Muthumanickam A. The nationwide drug affordability crisis – a human rights issue. HPHR. 2021;53.
The Nationwide Drug Affordability Crisis - A Human Rights Issue
Exorbitant prescription drug pricing in the United States is a systemic problem arising from the lack of a centralized formulary and compounded by multiple production, distribution, marketing, and legal practices that have unfortunately formed their roots in our healthcare system. This paper aims to recognize this problem as a human rights issue, and sheds light on the current factors that abet drug price hikes. Additionally, the author of this paper proposes recommendations to help facilitate policy reform and move towards achieving drug affordability.
As a public health advocate, I can tell you with unfortunate confidence that every one in four Americans report that they have troubles affording their prescription drugs1. As a physician I can tell you that I have encountered far too many patients, in clinics and on the inpatient service, who report having skipped weeks of their anticoagulation pills, self-administered less insulin than they need, and cut their heart failure pills in half. As a physician, I am worried for our healthcare system and the people it is meant to serve.
In the United States, the crisis of extravagant drug pricing is more so a socio-politico-economic problem than a clinical problem. Faced with the opioid epidemic, the cost of Evzio (Naloxone) rose by 6.5 times2. Humira (Adalimumab), the biologic agent used in the treatment of Rheumatoid Arthritis, underwent a 9.6% increase in net price in the United States while its price in other countries dropped due to biosimilar competition. Drug affordability is also an accessibility problem, and accessibility is a public health problem. Not being able to obtain the medication you need to fight disease is an infraction of human rights.
The inherent problem is the fragmented nature of the healthcare delivery system, allowing multiple parties to dictate drug prices, and creating a stark oligopolization of drug manufacturing and distribution. Born out of this longstanding puppeteering of drug pricing are processes and factors that create a complex gridlock. They include – and are not limited to – patent evergreening and product hopping (a loophole in pharmaceutical law that enables pharmaceutical manufacturers to continue to stack patents on originally owned ones and curb competition from other manufacturers), Pay-for-Delay agreements (a monetary leash used by major pharmaceuticals to prevent others from producing generic or cheaper versions of their drugs), and one of the most significant methods – rebates. Rebates are payments given by major pharmaceuticals to pharmacy benefit managers to improve their product’s ranking on an insurance company’s formulary, thus making this drug more commonly prescribed to patients with that insurance.
The protracted debate between investment in drug innovation and the struggle to procure basic treatment is wrought with polarized arguments that ultimately fail to improve global health. The recurrent rebuttal that reducing drug prices would stifle innovation is misinformed and misleading, especially since existing literature proves that despite reducing drug costs, the pharmaceutical industry would continue to make an adequate margin of profits, which in turn can be invested in innovation. An analytical paper written by West Health and the Bloomberg School of Public Health calculated the Return on Invested Capital (ROIC) for multiple large pharmaceuticals including Merck, Abbott Labs, Novartis, etc. and found that the unweighted average ROIC was 17.3%, as compared to an 11.5% average for all other industries3. This paper also found that even if there is a revenue reduction of $758.1B over the projected 10-year period from 2022-2029, large pharmaceuticals would continue to reign the industry profit echelon with an ROIC of 15.3%. There needs to be increased dissemination of this knowledge of assured revenue maintenance among stakeholders so that there is a dissipation of the fear of loss of venture capital. There need to be preparatory frameworks in place to respond to changes in pricing and revenue, so that industry preparedness encourages drug pricing reform.
Unfailingly, higher drug prices cascade into a series of consequences for drug availability, chronic disease prevalence, quality of life, declining trust in the healthcare system. But all hope is not lost. In December 2021, the Preserve Access to Affordable Generics and Biosimilars Act, a Bipartisan effort to prevent anti-competition, was introduced at the Senate. Similarly, the Affordable Prescription for Patients Act, last reviewed by the Judiciary Committee, is an ongoing effort to limit patent ever-greening and promote the introduction of generics and biosimilars. At the time of drafting this article, the federal government could not negotiate Medicare drug pricing. There is, however, ongoing deliberation in the Senate, as per the proposed Senate Finance Draft that enlisted over 20 drugs ranging from Januvia to Revlimid4.
