We Must Hold Big Pharma Accountable For Predatory Pricing

It’s hard to remember now, but there once was a time when pharmaceutical companies were considered heroes, not villains.

In the 1920s, Dr. Frederick Banting and Charles Best discovered insulin could be purified and administered to diabetes patients via injection. Before this groundbreaking discovery, people living with diabetes were placed on starvation diets as a form of treatment, and many patients died.

Banting and Best understood the enormity of their discovery and considered insulin a public good. But as these researchers soon realized, insulin wouldn’t be able to save lives if patients couldn’t access it. They sold the rights to the drug to the University of Toronto for $1. The university, in turn, gave it to pharmaceutical company Eli Lilly for a 5 percent royalty so the company could manufacture at scale to meet the enormous demand. In 1923, insulin became widely available and saved countless lives, thanks to Banting and Best – and Eli Lilly.

Now, just under a century later, Eli Lilly and other insulin manufacturers are taking the exact opposite approach.

Big Pharma is pushing every scheme imaginable to squeeze money from the pockets of patients who need insulin to survive. Many with diabetes, faced with tripling insulin prices ($200 to $700 per month), are now forced to choose between life and rent. Some patients ― like 26-year-old Alec Raeshawn Smith, who aged out of his parents’ health insurance plan and whose job didn’t offer comprehensive coverage ― have died from a lack of affordable insulin.

Eli Lilly says the company strives “to make life better for all those affected by diabetes around the world.” And because drug companies do save and improve lives (or, at least, are supposed to), the U.S. government allows them special privileges and protections. This includes tax breaks, government subsidies, extensive patent protection, free access to publicly funded scientific discoveries and more.

However, when drug companies use empty words to make promises they have no intentions of honoring, they do not deserve the public’s largesse.

Big Pharma has not shown any inclination to change its price gouging practices. On the contrary, drug companies continue to push higher costs despite the horrific impact this has both on human life and the U.S. economy. Price freezes in the U.S. are rare (and are exclusively voluntary). They also tend to be set at high levels, like the price “freeze” for the HIV drug Isentress, which caused a stir among HIV patients because of its exorbitant cost compared to competitive products.

Some companies have rolled back drug prices but typically only in response to public humiliation. Doctors at Memorial Sloan-Kettering publicly rejected Sanofi’s Zaltrap, a colon cancer drug, because it was priced twice as high as a competing product. Three weeks after the doctors’ announcement, Sanofi cut its price in half. This is why consumers shouldn’t be satisfied with price freezes; only rolling back prices will return us to reasonable drug costs.

Pharmaceutical companies do sometimes offer “solutions” to runaway drug prices, like value-based pricing and discount cards, but though these practices may help some, they are generally gimmicks meant to distract the public. Value-based pricing sets prices according to a drug’s perceived value rather than according to the actual costs of developing and manufacturing it. Such a practice can put a limit on the price of marginally effective drugs, but on the other hand, it increases the price of medications like insulin ― drugs that save lives but have been around for years and are cheap to produce. Discount cards are sometimes offered to a small subset of insured patients and do very little to help the vast majority of users or those who need the drugs most.

In the U.S., our 20 top-selling medications cost consumers three times more than the exact same drugs cost in Britain. I once paid $36 for a medication in Canada that costs me more than $700 here at home. In many European countries, government committees calculate “reference prices” for classes of drugs with similar ingredients, based on the costs to develop and manufacture them and their clinical effectiveness. That said, it’s probably not realistic to expect our politicians to agree to this kind of approach; in the U.S., pharmaceutical companies are some of the largest contributors to political campaigns, giving more than $2.3 billion over the past 10 years.

Our legislators, too afraid to challenge Big Pharma’s pocketbooks, continue to propose tepid solutions, like price transparency, that only work around the edges. Pharmacy benefit managers ― the industry middlemen who play a role in drug pricing ― take a piece of the pie, but how large a piece remains a secret. Legislation around transparency regarding undisclosed PBM deals could drive down drug prices somewhat, but it likely wouldn’t affect the baseline prices set by drug manufacturers.

The Right Care Alliance ― a group of patients, physicians, nurses, patient advocates, students and other community members with chapters around the country ― is currently organizing a campaign to target price gouging in the pharmaceutical industry. We are planning year-long grassroots actions, including town hall meetings, marches and demonstrations, to pressure Big Pharma to stop predatory pricing, particularly for life-saving medications.

We must force companies like Eli Lilly to address the gap between what they say they stand for and their actions. We must be loud with our demands to counterbalance the hold Big Pharma has on U.S. politics. Drug companies can become heroes again but only if they stop taking advantage of the patients who need them.

Marlene Beggelman is a physician and volunteer for the Right Care Alliance. She attended Harvard Medical School, the Harvard School of Public Health, and trained in Internal Medicine and Primary Care at Beth Israel Hospital in Boston. She is also the founder of Enhanced Medical Decisions, Inc.