By James D. Veltmeyer, M.D.
Millions of people were outraged in 2015 when Turing Pharmaceuticals raised the price of a 62-year-old drug considered the gold standard in the treatment of a life-threatening parasitic infection from $13.50 to $750 overnight — a 5,000-plus percent increase. Likewise, the cost of the drug cycloserine, used to treat multidrug resistant tuberculosis, jumped from $500 for 30 pills to $10,800 after its acquisition by Rodelis Therapeutics.
We also learned of the soaring cost of EpiPen as well as price increases ranging from 200 percent to 500 percent for two life-saving heart treatments manufactured by Valeant of Canada, the nation that is the Promised Land to advocates of single-payer health care. In one especially notable case, Questcor Pharmaceuticals raised the price of a multiple sclerosis drug from $1,235 per vial to more than $29,000!
A House of Representatives report issued in 2014 found 10 generic drugs experienced price increases just a year prior, ranging from 420 percent to more than 8,000 percent.
With Americans shelling out over $370 billion on prescription drugs each year, we need to ask ourselves why these costs are escalating beyond all reason.
There’s a saying attributed to the late Congressman Jack Kemp that “if you subsidize something, you get more of it, and if you tax something, you get less of it.” No truer words were ever spoken.
In 2006, the federal government added a benefit to the 40-year-old Medicare program. It was called Part D and it provided for the coverage of prescription drugs for Medicare recipients.
Medicare Part D handed 56 million new customers to America’s giant drug companies.
With the federal government footing the bill instead of the purchaser, what happened? Well, the combined profits of the largest pharmaceuticals soared 34 percent in the first year alone, to $76.3 billion. And, in the decade ending in 2012, the eleven largest global drug companies saw an incredible $711 billion in profits.
Medicare prescription drug coverage has proved extremely profitable to Big Pharma, less so to the average consumer who sees galloping cost increases for relatively routine medications. Of course, Big Pharma can charge you the taxpayers anything they want for drugs as Medicare is legally prohibited from negotiating the price of prescriptions with the government. That fact alone amounts to a massive $137 billion subsidy to the drug companies, according to the Congressional Budget Office.
We are told by Big Pharma that the true reason for these outrageous prices is the cost of research and development. That may be partially true, but only partially. The truth is that half of the scientifically-innovative drugs approved in the United States from 1998 to 2007 were developed in university and biotech labs, not by Big Pharma. The drug companies also spend 19 times more on marketing than on R&D as they blanket our TV airwaves with ads for pills that promise instant relief from everything from erectile dysfunction to insomnia.
This massive marketing campaign (something unheard of just 30 years ago) has undoubtedly resulted in thousands, if not millions, of unnecessary prescriptions being written for patients who see the ads and demand the pills from their doctors, just like children will demand the latest cereal they see advertised on television from their parents. Have no doubt about it, the cost of advertising is built into the cost of every prescription you take.
What can we do?
A number of things come to mind.
First of all, Medicare should be allowed to negotiate the prices of prescriptions with the drug companies, just like the Department of Veterans Affairs does. On some commonly-prescribed medications, Medicare pays between 64 and 100 percent more than the VA. Why?
Second, reform Medicare Part D so that the drug companies aren’t subsidized but the seniors are.
Third, permit the importation of less-expensive medications from overseas so that Big Pharma is forced to compete with nations like Canada and Mexico, where people are hardly dropping dead in the streets from adulterated drugs.
Finally, streamline and reduce the length of time the FDA requires to approve new drugs.
America has the longest approval process anywhere in the world, which only increases costs and delays getting new life-saving medications on the market.
Big Pharma spends tens of millions of dollars ($246 million spent on lobbying alone in 2016) buying the Congress. Isn’t it time we fought back?
—Dr. James Veltmeyer is Chief of the Department of Family Medicine at Sharp Grossmont Hospital in La Mesa, California. His views are his own and do not necessarily reflect the views of Sharp Grossmont Hospital or its staff. Dr. Veltmeyer can be reached at email@example.com.