I recently stumbled upon a brilliant opinion piece in the Washington Post about the leverage enjoyed by drugmakers of on-patent drugs which have no “reasonable substitute.” In it, a co-director of Yale’s Global Health Justice Partnership, a Yale Law School student, and an associate professor of medicine at Harvard Medical School and faculty member at Brigham and Women’s Hospital compare the pharmaceutical industry’s pricing powers to those of the federal government.
The leverage to which they refer involves drugmakers that own unexpired patents on treatments which are singularly necessary for patients with life-threatening conditions. “Predictably,” say the authors, “drug manufacturers sometimes use this leverage to demand excessively high prices.” They compare these situations to ones in which an owner of property along a proposed train route holds out for a massively inflated payout (known in the real estate industry as a “strategic holdout”).
On the other side of the coin, the federal government has the power to buy, not just pharmaceuticals but any product, at a reasonable price set by a judge under a legal privilege called “government use.”
Growing numbers of stakeholders in patient-care circles are calling for the executive branch to exercise government use in order to bring prices of a relatively small group of drugs under control.
The authors of the Washington Post article cite examples such as the Gilead Sciences-owned hepatitis C drug Sovaldi. A Senate panel investigated Gilead, and found months of meetings wherein company executives debated just how high they could set for their exclusive medication. For one 12-week treatment, they decided they could get $84,000. And they did – to the tune of $36 billion in three years.
Under government use, the Washington, D.C. can negotiate lower prices with the pharmaceutical corporations or simply purchase large quantities at the “reasonable price” for use in public programs. In the past, the mere threat from the executive branch to invoke government patent use has prompted drugmakers to voluntarily lower prices.
Along with Sovaldi, other drugs which could benefit patients who are currently priced out include the Leukemia drug Gleevec and “second-line” anti-retroviral treatments for HIV.
An activist group called FightPharmaRipoffs.com, a subsidiary of Public Citizen, Inc., is currently collecting signatures on a petition it says it will deliver to President Obama, asking him to exercise government use on “ultra-high drug prices [which] put life-saving medicines out of reach for the patients who need them most.”
In order for pharmaceutical corporations to continue conducting valuable research and development, it’s important for them to be profitable. Very few deny that fact. The controversy is in to what extent they should profit from drugs that patients need for survival. Mixing the factors, dying patients and corporate profits, creates a mess that, at least for now, is best resolved through positive executive action and judicial prudence.
My upcoming novel, DEADLY PRESCRIPTION, asserts that Big Pharma is analogous to a crime syndicate. In fictionalized settings, we see just how far people are willing to go for money and power.