Even Talking About Reducing Drug Prices Can Reduce Drug Prices

A study finds that pharmaceutical companies have cut drug prices in response to political pressure.

Comments: 46

  1. "Drug price control is exceedingly difficult to pass" because the pharmaceutical lobby is one of the most powerful in Washington, D.C. It spends an estimated $170 million annually to "persuade" our politicians to vote against any drug price control legislation. Until we find a way to reign in the power big pharma has over our political process, there's no chance any real price reform can occur.

    Governments around the globe regulate the cost of prescription drugs. Why should we pay Gilead, Pfizer or any other manufacturer significantly more for a drug sold on our soil than we would pay for the exact same drug in Europe or India? Why should a Hep C drug regiment cost over $100,000 here for 12 weeks of one a day pills and less than $10,000 overseas? It's nothing short of criminal.

  2. In some countreis, Chile and Argentina, for example, food is abundant and, therefore, cheap. The distance from export markets keeps it cheap. Manufactured goods that are imported are therefore reduced in price to meet the national market.

    The cost of manufactured goods, including pharmaceuticals, is in the machine tools used to produce them. The cost of materials is negligible. It costs as much to manufacture one pill as a million.

  3. Yes, essentially, the USA has been subsidizing global pharm costs, for Asia and Europe.

    What have BHO, HRC, and the Bush family done about that?

    Answer: nothing. That's real work. Res ipsa.

  4. Political machine of our country practices legalized corruption and condones it. Simple reason it is their job rather than public service. Politicians sing and dance price controls from one hand and take money from then other, price controls are not going to happen even if Sun rises from West.

    Gilead is selling Hep C drug in India at $4.29 per pill vs. $1000.00 per tablet and Gilead negotiated it. It started as $10.00 a pile. Gilead licensed 11 companies to do that. Bottom line pharma companies will do whatever it takes to make a sale at the highest price even in India. Interestingly patients fro the developed countries are going to India and getting Hep C treatment. It has become a new business opportunity for the Indian entrepreneurs.

    Song and dance of recovering R&D costs is getting old. Modus operandi is that price will be highest where people can afford them.

    A recent editorial in Fortune magazine suggested that it is CEO fiduciary duty to maximize profits for the investors. Question should be raised do these CEO's have any moral duty towards the customers (patients) who put food on their table. Challenge is their's to take. Does any one wants to take it?

  5. " Challenge is theirs to take. Does any one wants to take it?"

    It is America. Moral Duty comes last to Profit Duty, Greedy Duty and

    Fiduciary Duty (Profit Duty that wears a Tuxedo and has a slight British Accent)

    When it comes to Money , the only Duty most American Corporations is to get as much Booty or Looty as they can. It is their Booty Duty or Looty Duty and it overrides all else

  6. I worked in the pharmaceutical industry for many years. The claims that companies make about the cost of research are ludicrous. Why? Because they don't fire their marketing departments. They don't tell their CEOs that they won't make as much money in a "bad" year. They lay off their research staff. They cut funding for the research they claim to value. They claim that they can't find qualified Americans. That's true; at the salaries they are willing to pay they can't find qualified Americans who have families to support, bills to pay, etc. They also cherry pick their statistics for papers and submissions to the FDA. They refuse to acknowledge the fact that, in many cases, they don't check how the drugs work in women vs. men, children vs. adults, older adults vs. younger adults.

    One could write a novel on the subject of pharmaceutical companies and their pricing. Suffice it to say that it is often predatory, seldom in reach, and too protected to the detriment of the American public.

  7. That novel was written by Robin Cook (Mindbend. Macmillan London, 1985).

  8. "They also cherry pick their statistics for papers and submissions to the FDA."....You may have worked in the drug industry, but you did not work in any capacity even remotely associated with clinical trials and submissions to the FDA. I worked in drug research for a major pharmaceutical company for nearly 30 years. When it comes to submissions to the FDA, drug companies are very careful to submit everything related to a drug in clinical trials. Nothing is cherry picked and nothing is excluded. To make sure everything is controlled and submitted, any use of a drug that is in in clinical trials, any tests, any experiments, anything, is strictly forbidden without authorization of the project team managing the trials. And since the project team contains 20 to 30 senior scientists any suggestion of some internal conspiracy to withhold information is a joke.

