2018 Single-Payer Strategy Conference
Healthcare-Now! Agenda: 2018 Single-Payer Strategy Conference Friday, June 22 – Sunday, June 24 Minneapolis, Radisson Blu Minneapolis Downtown.
Agenda for Saturday, June 23
- Taking on Big Pharma – Facilitator: Alex Lawson, Social Security Works; Brian Yablon, Minnesota Physicians for a National Health Program; Justin Mendoza, Public Citizen.
November 2018, Bernie Sanders and Ro Khanna unveiled a new bill that would direct the secretary of Health and Human Services to authorize generic competition for any name-brand drug whose average domestic cost exceeds the median price in five reference countries: Canada, the U.K., Germany, France and Japan.
“The government is giving an exclusive monopoly to pharmaceuticals,” Khanna told HuffPost. “If a company abuses that grant by fleecing American consumers, then they lose that privilege, that property grant, that subsidy from the government.”
If the bill — dubbed The Prescription Drug Price Relief Act — were to become law, experts anticipate that drug companies would dramatically reduce prices rather than risk ceding market share to a generic competitor. “No company would want to lose its legal monopoly as a consequence of charging U.S. residents prices higher than in the reference countries,” said Jamie Love, director of Knowledge Ecology International, a nonprofit that specializes in intellectual property issues.
The bill from Sanders and Khanna isn’t going to become law anytime soon. It faces fervent opposition from Republicans, who will still control the Senate when Congress reconvenes next year. Even getting a vote in the House will depend on whether the Democrats in charge of key committees decide to greenlight it ― a choice that will likely depend at least in part on the whims of top leadership.
But the legislation nevertheless sends a statement about the priorities of the progressive wing of the Democratic Party and its intent to deliver on the campaign promises Democrats issued around the 2018 midterms, including House Minority Leader Nancy Pelosi’s election night pledge to “take real, very, very strong legislative action to negotiate down the price control of prescription drugs.”
Pharmaceutical firms typically argue that long-term monopolies are necessary to justify the money they spend on research and development. And major drug companies do spend billions of dollars a year on R&D ― but not nearly as much as they spend on marketing, meaning that most of the costs recouped by monopoly profits aren’t essential to groundbreaking science. Nearly all research funded by pharmaceutical companies, moreover, piggybacks on government-backed research conducted by the National Institutes of Health. One study published earlier this year concluded that every one of the 210 new drugs approved by the FDA between 2010 and 2016 relied on at least some government-funded research, reflecting over $100 billion of public investment.
“American consumers pay far too much for drugs, not because it is costly to manufacture them, or even because of the expense of research and development,” said Robert Weissman, president of Public Citizen, a public interest nonprofit. “We pay too much because the U.S. government grants patents and other monopolies to brand-name drug makers, and then stands aside as Big Pharma exploits those monopolies to price gouge.”
The United States is in a class by itself on prescription drug costs, but the five reference countries included in the Sanders bill are a relatively generous comparison pool. Three of them ― Germany, Japan and Canada ― are in the top five in per-capita pharmaceutical spending among OECD nations. International reference pricing is common among wealthy nations, with 29 of 31 European Union nations taking foreign drug prices into account when considering domestic price policy, according to the European Commission.
Patents on prescription drugs are a longstanding feature of both American law and international trade agreements, in part due to the outsized influence of the pharmaceutical lobby within the Office of the U.S. Trade Representative. But international law provides various exceptions patent-holders’ privileges when it comes to public health ― which is why so many countries party to the World Trade Organization and other trade treaties can obtain lower drug prices than the U.S. does. Though Khanna and Sanders crafted their bill to crack down on the monopoly, the legislation would not technically violate a drug company’s patent ― just change the legal substance of what that patent secured.
“Drug corporations charge us hundreds of thousands of dollars for a drug that was created with taxpayer dollars because they can,” said Alex Lawson, executive director of Social Security Works, a nonprofit that works extensively with Medicare costs and access. “We don’t have to let them rip us off.”