What is the leading cause of America’s exponentially growing drug prices in comparison to other countries around the world?
Currently, America pays the most amount of money for its prescription drugs and just this past New Year, drug prices were hiked up an at average rate 6.3% which is 3x the rate of inflation. This is terrifying to consider as almost half of America takes some form of prescription drugs. I was drawn to this topic due to its prevalence within today’s society. American’s are struggling to make ends meet because of the financial strain their life-saving medicine is putting them under. What’s even more alarming is that America is alone in this struggle; other countries are able to keep their drug prices low and maintain a profit so the question that naturally arises is what is America doing that spikes drug prices to a point where they are categorized as a luxury rather than a necessity? I initially was introduced to this topic through watching an episode of Patriot Act that delved into the issue and tried to pinpoint the root cause of the problem. After being genuinely interested, I researched a little more on the topic and found that it really comes to drug patents. Drug patents have historically only been used for new drugs so they can be covered under patent protection, which means that only the pharmaceutical company that holds the patent is allowed to manufacture the drug, market it and eventually make a profit from it. Unlike in other countries, US law states that patents can be extended so long as changes are made to the drugs. Now, the law states that only changes have to be made not improvements. They don’t have to prove it’s better, they just have to prove that it’s not worse(Patriot Act). Drug companies are using this loophole to their advantage and it was reported that in the last decade alone, 78% of drugs that received patents were for existing drugs. Our government doesn’t cap drug prices so these drug companies have complete control of their medicine, making it completely legal to sell a drug for hundreds of dollars. Now, drug companies do admit that drug pricing has gotten out of control, they just don’t think they’re part of the problem. They love blaming Pharmacy Benefit Managers or PBM’s. If you’ve ever gone to a pharmacy, they usually tell you how much a drug cost and how much your insurance is paying. PBM’s negotiated that price and take a lot of heat for being the middlemen. When people pay for medicine through an insurance company, these PBM’s will require some form of copayment, 80% of which they keep for profit making them a target for a lot of hate by the public. What’s even more alarming is that Congress has the power to break patents in an emergency. They’ve never done it, but in the past the threat of breaking patents has forced drug companies to lower prices. Drug pricing, especially insulin, has gotten so out of control that many are upset that no legal action is taking place to counteract these absurd prices. All of this back and forth bickering between drug companies, PBM’s, Congress and insurance companies causes us to focus more so on the fighting and not on the repercussions on their decisions. So these four love pointing fingers at each other cause if we can’t figure out who to blame, they all keep making money.
Citation:
Patriot Act. “Drug Pricing”. Netflix, commentary by Hassan Minhaj, 17 Feb. 2019, https://www.youtube.com/watch?v=z7LgT4_jkLA.
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