  9. Perhaps W.A. Spitzer thinks everyone else has forgotten about the Vioxx debacle as it appears he has rather purposefully done. Or the facts that Eli Lilly hid about Prozac, including its rejection by the German equivalent of the FDA. There's enough evidence out there to prove that his honesty is much like those cherry picked statistics submitted to the FDA. Anyone who doubts it should do a bit of research, One place to start is Melody Petersen's book, Our Daily Meds. But that's just a start.

  10. We are 2 seniors ages 78 and 82. My husband has Alzheimer's and takes medication for this. He also has meds for high blood pressure since he had a TIA a few years ago, osteoporosis pills, glaucoma drops and various over the counter drops and pills requested by his physicians. I have a-fib, recurrent attacks of c. difficile, macular degeneration in both eyes and occasional anxiety problems which must be addressed. I take my prescribed meds as well as over the counter probiotics, drops for dry eye and eye nutrient pills. Our monthly pharmacy bill, even with our part D Medicare drug plan through the AARP provider, is often between $250-$300 per month. Add in the $600 bill for my husband to attend an Adult Day Care program for 5 hours per day 3 times a week. That's quite a hefty sum for people like us who live on a fixed income.
    A word to the wise. Unless you vote for people who will push for universal health care and sit on the pharmaceutical companies, you'd better do a much better job of financial planning for your old age. We thought we had been very prudent in that area. But we have lived longer than our deceased family members and DNA predicted and if we live much longer, the picture is going to get a bit dismal to say the least.

  11. Madam, there is absolutely no proof that "universal health care" would "fix" pharm research. Russia and North Korea have "universal health care." They've created nothing.

    The USA has been subsidizing global pharm costs for 25+ years. What have the Kennedys and Bush family done about that? Nothing.

  12. How do you know that these price reductions are not responses to competition?

    Gilead had to reduce its Hep C treatment drug when AbbVie and Bristol Myers came out with competing products. These companies want to get contracts, and are willing to cut deals.

  13. Because not all of us are so naive?

  14. So we should just tell them to "cut it out"? How about we try something brand new - stop re-electing the bipartisan corporate centrist cabal.

  15. This just shows why government needs to go ahead with legislation/regulation when necessary even if companies say they are willing to do it voluntarily, because the companies may go along for a while but will eventually go back to their old ways. So when companies volunteer to do something congress should be like "well good you shouldn't mind us passing this law at all then".

  16. Socialized Medication

    The development of new drugs is expensive and availability generally depends upon anticipated profits as much as effectiveness. Profit in turn depends on government granted monopoly (patents) and demand. Research driven by profit will favor a weight loss drug over a cure for rare and even fatal disease. A minor improvement on a profitable drug for the purpose of extending the term of the patent can be quite good for the shareholder’s bottom line. Legal monopoly can destroy competition and slow progress in medicine.

    Joe Biden will spend his final year in office attempting to cure cancer by encouraging a wider sharing of research data which is often directly or indirectly funded by government. Imagine the progress that could be made if Big Parma were socialized at least to the extent of rules that would put treatment over profit. Better still, imagine if all medications were. Advances in medication would quickly improve health care. Cures would help the patient and the taxpayer.

    Obamacare has done some good and some harm. Free medication and government managed research would do much more. All health insurance would be reduced by 15% and primary care doctors would be guided by the best available research rather than the latest samples or advertising by big Pharma. When the GOP votes again to eliminate Obamacare and the next president does not veto the bill; socialized medication should be considered as an alternative comprimise gift for all.

