The Debate On Drug Costs

by Jon D. Barganier

Let me make a disclosure right out of the chute, I worked for a pharmaceutical company for twenty plus years and in the pharmaceutical industry in general for most of my professional life, which is about forty years. I am biased toward that industry like I am biased toward nursing because I believe both have improved and/or prolonged the lives of millions of people during the past century. Penicillin and countless other antibiotics, insulin, oncology drugs, mental health drugs, HIV drugs, vaccines, and presently the therapeutics coming to the aid of health care practitioners fighting COVID-19, and ultimately a vaccine for COVID-19, all have created a health care environment that makes us hopeful where in previous centuries doom reigned.

The pharmaceutical industry has made a massive impact on our well being today. HIV was once a death sentence but is now manageable. The only answer to severe mental illness was warehousing those suffering from the disease but today, thanks to new treatments, many can live in their homes or communities.

Testing The Limits

Former Alabama Mental Health Commissioner Kathy Sawyer credited new medicines with her ability to close or reduce mental health hospitals in the state. Those are just a few examples of how the pharmaceutical industry has brought progress to the treatment of illnesses once untreatable and the industry is still pushing forward to reach goals that are within its grasp. The pandemic in which we find ourselves today has tested the limits of what that industry can do working with the government to find new pathways for drug advances in record time. As nurses, I’m sure you recognize the advances of drug therapy even more than me because you work where the rubber meets the road.

But, that industry faces challenges, perhaps better viewed as existential threats. Some look at the pharmaceutical industry and are reminded of the comic strip, Pogo, and its famous admonition, “we have met the enemy and he is us.” The soaring price of pharmaceuticals through the years has focused policymakers on the industry with the intent of stanching the hemorrhage of high costs. They claim the industry is price gouging. The industry counters that there are other explanations for rising costs. Plaintiff attorneys have smelled the blood in the water and pursued drug companies with thousands upon thousands of lawsuits each year against drugs claiming they have harmed patients more than they have helped them. Lawsuits, the industry claims, are a cost of doing business and results in higher prices.

The pharmaceutical industry also points to government oversight that requires years of costly and time-consuming trials and patents that cut into the time that a drug is profitable before it “goes generic” and loses its profitability. The industry also points to the number of failed drugs that it funds with billions of dollars before they prove ineffective or unsafe. The drugs that make it through the gauntlet of clinical trials and become profitable pay for all those failed drugs that cost hundreds of millions of dollars to test but never get to the marketplace. Another culprit in the high costs of drugs is the “middlemen” that drive the costs higher. These are insurance companies or pharmacy benefit managers that require pharmaceutical manufacturers to pay discounts or rebates to them as a prerequisite to their drugs being placed on formularies or in the alternative, restricted.

Profit As A Motive

I began this article admitting to a bias that I have that favors the arguments of pharmaceutical companies in the drug price debate but I would also admit that profitability is very important to the pharmaceutical
industry. As I said before, profitability funds innovative new drugs but it also pays for its failures along the way. Still, profit is a motive and results in the higher cost of drugs. So why is this debate important to nurses? Because you are where the rubber meets the road. You understand the role that drugs play in health care. You are an influencer on health care policy. For those reasons, it is good to know the parameters of the debate. I hope that my remarks in this column have helped define them for you, however biased they may be.