On someone else 's misfortune
"Dirty secrets" of Big Pharma
Earl Harford, a retired professor from Tucson, Arizona, recently bought a monthly dose of pills that he has to take in order to maintain his condition with leukemia. The purchase price – $ 7,676 – is three times more than what he paid in 2001, when he started taking this medicine.
Over the years, he has paid more than $140,000 from his retirement savings to cover that fraction of the drug's price.
"The pharmaceutical industry is profiting from people in this condition," Harford says. "They haven't improved the medicine; they haven't done anything other than keeping it in production. How can they justify it?"
Big Pharma (large pharmaceutical companies) The United States is in the throes of the greatest period of centralization of capital in a decade. This is evidenced by the takeover offer worth more than $ 100 billion, which Pfizer (Pfzer, USA) sent to AstraZeneca (AstraZeneca, UK). However, the reality remains unchanged: drug prices continue to defy the laws of gravity.
Since October 2007, prices for well-known brands of medicines have soared, which has accompanied a twofold increase in the cost of dozens of created drugs used in the treatment of a wide range of diseases: from multiple sclerosis to cancer, hypertension and even erectile dysfunction, as evidenced by the results of a study conducted by Destinationrx, the creator of software for managing the health insurance system. While the consumer price index increased by 12% during this period, one diabetes drug trembled 4 times, and the other by 160%.
Initial drug prices are also rising. Taking one of the 15 drugs used in the treatment of oncological diseases that have been created in the last 5 years costs more than $ 10,000 per month. Taking a cholesterol–lowering drug in people with a rare hereditary disease costs $311,000 a year, and a drug used in the treatment of cystic fibrosis of the pancreas costs $ 300,000 a year (despite the fact that its development was partially paid for by philanthropists).
The latest series of acquisitions could lead to even more price increases, says Robert Kemp, an economist at the University of Louisiana at Monroe. This will happen because the more medicines a company produces in the pharmaceutical industry, the more it has the ability to dictate prices to the buyer. "In general, the concentration of capital leads in practice to higher prices in most industries," Kemp reports.
Another reason for the rise in drug prices is the competition between patented drugs and generics (medicines whose active ingredient has expired patent protection). Drug manufacturers raise the prices of patented drugs to cover the losses associated with the loss of patent protection of other drugs. The closer the end of the patent protection period of the drug comes, the more the price is inflated, experts say. As a result, despite the fact that generics, which are much cheaper, account for 86% of the drug market in the United States, the total spending of Americans on prescription drugs is only increasing (by 11% over the past five years).
Patents have been protecting against competition with generics for many years, and the US Congress prohibits one of the largest buyers of medicines – the state Medicare program – from negotiating drug prices directly with manufacturers.
Manufacturers justify the steady rise in drug prices with development risks, ever-increasing costs of doing business, the great value of their products and the need to invest in new developments. And for attending physicians, algorithms are being developed to evaluate the cost-effectiveness of expensive drugs, which are strongly recommended to be used when discussing a treatment plan with patients.
In fact, the way pharmaceutical companies set prices for medicines is "one of the dirty secrets of the industry," says Bernard Munos, a former representative of Lilly's management, now the founder of the biomedical innovation research center, a consulting firm in Indianapolis. "Everyone participates in inflating the price to the maximum, because they can all profit from it with impunity," he notes.
According to Bloomberg – Big Pharma's Favorite Prescription: Higher Prices.
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