Darrell Berkheimer: The ways drug companies bilk our citizens | TheUnion.com
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Darrell Berkheimer: The ways drug companies bilk our citizens

Just how thoroughly the American public is being bilked by drugs companies is outlined in the beginning of a new book by economist Robert Reich.

And the blame for the situation must rest squarely on the shoulders of our members of Congress, who have been corrupted by the drug industry lobby and big campaign contributions.

In his book titled Saving Capitalism, Reich asks: “Why should a company that creates a blockbuster drug that can be reproduced for pennies earn billions while many who would benefit from it cannot afford it?”



And because of exorbitant prices, people we know are suffering and dying needlessly.

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The most recent gouging example is the price increase for the life-saving EpiPen, which saves the lives of millions whose allergies can send them into severe shock – including many schoolchildren who are advised to keep an injector handy at all times. But its producer, Mylan Pharmaceuticals, a few weeks ago raised the price of a two-pen pack to $608.61 – a 548 percent increase since Mylan began selling the drug in late 2007, according to Truven Health Analytics.




In Britain a pair of the injectors costs only 53 pounds ($69) because the government negotiates with pharmaceutical companies to limit costs, a Bloomberg article reported. And a Time magazine article revealed only $1 worth of epinephrine goes into the injector pen.

The subsequent scorn heaped on Mylan and its CEO, Heather Bresch — after her $18 million-plus salary was cited — prompted Mylan to announce price discounts and a half-price generic version.

But the Mylan EpiPen increase was only one in the latest round of price-gouging actions by a number of other drug companies. Earlier this year, prices on four of our nation’s top 10 drugs were more than doubled over prices posted only five years earlier. And prices for the other six of the top 10 were increased by more than 50 percent.

Those increases were cited in a Reuters story: “Together, the price increases on drugs for arthritis, high cholesterol, asthma and other common problems added billions in costs for consumers, employers and government health programs.”

So the big question is why? Why are drug prices allowed to be set so high?

Here are 12 reasons:

• Because our U.S. patent laws give a drug company a monopoly on selling a specific drug for 20 years. And sometimes that monopoly is even extended for another 20 years by a new patent granted after minor changes in the drug.

• Because our government does not regulate drug pricing. But other countries do.

• Because many drugs sold over the counter in other countries require prescriptions in the U.S.

• Because it’s illegal for Americans to shop with foreign pharmacies for cheaper versions of the same drugs sold in the U.S.

• Because many life-saving drugs are still made by one company long after the patent expired.

• Because drug companies are allowed to pay the makers of generic drugs to delay marketing cheaper versions. (Isn’t it nice to be paid for doing nothing?) Europe does not allow such payoffs; and Reich reports that tactic alone costs Americans an estimated $3.5 billion every year.

• Because a law, passed after lobbying by drug makers, does not allow the federal government to use its considerable bargaining power to negotiate lower drug costs.

• Because no laws limit the outrageous drug company profits and salaries. And Congress members don’t seem to care how many people might suffer and die as a result.

• Because drug companies are allowed to pay doctors to prescribe and recommend their drugs — a conflict of interest prohibited in other professions. Doctors are receiving hundreds of millions of dollars every year from the drug companies for such services.

• Because there are no laws that limit how much drug companies may spend on marketing. Drug companies spend billions of dollars on TV advertising alone every year. And the U.S. is one of the few advanced nations that allow direct advertising of drugs to consumers. (The Affordable Care Act sets percentage limits on amounts healthcare insurance companies may allot to marketing, administration and profits. So why no such limits on the drug industry?)

• Because there are no laws to limit how much money drug companies may spend on lobbying. The hundreds of millions of dollars that they dole out for lobbying is second only to the monies spent on lobbying by arms makers and defense contractors.

• And finally, prices are outrageously high because we voters fail to pressure Congress members to change the situation — so people can get needed medicines at affordable prices.

Our lawmakers, instead, appear more interested in getting big campaign contributions, with hints of lucrative job offers after they leave office. They don’t need to care about making healthcare cheaper for families — because their healthcare benefits are some of the best available!

But the failure of Congress to take action on these issues is inexcusable. And members should be ashamed of that failure. Again, it’s another situation where the rich and powerful are successful in making sure the rules work to their advantage — at the expense of everyone else.

And where are the protests from all the free market advocates? How can our citizens benefit from a free market if we’re not operating by the same rules other nations are using?

How does a 20-year monopoly fit in with a free market?

The original patent law established only 14 years for product development protection. Why was that period expanded to 20 years in 1995?

Do we have a free market when Americans are not allowed to buy the same products at cheaper prices from foreign drug suppliers?

Is it a free market when our government agencies are prohibited from negotiating for lower prices? Isn’t negotiating a classic part of free-market activities?

Isn’t this travesty another example of greed blatantly prevailing over the needs of our people?

Darrell Berkheimer, who lives in Grass Valley, writes a biweekly column published Saturdays by The Union. Contact him at mtmrnut@yahoo.com.


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