Donald Light, currently Lorry Lokey Visiting Professor of Human Biology at Stanford , has presented a paper at this year's American Sociological Association convention that's getting a lot of attention from the world press . (The paper is not yet published.)
Light takes off from George Akerlof's famous 1970 "lemons paper," which focuses upon what Akerlof calls the problem of adverse selection due to information asymmetry. To quote from the Nobel Prize page summary  of this work:
[Akerlof] analyses a market for a good where the seller has more information than the buyer regarding the quality of the product. This is exemplified by the market for used cars; "a lemon" – a colloquialism for a defective old car – is now a well-known metaphor in economists' theoretical vocabulary. Akerlof shows that hypothetically, the information problem can either cause an entire market to collapse or contract it into an adverse selection of low-quality products.
Light argues that the market for prescription drugs - in the United States and throughout the world - has become a lemon market, indeed "the largest and most dangerous market in lemons in modern society." It has contracted into a choice among overwhelmingly low-quality meds: Meds that are expensive, that do nothing, that do damaging things, that do exactly what earlier versions of their ingredients did much more cheaply, that create dependency, that promote problems generating the taking of yet more sorts of pills, etc.
As with any asymmetrical information market in lemons, many of the pharmaceutical companies and doctors selling and prescribing pills are, writes Light, "us[ing] their superior knowledge, expertise and authority to persuade clients that they need services or products of questionable benefits and possible harm." Light describes the close and sometimes corrupt relationships between pharma and physicians; he notes the weak utility of (increasingly discredited) SSRI drugs, and of expensive, much-hyped new drugs like Nexium; he reviews some of the latest high-profile drug scandals (Vioxx, for instance); he remarks on the industry practice of "inventing new 'risks' and 'diseases' ... that have little to do with real clinical life;" and he points out that many clinical trials are so compromised as to have become jokes.
Information asymmetry, in the case of prescription drugs, also involves "companies manag[ing] what [research] gets published and what does not" through a complex process known as "ghost management" of all public data about a particular drug or device.
To all of this Light adds incessant, fear-mongering, direct to consumer advertising, control of Continuing Medical Education courses by industry, and the constant gift-giving presence of drug salespeople in the hospitals and clinics where prescribers work.
Our focus on this blog is universities, and I want to concentrate on the danger our medical schools are running of becoming lemon dispensers. Through their collaboration with the prescription drug industry, increasing numbers of American medical school professors are beginning to look like a used car sales force.
Light remarks that Senator Charles Grassley's seemingly endless investigations into conflict of interest among medical school professors are an important part of this story. Significant amounts of academic research, Light writes, have been corrupted by "company grants, fees, and retainers, that [have been associated with, for instance,] greatly increased psychiatric diagnoses, especially in children, and [increased] prescriptions for powerful drugs of unclear or unproven clinical benefit."
Why is a senator, rather than the FDA or a particular university, going after compromised professors on the faculties of American medical schools?
Universities are profoundly asymmetrically ignorant when it comes to what powerful physician-investors are doing on their faculty. They can do virtually nothing about the lemonization of the university.
People tend to be surprised at the feebleness of the FDA, though.
Yet Light writes that the combination of direct to consumer advertising, "looser rules about promoting unapproved uses [of drugs,] and [companies] being allowed to give doctors articles testifying to their advantages from company-sponsored journals, supplements, and studies, [means that] the role of regulators like the FDA as an expert gatekeeper to keep lemons out of the market is marginalized."
With all the attention currently being directed to the scandal of for-profit American colleges, and with people questioning to what extent their scandalous features might be shared by non-profit institutions, it's a remarkably bad time for the for-profit ethos of pharmaceutical companies to exhibit itself -- in bold shades of lemony yellow -- on our campuses.