The People's Perspective on Medicine

Will High Drug Prices Soon Destroy Healthcare?

Has the pharmaceutical industry become too greedy? High drug prices for rare but deadly diseases are breaking the health care system. What can be done?

Have you ever heard of a house of cards? We’re not referring to the TV series. We mean a structure that will eventually collapse when it can no longer sustain itself. We fear that high drug prices will shortly cause the collapse of our entire health care system. That’s because hospitals, nursing homes, patients and insurance companies will no longer be able to afford the incredible costs of crucial medicines. If a drug for dementia were developed, it would break the bank.

Volume: The Old Business Model

Not very long ago the pharmaceutical industry made money based on how many pills it sold. The big money makers were brands like Lipitor, Nexium, Prilosec, Prozac, Valium, Xanax, Zantac and Zoloft. Many became household names.

The business model for drug companies was to first choose a health condition such as nervousness, insomnia, depression, heartburn or high cholesterol that affects millions of people. Then they developed a medication to help control that problem. If doctors would keep prescribing the drug for a really long time to millions of patients, the dollars would flow.

The marketing plan was to get as many people as possible taking these frequently prescribed medicines for as long as possible. Millions of individuals stayed on such drugs for years or even decades.

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If stopping an anti-anxiety agent, antidepressant or heartburn drug suddenly led to uncomfortable symptoms, many people would choose to stay on the medicine indefinitely. Drug companies didn’t do a lot of research on withdrawal complaints and rarely offered providers clear guidelines on how to help patients taper off such medications. Why would they? The more people taking their pills the better!

The Edge of the Cliff:

Needless to say, big brand name drug makers worried about losing patent protection on their best sellers. That’s because once such drugs went off patent, generic companies jumped in to make copies that could be sold for a fraction of the cost.

Here are just a few examples based on data from GoodRx.com. The generic prices are with coupons from GoodRx.

A One Month Supply of:

Valium = $175-$200  Generic diazepam = $6-$11
Nexium = $275-$290 Generic esomeprazole = $18-$47
Prozac = $450-$550  Generic fluoxetine = $3-$15

It’s hardly any wonder that most people opt for generics. That’s especially true since insurance companies often refuse to pay for pricey brands. Not surprisingly, sales of branded drugs plummet once a generic version becomes available.

Why Are High Drug Prices Ravaging Healthcare?

To keep its shareholders happy, the pharmaceutical industry has had to come up with a new model. Instead of seeking common conditions, drug companies began searching for niche markets and charging extremely high prices.

Treatments for relatively rare diseases are known as orphan drugs and get special treatment from the FDA. When Congress passed the orphan drug legislation in 1983, it didn’t envision that pharmaceutical companies would make much money on these medications. In fact, they were referred to as:

“significant drugs of limited commercial value”

High Drug Prices for Orphans:

Now, however, the prices of many orphan drugs are stratospheric. Actimmune, used to treat a rare immunodeficiency disease, can cost up to $55,000 a month.

Treatments for Gaucher disease, a genetic condition that can become fatal if untreated, can run to $300,000 or more annually.

Spinraza, to treat spinal muscular atrophy, costs approximately $750,000 for the initial year of treatment.

A drug for Duchenne muscular dystrophy, Exondys 51, has an annual price tag of $300,000 after discounts, though some experts project anywhere from $750,000 to $1.5 million (New York Times, June 22, 2017). 

Making Billions from Orphan Drugs:

Nowadays, instead of “limited commercial value,” orphan drugs have become bonanzas. Some of them, like Humira, EnbrelRemicade and Revlimid, are among the top-selling drugs by dollar value. We are talking billions of dollars annually for each drug.

Cancer medications may also earn orphan drug designations. And that can mean that they earn big bucks as well. Some of the newer cancer medicines, such as Keytruda or Opdivo, can cost $100,000 or more annually.

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The total cost including hospitalization can exceed $500,000.