  17. "Imagine the progress that could be made if Big Parma were socialized at least to the extent of rules that would put treatment over profit."....Discovery and development of a new drug is very expensive. Clinical trials are very expensive. Most people who have money to invest are looking for the best return on their investment and move their money around accordingly. In general, people who get paid whether they discover a new drug or not are going to be less likely to be successful than those that only get paid when they discover a new drug. The law of supply and demand works everywhere all the time. Good luck.

  18. "Discovery and development of a new drug is very expensive. Clinical trials are very expensive."

    Yes, they are. But not as expensive as the marketing done by the pharmaceutical companies. Of course, only a tiny part of that marketing effort goes to having someone claim that "discovery and development of a new drug is very expensive" without ever mentioning that over the years most pharmaceutical companies were spending more on marketing than they were on research and development. Perhaps W.A. should read the article, Dr. Drug Rep, right here in the NYT that gives a glimpse of only part of the spending done to influence the medical community itself. And perhaps he should admit that the U.S. is one of only two countries that allows advertising for prescription medications in public media. Or would he like to claim that all those ads are provided free as a public service?

  19. Annie - I worked in drug research for a major pharmaceutical company for 30 years. I have lots of problems with the way large corporations are run, and while I was not at all involved in marketing, I can say that most scientists where I worked object to direct marketing of prescription drugs to the public..... But I can also assure you that drug discovery research and clinical trials are in fact very expensive

  20. Isn't a lot of drug research funded by federal agencies such as the NIH in order to improve human health? Why is it that our tax dollars are going to support patent grabbing and profiteering?

  21. There is an important difference between basic and applied research. Both are essential for drug discovery and development. Organizations like NIH are not designed to carry out applied research. What the tax dollars support only represents the basic research portion of what is required.

  22. There's one proven way to control prescription medication pricing: injecting as much competition as possible into the supply chain. And that depends on three things: a regulatory pathway that allows equally effective medications to be pitted against one another, pharmacy benefits management companies that make money when they save patients and payers money, and a deep, practical understanding of human behavior (so patients will accept programs that move them from higher- to lower-cost medications. The biggest driver of prescription price growth today is among "specialty" medications, and that's because we still don't have a viable regulatory pathway for biosimilar (i.e., generic specialty) medications.

  23. Sorry, but competition is not the answer to everything.

  24. " Drug price control legislation is exceedingly difficult to pass, and many prior attempts to do so have failed. At least with political pressure, drug price growth may slow, if only temporarily."

    And the reason for that would be?

    So the interests of the Drug Companies outweigh the interests, wellbeing and health of the the 300 MILLION U.S Citizens who ALONE in the World pay the most for their Drugs than anybody else!

    So strange that most of Europe, Parts of Asia , Australia, New Zealand ...so many countries tell the Big Drug Companies to go take a Flying Jump and pay them so much LESS than American Drug Representatives in Congress are willing to even try...As these Politicians voted in by the People and supposed to Represent them and the best Interests, instead have become Drug Representatives protecting the massive profits of these companies that will not hesitate to Charge $1000 for a pill that everyone else in the world pays $4 for.

    I'm Australian, get Free Health Care as do ALL Australians and 90% of all Prescription Drugs (the same ones you get in America ) cost me US$21 a pack and NOTHING if my Family spend more than US$800 on them in a year.

    If retired, Poor or Unemployed then any drug costs US$3.50 a box.

    I won't tell you about our Top Private health Cover with a deductible of $500 once for a family in any year covers dental all surgery, private room EVERYTHING. Family of 5 - 1 Smoker 1 with congenital Heart Disease, 3 boys

    US$195 a MONTH. YEP-that's it.

  25. Could you please provide an example of the drug discovered, developed and first introduced into clinical practice in Australia? It's great that your government is able to piggy-back on the results of the R&D effort underwritten by the American patients - but boasting about this free ride is somewhat indecent...

  26. Incorrect, not all drug companies are based in the U.S. AND much Research is done collaboratively through institutions throughout the world.

