2020-2021 Multidisciplinary Course Offering

The Birth of the Medical-Industrial Complex in America…and What’s To Be Done About It Now.

This multidisciplinary course explores the complex historic origins of America’s Medical Industrial Complex—the network of mutually beneficial relationships between big business, academic medicine, patient advocacy organizations, hospitals, and government—and considers a range of workable solutions for transforming America’s healthcare system. This interactive class, through small group breakouts, consensus building exercises and content lectures, will deconstruct the complex, connectivity between the pillars of our health system—Big Pharma, insurance companies, hospitals, the American Medical Association, and affiliates. With an eye first and foremost on the scientific, economic and political bottom lines, course work will reveal the mechanisms of greed, and collusion within our medical system built over the last eight decades, and assume the roles of strategic planners in designing a workable health care system that responds to the basic question, “How do we make America and all Americans healthy?”

Audience: Undergraduate and graduate level students in sciences and pre-health, public health, history, political science, economics, philosophy, theology, sociology, psychology, business, law, and anthropology.


Code Blue: Inside The Medical Industrial Complex

Additional Resources:


Social Transformation of Health Care. Paul Starr. (Basic Books/1982)

The Medical Triangle. Eli Ginzberg. (Harvard University Press/1992)

Priced Out. Uwe E. Reinhardt. (Princeton University Press/2019)

Being Mortal. Atul Gawande. (Metropolitan Books/2014)

Breakthrough: Elizabeth Hughes, the Discovery of Insulin, and The Making of an

American Miracle. Thea Cooper and Arthur Ainsberg. (St. Martins/2010)

Noble Conspirator: Floence S. Mahoney and the Rise of the NIH. Judith Robinson. (Francis Press/2001)

The Man Who Sold America. Jeffrey F. Cruikshank and Arthur F. Shultz. Harvard Business Review Press/2010)

God, Church and Flag. Donald F. Crosby. University of North Caroloina Press/1978)

Catholics and Contraception: An American History. Leslie Woodcock Tentler. (Cornell University Press/2004)

Pills, Power, and Policy. Dominique A. Tobbell. (University of California Press/2012)

The Lost Divisions. Eli Ginzberg. (Columbia University Press/1959)

Science, Money and Politics. Daniel S. Greenberg. (University of Chicago Press/2001)

And The Band Played On. Randy Shilts. (St. Martins/1987)

The Eye of Illusion. Eli Ginzberg. (Transaction Oublishers/1993)

A.D.H.D. Nation. Alan Schwarz. (Scribner/2016)

Health Politics and Policy. James A. Morone, Daniel Ehlke. (Cengage Learning/2013)

Merchants of Doubt. Naomi Oreskes and Erik M. Connway. (Bloomsbury Press/2010)

On The Take. Jerome P. Kassirer. (Oxford University Press/2005)

America’s Bitter Pill. Steven Brill. (Random House/2015)

The Truth About The Drug Companies. Marcia Angell. (Random House/2004)

The Antibiotic Era. Scott H. Podolsky. ((Johns Hopkins University Press/2015)

An American Sickness. Elisabeth Rosenthal (Penquin/2017)

The Heart of Power. David Blumenthal and James A. Morone. (University of California Press/2009)

Politics, Science and Dread Disease. Stephen P. Strickland. (Harvard University Press/1972)

Pain Killer. Barry Meier. (Rodale/2003)

Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients. Ben Goldacre. (Faber& Faber/2013)




Session I

Session II

Session III

Session IV


What forces led to the development of the Medical-Industrial Complex ?

Between 1850 and 1910, the AMA consolidated its power base and prerogatives over medical practice, medical education, and prescribing power in the U.S.

The pharmaceutical industry began to industrialized at the end of the 19th century, separating itself from entrepreneurial pharmacy compounders, quacks and “medicine men” of that era.

The death of children for diptheria vaccine tainted with horse tetanus in 1901 created a public outcry and demands for safer medicines. The resultant 1906 Food and Drug Act extended the power of the federal government to ensure accurate labeling of medicines but did little to ensure the safety of those medications.

Prescribing power was granted to physicians as part of opioid and alcohol labeling efforts in the wake of the 1906 Food and Drug Act. This created liability distance for manufacturers who handed over their products to physician “learned intermediaries” who “provided the orders” to pharmacists to provide the products. Thus a distributive collaborative commercial power sharing arrangement was codified.

Aggressive advertising, marketing and selling of remedies and cures for Americans ills are more than a century old. In the 1900’s, mass marketing tools were employed across the food, tobacco, chemical and health markets. Tactics and tools from one sector began to be copied and modeled by other sectors. Funding was provided by increasingly aggressive corporations and their trade organizations. Advertising created a constant stream of new markets and the capacity to sell product into these markets.

