The U.S. pharmaceutical industry has long justified their soaring profits and exorbitant pricing structures with the premise that the profits go into research and development to create newer better drugs. The problem with this statement is that by in large it is a misnomer and largely false.
A large amount of research as the basis for these newly developed drugs comes from subsidized laboratories at universities and at National Institute of Health.
The aforementioned argument also doesn’t account for many notable examples of excessive and seemingly arbitrary price jumps such as those of the anti-parasitic drug used to treat many AIDS patients, and the recent outrage over the price jump of Epi-Pen devices.
The American Academy of Allergy, Asthma and Immunology states about one in thirteen American children have a food allergy potentially requiring the use of an epinephrine delivery device.
The wholesale price of a two pack of Epi-pens has skyrocketed over the last nine years from $100 to over $600. The patent was bought by the current manufacturer and no improvements have been made to the drug therefore eliminating the R&D argument from the equation.
While the court of public opinion has convicted the owner of the patents for Epi-Pen and the house oversight committee has gotten involved, there are countless other examples that are passing under the radar. These examples raise the question how has Big Pharma used campaign contributions to influence our government and allow for these injustices?
Here are just a few examples.
- The pharmaceutical industry had pushed for and maintained premium patent protections that stifle competition, curious given that the war cry of economic development in the U.S. is often touted as being the result of healthy competition in industry. This type of patent protection often lasts for upwards of 20 years. This leaves the prices of life saving drugs up to market influence. A Reuters article from 2015 highlighted in countries without premium patent protection the Novartis leukemia treatment drug costs $159 a year for treatment versus $106,000 in the United States. The pharmaceutical industry has gone so far as to put pressure on Congress to try to force India to change its patent laws to protect American corporate profits.
- Big Pharma spends large sums of money on political contributions. The Center for Responsive Politics states that the pharmaceutical industry spent $51 million on the 2012 federal election alone as well as $32 million on the 2014 federal election cycle. We can only wonder how much is being spent as we sit here. As with all big money in politics, contributions buy connections and favors. What’s more – this is not a partisan issue. Big pharma buys both Republican and Democrat votes.
- Big pharma understands demand and in the U.S. direct marketing of drugs is legal. According to the Pew Charitable Trust in 2012 the Pharmaceutical industry spent $27million marketing to physicians and $3 million on direct to consumer marketing. According to the Pew Charitable Trusts the United States and New Zealand are the only countries holding membership Organization for Economic Cooperation and Development that allow for direct marketing and advertisement of pharmaceuticals to individuals. These ads have proven to be effective at motivating patients to speak to doctors about specific and brand name medications.
- Private industry is finding ways to put a strangle hold on the government to negotiate drug prices. When Medicare Part D was negotiated there was a provision barring the government from negotiating drug prices with insurers and the pharmaceutical industry. While the U.S. is the most heavily medicated nation with 60% of the population on a prescription drug, what segment of the population uses the most medication? The answer, according the Center for Disease Control is age 60 and over. 88.4% of the population over the age of 60 uses at least one prescription drug. Medicare starts at age 65 in most cases. There is little coincidence here that big pharma is pushing profits on the dime of all U.S. tax payers.
- Lobbying! In 2014 pharmaceutical companies and their lobbying groups spent over $229 million influencing politicians and lawmakers. This industries lobbyists out spend defense contractors and the oil and gas industry. When Bill Moyers so eloquently reported regarding the revolving door policy in American politics he highlighted how industry insiders so often end up working with and for those in power directly influencing policy before often returning to their old lucrative industry position. Many former politicians do the same when leaving public office.
No matter how you cut it, the status quo of campaign finance in which corporations and the super-wealthy can make virtually limitless contributions on behalf of candidates has allowed those with the most money a disproportional influence over our government. And it is you and I that pay the cost.
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