“Your money or your life!” was a laugh line in a radio skit by the comedian Jack Benny, who pretended to be a skinflint. To the robber’s demand, Benny replied, after a long pause, “I’m thinking. I’m thinking.”
Today, your money or your life is a deadly serious dilemma that confronts Americans not so often at the point of a gun as at the pharmacy counter.
As many as one in every five Americans are trying to cope with Big Pharma’s morally indefensible pricing schemes by leaving prescriptions unfilled, skipping doses or splitting pills. Such desperate economies, coupled with unwitting failure to take medications properly, are said to contribute to some 125,000 deaths every year and as much as $289 billion in additional health costs.
The cost of drugs is one of the reasons why Americans spend more on health care — with less to show for it — than almost anywhere else.
Though it’s not the most outrageously priced lifesaving drug, insulin is one of the most common and has become Exhibit A in the national outcry. The doctors who discovered insulin sold their patent to the University of Toronto for only $1, intending it as a gift to humanity. Between 2009 and 2017, the cost of a single vial of Humalog rose from $92.70 to $274.70. It cost only $21 when marketed as the first short-acting insulin in 1996. Feeling political pressure, Eli Lilly & Co., the manufacturer, is now offering the same drug as a generic at half price. But that’s still $45 more than it cost just 10 years ago.
When Nevada enacted a law to make insulin makers disclose more price increase details, the industry hired 70 lobbyists to fight the bill. In Tallahassee, at least 63 lobbyists are registered for the trade group and its constituent companies.
The federal government historically has parroted Big Pharma’s propaganda about foreign drugs not being safe. Such cases are infrequent. In fact, as the New York Times reported, 25 percent of drugs labeled American are made elsewhere in plants inspected by the Food and Drug Administration, as well as 80 percent of the active ingredients used in American factories.
The probability that Canadian imports would help those in need cope raises a fundamental question. Why does the same drug cost less in Canada — and almost everywhere else — than in the United States? It’s because other countries regulate the price of drugs through one mechanism or another. Some stipulate that the price of a drug decline as it ages. Here, it goes just the other way.
The medical industry is immune to the normal effects of competition. For one thing, a critical drug probably has only one, or at most three, suppliers. And when one of them raises a price, the others inevitably do. People who need the drug have no choice.
The United States must face the necessity of drug price controls. Medicines on which people’s lives and health depend need to be regulated no less than the prices of two other essential commodities, electricity and natural gas. Utilities account to the states for their investments and expenses, and are awarded a reasonable rate of return. Big Pharma, on the other hand, accounts to no one but its stockholders, and only in ways that don’t tell whether prices fairly reflect costs.
Congress sought to help with the so-called Orphan Drugs program, which Ronald Reagan signed into law. It gives benefits — including extended patent protection for drugs that might not be otherwise profitable because fewer than 200,000 people would need them. Here’s what has happened with that: Manufacturers have found so many ways to relabel them for other purposes that such best-selling drugs as Crestor, Abilify and Humira have enjoyed “orphan” protection.
No matter the reform, Big Pharma will fight it. Its allies at the U.S. Chamber of Commerce have flooded the internet with propaganda against a U.S. government proposal called the International Pricing Index Model. In test markets not yet announced, Medicare would set price ceilings based loosely on those in Canada and some other nations, and allow drug vendors to compete within those limits. It would apply only to drugs dispensed to Medicare Part B patients in doctors’ offices and hospital outpatient departments, which have faced price increases averaging 9.8 percent a year.
The Chamber claims that this “would block access to life-saving drugs for America’s seniors.”
That is, of course, nonsense.