For years as a psychiatrist I have observed the pharmaceutical companies charge huge amounts for every new psychiatric medication. This started in my view with the emergence of Prozac ( generic: fluoxetine) in the late 1980’s. Suddenly this drug cost several times what previous antidepressants had cost before Prozac. I felt later that part of what happened was the Big Pharma watched intently as the Reagan administration deregulated industries and let the “market forces” take over. They saw no enforcement or regulation of higher prices. They priced Prozac accordingly higher, much higher. But since Prozac was supposedly the best thing since toasters, and a ‘new’ class of antidepressant, many people were willing to pay the higher costs and the insurance companies largely followed suit and covered it. All other classes of medications, antibiotics, blood pressure medications, etc., also took the initiative and priced their emerging drugs to market from then on and we had a spike in health costs as medications nationally became a higher cost for everyone including corporate entities since companies are now to be considered “citizens” due to the Supreme Court’s Citizen v. United States decision.
Perhaps a review of the drug pricing cycle is in order for the non medical professional reader. Drug companies have by law for decades, a 20 year exclusive right to a medication from discovery and patent filing, through research and development, drug trials and approval. This usually takes on average approximately 10 years. Then when a drug comes on the market, it is a “brand name” drug and its pharamceutical company can price it at whatever level they wish until that 20 year total is met. Then the medication goes “generic” and can be manufactured and sold by any other company after FDA approval in the generic pipeline which is much much shorter.
Now to my story. Another psychiatrist, Dinah Miller MD (no relation) wrote a story published in Clinical Psychiatry News, a monthly psychiatric newspaper that most USA psychiatrists receive, entitled: Shrink Wrap News: The surprisingly high cost of Abilitfy.” She put into words what we all knew about the cost of Abilify, that its average monthly cost retail at the pharmacy was between $900-1200 a month. Shocking but expectable under our present system of medication development and marketing.
Does this system exist outside the United States? The answer is NO. Canada and Europe have far lower prices, on average 2/3 lower for the same brand name medications. In the late 1980’s a very large number of patients/healthcare consumers, started obtaining their medications by postal mail fulfillment at the new western Canadian by mail pharmacies centered in Alberta and Manitoba as discrete industries. Other people began the drive to Mexico, would cross the border and travel into the nearest adjacent Mexican city and fill their prescriptions there at far lower costs. The latter option has greatly diminished as it has become dangerous to travel to Mexico because of the drug cartel wars.
This sector of the consumer economy has received in my opinion, to use Dr. Dinah Miller’s word, “surprisingly” little news attention through the last 25 years or so. In large medication buying circles such as the VA hospital system, and state pharmacies and states’ Medicaid systems, Abilify is priced much lower. This happens because those state or nationally based groups can dictate terms to the pharmaceutical companies when they declare, in effect, “give us your drug at this price range or we won’t buy your medicine at all.” But the retail consumer gets gouged. It appears that the forced downward price pressure exerted by the “marketplace,” a favorite conservative economic concept, has caused indirectly the pharmaceutical companies to make up the lost profit difference by pricing the retail drug cost higher. A sad example of the law of unintended consequences. Good intentions but the yuck leaks out somewhere else.
So far there has been no protection or remedy for the retail consumer who gets the worst bite in the pocketbook. What has this done to me and other psychiatrists nationally? In the last 15 years especially, it is my conclusion that we have shifted our medication prescribing emphasis to the most recent group of generic psychiatric medications and lowered our prescribing of current still brand name, overpriced psych meds. In my view this is not a poor second choice as nowadays many medication members of the same class are mostly similar and the patient/consumer does not suffer and receive second class treatment.
What do you think? Are drug prices still too high? Do drug companies deserve this indirect subsidy by our system as many other industries do?