Can I make a suggestion to you? When some political blowhard on TV or the radio tells you something, don’t automatically believe it. Do your research to learn the facts for yourself, OK?
You see, pundits and politicians lie. And they hope you’ll be so accepting of their carefully crafted talking points that you won’t bother to investigate an issue for yourself.
A great example is high drug prices. America has — by far — the highest prescription drug prices in the world. But the pharmaceutical industry, aided by various demagogic pundits and alleged “think tanks,” has done a masterful job of convincing a sizable minority of Americans that these high prices are not the pharmaceutical industry’s fault, or our government’s fault — but instead, the fault of other countries.
Specifically, they argue that drug prices in Canada and Europe are too low, because those countries are “socialist” and put price controls on medications. That leaves the poor pharmaceutical industry to recoup all its enormous R&D costs by charging your grandma $100 for a bottle of pills that everyone else on the planet pays $40 or less for.
You see, America believes in the “free market.” America believes in “competition.” And that’s why America’s drug prices are correct — because they’re set by the “free market,” not by “socialist” price controls.
What a load of rubbish.
When it comes to prescription drugs, America is anything but a “free market.” In a free market, if a company developed a new drug, its competitors could develop competing drugs, and prices would quickly come down to a price set by the market.
That doesn’t happen in America. In America, we do have a form of socialism; it’s called “corporate welfare.”
When a new drug is developed, our government gives the drug company so-called “patent protections.” This means other companies are not allowed to compete with the drug developer for a period of several years.
Then, we allow these same drug companies to game the system, enabling them to extend their patents indefinitely by creating “new and improved” versions of the same drugs ad nauseum.
Finally — and this might be the most “ad nauseating” thing of all — once a drug company’s patent expires, our government allows drug companies to pay off generic suppliers to NOT make low-cost competing drugs.
Does ANY of this sound like a “free market” to you?
You can thank our lawmakers in Washington — and their friends, the pharmaceutical lobbyists with briefcases full of campaign contributions — for creating this system. It’s not a “free market” because Big Pharma has bought and paid for it.
All of this is to preface telling you that your outrage as consumers — despite the best efforts of Big Pharma and its water carriers to tamp it down — is finally having an impact.
President Obama is working with Congress to make it illegal for drug companies to pay off generic drugmakers. As U.S. News & World Report explains:
The administration wants to ban makers of brand-name drugs from shelling out “pay-for-delay” settlements to generic drugmakers, a practice that creates a financial incentive for generic drug companies to keep their much cheaper drugs off the market.
“If it’s legal for a brand to pay a generic to sit out, why wouldn’t it?” Federal Trade Commission Chairman Jon Leibowitz explained today at a Center for American Progress event. “And if a generic drug company is allowed to make more money by not competing than by going to market, isn’t that a good business deal for the company and its shareholders? The answer is, of course it is.”
Brand-name drugmakers have exclusive rights to their drugs only for a limited time. Generic drug companies can enter the market once the original patent is expired, “invented around,” or invalidated. This is when the elbows come out, as brand-name drug companies in recent years have spent millions paying their generic rivals to drop patent challenges. It’s often better business for the generic drug company to take the money than to continue the challenge and then put the drug out there. “Clearly these are win-win deals for the companies, but they leave consumers footing the bill,” says Leibowitz.
The administration is solidly behind stopping this, and there are bills making their way through the House and Senate that would do just that. If the practice ends, American consumers could save $35 billion over a 10-year period, according to Leibowitz. The government’s savings could be $12 billion over 10 years since it pays such a hefty chunk of the nation’s prescription drug bill. “And these assumptions are quite conservative,” adds Leibowitz.
Someone once told me during an argument that I was entitled to my own opinions — but not to my own facts.
You can say “yes” to high drug prices if you want to. But don’t ever say that high drug prices are set by the “free market.” That’s a load of hooey.