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High Drug Prices Shielded by Soaring Lobbying Budgets

Have noticed that your copay is going up or that your insurance company demands you buy a generic drug? High drug prices are a scandal in the United States!

Wonder what’s behind high drug prices? Have you ever heard the crude expression:

“Money talks and bulls**t walks.”

We apologize for the obscenity. But nowhere is that crude phrase clearer than on Capitol Hill. Pharmaceutical manufacturers contribute enough money to Congress to keep high drug prices shielded from scrutiny. 

Lobbying Is About the Money, Honey:

The pharmaceutical industry has a powerful lobby. Regardless of who is in power, drug makers sway votes with their financial clout. Lawmakers on both sides of the aisle accept large contributions from drug lobbyists. That may be why Americans pay more for prescription drugs than any other nation in the world.

Over the past few months pharmaceutical lobbying has intensified. With the Senate now considering repeal of the Affordable Care Act and President Trump accusing drug manufacturers of “getting away with murder” on drug pricing, the industry has gone into overdrive. There are a lot of industry executives concerned about future profits. They want to protect high drug prices and are willing to spend money to do so.

Spending More to Sway Congressional Votes:

According to Kaiser Health News, eight companies more than doubled their budgets for lobbying during the first quarter of the year. Altogether, pharmaceutical trade groups (including the largest, PhRMA) and 38 individual firms spent more than $50 million between the beginning of January and the end of March.

Some of the eight companies that increased their lobbying the most are generic manufacturers such as Teva and Mylan. Mylan, of course, gained notoriety when it took the price of the emergency allergy medicine EpiPen from $100 to $600.

Teva, the largest generic drug maker in the world, has been accused of fixing prices. So have a number of other generic drug companies, including Mylan.

The Attorneys General Go After Generic Drug Companies

At last count, 40 attorneys general have joined the lawsuit against these generic drug makers and Aurobindo Pharma USA Inc, Citron Pharma LLS, Heritage Pharmaceuticas Inc and Mayne Pharma (USA) Inc.

The Illinois Attorney General, Lisa Madigan, stated:

“Our lawsuit alleges drug companies engaged in illegal behavior to increase the cost of drugs. This unlawful conduct is responsible for the soaring cost of vital and potentially lifesaving prescription drugs.”

Want to read more about this? Here is a link to the Kaiser Health News Story:

“Alleged Scheme to Fix Generic Drug Prices Started at Dinners and ‘Girls Nights Out'”

High Drug Prices for Brand Names Under Scrutiny Too:

It’s not just the high drug prices of generics that are under scrutiny. Manufacturers of high-priced brand-name medications for rare conditions have also been criticized. Makers of “orphan drugs” are entitled to tax breaks and federal grants. They still charge huge amounts for their medicines.

Orphan drug legislation was originally designed to encourage the development of drugs that would otherwise have too small a market to be profitable. But manufacturers have found ways to utilize the Orphan Drug Act to bring forward medicines with huge price tags.

One recent approval, Spinraza to treat spinal muscular atrophy, is expected to cost $750,000 for the initial year of treatment. Enbrel, Humira and Remicade, drugs for rheumatoid arthritis, ankylosing spondylitis and some types of psoriasis, are also considered orphan drugs and are also pricey. They bring in billions to their manufacturers each year.

Celgene’s orphan cancer drug Revlimid has annual sales of over $4 billion. It costs a patient or his insurance company more than $100,000 a year. Rather than lower the price, the company has beefed up its lobbying efforts. According to Kaiser Health News, Celgene tripled its lobbying budget in the first quarter of 2017 to more than $1 million.

With so much money at stake, politicians may talk about the high drug prices, but doing something about it is another story.

What Can Patients Do?

If you would like to learn more about the scandals swirling around the high cost of orphan drugs as well as the generic drug scandal, check out our online resource: Saving Money on Medicine. It provides details about the pros and cons of purchasing prescription medications in Canada. There are also tips on how to negotiate with your pharmacist to save on high drug prices.

And please let us know what you think about the recent drug scandals. Here is one comment from Jim B:

“Joe & Teresa,

“This is a great piece!!!! Needs to be on the front page of every newspaper and the cover of every magazine available to the American public. I will share it with everyone I know.

“People are upset about the cost of insurance but know one seems to be looking at the real problem, the cost the insurance companies have to absorb from unscrupulous drug companies and medical service providers.

“This is truly outstanding journalism.
“Thank you,  Jim”

Share your own thoughts in the comment section below.

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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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