Anyone who thinks that the pharmaceutical industry should continue to be able to gouge Americans with their near-monopoly pricing power should recognize that this power is preventing people from filling prescriptions and keeping important drugs from both coming into the market and from being manufactured. Mounting evidence suggests the need for the government to intervene to ensure that people get the medications they need.
A story in The New York Times about a lawsuit against Gilead, a pharmaceutical company, for failure to bring a critical drug to market quickly, speaks volumes about how drug company profits come before patient health. The delay in bringing a new HIV drug to market allowed Gilead to maximize revenue on another drug with possibly more dire side effects.
The people at Gilead believed the new drug would have less harsh side effects on people’s kidneys and bones. But, the drug likely would bring down revenue on Gilead’s patent-protected drug. So Gilead’s executives decided to delay bringing the new drug to market until the patent-protected drug lost its protection. Based on a review of Gilead’s internal documents, the New York Times reports that Gilead was “gaming the U.S. patent system to protect lucrative monopolies on best-selling drugs.”
Stories also abound about drugs that are not available because pharmaceutical companies are not able to make big profits selling them. These drugs are not outliers. They can treat cancer and heart disease and basic infections. And, there are drug shortages of more than 300 of them.
Geoffrey Joyce, Director of Health Policy at the USC Schaeffer Center, explains in The Express that drug shortages have been around for some time. But, we are seeing shortages of more drugs of late and we are seeing drug shortages for longer time periods. Amoxicillin to treat ear infections, for example, is hard to get, as is lidocaine and albuterol, which many Americans depend on for treating their asthma. Ironically, the problem is that these drugs come with a low price tag, so pharmaceutical companies don’t see the financial value of producing them.
Because of US patent laws, pharmaceutical companies can pretty much call the shots on what they charge for brand-name drugs for a long period of time. That means big bucks for them. They can charge many times more for these drugs in the US than in any other wealthy country because every other wealthy country negotiates drug prices. And, drug companies generally can charge high prices for at least 20 years or until their patent expires, which could be even longer. Once a drug is off patent, they face generic competition and prices tend to fall, along with profits.
Even when drug companies outsource generic drugs for manufacture, they do so to cut costs and, in the process, sometimes undermine quality and supplies. Interestingly, though the FDA struggles to inspect foreign drug manufacturing facilities, it allows the sale of these drugs in the US but still does not allow drug importation.
And, when several companies manufacture a generic, quality and supplies can suffer. The supplier of key ingredients might be the same for all of them. If the supplier stops producing, no generics are produced. Or, the supplier might be responsible for a harmful ingredient in all the generics. Who knows the consequences in any given situation, but people can die.
Joyce proposes that the US produce more generic drugs, as California has proposed to do.
Here’s more from Just Care:
- 2023: Medicare Part D prescription drug coverage and costs
- Case study: Costco saves one couple hundreds of dollars over Medicare Part D
- Case study: Medicare Advantage delays, denials and consequences
- Which outpatient drugs are costing Medicare the most?
- Prescription drug middlemen, PBMs, will always drive up drug costs
