People fight battles in hopes of finding peace. Fifty-eight-year-old MaryLou Townsend, a pancreatic cancer patient, approached her will to fight following her diagnosis in much the same way. However, somewhere between the frantic trips to the OR and frequent chemotherapy treatments, the bills piled up. And true to its word, the insurance company covered charges in the plan, fighting the hospital and drug costs every step of the way. A daily blood thinner for Townsend cost over $1000 a month and “had to be paid out of pocket” (Aronczyk). After she died, her husband and daughter were left with about $100,000 in medical debt.
The benefits of life-saving drug therapy, while apparent, has a looming cloud of rising costs darkening the light daily. The price of prescription drugs for terminal illnesses is a contributing factor to medical expenses and by extension, bankruptcy. Pharmaceutical companies go unchecked as they set astronomical, arbitrary prices on medicines for diseases. In 49 out of 50 states, the leading cause of bankruptcy in 2014 was found to be medical debt (Stech). (Massachusetts was the only state in which, medical debt came in second to loss of income.) Due to the lack of regulation over biomedical industry by the U.S. government, those who market and sell the pharmaceutical drugs make enormous profits while their consumers are left scrambling for money to pay for them.
Patients who suffer from severe, life-threatening illnesses, like cancer, realize the large role money plays in treatment. Therefore, instead of worrying about only fighting, they worry about “paying the bills—[the family] paying the bills after [the patient] was gone” (Aronczyk). Now families are left with both emotional and financial stress. It may not seem like it when drug prices at set at the corporate level; however, the job description of biomedical companies is to quite literally put a price on human life.
Medical professionals agree that these rates have the potential to be outrageous. In an interview with NPR, Dr. Ayalew Tefferi, M.D., hematologist at the Mayo Clinic, discloses that his patient cry at “these drug prices [that] are completely unsustainable;” he claims that “pharmaceutical companies are in greed mode…[and] completely unregulated” (Whitehead). The current situation allows physicians to feel helpless as they administer treatment. Although it is not part of a clinician’s job to verify the expenses of treatments and procedures with their patients, it is difficult for them to see their patients giving up on certain treatments or not following through with their medication due to monetary issues. Many including Dr. Tefferi believe in the active change beginning with the legislation of America’s health policy.
America’s regulation of healthy policy began in 1984 with the Hatch-Waxman Act, more formally known as the Drug Price Competition and Patent Term Restoration Act. Its purpose encompasses the establishment of cheaper manufactured generic drugs by the pharmaceutical industry. The Act was the first of its kind on prescription drug pricing. The aim remains to lower drug costs for small molecule biosimilar medications by generic brands as compared to brand name companies. This is made possible by the removal of clinical trials, studies, and research that normally must be executed and approved by the FDA for brand new medications before they are available on the market. According to The Journal of International Human Rights, “consumers are unlikely to see comparable biosimilar price reductions resulting from the BPCIA’s enactment” (Timmis, 215). While this Act was adequate for its time and did succeed, it’s effectiveness ends there.
Various countries have different methods of regulation upon the inflation of drug prices and how they are set, such as Great Britain’s Pharmaceutical Price Regulation Scheme of 2014. Contrastingly, United States law currently does not contain regulative policies applicable to the regulation of the skyscraper prescription drug prices by for-profit companies. So if medications for terminal illnesses in America are considerably more expensive than the European or Asian counterparts, then quite possibly the same companies are marketing at two different rates in two different locations. Logically Americans may try to outsource their own medication by ordering from abroad. However, in an effort to prevent illegal substance abuse, the Food and Drug Administration (FDA), a regulative body responsible for promoting and protecting the state of public health in the nation, placed a 90-day limit on imported medications as a part of the 2006 revision to the 2003 Medicare Prescription Drug, Improvement, and Modernization Act. Thus, preventing American physicians and residents from consuming imported drugs.
About a decade after the Hatch-Waxman Act, the United States patent law was increased to a period of 20 years, resulting in delayed access to generic medications to consumers across the nation. What started as an innovation incentive for pharmaceutical firms by extending their copyright privileges on medications by the extension of free reign on drug pricing, cascaded to the modern world of expensive drug therapy treatment programs and uncontrolled multinational pharmaceutical corporations.
The patent period extension provides innovation incentive for pharmaceutical companies by creating more competition as generic medications compete with their brand name bioequivalents. However, there is no further regulation on creating more competition to keep all or most medicine prices low. For years the biomedical industry has been a monopoly of which company dominates which field of medicinal drugs and equipment. From 2000-2014 about 60 biomedical companies underwent either acquisitions or mergers. The result of this? The company that set the higher prices for their brand name market would choose the prices of all new, patented medication down the line creating a monopoly of the industry with prices based on what the market can handle.
