The High Cost of Drugs
The pharmaceutical industry is out of control when it comes to pricing their products. Since 2008, prices of brand-name drugs have increased by 127% compared to the consumer price index’s 11%. Only in 2013 the cost of specialty drugs increased by 14%, according to the Express Scripts analysis. This is the main obstacle to control prices in the health sector.
The problem is, it remains unclear what’s the procedure by which the industry establishes the price of a drug. Some treatments today cost up to $1,000 daily, which puts them out of reach of many Americans. The industry cites the high cost of investigations to develop a drug, and says that spending in failed remedies that never made it into the market should also be taken into account.
What we do know is that many U.S. drugs are sold cheaper in other countries that have a public health system. In this case the excuse is that they must recover the money in the internal market. Under this idea, pharmaceutical companies negotiate with generic drug makers to keep prices up, make irrelevant updates to their dugs to extend the patents, and buy drugs to drive up prices, among other practices.
The pharmaceutical industry has been the most profitable, topping Wall Street, with a 42% profit margin in the case of Pfizer in 2013. Most of those proceeds come at the expense of the U.S. client.
That’s why there are bills in five states requesting the industry to reveal the cost of the drugs, among other details, to know why they are so expensive. The measures in Oregon and California were blocked by the pharmaceutical industry. They are still in place in North Carolina, Massachusetts and Pennsylvania, as well as New York State Senator Rubén Díaz’s SB5338.
The industry alleges that those demands are cumbersome and will harm the states and their patients. This is how they want to keep in place a model in which they spend more in marketing than in research, and where prices are as high as the market allows it. This is unsustainable.
Some bills are onerous, but help to create a necessary and urgent national debate about this costly aspect of health care.
