dollars and it is hoped this will attract attorneys to take
these cases," the web site noted.
In September and October 2009, Gottstein gave presentations on the
initiative at the annual conferences of the National Association of
Rights Protection and Advocacy and the International Center for the
Study of Psychiatry and Psychology in order to find people who are
potentially interested and willing to pursue such cases.
"This was successful and we have at least a few such cases cooking," he
reported. "PsychRights stands ready to help people interested in
bringing such suits."
In late 2006, Gottstein won international fame by subpoenaing and
releasing thousands of documents involving Eli Lilly's illegal
marketing of Zyprexa, which resulted in front page stories in The New
PsychRights also has an appeal pending on a lawsuit filed against the
state of Alaska and responsible state officials seeking declaratory and
injunctive relief that Alaskan children and youth on Medicaid have the
right not to be administered psychotropic drugs unless and until a
number of specific conditions are met. The lawsuit seeks to prohibit
the state from paying for psychiatric drugs prescribed off-label to
children and youth.
In responding to the lawsuit, the state claimed that they do have any
control over or responsibility for the psychiatric drugging of children
in their custody, or any responsibility under Medicaid, and moved for
dismissal on the grounds that PsychRights does not have standing, or
the right to bring the suit, because it was not harmed by the state's
The court agreed and dismissed the case. "We think the judge is wrong and have filed an appeal," said Gottstein.
In May 2009, Gottstein sent letters to Sens. Charles Grassley and Herb
Kohl and Reps. Henry Waxman, Bart Stupak, John Dingell and Barney
Frank, describing the massive Medicaid fraud involved in the
prescribing of psychiatric drugs to children in the US and asked for
"assistance in stopping these illegal reimbursements."
As of November 8, 2009, Gottstein reported, "I haven't gotten as much
as an acknowledgment of receipt from any of the members of Congress to
whom I wrote."