Prescription Drugs: The Price We Pay

by Anonymous

Research for the 21st Century : Fall 2004
WAOL course

"O true apothecary! Thy drugs are quick."

Shakespeare

INTRODUCTION

Over the past few years, prescription drug users in the United States have encountered rapidly rising prices. Drug costs are now so high that stories of patients having to choose between paying for medicine or other necessities have become commonplace. These prices, comparatively lower Canadian ones, and the blame the public places on the pharmaceutical companies invite research into what contributes to the cost of prescription drugs.

Drug manufacturers are given marketing monopolies, in the form of patents, to help offset the costs of new product development. American consumers seem to bear a disproportionate burden in this payback plan. Some would argue that since much of the new drug research is publicly funded we are being gouged even prior to paying higher prescription prices. Although critics make accusations of outlandish profits, drug companies note that sales must also pay for all those thousands of drugs that never made it through the process to become marketable products. Another concern is that of "me too"drugs, those developed to get a piece of an already thriving market sector. These are not directed toward filling a new medical need.

In the matter of international pricing, drug companies and the U.S. government contend that much of the price differential centers on the matter of patents and intellectual property. Although patent honoring countries charge more for their drugs, the U.S. is trying to convince more nations to sign intellectual property treaties. Some other countries also have price controls or socialized medicine systems that limit costs but may also limit services.

Topic Analysis

Academic Disciplines

• Medicine
• Business
• Economics
• Ethics

Library of Congress Subject Headings

• consumer education
• Pharmaceuticals, pricing
• Patent law
• Pharmaceutical ethics

Library of Congress Classification numbers

• RM 302.5 Pharmaceutical Industry
• RS 100.5 Pharmacy Ethics
• HD 966.5 Prescription Pricing
• KF 2979 Intellectual Property

Keywords

In retrieving relevant material from indexes and databases, I used the following key terms, among others:

• Prescription Pricing
• Drugs-Prices
• Pharmaceutical
• Pharmaceutical Industry
• Patents
• Intellectual Property

Description of my keyword search strategy:

Some times the word that seemed like it should open up a whole new world of information sources did not work well at all as a keyword. In the case of my subject, the word “drug” would seem to be a good term to use for research. Much of the time, however, “drug” only brought results related to illegal material. I found myself having to use “prescription” either alone or in conjunction with “drug” to get the results I desired. Since some of the databases would also suggest other keywords and headings to try, I began experimenting with these alternatives. I used the words “prescription” and “pharmaceutical” in conjunction with “pricing” to get my best results. These terms also worked well in the Library of Congress “red book” to give me my most productive topic

Most Important Databases and Periodical Indexes

• ProQuest Direct: http://proquest.umi.com/login
• SIRS Knowledge Source: http://sks.sirs.com
• Health Source: http://search.epnet.com
• Alt-Press Watch: http://proquest.umi.com/login

REFERENCE SOURCES

Organizations

The Pharmaceutical Research and Manufacturers of America

http://www.phrma.org/

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents many of the country’s leading research based pharmaceutical and biotechnology companies. It seeks to serve that group by advocating public policy which encourages the discovery of new medicines. Its home page has links to articles explaining the industry’s views on such topics as drug pricing and intellectual property.

The American Association of Retired Persons

http://www.aarp.org

The American Association of Retired Persons (AARP) is the largest advocacy group for senior Americans. It serves as a lobbying group in causes that effect those over the age of fifty. It also provides information to its member in a regularly published magazine. The organization keeps a particularly close eye on the medical and pharmaceutical industries

Statistics

From 1995 to 2002 the annual total of prescription drug sales in the United States increased from 72.2 billion to 182.7 billion dollars.

 United States. U.S. Census Bureau. Statistical Abstract of the United States: 2003. (123rd 
	Edition). Washington, D.C. Page 106.

Articles in Reference Books

Kratz, John C and Hartley, Frank. “Pharmacy.” Encyclopedia Britannica. 2002. Pg. 821

John C. Kratz was a long time professor of Pharmacology at University of Maryland. Frank Hartley was dean of the University of London School of Pharmacy. In this generalized article, the authors offer not only an overall view of the practice and history of pharmacy, but give the reader an introduction to some of the problems the industry faces today. In just a few short sentences, they sum up the phenomenal growth pharmacy has taken since World War II. They also expose us to the concepts of patents and marketing rights that have such a prominent place in the examination of prescription drug pricing.