High Drug Prices = the New Pharmaceutical Model:

Instead of millions of people paying a modest monthly price for their medicine, the recent Pharma model has relied on a few hundred or a few thousand individuals paying huge amounts of money for an essential or life-saving medication.

This more or less works as long as people have good health insurance. If, however, the insurance has a high deductible or if someone is uninsured, access to a life-saving treatment could easily be out of reach.

Insurance companies are beginning to balk at the high cost of some new medicines. Drugs for hepatitis C can cost over $1,000 a pill. Even though such medicines are less toxic than older alternatives, some insurance plans require patients to “fail” less expensive treatments before they will cover the newer drugs.

Alzheimer’s Disease: Justifying High Drug Prices?

What if drug companies came up with truly effective medications for people with devastating conditions? If those conditions affected hundreds of thousands or millions of people, the health care system would likely collapse like a house of cards.

The holy grail for the pharmaceutical industry would be a treatment for Alzheimer’s disease. Note that we said treatment and not cure. If a drug company came up with an effective therapy against dementia, it could single-handedly bring down health care in America.

It is estimated that over 5 million people have Alzheimer’s disease in the U.S. A skilled memory care facility can charge anywhere from $60,000 to $90,000 a year.

A drug company could easily charge more than $100,000 to keep someone with Alzheimer’s disease from deteriorating. If the hypothetical drug helped patients improve, that would be a huge bonus. If that patient had to take the medicine daily for the rest of her life, it would be a bonanza for the company. Just try multiplying $100,000 times 5 million. You get a lot of zeroes, as in:

$500,000,000,000

That is for one year.

Can Insurance Companies Survive?

We have no great love for insurance companies. That said, we cannot imagine that they can continue to pay extraordinarily high drug prices. Even the government can’t manage to cover the kind of high drug prices we anticipate in coming years.

The current situation is unsustainable. It isn’t clear, however, how it can be resolved. In the United States, drug companies can charge whatever the market will bear. The question is, what will the industry do if it breaks the health care system?

We welcome your 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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I have had A-fib since 2008, and I refuse to take the “modern” blood thinners as they run from $400 to $500 per month. During the 10-plus years that I have had A-fib I took coumadin for about four months. As a result of the coumadin I experienced a series of blood infections (never in my life time until coumadin), and stopped taking the coumaidin. I had a catheter ablation in August 2017 and have been A-fib free since.

Prior to August 2017 the medical industry kept telling me that I will have a heart attack/stroke if I do not take the expensive blood thinners: Why haven’t I had a heart/attack stroke? Simple: Plant based diet, exercise, and hydration: Water is a natural blood thinner. The drug/medical industry does not want anyone to know that, as they cannot charge $400 – $500 per month for water. Corruption, greed, and avarice: That defines the pharmaceutical industry. Congress will do nothing.

The Pharmaceutical industry is the most profitable sector of our economy, and by definition, their profits are on the back of sick people! (And often the poorest among us.) What is the matter with our country that we allow this brazen greed and violation of the anti-monopoly laws?

Here in Florida, our Governor is pushing the legislature to approve a request to the feds to purchase drugs from Canada. A similar request was approved for Vermont, which has already saved several million dollars for a state with about 600,000 population. Can you imagine the difference for a state like Florida with millions of people?

What is really sad is the attitude our society has taken concerning “drugs.” We used to be taught that drugs are bad, say no to drugs. I know they meant “street drugs” but at least with street drugs, you knew those were bad for you and you should not be taking them. What the pharmaceutical industry is pushing is no less “drugs” yet we think taking them is good, even when they tell you all the side effects that are possible. Worse yet, they do not cure the root of the problem, and only create dependence – sounds like the pharmaceutical industry has mimicked the drug dealers methods to keep making money!

I have personally experienced two examples of this behavior. My father experience Afib after having bypass surgery following a heart attack. He was prescribed a drug called amiodarone for this, and was never told of the dangers of this drug. He thought it was safe because his doctor told him this was a routine treatment for Afib. He took this drug thinking it was perfectly safe for several years, and his health was going steadily downhill during this time, yet his doctor never told him, or never recognized, that he was experiencing every possible side effect of this drug. He expressed to me in several phone calls that he felt like every time he thought they fixed one thing, something else went wrong.

