WHY ARE WE OVERPAYING FOR OUR MEDICATIONS?

Our local newspaper, The Omaha World-Herald, sometimes runs editorial pieces from other publications.  These pretty much run the gamut from liberal to conservative, and each one usually gives someone something to disagree with.

Recently, the paper published an opinion piece that had appeared in The Wall Street Journal, essentially mocking an effort by a U.S. Senate committee to investigate drug prices in the U.S.  It was my turn to disagree.

Most Americans have become so accustomed to hearing about how expensive our medications are compared to the rest of the developed world, that such information just goes in one ear and out the other.  But these costs are a real hardship for many Americans.

So here’s the original editorial Bernie Sanders Wants a Pharma CEO Show Trial , as well as my response below, published today in the Midland’s Voices column of the World-Herald.  I use an analogy that previously appeared in an earlier post Guns, Drugs, Geezers, and Money but it’s still relevant.  You might keep it in mind the next time you pick up your prescriptions.

Oh, and I did add an editorial comment here on the singer Jelly Roll that didn’t appear in the paper.  Feel free to disagree if you’d like.  It’s not meant to take away anything from his testimony about the dangers of Fentanyl, but his appearance isn’t exactly a textbook promotion of sobriety. . .

And no apologies for the Ron DeSantis comment, either.  Anyway, the extended version is below, and you can see the original newspaper piece here: https://omaha.com/opinion/column/midlands-voices-americans-deserve-to-know-why-their-drugs-are-so-expensive/article_a81f4576-ccfb-11ee-855b-eb6f1532d92e.html

AMERICANS DESERVE TO KNOW WHY THEIR DRUGS ARE SO EXPENSIVE

Donald R. Frey, M.D.

The author is Professor Emeritus of Family Medicine at the Creighton University School of Medicine.  His comments do not necessarily reflect the views of Creighton University.

Let’s say you need to pick up a few things at your local grocery store.  You grab the items, toss them into your cart, and head to the check-out line.  A couple of your neighbors are in line ahead of you, and you notice they have exactly the same things in their carts, too.

The cashier rings up their individual purchases, and charges them each $49.  But when your items get rung up, your bill is $108.

You’re stunned.  You’ve just been charged over twice as much for precisely the same things your neighbors bought.  You’re confused, hurt, and angry.  Don’t you at least deserve some answers?

Apparently not, if you believe the recent Wall Street Journal (WSJ) piece, carried by the World-Herald on January 25, 2024.

As has been well documented by multiple sources, Americans pay over twice as much for prescription drugs as citizens of comparable countries.  We’re talking about the same drugs, manufactured in the same way, by the same companies, and used to treat the same diseases.

Over twice as much.  Why?

That’s the question the Senate Health, Education, Labor and Pensions Committee is seeking to ask pharmaceutical CEOs on behalf of the American people.  But according to the WSJ, this is somehow all just a “socialist show trial.”

Really?  At a time when we’ve seen a parade of Congressional witnesses ranging from university presidents to UFO buffs, public health officials to a guy who changed his name to “Jelly Roll” (who looks to have about a half-gallon of ink sitting under his skin, and enough metal on his teeth to build a lawnmower engine), asking those responsible for high drug prices to explain their actions hardly seems unreasonable.

What kind of money are we talking about?  According to research by the Peterson Institute and the Kaiser Family Foundation, Americans pay $1,126 per year for prescriptions.  Other developed countries average $552—for exactly the same drugs.

All of this has real life consequences.  The same Peterson research also revealed that one out of every three American adults has forgone taking prescribed medication due to costs.

Most other countries use their collective purchasing power to manage drug costs.  By negotiating directly with the manufacturer, these countries can drive a harder bargain and bring down prices for their citizens.

And it works.  Europeans, Canadians, and Australians all buy the same drugs for half as much.  And it doesn’t hurt the drug companies one bit.  They still reap gross profit margins more than twice those of S&P 500 companies.

Research and development (R&D) costs are often used as an excuse for high drug prices.  But this argument doesn’t hold water.  All major companies have R&D costs, regardless of their industry.  And if pharmaceutical research really is so expensive, why is it that only Americans are being asked to pay the price?

The good news is that our government is just beginning to conduct direct price negotiations with some pharmaceutical companies.  These carry the real possibility of reducing prescription costs for hard working Americans.

Yet, this is precisely what the WSJ derides as “sham negotiations behind closed doors.”

Whether these negotiations, along with the Senate hearings, produce results remains to be seen.  But political ideology should not be an excuse to shut them down.

After all, if the Ron Desantis-led state of Florida is resorting to importing drugs from Canada, the reality of this problem should be obvious to all of us.

The only question is whether we have the collective national courage to address it.