Early attempts to curtail advertising (in newspapers and medical journals) in the early 1900’s met stiff opposition from owners of newspapers and leadership of medical organizations whose journals profited from this revenue.

The Flexner report consolidated the AMA and elite medical school’s control over medical education and practice of medicine in the U.S. It defined quality and identified winners and losers in the field.

The collaborative relationship between Medicine and Big Pharma was modeled after the research and industrial partnership efforts executed by the University of Toronto and Eli Lilly Company. It was further consummated under the direction of Vannevar Bush in WW II with its most famous output being Penicillin.

In 1937, the Massengill Elixir tragedy that poisoned and killed over 100 children provided FDR enough political cover, and the support of the AMA, to pass new FDA legislation. For the first time drug producers had to prove their medicine was safe before it goes to market. They still did not need to prove their medicines were effective.

How did World War II impact America’s approach to heath delivery?

WW II created a coalescence of factors that consummated the modern medical industrial complex including:

1.The endorsement of active scientific partnerships between industry and medicine that yielded discoveries, profits and career opportunities for all.

2. The creation of an enormous dual burden of disease including infectious diseases and immunizations on the one hand, and chronic diseases like cancer, heart and lung disease, mental illnesses, and arthritis and disability on the other. Warfare reinforced smoking, substance abuse, traumatic injuries and pyschiatric illnesses.

3. The specialization of medical practice and a philosophy of “Waging War on Disease” as we had waged war on the Nazi’s. Conquer disease and health will be left in the wake was the belief. The GI Bill at the end of the war was used by wartime physicians returning to the states to pursue specialty training.

4. Efforts to screen out low productivity soldiers (especially those with “psychiatric defects”) and to slow the loss of soldiers to “shell shock/battle fatigue”, led to a systematic labeling of types of mental illnesses and the widespread use of barbiturates to quickly return soldiers to the front lines. These systems and labeling methods became the basis for the 1st DSM catalogue of mental illness and the concept that if you name it and measure it, you can treat it with pharmaceuticals.

5. When corporations complained about wage and salary freezes imposed during the war, the government allowed that health insurance benefits would be exempted from control. Later they also allowed that employer contributions to health insurance would be tax free. These two actions exploded the offering of health insurance through employment rather than its provision as a right of citizenship as prevailed in Canada.

6. Returning soldiers had a heavy burden of chronic disease and mental illness as a result of wartime trauma, alcohol and substance abuse, cigarettes and nicotine addiction. The explosion of cardiovascular disease, lung diseases, cancer rates, and mental illness provided patients for medical-surgical and psychiatric hospitals. Patients became “subjects” for experimentation with new forms of therapy. Federal funding for research, medical training, and hospital expansion through the Hill Burton Act helped pay the bills.

7. An over-confidence in medical research without adequate ethical safeguards for patients. The U.S. was the only Allied nation that did not sign on to the Nuremberg ethical guidelines for research. Returning psychiatrists also took a liberal approach to testing new chemicals on the thousands of Americans institutionalized in mental hospitals at the time.

8. In response to a direct request from FDR, Vannevar Bush wrote “Science – The Endless Frontier” which laid out a plan for a federally funded national scientific research effort.

9. Two private philanthropists, Mary Lasker and Florence Mahoney, married into great publishing and advertising wealth, become power players for all pursuing careers based on science advancement. They seize control of what will become the American Cancer Society, and then successfully support federal support for a new National Institute of Health, sub-dividing it into a series of specialty institutes with staffing and advisers drawn from scientists whose advancement they support.

10. In the immediate post-war periods money flows into science as never before:

a. Hospital building explodes as result of the Hill-Burton Act

b. Federal dollars flow into the new NIH and its ”Institutes”

c. Returning military doctors take up specialty training paid for by the GI Bill.

d. A new field of medical marketing emerges with big advertising budgets, detail men, loose research oversight, and samples for all. TV advertorials such as those for “Atarax” by Pfizer make their first appearances.

e. An integrated medical science career ladder appears with Merck’s establishment of scientific advisory boards and Vannevar Bush and George Merck modelling what a corporate scientific collaborative relationship looks like.

f. Federal funding is provided to expand the number of medical schools.

How did the Cold War impact efforts to establish a national health care system?

FDR viewed the success of Vannevar Bush’s Organization of Scientific Research and Development(OSRD) as transferrable to peacetime. With his death, Truman took on the cause of nationalized health care but was quickly branded as supporting “socialized medicine” by the AMA, the PMA and their allies. In launching their sophisticated public affairs campaigns, they employed Big Tobacco PR firms like Hill and Knowlton, Similar tactics were utilized by Monsanto  against Rachel Carson’s  and her book, “Silent Spring”.

