More than half of all Americans take some form of a prescription drug, not to mention various over the counter drugs, vitamins, and other supplements . In fact, the United States is one of the most heavily medicated countries in the world, but also pays far more to stock its medicine cabinet than most other high-income nations. Surveys of drug prices show that Americans can pay somewhere between two to six times more for the same drug in the United States as opposed to other countries . For example, Gleevec (a cancer treatment) costs $6,214 (per month/per customer) in the United States, compared to $1,141 in Canada and $2,697 in England. High drug prices are an issue that affects nearly everyone and is one of the few issues that both sides of the political spectrum can agree on. In fact, a recent poll found that 72% of Americans think drug costs are unreasonable and want drug companies to release information on how they set prices . The demand for transparency on pricing and profit margins is mounting even as drug prices continue to climb.
High drug prices have a serious impact on people’s health. This is particularly visible in the case of drugs that treat chronic conditions such as diabetes. A recent study showed that 30% of patients ration insulin, either by skipping doses, taking a lower dose than recommended, or even not refilling a prescription due to the cost . Tampering with prescribed dosages can result in a decrease in glycemic control, and has even caused several fatalities. Unfortunately, the climbing modern drug prices are costing some people their lives as they try to stretch their supply thin . Some have even resorted to buying older vials of insulin, the original kind released in the 1980s that could cause dangerously low blood sugar. The irony of this is that when insulin was first isolated, the two Canadian researchers (and eventual Nobel Prize laureates) immediately saw its lifesaving potential and sold the patent for a total of three dollars. At the time, Type 1 diabetics would die within a few years even if put on a starvation diet . Their discovery saved countless lives, but because diabetics require a constant supply of insulin, high drug pricing will have a heavy impact on their everyday lives.
Recently the CEOs of several major pharmaceutical companies were brought in front of Congress to testify about spiking drug prices. The CEOs from Pfizer, Merck, Sanofi and other pharmaceutical companies deflected blame for their list prices, and instead shifted the responsibility to insurance companies and pharmacy benefit managers, despite an admonishment from Senate Finance Committee Chairman Charles E. Grassley (R-Iowa) against finger-pointing . Furthermore, shifting blame is exactly why progress in lowering costs has been minimal. Pharmaceutical companies blame insurance deductibles, for example, while the insurance companies claim that the companies’ profiteering is causing the spike. Pharmaceutical companies also argue that their high prices are justified because of the cost and difficulty of developing new drugs. Obtaining the necessary FDA approval can take years, and only a handful of the potential new drugs ever make it to market. Thus, pharmaceutical and insurance companies are seemingly engaged in a perpetual blame game that has proved unconstructive in lowering drug prices.
In comparison with the US, other countries have significantly lower drug prices. One of the reasons for this is because most nations only have a small number of large organizations purchasing from drug manufacturers. For example, in the United Kingdom, the National Health Service (NHS) purchases the entire country’s supply of medicine. On the other hand, in the United States, individual insurance groups, hospitals and coverage plans buy for individual consumers, and each negotiate their own prices. Medicare is legally not allowed to negotiate prices with drug manufacturers . The limited number of buyers in other countries forces pharmaceutical companies to be more sensitive to what they charge, while the fragmentation in the United States allows for unregulated, skyrocketing prices. In addition, most countries have policies to lower drug prices, including price controls, regulations that limit the profitability of drugs, and cost-effectiveness thresholds (computed through research on comparative efficacy of drugs, which the FDA currently has no authority to conduct). There is no federal research on comparative efficacy of drugs, information that would allow for direct comparisons between drugs and help consumers find cheaper alternatives, driving down the cost of drugs. The lack of these systems in the United States results in higher drug prices and contributes to lack of access to healthcare.
The congressional hearing is a step in the right direction, but increased bipartisan scrutiny is essential to changes that lower the drug prices for those that need them. All parties need to be held accountable for the unsustainable and harmful way that higher drug prices have been a moneymaker. What goes into the price of a vial of insulin is deeply complicated, which makes simple solutions difficult to find. However, more hearings are planned to be held, signaling that perhaps enough demand for transparency and awareness of the drug pricing issue has built up to finally force changes.
Edited by: Soyi Sarkar
Illustrated by: Eugenia Yoh