The pharmaceutical company is a hallmark boogeyman in American politics. Big pharma is the ultimate evil in the back of our political minds. But often, the idea of a malicious pharmaceutical company is muddled with conspiracy and deception. Sometimes, Americans need to refocus. Yet we cannot forget that malicious companies exist. And they do evil things. Most recently, whistleblowers revealed that a pharmaceutical company is bribing doctors to sell their price-hiked drug.
Mallinckrodt is a company that produces H.P. Acthar Gel. Doctors prescribe it for a rare infant seizure disorder, and because it is so useful people are willing to pay a very high price for it. But the price that they pay is higher than the market rate (big surprise). Whistleblowers reveal that the company engages in a multi-tiered strategy to boost drug sales. This strategy consists of bribing doctors and staff to boost profit margins. Obviously, this is a big no-no.
The drug was priced at $40 a vial in 2000. As of now, though, Mallinckrodt sells the drug for $39,000. Yes, you read that right. It’s a 97,000% price increase. It is an absurd situation, and every American is right to be outraged by this. But is there a simple solution? Is government the answer, or is it the root of the problem?
Government and Pharmaceuticals
High priced pharmaceuticals are clearly problematic for everyone, and we should work to avoid them. Sure, insurance companies help people pay for these expensive drugs, but that doesn’t mean patients don’t end up paying a lot out of pocket. This is especially true when it comes to a $39,000 vial. There is a simple solution, though, and the government can implement it. And no, it’s not more regulations; it’s less.
There are two primary approaches that the United States can take in regards to pharmaceutical regulation. The first is letting doctors prescribe foreign-approved drugs in the U.S. In 2015, Ted Cruz proposed a bill that would do just that. An implementation of the RESULT act would benefit Americans profoundly. A new piece of legislation will both save American lives and reduce drug prices. Furthermore, it will solve the issue of doctors bribing pharmaceutical companies. There are many benefits of the act:
Amending the Food, Drug and Cosmetic Act to allow for reciprocal approval of drugs, devices and biologics from foreign sponsors in certain trusted, developed countries including EU member countries, Israel, Australia, Canada and Japan.
Encouraging the FDA to expeditiously review life-saving drug and device applications, this legislation would provide the FDA with a 30-day window to approve or deny a sponsor’s application.
If a promising application for a life-saving drug is declined Congress is granted the authority to disapprove of a denied application and override an FDA decision with a majority vote via a joint resolution.
Ted Cruz explains why he proposed the act:
We continue to lose far too many of our loved ones to the “invisible graveyard,” as economist Alex Tabarrok has described: lives that could have been saved but for a bureaucratic barrier that rejects medical cures and innovation.
The bill I am introducing takes the first step to reverse this trend. It provides for reciprocal drug approval, so that cures and medical devices that are already approved in other countries can more expeditiously come to the U.S.
Clearly, this would benefit both patients and the health of America as a whole.
Japanese Drug Model
Early in 2015, Japan significantly liberalized its drug approval process. The United States should implement a similar process via Free to Choose Medicine(FTCM) legislation. Such a regulation (or, more precisely, deregulation) would allow for more competition in the drug market, thus lowering prices. This occurs when patients can use drugs that researchers prove provide safety and efficacy while preserving the FDA clinical approval process in parallel. Forbes explains:
FTCM legislation in the U.S. would create a dual track system (see figure below) that preserves the existing FDA clinical trial process while offering patients an alternative. Patients, advised by their doctors, would be able to contract with a drug developer to use not-yet-approved drugs after Phase I safety trials are successfully completed and one or more Phase II trials have demonstrated continued safety and initial efficacy.
Today’s world of accelerating medical advancements is ushering in an age of personalized medicine in which patients’ unique genetic makeup and biomarkers will increasingly lead to customized therapies in which samples are inherently small. This calls for a fast-learning, adaptable FTCM environment for generating new data.
Clearly, such legislation is beneficial to patients. When more drugs can get on the market faster, this allows doctors to prescribe pharmaceuticals that are more suited for the patients’ needs. In addition, the increase in competitive safe drugs on the market means that prices have to stay low. Patients want to pay less, so they will look for the prescription that is safe but affordable at the same time. Such legislation forces drug companies to keep their prices low.
A Brighter Future
Making both of these changes will effectively solve the problem of pharmaceutical companies bribing doctors. Obviously, Mallinckrodt needs to be prosecuted for their practices. The government also needs to go after other companies that engage in such malicious profit-over-people tactics. But doing this is not enough; safe and calculated deregulation of the market needs to occur so we can solve this problem at the root. The end result would be beneficial for everybody, save the malicious pharma executives.
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