“CODE BLUE: Inside the Medical-Industrial Complex” could not be more timely and relevant. Written by veteran medical historian and journalist, Mike Magee MD, the book explains why we were so unprepared for the pandemic, and what we should do about it now. The “talking point” materials below are available open access: 1) a 15 minute interview of Dr. Magee by Professor of Economics and founder of Democracy at Works, Richard Wolff; 2) talking points, 3) suggested questions, and 4) a synopsis of book content.

Professor Wolff interviews Mike Magee HERE.


Questions to address to Mike Magee MD, author of Code Blue: Inside the Medical Industrial Complex:

#1: The US Health Care System is the most expensive and least effective health care system among developed nations around the world.

#2: The US health care system is purposefully complex and driven by profiteers and predatory pricing on every level.

#3: There is widespread collusion by medical, hospital, pharmaceutical and insurance organizations whose lobbyists coordinate their efforts on state and federal levels to maximize profitability. The new Pharmacy Benefit Management (PBM) companies permit kickbacks and inside dealing at pateints expense.

#4: The US has no strategic health plan for the nation and has under-funded public health services since WWII.

#5 US taxpayers funded the creation of national health care systems for vanquished enemies in Germany and Japan through the Marshall Plan. However, attempts by Truman to introduce universal health care for Americans after WWII were labeled Socialism by the AMA and PMA and defeated.

#6: The disasterous health care response to a public health challenge like the Covid pandemic was predicted by Code Blue in 2019.

CODE BLUE Reporter Questions:

Why did you write Code Blue?

What did you learn in your 10 years at Pfizer as head of their Global Medical Affairs?

Why were you hired to be the “face of Viagra?”

Why is health care so expensive in the U.S.?

Why do we have such a large percentage of our citizens uninsured?

Why do drugs cost so much?

Have you ever met anyone who doesn’t like their Medicare?

Why do we have such a high mortality rate for pregnant mothers and their infants in the US?

Why is lifespan for the first time moving in the wrong direction?

Why do you label our current Opioid Epidemic as “man-made?”

How is the Sackler Family tied to the current opioid epidemic?

Why is Arthur Sackler considered the father of medical advertising? What did he do, and what did he hide over the years?

What are the major components of the Medical Industrial Complex? How and where to they collaborate? What is their main objective?

Why are health insurers and pharmaceutical companies so profitable?

Why do hospitals have nearly a half million avoidable deaths each year? 

Who regulates hospitals? Why is the Joint Commission or the JCAHO a “failed institution.”

Do you think the average employer knows much about health care?

Does America have the best health care in the world?

Why do you call Pharmacy Benefit Mangers a “criminal enterprise?”

Why is our health care system so complex and so expensive?

Why does Warren Buffett call American health care the “tapeworm on American competitiveness?”

What % of our Gross Domestic Product (GDP) do we currently expend on health care in the US.

How many health care workers do we have for each physician in America?

How many of those workers actually care for patients? How many would lose their jobs in a national health care system? What would they do instead?

How many Americans sell health insurance for a living? Why so many?

A Summary of Content in Code Blue:

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

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

2. 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.

3. The death of children from diphtheria 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.

4. 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.

5. 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.

6. 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.

7. 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.

8. 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.

9. 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 psychiatric illnesses (over 1 million mental health casualties).

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 national provision as a tax supported offering 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 (1957) make their first appearances.

e. An integrated medical science career ladder appears with Merck’s establishment of scientific advisory boards and Vannevar Bush(Chairman of the Board) and George Merck (President, Merck Corp.) modeling 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 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 was 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 had 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 provided fast-tracking of drug approval in return for pharmaceutical user fees funded by PhRMA.

d. The HIV/AIDS crisis further allowed 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.

What collusive tactics were employed?

a. Engage leaders in specialty fields. In return for their support, they were paid as advisers, received research funding and supported and generated publications, and professionals inclusion in governmental advisory boards and medical speaking roles.

b. Corporate supported experts developed new specialty organizations. These “thought leaders” applied to the AMA to create specialty organizations in new fields like pain management, and established their own “peer review” journals.

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

d. Thought leaders identified activist patients to establish corporate funded Patient Advocacy Groups on both state and Federal levels.

Was Obamacare a Success?

a. In order to pass his signature legislation, President Obama made major concessions to doctors, hospitals, pharmaceutical companies, and insurers that were anti-competituive, In return, they supported new protections for the insured and expansion of coverage for the uninsured.

b. Major achievments of the ACA include:

1. Agreement on a Basic Benefit Package that all insurers must provide. 

2. Protections for those with prior conditions. 

3. Expanded insurance offerinfs for 20 million uninsured

4. Large majority of Americans now believe that universal health care is a right rather than a privilege.

c. Challenges that remain for the ACA:

1. Continued attempts by the Republican party to undermine the legislation.

2. Fundamental cost-control measures like an ability to negotiate competitive prices for pharmaceuticals are absent.

3. Twelve Republican led satates refuse to expand Medicaid.

4. Complexicity, opague pricing, and high levels of variability and inequity continue to plague the system.

What should Biden do now?

The challenge for the Biden Administration is twofold:

1. Defeat the pandemic by a combination of vaccinations and public health measuers.

2. Build a “first-in-class” health care system with the following features:

a) Universality: Coverage for all – shared responsibility and risk.

b) Strategic Planning: Multi-year national health priorities.

c) Efficiency: Streamline payments, annual negotiated budgets, strict oversight, standardized national billing and payment systems.

d) Transparency: No DTC advertising. No kickbacks inside PBM’s. No data profiteering. Industry funded academic researchers must register as lobbyists.

e) Local Control of Delivery: Federal standards with local autonomy. Public insurance is primary. Private insurers are secondary and supplemental.