Problem
Predatory Drug Pricing
Other developed countries pay markedly less than the United States for prescription drugs (i.e., Japan 70%, France 59%, Denmark 29%). The prices of prescription drugs in the United States are expected to rise 6.3% per year between 2016 and 2025. The U.S. government paid about 43% of the cost of all prescriptions in 2015, yet when Medicare D (prescription drug coverage) was enacted, the legislation barred Medicare from negotiating with pharmaceutical companies to get lower costs (Olson & Sheiner, 2017).
Drug companies influenced this and other legislation that prohibits negotiating prices on drugs and medical devices, having spent over $2.5 billion over the past 10 years funding lobbyists and politicians in Congress. In fact, lobbyists outnumber the members of Congress 2 to 1 (McGreahl, 2017).
Drug manufacturers are protected by U.S. patent and intellectual property laws to protect their investment in developing a new drug-estimated as high as $2.5 billion. And they have learned to game the generic drug laws that were enacted to promote competition (i.e., antitrust laws). When their patents are about to expire, they simply make a very minor adjustment and re-patent the medication, thus avoiding generic competitors and allowing increased prices. Legislative attempts to legalize the importation of lower-price drugs from outside the United States, to reverse the ban on the government negotiating drug prices, and on increasing Medicare rebates on generic drugs have failed (Walsdorf, 2018). Our "multiple, overlapping health care systems," with government, private insurance, and private payors, have also made it difficult to maintain a consistent method of drug pricing and purchasing, making it easier for drug companies to limit access to specific medications leading to price spikes (Marciarille, 2017, p. 46).
The result of these policies and practices became very apparent when prices began to soar beginning in 2015:
The price of an established drug, Darprim to treat toxoplasmosis (often associated with HIV/AIDS patients), rose 5,000%-from $13.50 to $750 per pill (Pianin, 2016).
Two pharmaceutical companies-Retrophine Inc., and Rodelis Therapeutics-raised prices on some drugs 2,000% (Pianin, 2016).
Valeant raised prices on two long-standing drugs to treat Wilson's disease, from a 30-day cost of $500 to over $24,000 (Peterson, 2016).
The cost of a lifesaving medication for those with serious allergic reactions, EpiPens, rose to over $600 in the United States, while the United Kingdom was able to negotiate a $70 price tag (McGreahl, 2017). Mylan, a drug company making EpiPens, gave their CEO an increase in salary from $2.5 million to $18.9 million between 2007 and 2016 (Babcock, 2017).
In the midst of a serious U.S. opioid crisis, naloxone (Narcan-used to reverse opioid overdose), in all forms except nasal spray, increased between 469% and 2,281% between 2006 and 2017. Because of drug shortages due to only one drug company selling the 0.4-mg single-dose product, sustained and dramatic price increases have resulted (Rosenberg, Schick, Chai, & Mehta, 2018).
From 2002 to 2013, insulin prices more than tripled-from $40 to $130 a vial (Pearl, 2018). A survey of type 1 or type 2 diabetics found that 26% had used less than their prescribed insulin dose due to rising costs, and that almost half had intermittently gone without diabetes treatment ("High Cost Has 1 in 4 Diabetics," 2018; Upwell Community, 2019).
It may now be important to not only consider side effects and effectiveness of a medication but the negative impact of excessive cost. This may enable Medicare and other insurers to consider cost as well as quality in deciding which drugs to include in their formularies. For instance, physicians at Memorial Sloan-Kettering Cancer Center refused to put a new, very high-priced drug for colon cancer (Zaltrap) on their formulary because it was too expensive, and they encouraged other physicians to examine the financial strain to their patients in their decision-making process. After some publicity, the pharmaceutical company dropped the price by 50% (Buck, 2017).
The focus is on public health ethics concepts and application to community/ public health nursing practice.
Answer the below questions.
i. Do you think drug prices are problematic? State the ethical principles involved.
ii. Do both sides of the argument have merit (drug company's costs, a consumer's inability to pay)?
iii. Does this situation constitute an ethical dilemma?
iv. How could you go about resolving this? Consider the rights of a few versus the rights of many.
v. Apply Iserson's (1999) three tests (under heading Decision-Making Frameworks).
Source: Babcock (2017); Buck (2017); "High Cost Has 1 in 4 Diabetics" (2018); Marciarille (2017); McGreahl (2017); Olson & Sheiner (2017); Peterson (2016); Pianin (2016); Rosenberg et al. (2018); Upwell Community (2019); Walsdorf (2018).