Viral Price Hike Story Puts Prescription Drug Costs Back in SpotlightThere’s no doubt that advanced technology, research, and development have made humanity healthier. In fact, many drug companies today have provided countless people with years or even decades of extra time in this life. In the past, life expectancy rates were leaning toward the 30’s or 40’s, but these days, due to medical technology, humans tend to live longer, into their 80’s, 90’s, and even over the age of 100. Many conditions, such as high blood pressure, can be controlled using pharmaceuticals, and in many cases, the cost of necessary drugs is handled by insurance companies.
Health professionals are more eager to provide service than ever, but patients are feeling the pinch.
Prescriptions Seem to Cost More Than Ever
So, with medical technology on the rise and humanity having an ever-increasing supply of life-saving drugs available, why does it seem that important drug costs are on the rise. Well, a few things factor into the equation. First, the actual cost of drugs. Many pharmaceutical companies spend years to develop, research, and then test new drugs. Also, the Food and Drug Administration, or FDA, can make it complicated to get a new drug approved. Even if the FDA approves a drug, then it needs to be marketed. This can mean spending money on everything from television advertisements to billboards to digital media. All in all, it can cost millions of dollars or more to develop, research, and market a drug.
Medical professional often have no direct impact in prescription drug prices, but they can potentially affect the overall cost.
The Truth About Production
With the above stated, it’s necessary to discuss production, administration, and the associated costs. Yes, it’s certainly true that a new drug may require millions of dollars to be spent in order to bring it to market, the production costs of prescription medications are often very low. In some cases, pharmaceutical companies can produce pills for pennies on the dollar, and once a generic version is released, costs may be reduced even further. However, these same companies that are paying under a dollar per dose may raise prices to hundreds of dollars per dose using the rational of “we spent years developing this in order to bring it to you.”
Is This Fair?
Fair or not, it’s up to the developer of the drug to decide the price. If a company has gone through the hard work and spent years creating an important product, it can decide where it wants the price point to be, even if it seems unfair. However, when you speak about medical morals, ethics, and values, this is where things start to get dicey. Take this example: let’s say you held the key to world peace, no one would be killed or injured, everyone would be happy … could you put a price on that key? If you did, what would it be? Would that price be fair?
The Turing Pharmaceuticals Debacle
Daraprim is a drug that was developed to treat HIV patients and those with infections, including those related to malaria, and its development history spans 62 years as of 2015. Strangely enough, the rights to the drug’s name-brand manufacturing were purchased by Turing Pharmaceuticals in 2015. This move was spearheaded by Turing Pharmaceuticals founder Martin Shkreli, and under his watch, Daraprim costs rose from $13.50 per pill to $$750 per pill. Yes, a 5,455% increase.
The Aftermath of Shkreli’s Cost Increase
Upon hearing of this obscure, seemingly low-level company increasing prices in such a way, for such an important drug, the Internet exploded. Social media sites like Twitter and Reddit invited the wrath of tens of thousands of users toward Turing Pharmaceuticals and Shkreli. Shkreli himself took to major news outlets, such as CNN, NBC, and Fortune Magazine to claim that he would reduce drug costs. However, this has yet to be evidenced, and Shkreli has continued to use outlets like Twitter to make snide remarks and essentially insult news outlets across the world.
The Insurance Connection
Shkreli’s actions aside, what is the real cost of healthcare? Is it true that pharmaceutical companies hold the key to power? Well, not really. Generic versions of medications are available in many cases, but this is where insurance companies come in. See, the idea of healthcare insurance is based on a lot of numbers. For example, if you’re 45, a smoker, and overweight, you’re more likely to suffer health consequences, and therefore undertake more healthcare costs, than someone who is 20, a non-smoker, and in relatively good shape. So, the insurance provider factors in all of this information to form a requisite picture of its potential costs. The provider then distributes expected costs across the board.
How Insurance and Pharmaceuticals Tie Together
Pharmaceutical companies know that insurance providers will be inundated with customer claims, and so therefore, these companies can raise their rates on prescriptions and devices. Medicare fraud has well documented over the past few decades, and many insurance providers are left holding the bag as a result. In addition, because hospitals are required to provide life-sustaining services to anyone and everyone who shows up with an injury or illness, these institutions are often left with unpaid bills for services. This, in turn, requires price hikes in fees, and the cycle simply continues. The more expensive medical care becomes, the less likely people are able to pay for it. The less likely people are to pay medical bills, the more likely hospitals are to raise their rates.The Change America Needs
Everyone in America is concerned about healthcare, access to healthcare, and the cost of healthcare. President Obama has attempted to correct the problem with the Affordable Care Act, but many people are left with high premiums and deductibles, despite now having health insurance coverage. What needs to happen, however, on a national basis is for health insurance providers and medical professionals to head back to square one. As mentioned, right now, the relationship between the two leads to a vicious cycle. As insurance costs go up, so do medical costs, and vice versa. In this direction, no one wins as no one will be able to afford neither health insurance nor medical care.
Bringing Turing back Into Focus
To bring the Turing and Shkreli issue back into focus, there is the problem of ethics and morality in the country. Shkreli decided to take a drug, one that is available as a generic in many countries, and charge an exorbitant amount for it. No one is arguing with this. But, were we to focus on ethics and a moral duty, would Shkreli make more money for Turing by selling Daraprim at slightly over cost for 50 years as opposed to selling Daraprim at a 5,455% rate increase over a few years, given the public backlash?
Someone Else Will Enter the Market
What’s important to realize is that progress is the American way … no … it’s the world way. For every Martin Shkreli out there exists 10 more dreamers who are going to produce even better results. These are going to be people who will deliver better results for less cost due to their commitment to humanity and the medical field. Progress, especially in the medical field, has been ongoing since the dawn of man, and it will continue on its track throughout the history of humanity. At the core of each person, for the most part, is a desire to see others and society as a whole succeed.
Avoiding Pharmaceutical Scams
Whenever you visit your healthcare provider, always make sure to review all of your options before leaving. If you’re prescribed a medication, discuss the pros and cons with your doctor. In addition, you should ask about generic versions of the drug to see if they qualify for treating your condition. Although it may sound better, due to commercials, marketing, and advertising, to pay more for a name-brand drug, generics are essentially the same thing, available at a lower price. Of course, only your primary care physician can give you medical advice, so talk to him or her before making your choice.
So, What’s the Future for Drug Prices?
As to the cost of life-saving drugs and other prescriptions in the future … well, it’s anyone’s guess. But, due to the Turning controversy, it seems that the American public is waking up to the apparent scams being run by people in power. Comprehensive reform will not come until Americans have grown weary of watching loved ones suffer due to inadequate healthcare options and high prices for medications. The consensus right now is simple and has been voiced … $750 for a pill that was previously $13.50 is unacceptable.
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Andrew Rusnak is an author who writes on topics that include pharmaceuticals and social media.