George Reed

Of all the many ways in which the American public is being taken for a ride by the corporate world, I think the price gouging and profiteering by the pharmaceutical drug industry, aka “Big Pharma,” tops them all.

Today we pay by far the world’s highest prices for prescription drugs. Various studies and comparisons indicate we pay double or more for the same medications as Canada, our neighbor to the north. Canada, incidentally, has some of the world’s higher drug costs. And a report from the International Federation of Health Plans verifies that U.S. pharmaceutical prices are by far the world’s highest.

Once on a trip to Mexico I forgot to pack my blood-pressure medication, Prinivil. But I was able to purchase that same drug in the same quantity at a Mexican pharmacy for $3.50 for which I had been paying $18.00 back home. Needless to say, I took a generous supply back home with me. And no prescription was necessary in Mexico for non-narcotic-based medications.

When questioned about the disparity in foreign and domestic drug prices, Big Pharma spokesmen claim the higher prices are necessary to cover their research and development costs. Baloney! The U.S. taxpayer pays a major part of these costs through the National Institute of Health (NIH) to the tune of $30 billion annually. And much of this research is conducted in state and privately-funded university labs, another free ride for the drug industry.

Unlike other governments that can negotiate lower prices with the pharmaceutical industry based on purchase volume, a standard business practice, U.S. drug companies can, and do, arbitrarily charge any price they want. For instance, the U.S. Veterans Administration, probably the largest U.S. purchaser, is prevented by the powerful congressional drug lobby, Big Pharma’s political arm, from negotiating better prices. How do they do this? The pharmaceutical industry spends more than $1 billion more on congressional lobbying and campaign contributions than the insurance companies which come in second place in the lobbying game. Money talks; it even screams.

Our patent laws insure the protection of intellectual property and provide for the recovery of research and development costs. But when drug patents expire generic versions are then permitted to enter the market. Generics can provide patient benefits through price and quality competition. But through various maneuvers such as “pay for delay” agreements with competitors and restricted product introductions, the benefits from the generics are often delayed or kept off the market entirely. And most of the pharmaceutical industry’s marketing is targeted, not surprisingly, at the physicians who prescribe the medications. The welfare and interests of the patient/consumer are largely ignored. Welcome to the world of free enterprise.

The one weakness of our free-market economic system is its reactive, rather than proactive nature. Things must really deteriorate before any corrective action begins. But can we afford to go through this iffy, torturous process with our health care? How many people are going to have to needlessly die because they can’t afford the care and the medications they need before we decide to do what all other developed countries have done decades ago? We pay double or more than other developed nations for our healthcare, yet ours is ranked near the bottom in responsiveness, coverage and quality by the World Health Organization. How long can we continue ignoring this?

George B. Reed Jr., who lives in Rossville, can be reached by email at