Wait, It Gets Worse: Big Pharma Price Gouging And The Infinite Suffering Machine

By: Jeremy Bond

Ah, 2019.  The memories! When looking back on this sordid year we (the people) may remember it containing the hottest month yet-recorded in human history[1];  an inflection point in violent ethno-nationalism[2], or the year justice remained tantalizing just beyond our grasp[3]. Does our ailing biosphere and society have you down, consumer?  After you download a mindfulness app and purchase a subscription, be sure to become a C-suite pharmaceutical executive. Rest assured, their memories of 2019 will be quite fond.

It has been a productive year for big pharma, despite some speed bumps[4].  Across the industry, more than 3400 drugs increased in price from January to June of 2019[5]. The average price increase of 10.5% exceeds the rate of inflation by a factor of five[6]. One particularly horrifying example is antidepressant Prozac, the cost of which has spiked 879%[7].

In human terms, these hikes represent a distilled, perfected vision of profit extraction from suffering. A recent survey indicates that three in ten Americans have skipped taking their prescription medication as directed due to high cost[8].  Skipping medication often leads to tragic consequences[9].

These price increase exist at the brutal intersection of price inelasticity, shareholder demands for ever larger profits and the life or death decisions made by people that need these drugs[10]. Michael Rea, founder and CEO of Rx Savings Solutions, describes the situation succinctly: “It’s a good that people need, in many cases in order to stay alive. . . [y]ou have a lot of flexibility to drive prices higher and higher.”[11]

This situation is unacceptable. It is untenable. It is morally repugnant. Buying life-saving medication is not a normal market transaction; you pay or you die. Of course, any systemic push for drug pricing regulations and laws must be part of a more comprehensive effort tackling skyrocketing health insurance costs and the crippling influence of money on our politics.

One proposal to reign in drug costs is Sen. Elizabeth Warren’s plan to nationalize the manufacture of generic drugs through a hypothetical Office of Drug Manufacturing[12]. This office would be housed within the Department of Health and Human services and would be granted the authority to manufacture generic versions of “any drug for which the U.S. government has licensed a patent, whenever there is little or no competition, critical shortages, or exorbitant prices that restrict patient access.”[13]

While we wait for anything resembling relief from under the crushing boot of Big Pharma, I suggest some cautious optimism. Even if you can’t afford your Prozac. Even if you need to decide between buying food and a $300 generic EpiPen (manufactured by Mylan, who conveniently also makes the name-brand version)[14].  This naked greed will ultimately suffocate itself. Some CEOs are rapidly trying to get ahead of the growing political wave before substantive regulation makes decisions for them[15]. Such shameless profiteering exposes the rot central to unchecked capitalism. This issue unites real people of all political persuasions. Our health is more important than a pharma executive’s bonus. We will prevail if we fight for it.

 

 

 

[1] See Brady Dennis & Andrew Freedman, Here’s how the hottest month in recorded history unfolded around the world, Wash. Post (Aug. 5, 2019), https://beta.washingtonpost.com/climate-environment/2019/08/05/heres-how-hottest-month-recorded-history-unfolded-around-globe/?outputType=amp

removed underline per rule 18.1

[2] See Nicholas Bogel-Burroughs, ‘I’m the Shooter’: El Paso Suspect Confessed to Targeting Mexicans, Police Say, N.Y. Times (Aug. 9, 2019), https://www.nytimes.com/2019/08/09/us/el-paso-suspect-confession.html?searchResultPosition=17

Corrected to remove underline from URL per rule 18.1

[3] See Marc Fisher & Nonathan O’Connell, Final evasion: For 30 years, prosecutors and victims tried to hold Jeffrey Epstein to account. At every turn, he slipped away. Wash. Post (Aug. 10, 2019), https://www.washingtonpost.com/politics/final-evasion-for-30-years-prosecutors-and-victims-tried-to-hold-jeffrey-epstein-to-account-at-every-turn-he-slipped-away/2019/08/10/30bc947a-bb8a-11e9-a091-6a96e67d9cce_story.html

