The People's Perspective on Medicine

Drug Price Gouging Is Immoral

Drug price gouging is becoming commonplace. Desperate people are being charged thousands of dollars a month for critical medicines. If price gouging is illegal in an emergency, why is it OK for drugs?

Are you angry about the ever-escalating cost of medicine? Here are some examples you may not be aware of. Humira (adalimumab) is highly advertised on TV. It is used to treat Crohn’s disease, ulcerative colitis, rheumatoid arthritis and psoriasis. A month’s worth runs about $6,000. Zytiga (abiraterone) is a valuable drug for metatastatic prostate cancer. A month’s supply is around $12,000. Revlimid (lenalidomide) extends life for multiple myeloma patients. The cost: $15,000 to $20,000 a month. A 30-day supply of Cinryze for hereditary angioedema could exceed $50,000. Drug price gouging is out of control but there are no laws against it. Why not?

Hurricane Florence:

We live in North Carolina. Hurricane Florence devastated our state and neighboring South Carolina. Over 40 people have died as a result of the storm. The destruction is ongoing as many roads remain impassable due to flooding. Something that has people really irate has been price gouging.

What Is Price Gouging?

When people are frantic to buy gasoline so they can evacuate before a hurricane hits, gas station owners may raise the price by a dime per gallon. If the only gas station with fuel boosts its price by two or three dollars per gallon, people become outraged. Many states have laws against such price gouging during emergencies.

The Attorney General of NC has reported more than 600 complaints. Not surprisingly, people have grumbled about the cost of gas, food and water. But when someone desperate to have a tree removed was charged $12,000, the attorney general moved it to the top of his to-do list.

Why We Hate Price Gouging:

Americans hate price gouging. It challenges our sense of fairness when the price of something we desperately need is raised well beyond a reasonable cost.

If removing a large oak tree normally costs $1,500 is it fair to charge $12,000 after a storm? Some people justify price gouging on the grounds that greed is good. Their slogan, “let the market determine the price.”

But Americans hate gougers who prey off desperate people who cannot afford outrageous prices. That’s why many states have laws that prevent unscrupulous individuals from charging excessive prices during emergencies.

Drug Price Gouging is Outrageous!

There are no laws that prevent drug companies from spiking their prices to maximize profits. Martin Shkreli became notorious when he raised the price of an old drug called pyrimethamine (Daraprim) by more than 5,000 percent. This medication is crucial to treat a parasitic infection called toxoplasmosis in immunocompromised patients.

The latest outrage occurred when Nostrum Pharmaceuticals raised the price of an antibiotic called nitrofurantoin by 400 percent. That took the price from about $475 per bottle to over $2,300.

Nitrofurantoin: Drug Price Gouging?

Nitrofurantoin has been used to treat bladder infections since 1953. It was originally sold under the brand name Macrodantin. In 1976 a bottle of 100 pills cost $15.85. It is not strictly comparable, though, since Nostrum’s generic nitrofurantoin is sold as a liquid. A full course of treatment might require one to two bottles.

The substantial increase in price wasn’t what created a firestorm of controversy, however. After all, a competitor, Casper Pharma, makes a brand name nitrofurantoin product called Furadantin. Earlier this year Casper raised its price to $2,800 a bottle. As far as we can tell there was no outcry.

What got the CEO of Nostrum into hot water was his justification for the 400 percent increase. Nirmal Mulye got a lot of attention when he claimed that he had a:

“moral requirement to sell the product at the highest price.”

Mr. Mulye went on to say:

“The point here is the only other choice is the brand at the higher price. It is still a saving regardless of whether it is a big one or not.”

The FDA Weighs in on Drug Price Gouging:

Mr. Mulye has a completely different understanding of morality than we do. FDA Commissioner Scott Gottlieb also objected to Mr. Mulye’s claim. He responded in a tweet:

“There’s no moral imperative to price gouge and take advantage of patients. FDA will continue to promote competition so speculators and those with no regard to public health consequences can’t take advantage of patients who need medicine.”

We fear that the FDA has very little clout when it comes to drug price gouging. There are no laws that restrict drug companies from charging whatever they want. The pharmaceutical industry will fight any restrictions on pricing as you will discover in this article.

If a real cure was discovered for cancer or Alzheimer’s disease the company could charge a million dollars a shot even if it would bankrupt the country. Do not count on legislators to push back.

What About Generic Drugs?

Most people assume that generic drugs are inexpensive. That was the original idea, after all. Manufacturers of such products do not have to do expensive clinical research to prove their medications work.

Although generic drugs are usually less expensive than their brand name counterparts, some companies have found opportunities to increase prices dramatically. There have even been charges of price fixing by some generic drug companies.

Is There Any Hope for the Future?

Most countries negotiate prescription drug prices. The pharmaceutical industry doesn’t like this, but if companies want to sell their products in Europe, they have to justify the price.

