In a bid to fix the expenses that come with the U.S. health care system, hospitals are joining forces to boost the not-for-profit pharmaceutical industry. According to the CDC, 1 in 4 U.S. families struggles to meet their medical care costs. In 2017, pharmaceutical companies spent $171.5 million lobbying against President Trump’s attempts to lower drug costs. One of the more startling examples of this is Turing. While there was once an attempt to sell it for $750 a piece in the U.S., it was available for less than $1 in the UK.
The reasons for high drug prices in the United States are fraught with controversy. Some will argue that the higher prices drive research. As a result, they ensure safety and quality.
Others fiercely argue against offering drugs at a lower price in Europe. Why? Because they believe their cost in the United States is subsidizing countries such as the UK.
Many arguments ignore external factors. For example, varying insurance costs between states. And, the human input behind prescribing, administering, and monitoring drugs. Let’s say you’re relying on Warfarin. If you are, you’ll need to attend a clinic to check how thin your blood is. Depending on where you live and your clinician’s skillset, this can have a big impact on drug prices.
The hospitals initiating the not-for-profit pharmaceutical industry efforts are targeting 20 drugs that are in short supply and, therefore, expensive. Here’s how they plan to make it work. And, why it’s crucial that they’re successful.
The not-for-profit pharmaceutical industry will save lives
Under the title of Intermountain Healthcare, the new contributor to the not-for-profit pharmaceutical industry is based in Utah. Several hospitals are contributing to the effort, with a starting fund of $100 million. The work is starting in 2018, with hopes of a successful launch in 2019.
So far, Intermountain Healthcare has remained tight-lipped about the drugs they’re going to fund. This is hardly surprising, given what we already know about Big Pharma’s lobbying efforts. As their plans progress, Intermountain Healthcare is attempting to attract philanthropic contributions.
To ensure the medications remain cheap, they will produce generic versions. Generic drugs typically don’t need to cover the cost of marketing. According to the FDA, this makes them 80 to 85% cheaper than branded versions.
With such a steep decline in prices, essential medications could become accessible to those 1 in 4 families that can’t otherwise meet their medical care costs. It’s worth repeating that we don’t know which drugs Intermountain Healthcare wants to cover yet. But, to use an example, we’ll compare the costs of Tylenol vs Acetaminophen. Both come in an extra strength format. While Tylenol costs $9.49, Acetaminophen at Walgreens is just $2.39. That’s almost a 400% increase in price.
Now, if we place such price differences into the context of life-saving antibiotics, it’s clear how powerful this campaign could be. For example, if a patient develops cellulitis and cannot afford their Flucloxacillin, they’re on a fast-track to sepsis.
Potential challenges to the Intermountain Healthcare proposal
As we’ve already seen with Trump’s efforts to lower drug prices, the pharmaceutical industry won’t take this one lying down. While there is a dependence on profit to drive innovation, there also needs to be a balance that benefits consumers of all income levels and backgrounds. With the likelihood that Big Pharma could level the same fight against Intermountain Healthcare, it’s not surprising that they’re staying quiet about their coverage plans.
Until 2019, all we can do is watch and wait. If Intermountain Healthcare’s entry into the not-for-profit pharmaceutical industry is successful, millions of people will benefit.