Policy measures that curtail the duration of patent protection, reprimand patent stacking, and reinforce antitrust principles would help deter manufacturers from using unscrupulous means to protect their drugs. Granting Medicare the ability to withhold coverage of some drugs based on clinical efficacy and safety would serve as a strategy to negotiate lower prices. Aduhelm (Aducanumab) coverage has been limited to clinical trials by CMS and has been left off many Blue Cross Blue Shield plans, due to unclear clinical efficacy and safety. In the same vein, using cost-effectiveness analyses to leverage drug prices will improve the quality of care, decrease US spending on drugs, and help reduce drug costs.
A paper published in the New England Journal of Medicine in January 2020 detailed the lifecycle of a drug, specifically through the three periods of innovation, monopoly, and competition. Subsequently, the authors compared how multiple prior acts and regulations alter the shape of the curve for drugs under these three periods5. Through reimbursement rate calculations, price concessions for drug development, etc., the paper explains that there are abundant ways to protect revenue and nonetheless continue to ensure innovation and competition.
On an individual level, the author proposes that there be increased advocacy for drug pricing reforms as the Build Back Better Act4, the Democratic proposal with some preserved terms of the original HR3 Bill (Elijah E. Cummings Bill), passes through the Senate6. On a community level, there needs to be increased engagement with legislators – healthcare professionals and patients alike must convey their priorities to Senators. Conversations between legislators and the people they work for will help ensure that the bill’s provisions are not denuded and are consistent with the community’s goals.
There is no single solution to the problem of drug pricing. A multipronged approach, including vigorous advocacy, policy reform, increased market regulation, and trading interventions, will help us reach closer to the goal of universal access to affordable medications.
In the wake of the COVID19 pandemic, the right to adequate, affordable, and efficacious healthcare is a basic human right, of which drug affordability is an indispensable component. There is a need for healthcare professionals, public health professionals, and the communities we work with to be informed of both the present inadequacies and the potential solutions that lie ahead. As physicians, there is great sorrow in being unable to provide your patients with the treatment they need to fight illness and attempt to lead a better life. It is about time we changed that.
- Kirzinger A, Wu B, Brodie M. Kaiser Health Tracking Poll: September 2016. The Henry J. Kaiser Family Foundation Website. http://kff.org/health-costs/report/kaiser-health-tracking-poll-september-2016/. Accessed February 16, 2022.
- Gupta R, Shah ND, Ross JS. The Rising Price of Naloxone – Risks to Efforts to Stem Overdose Deaths. N Engl J Med. 2016;375(23):2213-2215.
- Dickson S, Ballreich J. How Much Can Pharma Lose? West Health Website. https://www.westhealth.org/wp-content/uploads/2019/11/WHPC_White-Paper_How-Much-Can-Pharma-Lose_FINAL-November-2019.pdf. Accessed on February 16, 2022.
- United States Senate Committee On Finance. Build Back Better Act. United States Senate Committee On Finance Website. https://www.finance.senate.gov/imo/media/doc/12.11.21%20Finance%20Text.pdf. Accessed on February 22, 2022.
- Khullar D, Ohn JA, Trusheim M, Bach PB. Understanding the Rewards of Successful Drug Development – Thinking Inside the Box. N Engl J Med. 2020;382(5):473–480.
- Sachs R. Understanding The New Drug Price Reform Deal. Health Affairs Blog Website. https://www.healthaffairs.org/do/10.1377/forefront.20211104.184553/. Accessed on February 22, 2022.
About the Author
Dr. Aruna Muthumanickam, MD
Aruna Muthumanickam is an Internal Medicine Resident Physician in New York City. She is a member of the National Steering Committee for Drug Affordability at Doctors For America. She has has served a public health advocate in the field of climate change and health at UN delegations in the past and is now interested in the drug affordability crisis in the United States.