It was not until he moved in with my sister in another state and was hospitalized with what they initially thought was pneumonia, that we discovered it was actually toxicity from the amiodarone in his lungs. They immediately took him off of that drug and we began researching. It turns out this drug was only approved by the FDA for ventrical fibrilation, and it was only supposed to be given as a last resort. I guess the drug company was not making enough money in being limited in this way, so they began getting doctors to routinely prescribe this drug to treat afib (which it was not meant to treat). How many commercials do you see for afib treatments? Much bigger market, right? It turns out that is takes your body a LONG time to rid itself of amiodarone, so although they took my father off of the drug, the damage was already done and he died a few months later.

The second example was just recently when my husband was admitted to the ICU for multiple issues and complications of COPD. Once they had all of the other symptoms stabilized and got his CO2 level down using a bipap machine, his blood pressure remained high and he received very aggressive treatment with drugs to bring it down. He began to complain that he was being over medicated with blood pressure drugs because they started to make him dizzy and have blurred vision. He asked them why couldn’t they just let the drugs they had already given him have time to work before they gave him more? They backed off on the drugs, but labeled him as non-compliant with the medication. He finally asked one doctor who argued with him about all the drugs why were they not trying to fix the root problem instead of so aggressively treating this one symptom? The doctor told him they fix the root of the problem by giving drugs for the symptoms. My husband said wow, he just verbalized what we had known for years – he just said he was nothing but a drug pusher!

Don’t get me wrong, I know there are many drugs that have saved many lives and I am not against that.

I said all that to say this – I agree with this article. I believe the current situation of our health care system is unsustainable, and I am not sure there is really a possible fix. I do not believe for a minute that more laws and more regulation are going to fix it. I believe the only thing that can fix it is for us to take ownership of our own health and teach our future generations better eating and exercise habits so that we are not in the position to begin taking these poisons in the first place, and look for alternatives before taking long term. What did we do before we had Big Pharma pushing all these drugs? We relied on alternatives such as natural medicine, chiropractic, acupuncture, herbology, nutrition, homeopathy, naturopathy, ayurvedic, massage, etc. Nowdays those things are frowned upon by the medical community, whereas in the past these practices were relied on and were considered mainstream.

Luckily for us, we have The People’s Pharmacy to give us the information and the research we need to be our own health advocates!

Pharmaceutical companies are a very important part of the health care system. They are the ones who will develop the drugs that cure disease. But they have become too powerful and are getting away with price-gouging Americans! It’s time our Congressmen and women regulate these companies. Even wealthy people can’t afford to pay the prices they are charging!

I too am appalled at the drug prices. Early this year I went to the dermatologist to get medicine for my face. Prescription was e-mailed to the drug store. Went in a couple of days later to pick up my meds. What a surprise I had. My health insurance would not pay for it. Druggist said If I wanted the meds it would cost me $1,000.00. Contacted my dr about it. She then faxed the prescription into another pharmacy in Arlington, Texas. The cost was $90.00. Paid for the meds, and it was mailed to me. Living in Dallas, I was not going to make the 40 miles drive out to Arlington. I appealed. Won the appeal. Prescription then was sent to my pharmacy. Waited a couple of days to pick it up. Betcha can’t guess how much it cost me? $35.00. Yep! $35.00. Now, I want some one to explain to me about the prices.

Have they become greedy? Are prices too high? They’ve always been greedy and prices have been way too high and are going higher as long as they can continue to grease the politicians!

I’ve taken the same drug for Multiple Sclerosis for 21 years. I’m very grateful for it. I would most likely not still be alive as I’ve been told I have too many lesions in my brain to even count. This drug was $900/month in 1998.

