Lowering drug prices

No denying something needs to be done about the cost of – certain – prescription drugs. But what is that something and what are the consequences?

In Britain, for example, the NHS negotiates discounted prices with pharmaceutical companies, and only after another public body has determined if a drug is beneficial enough to justify the price.

The Economist

Democrats in Congress have their own idea.

Starting in 2023, negotiations could begin on what Senator Ron Wyden of Oregon called the most expensive drugs — treatments for cancer and rheumatoid arthritis, as well as anticoagulants. Most drugs would still be granted patent exclusivity for nine years before negotiations could start, and more complex drugs, called biologics, would be protected for 12 years.

But for the first time, Medicare, the federal health insurance program for people 65 or older and for disabled people, would be able to step in after those periods, even if drug companies acquire patent extensions or otherwise game the patent system.

New York Times

What does negotiate mean? In some countries it means government setting prices and or limiting drugs to be paid for. That’s not negotiation.

There are several possibilities including:

  • There are negotiations resulting in stricter formularies in return for lower prices.
  • The US follows a process similar to Great Britain and negotiations begin only after a drug is deemed of value for the cost.
  • There are negotiations and if they fail government sets prices, penalizes manufacturers or refuses to cover the drug under Part D of Medicare.

No matter the approach taken, there must be consequences for patients and Americans in general. We need to think about the possibilities.

Negotiating or setting prices is attempting to treat a symptom and not the causes. We need to look at the process starting with basic scientific research for a new drug.

What if government decided that no tuition for any college could exceed $20,000 per year? Would there be consequences? Indeed there would be.

Setting drug prices even under the guise of negotiating to address the high cost of certain drugs is as phony and ineffective as forgiving student loans is trying to deal with the cost of college.


  1. Important to remember how we got MRNA vaccines. See: https://publichealth.jhu.edu/2021/the-long-history-of-mrna-vaccines See also: https://www.nytimes.com/2021/04/08/health/coronavirus-mrna-kariko.html

    That is, this stuff builds on prior work. It is not an on/off switch.

    No one seems all that concerned about Bill Gates or Steve Jobs wealth. Their products improved life – made many things possible. Is there some reason why we shouldn’t subsidize everyone to buy a computer, sofeware or an iphone? Perhaps we should make homes affordable to everyone – oops, that was the 2007/2008 Great Recession.

    I think, instead of reducing revenue to the drug companies, we need to manage the spend on middleman services, plus, increase the fees charged to those not in the US to the same rate charged here in the US. Kind of a “most favored nations” policy. https://www.verywellhealth.com/drug-prices-hit-americans-harder-5105304

    Perhaps if they got more money from other customers, it might keep our costs more manageable.


  2. I don’t have all the facts on how Covid-19 vaccines were developed or the profit structure that the government promised, but let’s use that as a test case. What if the government said that we will give $1M to the first company to develop a vaccine and then you could only sell each dose fo $1.00. (I am just throwing numbers out here). Do you think we would have had 3 different vaccines or none?

    On the other hand from what I have read regarding insulin is that genetic insulin still works but the manufacturers are are playing patent games by tweaking the formula resulting in a new patent at which point they stop selling the prior formulation. Maybe they need to be force to surrender the prior formula to a genetic manufacturer prior to being allowed to produced a tweaked formula. Of I am sure that there are unintended conquence to this idea too.


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