USA's PhRMA slams study that finds pharmaceuticals 'a two-tier market for producing 'lemons' and serious harm'

The pharmaceutical industry is a "market for lemons," a market in which the seller knows much more than the buyer about the product and can profit from selling products less effective and less safe than consumers are led to believe, according to an analysis that was be presented at the 105th Annual Meeting of the American Sociological Association, in Atlanta earlier this month.

Incentives and protections for the pharmaceutical industry encourage development of many drugs with few new benefits over existing pharmaceuticals, but with risk of serious harm to users, this claimed.

"Sometimes drug companies hide or downplay information about serious side effects of new drugs and overstate the drugs' benefits," said Donald Light, the sociologist who authored the study and who is a professor of comparative health policy at the University of Medicine and Dentistry of New Jersey. "Then, they spend two to three times more on marketing than on research to persuade doctors to prescribe these new drugs. Doctors may get misleading information and then misinform patients about the risks of a new drug. It's really a two-tier market for lemons."