What were the legal milestones in the two decades following the passage of Medicare that reinforced the Medical Industrial Complex?

Medicare and Medicaid passed under LBJ who defined the legislation’s as a “martyr’s cause” to the lost JFK. By 1970, the cost of health care was exploding. When ERISA passed in 1974 to protect workers pension, a small provision protecting employers from liability if they self-insured their employees for health care led many of the nation’s largest employers to assume risk for insuring their own employees, reinforcing a cost-containment movement.

In the waning days of his first and only term as President, Jimmy Carter signed a bill intended to address America’s competitiveness in pharmaceuticals during a prolonged recession. A coordinated effort funded by the AMA and PMA, using a range of well-tested public affairs tactics including Red-baiting and enlistment of allies from the Catholic Church and evangelical Christian movement, made the case that America has a serious “drug-lag” (compared to drug approvals in Europe) and that over-regulation was a national economic threat. In response, a series of legislative actions were taken to loosen controls including:

a. The Bayh-Dole Act releasing federal patents to PhRMA and Academic Medical Centers.

b. The Hatch-Waxman Act promoting quick generic approval of equivalency in return for patent extensions to PhRMA

c. PDUFA which provides fast-tracking of drug approval in return for pharmaceutical user fees funded by PhRMA.

d. The HIV/AIDS crisis further allows for liberalizing approvals creating fast-tracking evaluation and approval of new drug entities in cases of emergency.

How did the AMA and its’ collaborators gain control of the marketplace during the Reagan, Bush and Clinton years?

Individual pharmaceutical companies in the 1980’s and 1990’s engaged with the AMA in an effort to build new markets for their drugs and sell into those markets.

Collusive tactics included:

a. Engage leaders in specialty fields. In return for their support they are paid as advisers, receive research funding and support in generating potential publications, and support for inclusion in governmental advisory boards and medical speaking roles.

b. Experts develop specialty organizations. These “thought leaders” apply to the AMA to create specialty organizations in new fields like pain management, and establish their own “peer review” journals.

c. With assistance from their pharmaceutical patrons, the “thought leaders” generate studies and editorials intended to expand market size and need. These include creating quick screening diagnostic tests, aggressive limiting measures of normalcy, and systematic overstatement of benefit over risk.

d. “Thought leaders” recruit other clinicians to the field and establish fully funded “patient advocacy organizations” to support liberalization of drug approvals in their fields.

e. “Thought leaders” provide governmental testimony and media commentary in support of their patrons as needed.

f. The AMA licenses its physician database masterfile to middle men which enables them to sell physician prescriptive profile data to pharmaceutical companies who are then able to descend on soft targets ie sloppy prescribers.

g. As needed, the pharmaceutical companies fold in other sectors as intermediaries. For example, manufacturers of Ritalin and Adderral engage public school teachers suggesting that ADHD treatment could enhance test scores, providing quick poorly-validated screening tools for the condition and suggested physicians for referral who are known to be liberal prescribers of their medications.

h. In 1997, in response to intense lobbying by PhRMA and their funded Patient Advocacy Groups, Direct to Consumer Advertising is allowed. Except in New Zealand, this practice is prohibited everywhere else in the world.

i. As the Internet era arrives, data links emerge among and between members of the Medical Industrial Complex with inroads into joint marketing and lobbying, pricing strategies, profit-sharing, and supply chain management utilizing a new kind of organization – the Pharmacy Benefit Management (PBM) associations.

j. Planned genomic discoveries in the 1st decade of the new Millenium do not materialize. In their absence, insurers,  pharmaceutical manufacturers, hospitals, and physician groups agree to insurance expansions under Bush and Obama in return for assurances that the status quo will be left largely unchanged.

What were the core public health missteps?

1. Didn’t ask in 1947, “How do we make America (and Americans) healthy?”

2. We thought we could defeat “disease” using the same techniques that worked for defeating the Nazis.

3. We treated health care as a business rather than a right.

4. We segmented rather than integrated health care – specializing, over-promising, and reacting vs. pro-acting every step along the way.

5. We confused scientific progress with human progress – and under-invested in our social service network, a pre-determinant of health.

What were the structural megatrends that fueled the process?

1. AMA dominance was reinforced by pharmaceutical collaborators.

2. FDA oversight was fundamentally reactive to successive tragedies.

3. Marketers created markets and sold into them.

4. WWII triggered the move toward medical-industrial collaboration, specialization, reactive intervention over proactive prevention, wars on disease, federal investment in medical science with involvement of academics and private philanthropists, and focus on a growing dual burden of disease. No differentiation was made between war time and peace time conditions.

5. Creation of new human disorders instigated creation of medicines to treat them, and corruption of research and peer publications reinforced misbehaviors which increased profitability and advanced professional careers.