Without a regulating or negotiating body for pharmaceuticals in the United States, drug prices are left to the market competition, resulting in prices up to 16 times higher than their European or South American counterparts. The for-profit manufacturers argue that they must return the investment on high-risk research, which reflects the economic value of medicines (Hirschler). But sometimes, these corporations are found guilty of using price markups, not only to make profits, but also to cover the expenses on research for failed, unmarketable drugs.
There are multiple loopholes where money can be made for these companies. For example, the FDA only retains the power to check the science behind a medication before profit; they cannot regulate costs or negotiate prices. The FDA can only determine whether one medication works better than its immediately previous counterpart. They don’t have the power to measure the quality or quantity of improvement between the new drug and the one immediately preceding it. The newer editions of drug therapies are radically more expensive than their predecessors but only slightly more effective, perhaps providing the user with only a few more weeks to live than the significantly less expensive than previous drug treatment programs.
United States federal law is part of the problem. According to the federal patent law, in 1995 the patent period increased for up to 20 years. Meaning that, now companies that market generic medications must wait the full patent period of twenty years, before they are able to manufacture the medications of similar organic makeup without separate approval and clinical trials. The result being that prices will drop and there are no copyrights on the similar prescription drugs. Extending the patent period, contradicts the original intent of the Hatch-Waxman Act; it actually protects companies from free-market competition and the natural regulation of prices rather than solely serving the purpose of the Hatch-Waxman Act to lower drug prices by allowing generic brands to sell their bioequivalent medications for a much lower rate than brand name companies.
As far as insurance coverage goes the Center for Medicare/Medcaid Services sets precedents for those with government provided healthcare. And by nature, other insurance companies follow the CMS’s example to match national healthcare laws and standards. Pharmaceutical firms use this to their advantage, as the ill citizens of the United States become their primary mode of profit. In other countries, there are caps put on the price of prescription drugs, and prices are negotiated “based on…the actual therapeutic benefit” (Llamas). And although, these multinational corporations still receive a healthy profit from other countries, their costs in the United States are up to 40 percent higher. This dilemma forces ill Americans, to either come up with the money or accept their diagnosis and amount of time left to live as their immediate fate. This leaves many bankrupt and has families facing both emotional and financial loss, when at least one of these is preventable. Many European countries possess a Disclosure Code, requiring all healthcare or pharmaceutical firms to record and report each of their gross profits, their spendings on research, travel expenses, and collaborations. In comparison, the American equivalents to checks on the healthcare and providers market are clearly lacking.
The magnitude of this issue is being realized, as companies are now being investigated or called out to explain how they got to the listed market price. Presidential candidates are also calling attention to this tear in our health care system, as they discuss their plans for healthcare, should they be elected. Congress can no longer debate this issue as if it is just another political debate on the extent of regulating a capitalist free market economy. The limited regulations the United States possesses often contradict one another. Turing Pharmaceuticals, in September 2015, was caught in a controversy that they had increased the cost of Antiretroviral pills (AIDS drug) by more than 5000 percent overnight. After much public scrutiny and attention from presidential candidates, the CEO stated that they would mull over the decision to reduce prices, but failed to mention how (Harven). In December of last year, Pfizer, one of the largest multinational, pharmaceutical corporations around, set the price for a new breast cancer drug at $9850 per month. The badly documented journey of how Pfizer reached its price tag for this drug has US Congress rallying for its citizens. A Senate committee is actually having a hearing on drug prices that started in December 2015 and will restart when Congress reconvenes for the New Year (Rockoff).
American drug prices have more to do with the prices that the market can bear, rather than rewarding innovation, research, and risk in the drug industry. The minimally updated law since its passing through Congress in 1984, does not quite fulfill lowering costs of drugs. While generic drugs are cheaper, there is a lack of motive for innovation even with the extended patent law. Still, the workings of the American Society of Clinical Oncologists (ASCO) and many other organizations are attempting to make drug treatments more affordable cannot stand on its own. Pharmaceutical companies are protected by American laws, and not checked as far as how they arrive at their pricing. And yet, these corporations are able to advertise and appeal to patients directly while the cost of individual drugs is shielded to patients and physicians alike behind the code of copays and large insurance bills (L.N.). The further repercussions of increasing drug prices are as far as higher insurance costs, more “a la carte” treatment payments, and lesser holistic coverage. And in the event that companies and employers are required to pay high health insurance premiums for their employees, they are less inclined to raise salaries leading to a continuation of this morbid cycle (L.N).
According to a study from the journal The Oncologist, up to 20% of patient participants “took less than the prescribed amount of medication, partially filled medication, or avoided filling the medication altogether” (Zafar). This issue is present all around and people are desperate to have a life after treating the illness or at the very least, to allow their families to have lives after they are gone. The market of drug therapies works in paradox with an intention to save lives biologically, while destroying them financially.
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