Price Controls Needed to Solve Prescription Drug Cost Problem, Nation, Op-Ed Says
"If politics got real ... the debate over costly prescription drugs would turn to more fundamental solutions like breaking up the pharmaceutical industry's patent monopolies, which generate soaring drug prices, and rewarding consumers for the billions of tax dollars spent to develop new medicines," political journalist and author William Greider writes in a Nation op-ed. While he admits his is a "radical" business proposition, Greider argues this course of action would "actually eliminate outrageous profit-skimming at taxpayers' expense and liberate lifesaving medicines from inflated prices so millions of people worldwide could afford the health benefits." Through the National Institutes of Health, the government "picks up the bill for nearly all basic research and development," with private industry chipping in $25 billion a year for additional research, mostly clinical testing. Even though NIH and scientists working with NIH grants "do the hard part and take the biggest risks," they do not share the profits of the drugs, nor can they participate in "setting moderate prices that don't gouge consumers." Rather, "the drug industry reaps revenues of $106 billion a year, claiming that it needs its extraordinary profit levels in order to invest heavily in research," Greider contends. He asserts that prescription drug research "is one instance where a bigger role for government, by taking charge of the scandalous pricing system, could produce vast savings for the public -- as much as $50 billion to $75 billion a year." Greider offers support for two proposals to reform the patent system, which grants drug companies exclusive patents on new products for 17 years or more. Dean Baker, co-director of the Center for Economic and Policy Research, has proposed that NIH be given control over all drug research policy, with public money covering the industry's spending. He also calls for the patent system to be "phased out," starting with cancer drugs "and other desperately needed medicines whose prices are too high for poor nations to afford." Baker estimates this plan could save Americans 75% in prescription drug costs. A "less drastic" solution proposed by James Love of Ralph Nader's Consumer Project on Technology would "limit use of exclusive patent rights and, if needed, compel drugmakers to grant royalty licenses to other U.S. companies to make and sell the same medicines, thus fostering price competition." Under Love's plan, competing companies would have to contribute a minimum percentage of revenues to research and development to maintain research spending levels, and drug makers could also be required to contribute to government or university research. Greider concludes: "As a matter of public values, the discovery of new health-enhancing medicines ought to be shared as widely -- and inexpensively -- as possible, especially since public money helped pave the way to these discoveries. Jonas Salk never thought to patent his polio vaccine. He thought his reward was knowing how greatly his work had advanced all of humanity" (Greider, Nation, 11/13).This is part of the KHN Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.