 Aldridge, Susan. “Pharmacology and Drug Treatment”. Encyclopedia of Technology and
	 Applied Sciences. London. Marshall Cavendish Publishing. 2000. 

Susan Aldridge is a writer and editor who has written extensively about pharmacology and biotechnology. In this article she not only goes into some detail concerning the history of pharmacy, but she describes several types of drugs commonly used today. In each classification she gives a basic illustration of the working mechanics of that type drug within the body. Although this article does not address drug prices, it is very informative.

BOOKS

Merrill Goozner is the former Chief Economics Correspondent of the Chicago Tribune and the winner of numerous awards for journalistic excellence. He is the current director of the Integrity in Science Project at Center for Science in the Public Interest. In this book, Mr. Goozner examines the extremely large new product development costs that drug companies claim. Although he admits the costs are high, he disputes these claims. Goozner contends that most medical breakthroughs are made by dedicated scientists who are not working for pharmaceutical companies. His attitude is that of an intelligent writer presenting evidence from a field he knows well. He is not a ranting crusader.

        Goozner, Merrill. The$800Million Pill: The Truth Behind the Cost of New Drugs. 

Berkeley: University of California Press. 2004.

Marcia Angell is a former editor of New England Journal of Medicine, one of the most prestigious periodicals in the medical field. In this book, she contends that a major portion of drug research is performed in universities and is funded by the public. She feels the pharmaceutical companies spend too much money advertising. Although her tone might seem somewhat antagonistic, her credentials invite the reader to give her thoughts consideration.

  Angell, Marcia. The Truth About Drug Companies: How They Deceive Us and What to

                Do About It. New York. Random House. 2004. 

PERIODICAL ARTICLES

 Gladwell, Malcolm. “High Prices.”  The New Yorker. 25 Oct. 2004.                                                                

        < http://www.newyorker.com/critics/atlarge/?041025crat_atlarge>

Malcolm Gladwell is a former science and medicine writer for the Washington Post. He is also a business advisor and author of several books including The Tipping Point. In this article for the New Yorker’s Critics at Large column, Mr. Gladwell presents another view of the problem of high drug prices. Without absolving the drug companies of guilt, he presents a view that does not thoroughly demonize them. He discusses the problems of “me too” drugs and some commonly used trickery concerning patents. His suggested action is a consumer based one. He disputes some of the ideas of Dr. Marcia Angell.

 Matthews, Merrill. “Riding on the Coattails of U.S. Patents.” Biopharm International. 

        Oct. 2004. Pg. 82.ProQuest Direct. ProQuest Information and Learning 

        Company. Seattle Central Community College Library. 29 Oct. 2004.    

         >http://www.umi.com/pqdauto<

Merrill Matthews is a public policy analyst specializing in health care and is the author of numerous health care studies. He serves as a medical ethicist for the University of Texas, and has formerly served as a commentator for National Public Radio. In this “Final Word” column for the journal, Biopharm International, he examines whether people in other countries actually pay less for drugs when their purchasing power is factored in. He concludes they are paying less because other countries are not picking up their share of the research and development costs of new products. The U.S. consumer is funding R&D for much of the world.

 Sibbald, Barbara. “Are Canadians Paying Too Much for Generic Drugs?” Canadian 

        Medical Association. Journal. 30 Sep. 2003. Pg. 702. ProQuest Direct.Proquest 

        Information and Learning Company. Seattle Central Community College Library. 

        29 Oct. 2004.>http://www.umi.com/pqdauto<

Barbara Sibbald has written extensively on health care issues in Canada. In this article, she points out that generic drugs are often cheaper in the U.S. than in other nations. This is an aspect of pharmaceutical pricing that we seldom hear about in the U.S. Press.

