It seems that there are plenty of pharmaceutical companies in robust health and enjoying strong sales growth and profits, but some of the patients using their drugs are suffering as a result of this scenario.
Just as mass tort lawyers specialize in getting groups of claimants together to strengthen their claim for justice, a similar approach would appear to be needed outside of the courts to address the crippling cost of pharmaceuticals, which is damaging patient care in some cases.
The injustice of the drug-pricing system
When you have a situation where pharmaceutical companies are allowed to dictate the price they charge for their medications, sudden and significant increases in the cost of their drugs can seriously affect the patients who are then unable to afford their medications and treatments.
There are numerous examples of eye-watering sudden price hikes and the much publicized case of Turing Pharmaceuticals imposing a 5000% increase overnight is just one of them.
The CEO Martin Shkreli was quoted as saying he had regrets about the level of the increase but in case you were about to applaud his contrition, he was quoted as saying that if he had been able to do anything differently, “I would probably have raised the price higher”.
The fact that a company has the ability to raise the price of their pill from $13.50 to $750 at a stroke and with apparent impunity, is alarming in itself and highlights the problem that exists with the current pricing system and how it is regulated.
The painful truth that is one of the hardest pills to swallow, is that the way drugs are currently priced and paid for in the U.S makes it extremely difficult or almost impossible to find a way to stop drug companies imposing astronomical hikes almost at will.
One the fundamental reasons why this problem exists is the fact that the national insurance program Medicare, is currently prohibited from negotiating drug prices directly with the manufacturers.
It seems that the only viable way to apply pressure to the drug companies and attempt to drive down their price, is to find a viable non-branded alternative from a different drug maker, which you can threaten to switch to if the current supplier doesn’t play ball and adopt a fair pricing strategy.
The Affordable Care Act provides a cost cap and means that patients are shielded to a certain extent from the true cost of the drugs they may be using, but it still means that the bill has to be paid by the health providers and the Act creates a situation where neither the patient or the medical providers are able to apply sufficient pressure on the drug companies to lower their prices.
Rewarded for innovation
One argument put forward by the drug companies is that all the research and development costs involved with trialing and subsequently successfully bringing a new drug to market, has to reflected in the price they are charging, rather than just looking at how much it costs to produce the drug.
Questionable drug pricing is not a new phenomenon and has been a burning topic for a number of years, but when you continue to have a situation where the country’s largest drug customer Medicare, is restricted from negotiating prices directly with the drug companies, the outcome is entirely predictable.
Insurers are basically faced with two unpalatable options, which is raise the cost of their insurance or keep applying limits to the coverage of their plans, meaning that patients have to find more from their own pocket before the insurance benefits kick in.
This is effectively denying care to a number of patients who simply can’t afford the treatment they need and it is also having the effect of deterring patients from seeking the medical help they need in the first place.
One shining example of dissent is the company Express Scripts, who have continually made themselves unpopular with the pharmaceutical industry by offering access to cheaper alternative drugs to patients.
The company excludes certain drugs from its supply list if they consider them to be overpriced or underwhelming in what they do. For example, it refused to supply an $84,000 drug that treats Hepatitis C in favor of a cheaper alternative.
If the insurance industry collectively took this sort of stance, we might see an end to the crippling cost of so many drugs and it would encourage patients to seek the treatment they need without such a worry about the cost associated with making them better.
Natasha Waters is studying law. She enjoys writing articles on the topics she is learning about, her articles mostly appearing on business related blogs.
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