No such negotiation takes place in the U.S. We agree with Commissioner Gottlieb that price gouging is unconscionable when it comes to people’s health. Perhaps someday our government will reconsider its position about negotiating drug prices. In the meantime, you will find our “10 TIPS FOR SAVING MONEY ON MEDICINEat this link.

What Do You Think?

What is your opinion on drug price gouging? Do you think the industry should be allowed to charge whatever the market will bear? Have you ever encountered a medicine you could not afford? Share your thoughts below in the comment section.

Joe Graedon is a pharmacologist. Teresa Graedon holds a doctorate in medical anthropology and is a nutrition expert. Their syndicated radio show can be heard on public radio. You can also sign up for their free podcast.

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About the Author
Joe Graedon is a pharmacologist who has dedicated his career to making drug information understandable to consumers. His best-selling book, The People’s Pharmacy, was published in 1976 and led to a syndicated newspaper column, syndicated public radio show and web site. In 2006, Long Island University awarded him an honorary doctorate as “one of the country's leading drug experts for the consumer.” .
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This is crazy! People are suffering on a daily basis. We should have some kind of law against this. Is this a way to weed out the poor and keep the wealthy?

Absolutely, price gouging for medications is unconscionable. I have been a lawyer and later a judge for a combined 34 years. In my state alcohol related auto accidents reached epidemic proportions 30 years ago. The state legislature failed to act again and again. On rare occasions the state Supreme Court has reacted to public outcry by changing the law by “judicial fiat”. Occasionally our law making bodies refuse to act in the face of serious public pressure, and do so consistently . When the right facts enter the judicial system as a case and controversy, the Supreme Court may reach down and exercise its jurisdiction over lesser appellate courts. Its decision will be new law entitled to stare decisis status (law of decision must be followed by all lesser courts) . Such a decision will remain the law until the legislature takes some affirmative act to change it, modify it,expand it, or remove it. In this case the Supreme Court made liquor licensees liable for injuries caused by those served who were intoxicated or underage. It is possible that the strong pharmaceutical hold over our legislature could be conquered in this way. In our state the liquor lobby was strong paralyzing the legislature. The Court was compelled to act. Perhaps one day the U.S. Supreme Court would be so compelled regarding the negotiation of drug prices as an issue of constitutional proportions as affecting our inalienable right to life (health) liberty and the pursuit of happiness.

I worked for a major pharmaceutical company sixty years ago when they were caring and honest about their costs and sales. As they expanded they became more greedy. Yes, I know it took a lot of money and talented labor to develop their first antibiotic but it was still priced affordably for the time. I take Eliquis and can afford the first six months supply. After that when I’m in the third tier of my plan, the cost becomes five times what I can pay. I am middle-income, but cannot afford this.

Luckily, someone told me that the manufacturer had a help plan. I applied for it and received it for the second half of the year. Apparently most pharmaceutical companies have a patient help plan for most of their expensive drugs, and most people are not aware of this. I mentioned to the company that it would be cheaper if they lowered their price on the drug before they hire a staff and office to give it away for free. But giving it free makes them look better in the eyes of the public, and they still get away with their absurd high prices when the actual cost is absurdly low.

For the industry to say that market forces will fix this is ridiculous. Prescription drugs are not wants and desires like buying a television or a gaming system. The playing field is NOT level — on one hand you have the pharmaceutical company making profit, on the other hand you have the patient living or dying. This is not a scenario for market choices driving the price. Our elected officials should actually DO THEIR JOB and represent the people who elect them. They should make price gouging illegally; if big Pharma or medical device companies price gouge there should be jail time for the CEO and Board of Directors and a 100% tax on all profits from the gouging. I lay all of this on our Supreme Court who 25 years ago said money is speech. Since then it has been greed, greed, greed!

I am a retired nurse and for years administered a drug for gout routinely. It was a very inexpensive generic medication. Then after I suffered a massive pericardial effusion my cardiologist prescribed it stating that research had shown it to help prevent another effusion. When I got to the pharmacy to fill the prescription for what I expected to be an extremely inexpensive medication, I was flabbergasted to find I had an $81 copay as it was now in a higher tier. This was in February or March of 2011. It was the first example of this price gouging I have been exposed to. I refused to pay the price and am still alive to tell about it. Pat

Price gouging is unconscionabe, reprehensible, and disgusting! Our so-called congressional reps could care less about the cost of health care and prescription drugs for their constituents. They are beholden to “big business” and “big pharma” for their campaign contributions, and will never do anything to curtail the flow of that “price-gouged cash” into their fat, greedy, sticky fingers! I am a diabetic with low thyroid, high blood pressure, and bad kidneys. If not for my health insurance, I would be dead, because the cost of my insulin keeps going up, almost every time I get a refill. Pharmaceutical price gouging is bankrupting this country. The VA negotiates drug prices; why can’t Medicare? Because the Republican controller Congress will never bite the hands that feed them, and those hands belong to Big Pharma! We don’t have democracy in this country! Big Pharmacy is Big Business, and “they” run this country. Our Congressional reps are just “fronting” for the real power players in DC: the CEOs, CFOs, COOs and shareholders of Big Business, and their billiionaire Boards of Directors! The only thing they care about is the bottom line!