INTERNET SOURCES

 Consumer Project on Technology. “Comments on US DOC Study of International Drug  
    	Pricing.”, July 1,2004.Lycos. Seattle Central Community College Library. 8 Nov.
         http://www.cptech.org/ 

Consumer Project on Technology is a consumer watch group that concerns itself with government policies concerning drug development. The group was co founded by Ralph Nader. In this posting, the organization presents its comments on various findings in a government study concerning drug prices. The group contends, among other things, that U.S. consumers pay higher prices because our government does almost nothing to obtain lower prices. The comments are intelligently made and provide several topics to ponder concerning the nature of drug pricing.

“Prescription Drugs: Right at Any Price?” Watchdog Report. 22 Sep. 2004. American
	 Association of Retired Persons. 14 Nov 2004
         http://www.aarp.org/legislative/prescriptiondrugs/rxprices/watchdog/

In this Watchdog Report article, the AARP interviews two well respected people in the pharmaceutical world. One is Merrill Goozner, the author of The $800 Million Pill, and a critic of many of the policies of pharmaceutical manufacturers. The second is Richard L. Manning, PhD, Senior Director of Economic and Policy Research at Pfizer. His sentiments lie with the companies. The two are interviewed separately, and offer, as one might expect, differing views concerning the topic of drug prices.

NON-PRINT

 Weissman, Robert. “Dying for Drugs: How CAFTA Will Undermine Access to Essential 
	Medicines.” Multinational Monitor. Apr 2004. Pg. 13. Alt-Press Watch. ProQuest
	 Information and Learning Company. Seattle Central Community College 
	Library. 12Nov.2004. >http://proquest.umi.com<

In this article, Robert Weissman discusses certain aspects of the Central American Free Trade Agreement and how that agreement could cause people in certain poorer areas to lose access to lower priced and generic drugs.Mr.Weissman’s sympathies obviously lie with the people of these developing nations, but his presentation of the subject matter is calm and he avoids the ranting that can come with such an emotional issue. Robert Weissman is director of Essential Action, a corporate accountability group founded by Ralph Nader. Multinational Monitor monitors corporate activity with emphasis on developing nations.

Mossinghoff, Gerald J. “Progress In The Pharmaceutical Industry.” U.S. State
	 Department. USINFO. 2004. < http://usinfo.state.gov>
 

In this article, Gerald J. Mossinghoff discusses some of the same topics that are touched on by the author of the previous article, namely patent and intellectual property rights as they relate to pharmaceuticals and world trade. His point of view is definitely from the side of the companies which develop drugs. It is very well written. This is a USINFO article and as such is an official publication of the State Department. Mr. Mossinghoff is a former assistant Secretary of Commerce and is now a visiting Professor of Intellectual Property Law at George Washington University. This article should be looked upon as reflecting the views of the government on this subject.

REVIEW of my Research Process

As I began my research, I had hopes of coming upon information which would illuminate the entire problem of prescription drug pricing and explain why there is such a difference in the amounts paid for medication by American consumers and those in other nations. As I progressed in my research, I found that illuminating truth to be more than slightly elusive.

In some good generalized encyclopedia articles, I was introduced to the concept of marketing monopolies issued in the form of patents on drugs. Looking to research further, I came up against a problem common to all who research a fairly timely topic. The topic was too recent on the information cycle. I could find no references at all in any specialized encyclopedias. No scholarly books had been published. The first of the popular market books on the subject had only recently reached the market. For this reason, the bulk of my information would come from journals and periodicals. Although the journals are refereed by others in the field, information in the magazine articles would require more evaluation on my part.

It was in doing research on the internet that I found I really had to take care and evaluate my information sources well. I tended to rely on information gathered from the web sites of well established organizations and groups. Even then, I preferred only those with listed authors whose previous works I could check. I also shied away from articles written in an inflammatory tone.

In the end, I did not find that single illuminating truth. I did, however, find several small sources of illumination which combine to help me see my topic much clearer than I did before. Higher drug prices seem to be the result of many factors. Corporate greed, government reluctance to regulate industry, and a lack of organized consumer action are all listed as contributing to high costs. Others point the finger of guilt at “me too” drugs, and intellectual property matters concerning international patent recognition. The problem of high prescription drugs costs is complex and probably involves many of these reasons to some degree.