Guest Columnist

Action is needed to address drug costs

Chief Executive Officers of pharmaceutical companies testify before the Senate Finance Committee on
Chief Executive Officers of pharmaceutical companies testify before the Senate Finance Committee on "Drug Pricing in America: A Prescription for Change, Part II" Feb. 26, 2019 in Washington, DC. From left to right are Richard A. Gonzalez, chairman and CEO of AbbVie Inc; Pascal Soriot, executive director and CEO of AstraZeneca; Giovanni Caforio, chairman of the board and CEO of Bristol-Myers Squibb Co.; Jennifer Taubert, executive vice president and worldwide chairman of Janssen Pharmaceuticals, Johnson. (Win McNamee/Getty Images North America/TNS)

Healthcare is prominent once again in the upcoming election debates, with the rising cost of drugs taking center stage. Americans spend more per capita on medication than any country in the world, with prices even two times more than in any other industrialized nation. We have all seen the tour buses that make monthly forays into Mexico and Canada so Americans can stock up on insulin and other costly drugs.

A 2016 survey showed that 14 percent of Americans either did not fill a prescription or skipped doses of medication because of cost. Among the underinsured or uninsured, that figure was 30 percent. As a doctor with both a hospital-based and clinic practice, I regularly encounter patients who do not take prescribed, necessary medications because of the cost. This has a direct impact on their health and survival.

The pharmaceutical industry’s defense of this price gouging is the high cost of research and development (R & D). An examination of this claim, however, reveals a different equation. Between 2006 and 2015, 67 percent of pharmaceutical companies saw a significant increase in annual profits. During that same time span, however, R & D expenditure barely budged, increasing from $82 billion to $89 billion. In fact, much of the basic research leading to new medications originates in publicly-funded universities and research institutes. Of the medications approved by the FDA from 2010 to 2016, the development of all 210 was at least partially supported by public funding. R & D typically accounts for around 20 percent of a company’s revenue, but a more significant expenditure by the pharmaceutical industry is legislative lobbying and marketing.

They spend more than any corporate entity on influencing legislators, $3.9 billion over the past twenty years. The industry also spends $20 billion on marketing to doctors and $6 billion advertising prescription drugs to consumers each year.

Why are insulin, chemotherapy, inhalers and heart medication so much less expensive in Canada, Germany, Norway? One reason is they have nationalized health care systems that control costs, especially of pharmaceuticals. In most industrialized nations, the government contracts directly with pharmaceutical companies, agreeing on what the maximal cost may be. Even in the American “nationalized system” (Medicare), there is no limit on which drugs may be approved or what the charge will be. For example, newer cancer drugs often increase survival by only a matter of months yet many carry a price tag over $200,000 per year. A 2008 survey of Medicare patients taking at least one of the top five selling oral cancer drugs showed 70 percent discontinued treatment due to the expense. `

A recent Kaiser Foundation study showed 86 percent of Americans favor allowing the government to negotiate drug prices paid by Medicare recipients. That would have a significant impact as Medicare Part D currently pays one-fourth of all prescription drug costs in the United States. Another strategy used for expensive immunotherapy regimens is a contract whereby, if the patient does not show improvement in a set period of time, there is no charge. In some states and in the VA system, drugs are reviewed for effectiveness. If there is no therapeutic advantage, a newer, more expensive drug may not be approved. This may sound cruel and controlling, yet the greater tragedy is the wealthiest pharmaceutical network in the world failing to provide even basic medication to millions of Americans, for reasons of cost.

Let your senators (Chuck Grassley 202 224-3744, Joni Ernst 202 224-3254) and representative (Abby Finkenauer 202 225-2911) hear from you about medication cost. Encourage support of HR 1046, the Medicare Negotiation and Competitive Licensing Act. Ask that members of Congress listen to you, not paid lobbyists for drug companies.

• Dr. Mary Kemen lives in Cedar Rapids.

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