Corrected to remove underline from URL per rule 18.1

[4] See Martha Bebinger, Purdue Pharma Agrees To $270 Million Opioid Settlement With Oklahoma, (Mar. 29, 2019, 2:20 PM), https://www.npr.org/sections/health-shots/2019/03/26/706848006/purdue-pharma-agrees-to-270-million-opioid-settlement-with-oklahoma

Correct per rule 18.1

[5] See Aimee Picchi, Drug prices in 2019 are surging, with hikes at 5 times inflation (July 1, 2019, 11:34 AM), https://www.cbsnews.com/news/drug-prices-in-2019-are-surging-with-hikes-at-5-times-inflation/ correct per rule 18.1

[6] See id. correct per rule 4.1

[7] See id. correct per rule 4.1

[8] See Public Opinion on Prescription Drugs and Their Prices, Henry J Kaiser Family Foundation, https://www.kff.org/slideshow/public-opinion-on-prescription-drugs-and-their-prices/ italicized per rule 18.1

[9] See Sarah Jones, Another Person Has Died After Rationing Insulin, New York Magazine (July 15, 2019), http://nymag.com/intelligencer/2019/07/another-person-has-died-from-rationing-insulin.html correct per rule 18.1

[10] See Aimee Picchi, Drug prices in 2019 are surging, with hikes at 5 times inflation (July 1, 2019, 11:34 AM), https://www.cbsnews.com/news/drug-prices-in-2019-are-surging-with-hikes-at-5-times-inflation/ correct per rule 18.1

[11] Id. per rule 1.2 “See” is not necessary, correct per rule 4.1

[12] See David Dayen, Elizabeth Warren Plan Would Allow the Government to Manufacture Its Own Generic Drugs, The Intercept, (Dec. 18, 2018, 8:54 AM), https://theintercept.com/2018/12/18/elizabeth-warren-generic-drugs-bill/ Per T12, December needs to be abbreviated.

[13] Id. correct per rule 4.1

[14] See Beth Mole, Big Pharma is using faux generics to keep drug prices high, critics say, Ars Technica, (Aug. 8, 2019, 12:55 PM), https://arstechnica.com/science/2019/08/big-pharma-is-using-faux-generics-to-keep-drug-prices-high-critics-say/ Correct per rule 18.1

[15] See Jena McGregor, Group of top CEOs says maximizing shareholder profits no longer can be the primary goal of corporations. Wash. Post (Aug. 19, 2019), https://www.washingtonpost.com/business/2019/08/19/lobbying-group-powerful-ceos-is-rethinking-how-it-defines-corporations-purpose/ Correct per rule 18.1

Twenty-one-year-old Jesimya David Scherer-Radcliff might still be alive if he could have afforded his insulin. KARE 11 reported on Sunday that the Minnesota man had been rationing the insulin he needed to treat his diabetes. “The cost of insulin is ridiculous,” Jesmiya’s father, David Radcliff, told the news station. “It is hard for me to even go in there and look at his casket. He is gone now.” Radcliff added, “I just think this country is backwards and I am a veteran. I have seen other countries and how they operate.”

Scherer-Radcliff’s death is not an isolated event.

Drug prices are rising because of a combination of pressure from shareholders to deliver higher profits and what Rea calls an “inelastic market.”

“It’s a good that people need, in many cases in order to stay alive,” he says. “You have a lot of flexibility to drive prices higher and higher.”

But CEOs who favored the move said it would benefit shareholders in the long run as well.

“CEOs work to generate profits and return value to shareholders, but the best-run companies do more. They put the customer first and invest in their employees and communities. In the end, it’s the most promising way to build long-term value,” said Tricia Griffith, president and CEO of Progressive Corp.

Leave a Reply

Your email address will not be published. Required fields are marked *