By JASON CONE and RAYMOND C. OFFENHEISER, The New York Times|OCT. 27, 2016
Every few months, a drug company gets caught cranking up prices. Most recently, Mylan, the maker of EpiPen, took its turn in the hot seat for raising the price of a lifesaving allergy treatment by 500 percent. Congress was rightly enraged and opened yet another inquiry into pharmaceutical price gouging. Mylan offered discount coupons.
The story will soon fade from the headlines — until the next pricing scandal.
In the United States, companies have raised prices on many drugs over the past five years, mostly with little public notice or scandal. Pfizer alone raised the prices of more than 100 drugs in one year. Drug prices have seen double-digit inflation over the past three years, at a time of relatively low inflation in the rest of the economy. Recent research suggests that cancer patients may be delaying use of lifesaving drugs, while there are reports that prisoners are rationed access to hepatitis C treatments — all because of high prices.
But this problem is also international. In poorer countries across the world where our organizations work, millions of people are priced out of medicines that could save lives and relieve suffering. For example, a recent World Health Organization study found that in some 30 countries, hepatitis C medicines were unaffordable for much of the population.
Pharmaceutical companies simply charge whatever they want — or can. They have big budgets to counter image problems from bad press and congressional hearings. And while they claim that high prices are necessary to develop new drugs, it’s just not true. Public funding and subsidies pay for much of today’s pharmaceutical innovation.
Many world leaders recognize that high drug prices are a public-health crisis. Earlier this year, Ban Ki-moon, the secretary general of the United Nations, commissioned a panel of industry, government, academic and civil society experts, including Oxfam International’s executive director, to recommend ways to bring drug prices down to affordable levels and to improve research and development of new medicines in order to fulfill the human right to health.
The panel’s report, released last month, found that today’s system is failing. Pharmaceutical monopolies reap huge profits from high prices, while medicines are unaffordable for too many people. The report called for more transparency and competition in the drug industry and for preserving and implementing existing policies that help reduce prices.
Shamefully, the American government sought to obstruct and oppose the panel, even denying the premise that high drug prices undermine public health.
The Obama administration’s response to the report’s release called the panel’s work “deeply flawed” and accused it of recommending “divisive policies,” which it warned ominously “could have significant unintended negative consequences.” In other words, if we want new medicines and innovations, we must continue to support a system in which the pharmaceutical industry has unlimited power to set prices. Considering alternative pathways is apparently off limits.
These scare tactics not only contradict the United States’ stated global and domestic health priorities, they are also an offense to people unable to afford critical treatment. Worse yet, the American government actively exports this approach to other countries through trade agreements like the Trans-Pacific Partnership, which, if allowed to take effect, will lock in and extend global monopoly protections and high medicine prices for years to come.
This can’t be allowed to happen. High prices and monopolies are not delivering innovation that responds to people’s needs. In fact, many public health issues are being neglected by the pharmaceutical industry because the market for the needed medicines is not sufficiently profitable.
A clear example is the emergence of drug-resistant bacteria, which turn once-treatable infections deadly. Drug-resistant infections already kill 23,000 people each year in the United States and 700,000 people globally. Yet it has been more than 30 years since a new class of antibiotics has been introduced, and the pipeline for critically needed new antibiotics is nearly dry.
There are alternative means to stimulate innovation that do not rely on monopolies and high prices. Grants, prizes and other research incentives could go a long way. The Drugs for Neglected Diseases initiative, a public-private partnership that Doctors Without Borders helped to found, was able to develop therapies to treat malaria, sleeping sickness, kala azar and Chagas’ disease — illnesses long ignored by the pharmaceutical industry.
These approaches, which do not depend entirely on the pharmaceutical industry alone to fund research, show that it is possible to separate the cost of developing drugs from their final product price, ensuring both innovation and affordability.
Yet to really transform how drugs are developed, governments must lead the charge. There are hopeful signs this might happen. In September, world leaders agreed to address antibiotic resistance in part, by committing to develop new drugs through such new research and development models.
The United Nations panel recommendations, which the Obama administration has tried to attack and discredit, are precisely designed to open new paths to medical innovation that benefit us all. Access to existing and new medicines and treatments should not depend on how much money you have, where you were born or whom you know.
The United States government, especially the next president, must stop defending industry profits and work to reform how we pay for medical research to ensure that all patients’ needs are addressed. High prices of medicines are not inevitable; they are a choice the American government has made. Many lives and livelihoods hang in the balance until that choice changes.