Pharmaceutical Price Hikes Cause Unequal Healthcare Access
By Sami Siddiqui
Meet Laura Marston. Laura has Type I Diabetes. Managing this disease is difficult in itself, but purchasing insulin only makes matters worse. In 2019, Ms. Marston paid $275 for each vial of insulin, which she’d likely need to replenish 2–3 times a month as an average Type I Diabetes patient. Costs like that make you wonder how she can afford insulin while also putting food on the table.
To put it simply, she can’t. In fact, Laura sacrificed more than a hearty meal to stay alive, including her car, her furniture, her apartment, her dog, and her retirement savings. By age 36, Laura even had to sell her possessions twice over to keep up with her insulin payments. And, according to her calculations, Laura will need another $7 million if she expects to double her lifespan.
Laura is one of the 1.6 million Americans who have to undergo lifelong financial compromises to afford insulin. As you may suspect, unscrupulous pharmaceutical price hikes are to blame. In 1996, when Type I Diabetes patients like Laura first purchased insulin, vials were going for as low as $21. Today, companies like Humalog, Apidra, and Novolog charge upwards of $300 for the exact same product, equating to well over 1200% price increases in a 25-year period.
And it’s not just insulin. In 2019, the list prices for 22 of the top 25 prescriptions by Medicare Part D spending outpaced inflation that year–and by vast margins at that. Imbruvica, an anti-cancer prescription taken by 25,000 patients, led the way with a 19.7% list price increase, exceeding the rate of inflation by tenfold. Price hikes of that nature are too steep for patients to keep up with, especially given that their wages were most likely not raised to compensate for the expenses.
COVID-19 didn’t change anything for drug pricing. According to the AARP Public Policy Institute, the average cost for 260 “widely-used name brand” prescription drugs rose 2.9% last year, well over twice the general rate of inflation. Consequently, individuals who sought these prescriptions that year had to spend over $6600 on average to get it. To put that figure into perspective, the median cost of rent for a one-person apartment in the United States is $1098 per month. Had any of these patients not needed to empty their wallets for overpriced prescriptions, they could have comfortably secured nearly six months of apartment housing instead.
Oftentimes, settling for cheaper alternatives isn’t a viable option to make ends meet either. Take insulin for example. Retail stores like Walmart are selling re-branded versions of a “Novo Nordisk formula” for $25 per vial. Here’s the thing: the formula is older and less effective, which means patients will need to purchase more of it for their treatment to be sustainable. In Laura’s case, she is also allergic to some of the ingredients in the alternative Walmart insulin, negating any possibility for individuals like her to capitalize on the cheaper price tags.
Taken together, the ongoing price surge on common prescription drugs begs two questions: who is responsible for the pharmaceutical inflation, and what can we do about it? The answer to the former points to a couple factors, all of which trace back to the companies we trust with producing our medication.
First and foremost, the pharmaceutical industry is broken down into monopolies (or oligopolies for cases like insulin), who control the entire development process for select medications from factory to the CVS counter. For many patients, this means they have to settle with the prices set by the company that supplies their prescription–because they have no other choice.
Pharmaceutical companies also pose too much influence in Congress, spending as much as $220 million for lobbying purposes in 2018 alone. At the end of the day, money talks, especially over the voices that many concerned legislators have regarding this very issue. As a result, we have seen little political reform to show for the financial cascade that many patients endure just to stay alive.
On a slightly higher note, price hikes are slowly decreasing at the moment. According to the AARP, the 2020 price hikes for many prescriptions were their lowest since 2006. With that said, we shouldn’t rely on market trends alone to fix the drug prices. After all, leaving things as they are will continue to make your trip for ibuprofen a lot more expensive if left unchecked.
President Joe Biden already has the ball rolling on the issue, endorsing several proposals to limit drug price increases to the rate of inflation. But making pinky promises alone will not cut it either. According to a Mayo Clinic study, the first and most effective solution is to regulate the duration of a medication patent. This measure would prevent large pharmaceutical companies from applying for a new patent on the same drugs, thus reducing the power monopolies hold on the drug market.
Another viable option to achieve a similar effect is to lobby for faster approval processes for generic brand and biosimilar alternatives. In doing so, patients can opt for cheaper products that will be equally effective as their name brand counterparts because they will comprise similar ingredients. In turn, large pharmaceutical companies that once monopolized the industry would have no choice but to decrease their prices to remain competitive.
Ultimately, solving the problems that lie in drug pricing will be a tall task, for sure, but it’s one we need to solve quickly. Millions of people who live just as Laura does to make ends meet are counting on it.
Sources:
- The high cost of prescription drugs: causes and solutions (S. Vincent Rajkumar, Blood Cancer Journal)
- Insulin is too expensive for many of my patients. It doesn’t have to be. (David M. Tridgell, The Washington Post)
- The human cost of insulin in America (Ritu Prasad, BBC News)
- The High Cost of Insulin in the United States: An Urgent Call to Action (S. Vincent Rajkumar, Mayo Clinic Proceedings)
- AARP: Even in pandemic year, average price increase for common drugs more than twice inflation (American Hospital Association)
- Prescription Drug Price Increases Continue to Outpace Inflation (Dena Bunis, AARP)
- Type 1 Diabetes Facts (JDRF)
- Average Rent by State 2021 (World Population Review)
- Price Increases Continue to Outpace Inflation for Many Medicare Part D Drugs (Juliette Cubanski and Tricia Neuman, Kaiser Family Foundation)
Sami Siddiqui is a second year Molecular, Cell, and Developmental Biology major at UCLA and is a THINQ 2021–2022 clinical fellow.
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