A recent poll found that 82 percent of Americans say the cost of prescription drugs is too high. Big Pharma, which produces and sets the price for these drugs, clearly deserves the blame.
One of the ways Big Pharma price gouges the public is through its manipulation of the patent system. Drugmakers game the system to extend the patents on existing drugs to block out competition and keep prices high. The big companies will patent minor changes to drugs to keep these products squarely in their grasp. It diminishes genuine innovation and undermines consumer choice. But all is fair in Big Pharma’s pursuit of ever-greater profits.
Big Pharma also manipulates federal funding to increase its bottom line. A Senate report released earlier this year documented this sordid arrangement. It found that government-funded drugs cost significantly more in the United States than in other countries.
For example, one high-profile, brand-name cancer drug costs $424,000 in the United States, but less than half that in Japan. The disparities in the cost of medications for depression, HIV treatment and vision loss are just as stark.
Big Pharma says it charges Americans more than in other countries because raising prices in this nation is how it recoups its research and development expenses. However, the industry receives billions each year from the government to support research and development. Yet, its prices remain sky-high.
Congress realizes the American public wants something done about skyrocketing drug prices, but lawmakers have their eyes on the wrong target. They are pointing the blame at pharmacy benefit managers (PBMs), the groups that America’s health plans hire to stop Big Pharma’s abuses, instead of the drug companies.
Governments, insurers and private employers hire PBMs to administer their drug plans because they know that PBMs have a proven track record in reducing drug costs for their employees and customers. The federal government has found PBMs have saved Medicare Part D 20 percent of its costs, while the Coalition for Affordable Prescription Drugs found that 97 percent of employers who work directly with PBMs are satisfied with their services.
The Big Pharma drug giants have spent heavily to lobby Congress to blame PBMs for high drug costs rather than themselves. They claim PBMs pocket too much of the cost savings they accrue, but this isn’t true. According to a recent Visante study, 65 percent of every prescription drug dollar goes straight into Big Pharma’s pocket, whereas only 6 percent goes to PBMs.
Unfortunately, however, facts often don’t matter. Lobbying power does.
Big Pharma’s “blame the other guy” talking points have found a receptive audience on Capitol Hill, with a handful of lawmakers considering legislation to regulate PBMs. This would only embolden the drug giants to raise their prices higher.
Without PBMs, the drug giants would no longer have to worry about PBMs getting them to reduce drug costs. The prices the drug giants set would be final, and Americans would have no choice but to shoulder the burden.
Big Pharma’s greed is a tremendous problem for our country. It’s the primary reason Americans have to pay so much to get the prescription drugs they need. If Congress truly wants to do something about the high costs of drugs, it will tackle this drug cartel, not the companies that fight it tooth and nail.
The time is now for lawmakers to listen to their voters rather than lobbyists.