Shortly after Medicare Advantage plans were developed, insurance plans changed from three to five tiers of drug classification, the fifth being for the very expensive drugs. After that my MS drug rapidly increased about 500% in price over a few years. It has kept increasing more slowly to currently being $7200/month.

I’ve read that in the US, Medicare is not allowed to negotiate drug prices with drug companies. This has caused sky high prices here AND compared to other countries in which these drugs are prescribed.

I have believed everything this article says for years now. There can never be cures for MS, cancers, or dementias in this country as long as the drug companies are allowed to run free. There is an unholy amount of corruption in that industry. Not one of the people at the top know anything about healthcare, nor do they care one bit. It’s the stock market, profit & power at the heart of it all.

Welcome to medicine in America!

It isn’t just the specialty drugs. My neighbor, a veteran, just told me a story about a VA doctor who prescribed low dose aspirin for him – 100 tabs, 81mg. Not thinking, he had the prescription filled at the prescription counter, vs. just getting them off the shelf (OTC). He was charged $40 dollars for the aspirin.

Congress must amend US government drug purchasing mechanisms and permit these programs to negotiate drug prices like every other advanced country in the world.

Privatization of health system in the U.S. is destroying our health. Our health is too important to be left to the whims of private industry and their profit motive. And as individuals, we need to take more proactive approach with healthy life styles and eating practices and demand more wholesome foods and cleaner environment. The government agencies established to protect our health, our food, and our environment have been co-opted by big industry. Its time that these agencies work for the citizens.

i think that as a country America should demand that the drugs companies change the way they price drugs. Why does a drug for hepatitis c cost $1000 a pill or 84,000 a full course in the US yet is is less than 900$ for the full course treatment in other countries. What should be done is for each drug America should pay the average of all the other countries pay for that drug. We here in America carry the world when it comes to pricing of drugs. The CEO of Mylan admitted before Congress that the cost of a pack of 2 Epipens is aprox $85. So why is the cost at the pharmacy $600. It’s an outrage. How does that woman from Mylan slee at night–oh yea she gets a bonus and they raise her pay what a sad sham

I second that thought. I’ve seen expensive ads on TV targeting people with “non-small-cell lung cancer.” How big a group of potential customers is that?

I needed an inhaler. I went to pick it up at the pharmacy and the pharmacist said “your deductible for this in Hailer is $60, do you still want it?” I was floored why would somebody not want their inhaler?” and then it occurred to me…maybe they couldn’t afford it. The next inhaler I tried was over $300 my co-pay was over $200. This is ridiculous. What about families with children who need inhalers for asthma? this is absolutely ludicrous that we put up with this. It must stop now before the healthcare system and the insurance companies are no longer.

I have advancing prostate cancer and the favored drugs this condition are SO far beyond what I can afford there is NO question that I will have to die….. Even patient assistance programs are of no help because they do not fund people who are on Medicare Part D…. for the moment ( until it stops working) I am on a medication that I can afford…. but if(when) it stops working I am done for.

My sister-in-law suffered from severe migraines and her doctor prescribed a new drug that she described as life changing. She went 10 months with no headaches. She recently received notice that her insurance would no longer cover this new drug and her monthly cost would be $575!

How do the people who run these pharmaceutical companies sleep at night knowing that there are people who are financially ruined trying to cover the cost of outrageously priced drugs so that the drug companies can become even wealthier? What about those people who can’t obtain life changing or even life saving drugs because of the cost? Drug company executives get another mansion while their customers sleep in their cars because they had to sell the house to pay for their meds. There is a special place in hell for those folks.

Thank you for bringing us this most important and insightful topic. Your website does such a magnificent service to the public. And I believe I am writing for the many who read your information.

More evidence of favor to the wealthy in our culture.
What does that list of the most frequently ordered/used drugs tell us about our culture?
Thank you for the opportunity to share my thoughts.

I think we need to improve our attitude toward death. We are generally willing to drive ourselves and our families into financial and emotional bankruptcy in order to buy more time no matter quality of life. As long as we are willing to pay anything for more time, the drug companies have the upper hand.