  27. Could someone explain to me why a drug from the same manufacturer that is over the counter in the rest of the developed world is prescription only in the United States and costs four to five times as much? I used to buy it from Canada as an over the counter item, but Canada will no longer send it to the United States.

  28. Each country has it's own laws and what is considered to be over the counter depends on the laws of that particular country. What is considered an active ingredient is different from country to country. As an example zinc chloride is considered to be an active ingredient in Canada but not in the US.
    Becasue Canada has a national health care system when they purchase purchase pharmaceuticals the tax dollars of the Canadian people pay for some of the drug costs. If you are purchasing drugs from Canada but do not pay taxes their you are benefiting from the pockets of the Canadians.
    Canada does negotiate pharmaceutical prices as a country so again their are differences based on th system of government.

  29. Ellison, Wolfram, and author Austin Frakt have direct access to names and at least estimated salaries+benefits packages for each of the top ten executives at SmithKlein Beecham, Merck, Pfizer, Bristol-Meyer Squibb, PHARMA, et al. and their major lobbying agencies. Such information is indispensable to any view any reader attempts to form on this topic, and should be provided prominently in the body of such an article.

    "Last November, an executive of the largest advocacy group for drug manufacturers suggested that a drug’s price should be commensurate with the value it provides."

    "The value it provides" to whom?

    Soon as the pharmaceutical industry is nationalized, to the eternal benefit of all citizens, the lucrative private impulse to greed and extortion is removed from any equation concerning the health of Americans.

  30. As soon as the Post Office takes over the pharma industry you'll see innovation go "pffffft"

  31. No, jackinnj, I've a whole file here, a la Joe McCarthy, of top research pharmacologists who'd be happy to work for a $million/yr in NIH state-of-the-art labs, entirely bypassing the overpaid paper-shufflers in the current industry's bloated executive suites.

  32. How to lower drug prices:
    1: Ban TV advertising of drugs.
    2: Elect a Congress that represents voters, not the drug industry.
    3: Reform campaign financing by overturning the Citizen's United Supreme Court Decision.
    4: Elect a President that would not name the likes of a Scalia, Alito and Thomas
    to the Supreme Court, nor let the CEO of Novartis write the Medicare Part D fiasco.
    5: Try to stay healthy

    5: Try to stay healthy.

  33. Odd. Jeb! and Eric Cantor don't seem to have benefited from Citizens United. Looks like advertising doesn't always work, does it?

  34. In other words, vote for Bernie Sanders.

    And don't even think about voting for one of the Radical Republicans in their Clown Car.

  35. Costs for pharmaceuticals from research companies is not straightforward. Not only are you trying to recoup up to 1 billion dollars in research costs, make a profit but you are also making money to invest in new products. The last that I heard was that only 2 percent of new chemical entities actually make it to market. So the cost for the other 98 percent must be paid by the 2 percent that make it. The cost for innovation is high. The question is, is it worth it. From my perspective yes. If it was not for an innovative drug product my daughter would be crippled. Would I pay any amount that I had to for this, yes.

  36. Research costs are largely occurring in the research universities being funded by NIH, as in the case of the drug Solvaldi, developed by Emory University.

    Hepatitis C could be largely eradicated in the US with aggressive treatment because it is transmitted primarily through reused needles for tattoos, drugs, etc.

    But the exorbitant pricing strategy of Solvaldi is designed to maximize revenues, by treating only the sickest and allowing the rest to remain untreated to continue to infect others.

    That we can't gace the reality of this as a society says alot about the US today.

  37. "Research costs are largely occurring in the research universities being funded by NIH, as in the case of the drug Solvaldi, developed by Emory University....What information or resource can you quote to support your claim? I spent 30 years working in drug research for a major pharmaceutical company, and I can assure you that while research universities are good at basic research (which is essential), they are very far removed from being able to do the applied research required to produce a useful drug.

  38. I understand exactly what you are saying.

    But, why should Europe and Canada get the very same drugs cheaper, but we have to pay for all the research and development of these critical drugs?