Sadly, it’s not just the Republicans, either. Democrats Ron Weiden, Maria Cantwell, and Patty Murray all voted against Bernie Sander’s re-importation-of-drugs bill. Just one of these people supporting it would have been all it would have taken to get it passed in the Senate. Cantwell has even had the nerve to run ads for her current re-election campaign decrying high drug prices. Both parties are feeding at the trough.

Maybe the drug companies should rethink their ever increasing prices of life saving medications. When everyone who needs these drugs are no longer with us the drug companies will cry foul that the only places these life saving medications are needed will be countries that have negotiated prices that dont allow as much profit. Maybe the drug companies should rethink their logic when there are no patients left needed these drugs.

The Life Extension Foundation has the right approach on this issue. Drug companies are able to extend their patents indefinitely in many cases which reduces competition, so that should not be allowed. And taxpayers should not be subsidizing hugely-profitable drug companies in the first place. It is like they have a cartel which is against the public interest of better health. So a truly free market is the answer. And in most cases, there is an abundance of natural cures / treatments which actually work with your body to heal it. When was the last time you heard of an illness caused by a drug deficiency? Clearly we are being systematically poisoned by a multitude of chemicals, more of which appear in the marketplace every year. So let’s reduce our chronic dependence on drugs, bring natural health into parity and let the healing begin!

You are spot on about drug pricing. As a retired pharmacist, I figured out decades ago that drug prices have nothing to do with the actual cost to the manufacturer. Everyone who pays taxes and/or medical insurance is paying for these unjustified high prices. We in the USA. subsidize the drug costs of the rest of the world because, as far as I know, we are the only country that does not allow government providers to negotiate lower prices.

Insurance companies can do so, but they keep the savings as a profit for themselves. When insurance companies negotiate a lower price with a manufacturer, it does not change what the pharmacies are charged by the wholesaler. It was common for the pharmacy to earn only two to five dollars over the cost of drugs costing $100 or more. The fee may have increased slightly, but not much I am sure.

I take a generic drug that about five years ago cost me less than $15 for a three month supply. Then, several years ago, the next refill had jumped to more than $100 for the same quantity by the same manufacturer and has slowly increased since. I called other pharmacies and found that the two manufacturers had both made a similar price increase. Other comparable drugs cost even more.

The most egregious thing to me is when our government pays for all, or almost all, of the costs to research & develop a drug, then turns it over to a drug manufacturer with no effort nor requirement to have them charge a moderate price for it. I don’t remember the drug, but just this a year a new drug developed by our government came to market, gave it to a French drug manufacturer, which then set a price in the thousands of dollars for a course of treatment.

How to change this I do not know.

Sarah Palin said that the advent of the Affordable Care Act otherwise known as Obamacare, would raise the spectre of ‘Death Panels’. Instead we have the government allowing the pharmacy people, the CEOs, and CFOs to charge outrageous prices for life saving drugs such as insulin, thyroid hormone replacement drugs. Although it would be much cheaper to let these people go off and die and get out of the way of the healthcare industry, and other insurance. Should we recommend that those who need life saving drugs be marked for extermination because they are less than perfect?

The government should negotiate a price for drugs, like other countries do.

Yes, drug price gouging IS immoral and, unfortunately, not yet illegal. Until that time, the powerful drug manufacturers and their greedy shareholders will continue to kill people who can’t afford to pay for the necessary, life-saving drugs. It’s time for action!!! Thank you, Terry and Joe, for keeping this dilemma in the spotlight!

It’s really hard to watch this happen because of all the time and MONEY being spent on the opioid crisis. Their efforts are being put in the wrong direction?

Until congress,(bought and paid for by the pharmaceuticals), responds to pressure from their constituents, the pharmaceutical companies will continue to ever increase their outrageous prices, promulgated by the greed and avarice of the management of these companies. They do it because they can.

We should change the law that allows pharmas to advertise drugs in the U.S. We are the only country in the world that does this and pharmas spend billions of $$ every year on advertising — they pass the cost of this onto patients in our country via increased drug prices. My son is a Type 1 diabetic and the cost of his insulin is ever increasing . . . crazy!!

Drug price gouging should be illegal. Even new drugs come on the market priced very high. A new drug called Esbriet, is very high, over $11000 per 1 month. Can’t believe insurance companies can’t negotiate drug prices. Other countries do it.

If you aren’t currently a victim of drug price gouging, don’t disregard this issue. You could become a victim at any time. Next time you’re at the polls voting for someone to represent you in Congress, ask yourself: Which of these candidates is more likely to take my side and stand up to the pharmaceutical industry?

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