If there is one indisputable fact of life for Americans, particularly older folks, it’s that drug prices have soared to unsustainable levels.
Polling shows that nearly a quarter of Americans face severe difficulty in affording the prescriptions they need. Forty-four percent of Americans fear that drug costs could lead them into serious debt.
And high costs don’t just hurt American pocketbooks --- they also cost lives.
They’re estimated to have been responsible for over a million deaths of seniors on Medicare over a ten year period.
Thankfully, some concerned lawmakers have ideas to alleviate this crisis. At the top of that list is Utah Sen. Mike Lee, who recently proposed a bill to expand the number of generic drugs on the market.
Generic drugs contain the same ingredients as their name-brand competitors, but they’re also significantly cheaper. Studies show that generics can cost 20 to 70 percent less than the name-brands.
The Lee bill would eliminate much of the red tape that prevents generics reaching the market in a timely manner. It would act as a free market solution to the problem of drug costs.
But the primary culprit for high drug costs opposes this idea.
The pharmaceutical giants do not want more generics entering the market.
Indeed, Lee’s bill would undercut the complex system Big Pharma has set up to ensure that they don’t have to worry about competition from cheaper alternatives.
Here’s how the system is supposed to work.
Regulations dictate that new drugs get a 12-year period of exclusivity.
This allows drug creators to recoup investment on the product they pioneered. Our nation considers it the best way to protect intellectual property rights.
To have innovation, you must have a system that shields pioneers from being ripped off; however, in the spirit of free, competitive markets, competitors are eventually permitted to bring generics to market after the period of exclusivity is over — provided they meet the safety and testing requirements.
It’s here that the name-brand companies use the power of the bureaucracy and exploit legal loopholes to stifle competition.
The drugmakers use a variety of means to undermine their generic competition, including gaming the patent system and making anti-competitive, exclusionary deals.
Another method is for a drugmaker to file a dizzying number of patents on the same drug. Many of these patents are found to be bunk in court.
But that doesn’t matter.
The array of patents is meant to intimidate competitors. To even make their own generic alternative, a competitor would have to spend years and millions of dollars in legal wrangling just to produce their own product.
The regulatory regime is intended to make the market better for the consumer. But when it comes to drugs, many of these regulations hurt the consumer and favor powerful corporations.
Big Pharma likes to distract from their role in high drug costs. The drugmakers try to put the blame on pharmacy benefit managers (PBMs) instead.
PBMs are third party groups that negotiate lower drug prices for customers with health insurance plans.
The pharma giants argue PBMs are unnecessary, and it would be better if prices were left entirely with the drugmakers.
That would obviously serve Big Pharma’s interests, but not the consumer’s.
The drugmakers are currently championing legislation aimed at PBMs, insisting it will lower drug prices; however, Sens. Ted Cruz, R-Texas, Rand Paul, R-Ky., Tommy Tuberville, R-Ala., and other conservative stalwarts in Congress oppose this regulatory power grab that’s supported by everyone from radical Sen. Bernie Sanders, I-Vt., to Sen. Maria Cantwell, D-Wash., for good reason.
Any thinking person should be skeptical of any solution advocated for by the people responsible for high drug prices.
A much better solution (like Sen. Lee’s) would not thrill the drugmakers.
They would know it would impact their bottom line.
But that’s what it will take to get these prices under control.
Sen. Lee’s proposal is a good start on solving these issues.
The byzantine regulatory regime must be cut down to size to allow affordable drugs to hit the market. Big Pharma has spent too many years gaming the system for their own benefit.
Right now, the regulatory system prioritizes the profits of big corporations instead of the needs of ordinary Americans.
That needs to be changed as soon as possible.
Julio Rivera is a small business consultant, political activist, writer, and editorial director. He has been a regular contributor to Newsmax since 2016, on both its web pages and television network. His commentary has also appeared in The Hill, The Washington Times, The Washington Examiner, American Thinker, The Toronto Sun, and more. Read Julio Rivera's Reports — More Here.