Readers Write :What’s behind high U.S. drug prices

The Island Now

Shawn Bishop, who is vice president of Advancing Medicare and Controlling Healthcare Costs at Commonwealth, said in a podcast, “New Directions In Healthcare, the U.S. pays the highest prices for drugs in the world and we put more of our healthcare costs toward prescription drugs than any other country. Some 17 percent of total national healthcare spending goes for prescription drugs.

The Commonwealth Fund is a private U.S. foundation whose stated purpose is to “promote a high-performing, health-care system that achieves better access, improved quality and greater efficiency, particularly for society’s most vulnerable and the elderly,” according to Wikipedia.

Analysts who advise Congress expect the share to rise over the next 10 years, because drug costs are expected to outpace those of all other services like doctor visits and hospital care.

The crisis today is fueled by the high launch prices of new brand organics and year-over-year price increases of brand-name drugs that face no competition in the market for many years due to abuses of the patent system.

Brand name drugs now account for 77 percent of all spending on prescription drugs, yet only up to 10 percent of all prescriptions written. 

Even people with good health insurance are concerned. The Association for Accessible Medicines says “when the price of prescription drugs fits within a family’s budget, everyone is able to live and work at their healthiest. On the other hand, when people are unable to afford their medication, this negativity affects their health and their lives, and exacts a heavy toll on society.”

Bishop says multiple sclerosis, rheumatoid arthritis and cance are treated with specialty drugs and biologic, which as the highest priced medicie often run $50,000 to $100,000 per year.  Some of these drugs can cost as much as $300,000 to $400,000 for an annual treatment. “But even drugs for common conditions like diabetes have been increasing astronomically and creating affordability issues for patients,” he says.

I do not consider price increases by brand-name manufacturers an abuse as some do but rather a skillful use of making a profit, legally, and within the boundaries set forth by the laws of our land. Making a profit for your shareholders is not an illegal act but is really what is expected by those who invest in these companies.

David Mitchell of Commonwealth Fund acknowledges: “You deserve a return on that investment. For a small molecule drug, a period of exclusivity is five years. For an orphan drug for a small population, the period of exclusivity is seven years. For organics, it is 12 years. During that period of exclusivity, you are able to exercise monopoly pricing power. The short-term outcome of that is that drug companies are able pretty much to charge whatever they want, and we have no way to stop them.”

Instead of complaining about the high prices, perhaps some of those elected officials should learn how to run the biggest company of all, the U.S. government, as efficiently as the drug companies run their business. Why not change the laws that permit what you consider so wrong?

Former Congressman Henry Waxman, who co-sponsored the 1984 Hatch-Waxman Act that reformed the system for drug approval and patenting, said companies defend high prices by claiming they need money for research and development.

PHRMA, the trade association for the pharmaceutical industry, is quite powerful and has increased its lobbying and budget for advertising. Neither is illegal. Has anyone checked the price increases in cable television, tickets for sporting events, theater tickets on Broadway, apartment rentals in Brooklyn, apartment purchases in Bedford-Stuyvesant? All legal. 

David Mitchell points out that much of the research leading to new medications is done through the National Institutes of Health using tax dollars. That is true. He also says that drug companies spend more on sales and marketing than on research and developmen, but Waxman says many on Capitol Hill believe high prices for existing drugs help fund new ones. Probably also true.

The consensus in the Congress has consistently been that they did not want to enact price controls. The alternative to that was to have competition with a generic drug.

Change the rules that allow for fraud to proliferate as now shown by the Office of Inspector General, Criminal and Civil Enforcement, and the U.S. Department of Health and Human Services. Just this past June, the former president of Oregon Foster Care Agency was sentenced to federal prison for theft and money laundering. Also in June, the former medical director and two former operators of a Houston medical clinic were charged in a multimillion-dollar health care fraud scheme.

I say, eliminate “pay for delay,” eliminate “evergreening,” which is the making of small changes to drugs to delay the manufacture and sale of generics. Eliminate the “phony prices” and “rebates” as currently exists.

Bertram Drachtman

Great Neck

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