Thursday’s edition of USA Today included an editorial with this headline: “When pure profit drives drug development, you pay.” It told about the development of a drug called Makena, which went from a price of $15 a dose to nearly $1,500 and then — under pressure — fell back to $690 a dose.
Here’s the story. Makena is an artificial hormone which prevents premature births in many pregnant women. It was first developed in the 1950s and was approved by the FDA. It then fell out of favor and production ceased. But in 2003, the National Institutes of Health, a federal agency, did a new study and confirmed its utility. Because many premature babies suffer lifetime consequences, physicians began to prescribe it. It wasn’t available from any drug company, so pharmacists made up individual doses and charged patients $15 a dose, making a normal profit.
Then K-V Pharmaceuticals of St. Louis got wind of the increased demand, applied for and got FDA approval to manufacture and sell the drug exclusively for seven years. Doctors were pleased to have a stable source of the drug, which pharmacies could no longer provide because K-V had the monopoly.
K-V took instant advantage. A 20-week course of treatment that cost $300 when the corner drugstore compounded it by hand, dose by dose, suddenly cost $30,000 — a hundred-fold increase that, needless to say, put Makena out of reach for a large percentage of pregnant women.
The USA Today essay also estimated that the huge cost of the important drug added a potential $4 billion to the nation’s health care bill each year and drove up insurance costs.
“ … When a sole supplier has a drug that delivers unique results, the sky’s the limit. Some cancer drugs, for instance, cost patients and their insurers $100,000 a year or more.
“K-V argues that it has invested or committed a quarter billion dollars to test and market Makena. But the company won approval mostly on the strength of the 2003 trial paid for by taxpayers, making the $4 billion annual price tag seem excessive.”
The editorial continued: “… With health care costs rising so rapidly that sacrifices are inevitable, it’s enough to raise questions about the affordability of a system that relies almost exclusively on profit motive to drive drug development, without constraint. Medicare, for instance, isn’t allowed to negotiate prices. By law, it just pays what’s asked.
“One might also wonder why taxpayers don’t reap the benefit when a drug results from their investment.
“There’s no disputing the medical advances attributed to today’s market. They’re huge. But it’s not the only option. When Jonas Salk developed the most famous vaccine in U.S. history, one that ended the recurring epidemics of polio that terrified parents through the 1950s, he refused to take a dime. He had worked on it at a university using foundation money and he thought the public should own it.
“That was in a different America. Makena’s hundred-fold price jump, among other examples, argues that history has moved too far in another direction.”
RIGHT — SO HOW do we correct the course? The market won’t correct itself. K-V used taxpayer-funded research and the drug patent system, to leap in and rake off outrageous profits from this one drug. There are hundreds, perhaps thousands, of similar profit-driven examples.
Because our society makes it possible — and today’s business morals make it acceptable — Americans pay much more for prescription drugs than patients in other nations pay. And those high drug costs are part, but only a part, of the reason why health care costs in the U.S. are nearly twice those in other rich nations.
Can those costs be reduced down to rich-world levels? Yes. But only if the force used to cause that reduction is equal or superior to that which will fight tooth and toenail to prevent it from happening.
The cardinal fact in this discussion is that every dollar cut from health care costs is a dollar cut from some provider’s income. Being human, pro-viders don’t want their in-comes cut. But the providers are also consumers and taxpayers and can be persuaded to move toward Jonas Salk and away from K-V Pharmaceuticals by inspired leadership.
The alternatives are too destructive to accept.