Well obviously just change the law so we can buy drugs in countries with decent medical systems, like Canada. Places where the government is not yet in the pocket of the drug companies.

When Medicare Part D was enacted, one legislator got the Congress to vote that Medicare and Medicaid were forbidden to negotiate or regulate the prices on drugs. That has to be reversed. If Medicare for All becomes a reality, that would bring the pharmaceutical companies to heel – but they have to stop paying off members of Congress. It’s a huge, greased wheel – money here, money there. No one acts as if medical treatment, including drugs, is anything but a profit-driven cause. Profits should be removed from medicine. People can earn a decent living, without corporations having to pay off their shareholders every quarter and huge bonuses to their CEO’s every year.

My thoughts at present (April 2019) are that drug patent laws need to be overhauled to create a framework for pricing other than optimizing shareholder value (greed). Incentives to create health cure should be greater than incentives to create dependence. The entire medical system is dysfunctional at present and needs to be overhauled, not only as a matter of sustainability, but in order to protect the public good.

If our country stays with a 100% free enterprise system for healthcare, nothing good will happen. Congress needs to get a backbone and act but they won’t because they want to keep big pharma campaign contributions.

Much the same condition affects the UK where Government/quasi-government bodies presently “ration” very expensive medications and action groups try to influence prescribing practices permitted under the National Health Service guidelines. With both medication and direct procedures becoming more costly per patient, along with an increasing and ageing population to treat, there can be few happy outcomes for healthcare. Apart from the rich, of course.

I used to buy some expensive drugs from Canada with a good discount, But some meds like Dofetilide (Genereic for Tikosyn) for AFib are not available at Canadian pharmacies. Obviously, big Pharma is preventing sale of this drug from Canada to U.S. citizens. Obviously the Drug Lobby in Washington is preventing this action with the help of our legislators who are supposed to be our representatives.

Save money and your health. There are other, time-tested, traditional methods for REAL health care, not disease care, not medical or drug care. Allopathy, or what is conventional now, is based on using toxic chemicals to suppress symptoms only. Allopathic drug-based treatments are not meant to correct causes of the symptoms, in the first place, or else the drug makers would lose patients and profits. Why do our taxes enable allopathy to be the monopoly of health care? Democracy includes choices in health. Research the other health options, such as Acupuncture, Chiropractic, Herbology, Nutrition, Homeopathy, Naturopathy, Ayurvedic, Massage, Midwifery.

What humans did for health care, before the medical industrial complex, still exists because it works.

Greed Greed Greed. It’s the human condition, unfortunately.
Regulation in a social democracy is the proven solution. Support it with your votes.

The government needs to allows foreign drugs to come into the U.S. That will make the drug companies lower prices.

If these drugs were any good when they are first introduced into the medical system, then why does Big Pharma need to continually develop new drugs at higher costs? Most drugs cure nothing. More drugs are not the answer. Improved life style and nutrition are the answers. Until we cross over into a better world where Big Pharma is not controlling medicine, virtually all phases of it, we will continue to slide into the abyss.

Our whole healthcare system, not just drugs, is going to go bust. Every facet of healthcare charges too much, including paramedic units and life flight helicopters. It is my understanding that paramedic units and the helicopters may not currently be covered by insurance. Everyone in the healthcare business is greedy. It used to be good care was the trademark of doctors and hospitals. For the most part (not all) that has gone away and the focus of healthcare is how much money can be extracted from each person. Lack of good care is rampant in our society.

I’m all for a free market, and I hate seeing the government get involved, but this seems to be an area where we have no choice. With all the debate over a national healthcare system, this seems to be the one thing that most of us could agree with, and it’s something that would actually make a difference for just about everyone.

It’s simple. Regulate drug prices. Drug manufacturers have proven that they cannot be trusted. A drug no one can afford is the same as no drug at all.

How does television advertising factor into this discussion? Some of the orphan drugs you mentioned are those who advertise frequently.

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