Despite accounting for over 40 percent of global spending on prescription drugs, American patients may still be falling short of their recommended dosages. According to a study published in the Annals of Internal Medicine, roughly 30 percent of all pharmaceutical prescriptions in the United States are “never filled,” which has directly led to almost $300 billion in avoidable healthcare costs annually and roughly 125,000 deaths from patients failing to adhere to their prescriptions. This would be the sixth leading cause of death in America. Accordingly, the World Health Organization has written that increasing adherence to prescriptions would have a “far greater impact on the health of the population than any improvement in specific medical treatments.”
Unlike many biological diseases, however, this tragic phenomenon has a readily identifiable cause and, potentially, set of cures. When patients who failed to fill out their prescriptions were asked to provide a reason for doing so in a 2017 NPR Health Poll, 67 percent of respondents cited high cost, a number which rose to a staggering 94 percent for patients with incomes less than $25,000. Drugs sold in the United States are on average two to six times more expensive than they are in other countries, and are a key contributor to the rising healthcare costs that have caused approximately 62 percent of all personal bankruptcies in the United States.
This alarming trend is occurring in spite of record-breaking profits for multinational pharmaceutical companies. The average pharmaceutical company has a profit margin of 21 percent, which according to 2015 Forbes estimates is the highest of any sector. While these companies should be lauded for developing breakthrough therapies and cures never before thought possible, the blatant price gouging that they sometimes practice should not be tolerated by American regulators. To promote public health and ensure that patients are able to fulfill their prescriptions at a reasonable price, American policymakers thus have a moral obligation to replicate the success that other countries have already had in instituting price controls on drugs.
First, price controls would help to address the problem of prescription non-adherence and thereby save lives by reducing the cost of drugs. A two year study of 25,000 breast cancer surgery patients found that women who received a Medicare D subsidy (which substantially reduced their out-of-pocket costs for prescribed medication) had 30 percent higher odds of fully adhering to their prescriptions than women who did not receive a financial subsidy. This led the authors to conclude that legislation aimed at increasing prescription adherence should “focus on lowering out-of-pocket cost…[g]iven the high costs of …medications.” A 2014 quantitative analysis of price caps on name-brand drugs echoed these results, finding that capping the price of drugs 20 percent lower than the monopolistic price point at which they would otherwise be sold would lead to a 23 percent increase in the number of patients that could take that drug. The caps would cost only 1 percent of overall pharmaceutical revenues.
Skeptics of price controls, however, often counter that artificial price caps will be “harmful to Americans’ future health” by reducing the ability of pharmaceutical companies to invest in high-risk, high-reward drug development research. The high prices of drugs are therefore viewed as a “necessary evil” to ensure the continued development of novel therapies.
A closer look at the numbers, however, tells a much different story — one often distorted by pharmaceutical companies with conflicting financial interests. For example, one of the most cited academic studies regarding high drug development costs, a 2014 study from Tufts University, claims that the average drug takes over $2.6 billion and 10 years to develop. According to Professor of Health Policy Dr. Catherine DeAngelis, however, the study was deeply flawed: not only did pharmaceutical companies provide the funding and data, but the study also double counted the opportunity cost — the theoretical cost incurred by not having invested that capital in other ventures — of developing a novel drug. The New York Times also pointed out that the study focused entirely on the in-house development of “new molecular entities” (NMEs), the most expensive type of drug to develop. Generalizing this misrepresented the typical drug development pipeline, as NMEs are a small minority of the drugs approved annually by the FDA, and public research funding through institutes like the NIH defrays a large portion of most drugs’ early development costs.
Even though independent analyses have largely favored price controls, without political backing there is little hope for achieving real-world change. Fortunately, drug price controls are one of the increasingly rare issues where both President Trump and Democrats share the same goals, and for good reason — as previously mentioned, unfilled drug prescriptions are one of the leading causes of death in America despite (from a biological standpoint) being the most preventable. This crisis is incredibly unique in the healthcare space, for instead of requiring a costly, decades-long process of developing and testing possible drugs, this far-reaching issue can be addressed with straightforward legislation.
This solution, moreover, does not seem to be too far out of reach, as Trump advanced an “aggressive” proposal to closely tie domestic U.S. drug prices to their prices in foreign markets in October 2018. While the regulations fall short of what some had hoped, many political commentators view the issue as a promising and rare “area of cooperation” between Democrats and Trump. It is therefore imperative that the surprising political consensus that has emerged on the issue and public outcry over recent drug price hikes continue to gain momentum for the sake of patients’ lives, producing legislation that meaningfully impacts the healthcare market while resulting in fewer unfulfilled prescriptions.
Image Credit: Flickr/Chris Botter