Live in the US? Rejoice! You’re free to pay too much for prescription drugs

Why does the US pay more for prescription drugs than any other country? Monopolies and a government that can’t negotiate, scientists said in a paper that may provide ammunition for lawmakers aiming to lower drug costs.

Researchers from Harvard Medical School dug through medical and health policy papers published in the last 10 years to figure out why people in the US spent almost twice as much on prescription drugs in 2013 compared to 19 other industrialized nations — and why prices are still going up. They found that FDA regulations and patents protect drug companies from competition, and federal law prevents Medicare from negotiating drug prices. All of which work together to allow drug companies to set their own prices…

Aaron Kesselheim and his colleagues propose a number of solutions. Those include giving Medicare the power to negotiate prices, as well as removing some of the regulations that keep generics from speedily entering the market. The authors also suggest educating payers, providers, and patients about how effective competing treatments are, and having pharmacies automatically substitute cheaper generic drugs for pricey brand name prescriptions…

But Kesselheim thinks allowing Medicare to negotiate is small potatoes compared to making sure there’s competition in the pharmaceutical marketplace.

The JAMA paper describes two forms of legal protection that give brand name pharmaceuticals an effective monopoly. The first is exclusivity granted by the FDA that gives new small molecule drugs and biologics windows of five to seven years and 12 years, respectively, before generic versions can be sold. And patents can protect the active ingredient and chemical structure of a drug — as well as less fundamental aspects like its formulation and coating — for 20 years or more. Generic manufacturers can sue to challenge these patents, but in a practice called pay for delay, big name pharma companies settle the suits and pay generics manufacturers to wait it out until the patent expires…

Along those lines, Amy Klobuchar — the senator who called for an investigation into EpiPen price hikes — is co-sponsoring several bills that could, if they passed, help increase competition in the pharmaceutical marketplace by enabling Medicare price negotiation, allowing patients to import pharmaceuticals from Canada, and preventing pharmaceutical companies from blocking generics entering the marketplace.

And as the final healthcare professional interviewed for the article noted – all these remedies can and should be applied to the whole range of price-gouging we face as captive consumers in a nation where our politicians are owned by lobbyists.

OK. I added that last phrase.

6 thoughts on “Live in the US? Rejoice! You’re free to pay too much for prescription drugs

  1. Never wise up a chump says:

    A new investigative report finds that in the last two years Gilead Sciences has raked in billions in profits from exorbitantly priced hepatitis C medications that were developed with taxpayer dollars, and then shifted those profits to offshore tax havens where it dodges U.S. taxes.
    “Gilead is making a fortune selling essential drugs to the very government and taxpayers that helped pay to develop them, and then dodging taxes on the resulting profits,” said Americans for Tax Fairness Executive Director Frank Clemente. “Congress should stop this assault on the American people’s health and pocketbooks by curbing the company’s flagrant drug-price gouging and tax dodging.”
    U.S. Rep. Lloyd Doggett (D-TX), a senior member of the House of Representatives’ tax-writing committee and chair of the House Prescription Drug Pricing Caucus, said, “Gilead excels at tax dodging and price gouging. While a chief exporter of drug patents and profits to Ireland, it refuses to charge Americans the much lower drug prices of Ireland. Instead of innovation, it has spent more on stock buybacks for executives and shareholders than on research and development. Gilead’s formula for success: prices up, profits up, tax avoidance up. We don’t need research to know this about drug effectiveness: an unaffordable drug is always 100% ineffective.”
    California-based Gilead is the sixth most valuable pharmaceutical corporation in the world, with a market value of $146 billion last year. Its enormous profits come primarily from two life-saving Hepatitis C (HCV) medications. When Gilead’s first HCV drug launched in 2013 a full treatment cost $84,000, and a follow-on treatment cost nearly $95,000. And in late June the FDA approved a new version that will debut at $75,000. The cost of manufacturing the original drug was under $1,400.” See report @

  2. Geezer says:

    Catalyst Pharmaceuticals (NASDAQ:CPRX) is down 4% premarket on light volume on the heels of the news that Sen. Bernie Sanders (I-VT) has sent it a letter asking why Firdapse (amifampridine), approved by the FDA about two months ago for the treatment of a rare autoimmune disorder called Lambert-Eaton myasthenic syndrome, costs $375K when patients were previously getting it for free. Americans pay, by far, the highest prices for prescription drugs in the world, and reportedly one in five adults cannot afford to get the medicine they need.

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