    Shouldn't they pay some of the R & D and we pay less? Seems only fair to me.

  39. Considering any future solution of "paying for value" is fraught. Part of the problem is any blind belief than all social goods can be commodified and accurately represented by a market price. How do you measure the value of a single drug to society (and this might leave many orphan drugs right where they are). Who gets to make the decision as to what level of "value"--however measured--deserves a specific price? Do we then reduce patent protections? Various groups will either over- or under-state the perceived value of a drug. Some of the best bets for drug price constraints lie with insurers (and they will not be immune to making life difficult for some patients due to formulary restrictions). This is why big pharma was to pleased when Medicare was not allowed to bargain directly for drug prices. That needs to change. Mr. Frakt is correct. There is no quick fix.

  40. I worked for a major pharmaceutical company for thirty five years. There is a lot more to the story; your article omits a lot of facts. Every time I read such an article I am more convinced the lack of business acumen is so obvious with both Hillary Clinton and Bernie Sanders.

  41. pharmaceutical companies in the public sector are effectively required to maximise their profits for the benefit of investors, which -- directly or indirectly -- include individuals like you and me.

    i'm afraid simplistic "us vs. them" arguments are unhelpful. if you posit that high drug prices are a problem, you must acknowledge that such prices are the byproduct of a system...and pharmaceutical companies are only one of multiple stakeholders in this system.

    a systemic problem demands a systemic response.

  42. I don't need an article written in 2016 to know this. I knew this fact in 1993. I knew when Hillary spoke of this in 1993 and I was the least surprised of this result. I have repeated this fact to anyone I could corner for all these years.

    This tells me that the healthcare industry is highly allergic to Sunlight. Our best disinfectant to cure us from healthcareindustryitis.

    Hillary Clinton is the Best Person to take up the additional work to bring health care parity to America. She will not suffer fools like the GOPerShe will be a tough Mom who will to hesitate to bring the GOPer babies down to the woodshed for a "lesson."

  43. Considering their image is that of insurance companies, used care sales men, and congress then I don't think they care about it.

    This is an industry that has one company that is going to spend $160 billion to buy another company to save $2 Billion a year in taxes.

    The bad actors happen to be nearly ever company in the field. Pfizer just raised the prices of it's drugs by 10% on January 1st. We have entered a near recession for the last decade and they are bragging about getting drug prices to only go up 3 to 5% while wages are stagnate?

    The federal government should use the powers it has "March in" and just take the patents at this point. These are companies that charge people 500,000 for medicine and then fund groups that will spout outrage at this until the government pays them off.

    Enough is enough.

  44. Considering that the drug companies argue that they need higher prices to cover advertising budgets, why do no media companies cover how much they spend, and how much media makes from this "free market" argument for prescribed and medically justified purchases? There was a time, "back in the day," when advertising prescription drugs was inappropriate. Of course there as also a time when political debates were without advertisers and on all media. Ah, I guess it's "the market" that changes those rules... Jerks!

  45. The price of Big Pharma increased over the years as a direct result of the FDA's removal of the ban on advertising. The more money spent on advertising, starting slowly at first, the more prices rose. Nobody heard of such drug prices as there are today. Also, nobody ever saw so many Viagra, Restasis, Lipitor etc. ads as ever. Want to lower prices? Reinstate the ban on advertising. I can't fathom why anyone would take any medication after listing to the rapid-fire low voice-over at the end of these ads that tell of all the potential complications.

  46. Isn't it amazing that the conservative Republicans who constantly extol the virtues of competition and the free market won't even consider letting drug companies compete for Medicare? Isn't that called hypocrisy?

    The VA does it quite successfully, thank goodness.

    Drug prices may not increase - for awhile - but when attention fades, they will jack them up as high as they can.

    Unbridled greed is hard to control; whether it be the greedy drug companies or greedy conservative Republican politicians who want campaign money so they can stay on the public dole.