Hoopla Over Hike in Prescription Drug Prices Sparks Lively Debate
By Sherri Kimmel
This fall, the 5,000-percent price hike of a 62-year-old prescription drug provoked an outcry in the national media, on the presidential candidate debate stage and in some Bucknell classrooms.
Professor Amy Wolaver, economics, co-director of the Bucknell Institute for Public Policy, led students in her three sections of Economics 103 in a lively discussion of drug monopolies — showing a video clip of the CEO who was declared “the most hated man on the internet” by Benzinga, a financial-media outlet. Students watched the rather oily-looking Martin Shkreli of Turing Pharmaceuticals explain why he raised the price of Daraprim, which is used to fight parasitic infections, from $13.50 to $750 per pill: to make his company more profitable.
The controversy inspired a lively conference-call debate among Emily Powers ’18, her sister Carolyn and her mom, Barbara Weir Powers ’84. Emily took the middle ground in their discussion of ethics and economics; her sister advocated for the right of pharmaceutical companies to recoup the exorbitant cost of research and development before a drug can be approved; and her mother found the price hike unconscionable.
“I don’t agree with how aggressive it was — 5,000 percent overnight — but drug companies really do need to make a profit,” says Emily Powers. “Making a higher profit is an incentive for companies to make better drugs. Ultimately, that will make a healthier society. You just can’t give away drugs for free. The world doesn’t work that way.”
In some countries, drugs are nearly free, though, attests Teweldeberhan Misghina ’18. At least that was the case when he left his home country of Eritrea in 2006 for a refugee camp in Ethiopia. Another of Wolaver’s Economics 103 students captivated by the topic, Misghina says in Eritrea, individuals could acquire drugs for a nominal fee at hospital pharmacies.
Although he says, as “a private person, I feel terrible [about increases like the ones driven by Shkreli], I understand that firms are always trying to maximize profits.”
Misghina was among the 45 or so students, faculty and staff who attended a Pizza and Policy Forum titled Prescription for Trouble in late October. The panel of Wolaver; Professors Erin Jablonski and Ryan Snyder, chemical engineering; and Jove Graham, Geisinger Health System clinical research director; addressed prescription-drug pricing and pharmaceutical company obligations to patient safety, innovation, access and affordability.
According to Snyder, one reason drugs cost so much is that pharmaceutical firms spend on average $1 to 1.5 billion and a dozen or more years to reach the point where FDA approval is in sight. Only about five out of 10,000 drugs actually gain approval, he says.
Drug patents are good for 20 years, at which point a drug may be manufactured and sold by other companies as a generic. Because patents take effect before trials and safety testing begin, the patent period after approval is often just seven to 12 years.
“If we had the will in this country, we could devote more federal funding [for drug research, rather than relying on private companies to foot the bill],” says Wolaver. “I personally think that’s the best option. But politically, we’ve decided on a system that results in inequity in access. It’s a social-justice issue.”
Wolaver suggests an additional remedy: regulating drugs prices, as is done in the United Kingdom and Canada. But she sees no hope for this.
Nor does Professor Chris Ellis, political science. “Even if health economists agree on a technically sound solution, actually changing policy to reflect that solution is another matter entirely,” says Ellis. “The gridlock in our political system makes even really sound economic ideas politically impossible to implement.”
He also doubts that the “price gouging” headlines of this past fall will endure as a presidential campaign or media issue.
“It’s the story of the day, rather than something that sticks, since the drug in question doesn’t affect that many people,” says Ellis. “It makes for a jarring story, but it leads citizens to say, ‘That’s weird,’ rather than something they should take action for.”