In September 2015, Martin Shkreli shocked the world – the CEO of Turing Pharmaceuticals increased the price of the drug Daraprim by 56 times overnight. This is not an isolated incident, but is indicative of a systemic problem in the US healthcare system. Increases in drug prices affect lower-income families disproportionately, and despite attempts on both sides of the aisle, there has been no meaningful progress towards a more equitable solution.
Daraprim is an anti-malarial, anti-parasitic medication, often used to treat life-threatening parasitic infections developed by AIDS patients. The original patent for the drug had run out but there was no generic version of it available at the time. Generic drugs are unbranded medication – for example, Ibuprofen can be bought as a branded version (e.g. Advil or Nurofen), but many drug stores or even supermarkets also produce their own version of it. The only difference is the brand name and the price, with generic drugs usually being much more affordable – the effectiveness and chemical makeup tends to be identical.
‘the most hated man in America’
Turing Pharmaceuticals purchased the drug from its original manufacturer and changed the price of Daraprim from US$13.50 to US$750 per pill. This made the drug inaccessible to many people – especially as the US healthcare system is notoriously expensive for consumers and not everyone is covered by health insurance. Public and political outcry followed Shkreli’s actions, with all the 2016 US presidential candidates heavily criticising him. He became known as ‘the most hated man in America’.
To the rest of the world, it highlighted just how problematic the US healthcare system and US drug pricing policies are. As we approach another US election, the Shkreli case seems to have largely been forgotten. But have there been any changes? Have there been any attempts to make drug pricing fairer on patients? As current candidates pledge to reduce prices, how likely is it that they will be successful?
Martin Shkreli is an extreme example, but he is only a symptom of a wider problem. Despite Turing Pharmaceuticals announcing it would lower the cost of Daraprim, it has remained as expensive, with some pharmacies charging over US$800 for a single dose. This shows how powerful pharmaceutical companies are in the US – even after pressure from national and international politicians, the public, the media and various medical associations, the price of Daraprim has not fallen.
Healthcare becomes a purchasable good and a guaranteed way to make profit
Luckily for patients, a generic version of Daraprim was finally approved in early 2020, but previously, doctors, pharmacists and patients were stuck with either paying the price or using less effective and well researched alternatives. The problems with this are clear – it reinforces inequality in healthcare and discriminates against those on lower incomes, who are also the most likely to lack health insurance. It also gives companies the power to significantly affect the health of individuals. Healthcare becomes a purchasable good and a guaranteed way to make profit for big companies – someone will always need medication, an operation or other medical assistance. It is legal for them to exploit those who do not have the privilege of wealth.
In some cases, healthcare is so unaffordable that patients depend on multiple sources of income or have to make sacrifices in their treatment and their personal life. Those who are less privileged become trapped in a vicious cycle that permanently diminishes their quality of life. Healthcare is a human right, meaning it should be universally accessible, especially in developed countries. It is a stunning indictment of the US that this is such a far cry from reality.
In the US, drug prices steadily increase once or twice a year. In early 2020, drug prices went up by an average of 5.1%. This includes medications that people depend on: one of the most common drugs to treat autoimmune diseases like Crohn’s and rheumatoid arthritis, Humira, saw a price increase of 7.4%. The annual inflation rate of the US is around 2%, and does not explain these increases.
The often cited area of Research and Development is also unlikely to require an immense funding increase every few months. The drug pricing system is innately biased towards pharmaceutical companies and their profits and politicians risk crucial campaign donations if they challenge ‘Big Pharma’. According to the US law, pharmaceutical companies are free to price drugs themselves with hardly any limitations. The inability of the government to negotiate prices of prescription drugs with pharmaceutical companies was instigated by President Bush in 2003, as part of an expansion of the US Medicare programme. This gives companies like Shkreli’s Turing Pharmaceuticals the option to increase prices dramatically whenever they choose to.
Medicare itself is also a highly flawed programme. It does not cover all US citizens and has many gaps and loopholes, often used by insurers and pharmaceutical companies to make a profit. For example, the yearly expense limit for prescription drugs is set at an incredibly high level, meaning patients have to pay before they are eligible for government support. Some progress was made through Obama’s Affordable Care Act, but Trump has tried to revert these efforts and they have had little effect on drug pricing.
Reducing the role of government will not stop pharmaceutical companies prioritising profit
With the presidential elections looming, healthcare and drug pricing policies have become a hot topic once again. Both Donald Trump and the democratic candidates have publicly spoken out against Shkreli’s actions back in 2016, but no tangible action has been taken. Despite the Repbulican Platform in 2016 stating that reforms would lead to a reduced governmental interference in healthcare, it does not seem that this will lead to better patient welfare. Reducing the role of government will not stop pharmaceutical companies prioritising profit over health.This strategy could exacerbate the current issues, risking further the lives of low-income patients.
The document also sets affordable healthcare as a goal and Trump has repeatedly spoken about lowering prescription drug prices. Trump and his supporters have also claimed that drug prices have fallen during his presidency and are quick to cry ‘fake news!’ when this is disputed publicly. President Trump has persistently claimed that in 2019 prices fell for the first time in 51 years. Trump’s statistics rely on the Consumer Price Index for prescription drugs, which does support his statement but does not measure net prices for patients, making it somewhat flawed. The Producer Price Index is a closer depiction of net prices and that shows that overall, the increase continues, albeit at a slower rate.
Trump has made small steps towards reform in an attempt to make drug pricing more simple and transparent. However, his claims of success ignore that the effects have been limited and have not led to price decreases. It is clear that the system needs significant reform, and to start prioritising patient welfare and not profit. Piecemeal change may be enough to placate a voter base, but it is not what the system desperately needs.
Democratic candidate Joe Biden is campaigning heavily in the field of healthcare, advocating for the government to contribute more, not less to the healthcare sector. He wants to expand on the Affordable Care Act and has especially strong plans for prescription drug pricing. Removing the monopolies pharmaceutical companies currently hold over prices, aligning price increases to inflation, using international price averages to set prices of new drugs in the US, allowing Medicare to directly negotiate drug prices and allowing the import of medication are all aspects of this plan. Biden seems eager to secure the healthcare legacy of the Obama administration.
Such a huge overhaul of the current system will be expensive, and come with heavy resistance from the pharma industry, who are huge donors to the Democratic party and Biden’s campaign. There is no doubt that his plans will be incredibly difficult to achieve, but if they became reality they could have an immense impact on prescription drug pricing. However, the systemic inequalities in politics and broader society will not make any of these reforms easy for Biden and it seems unlikely that they will all pass unless they are significantly watered down.
Trump’s reforms may be enough to drive prices down slightly, or at least slow their growth. A new Martin Shrekli case could still erupt at any moment. There were no personal consequences, apart from a damaged reputation, for Shkreli. His pharmaceutical company still exists, no real political progress has been made and the US healthcare system is still inherently unequal and discriminatory.
No matter who the next president will be, fighting this will be as difficult as it is necessary. Health should not be a commodity, it should be an inalienable right. Any developed, democratic, modern country should be doing its best to fulfill this, and currently, the US is failing.