OPINION: COVID-19 pandemic shows cracks within pharmaceutical industry

White medical pills spilling out of a medicine bottle. Photo courtesy of StockVault.

Jackie Zimmerman, who suffers from ulcerative colitis, pays $17,000 a year for medications and treatment. However, this is only the tip of the iceberg in a sea of high insurance costs and unemployment due to medical recovery. From spending half of her monthly income on insurance to often relying on her parents to help pay premiums, Jackie does everything she can to manage the lofty prices of treatment.

At one point, Jackie began to take the drug Mesalamine, which cost $959.20 for a thirty day supply.

How much does it cost to manufacture this amount?


The immense inflation of drugs is a growing problem with negative ramifications on many. It is up to the government or private companies to simplify the complexity of the pharmaceutical industry to reduce drug prices for consumers.

While public attention towards the outrageous cost of drugs continues to wax and wane, these costs have continued to be a root of worry and vexation for patients who are depending on life-saving drugs. The blame is often placed on the greed of pharmaceutical companies, but the problem is significantly more complex than it appears. As seen with the pandemic, our healthcare system is broken, fragile, weak. This system — composed of insurance companies, pharmacy benefit managers, manufacturers, drug development companies, and hospitals — is contributing to inflated drug prices. Each of these players within the system can take some of the responsibility for the high sticker price of drugs, but it is ultimately the structure of the system as a whole that contributes to this problem.

As the drug travels from the manufacturer to the consumer, there are unnecessary middlemen and steps that hike up the price. For example, pharmacy benefit managers work with insurance companies to negotiate drug prices with manufacturers, and their pockets are lined at the consumer’s expense. Cutting out middlemen — like pharmacy benefit managers — will eliminate a substantial portion of the drug cost.

Considering this clear problem within the healthcare system, it is no surprise that the government, specifically Democrats, has continuously attempted to fix this issue. Clinton attempted to introduce competition into the pharmaceutical industry and increase regulations, but his efforts were quickly overturned when Bush took the presidency. Obama worked closely with drug companies to expand coverage without decreasing drug prices, but was quickly stopped after Democrats lost control of the House. Biden hoped to allow the government to negotiate drug prices through the Build Back Better Bill, but it is extremely unlikely that the bill will pass through the Senate. These efforts show a clear pattern: aiming too high for major industry infrastructure changes results in controversy and disagreement.

We cannot repeat this pattern.

As regulations and solutions continue to be proposed, the pharmaceutical industry shows significant opposition. Although cutting drug prices would be ideal for the consumer, pharmaceutical companies argue that government regulation on drug prices prevents them from developing new cutting-edge drugs. According to the Congressional Budget Office, it costs $1.3 billion on average to research and develop a drug. However, it must be noted that pharmaceutical companies are not the only source of funding for drug development, as the government funds 44% of drug research costs. Therefore, solutions that target the middlemen within the industry and increase research funding are the most plausible, as they will reach unified support from both consumers and drug companies.

To fix this persisting issue, either the government or private companies must take action. The stark division in Congress between Democrats and Republicans, coupled with intense opposition from drug companies, shows that monumental industry reform will have trouble passing. Instead, the government should both fund drug development research and impose price ceilings on heavily inflated drugs. Since the 1960s, government funding for drug research has dropped by over 20 percent, according to the National Science Foundation. If this funding is increased, losses due to price ceilings will be minimized for pharmaceutical companies.

Considering the government’s previous failure of targeting the pharmaceutical industry, private companies may be more effective at solving this problem. Recently, the Mark Cuban Cost Plus Drug Company started selling 93 drugs for the price ofthe manufacturing cost with a 15% markup, with complete transparency of the costs behind the price of the drug. For Jackie, who suffers from ulcerative colitis and takes the drug Mesalamine, the drug she would normally buy for $959.10 costs $36.90 from Cost Plus. If competition is introduced into the pharmaceutical industry, where companies cut out the middleman to reduce costs, the need for government intervention will be less dire.

Above each of these solutions, countering drug inflation requires one guiding principle: unity. To increase funding for research, we need support from the government. To adjust drug prices to reflect the manufacturing cost, we need support from drug companies. To implement changes to the price accessibility of drugs, we need support from consumers. If each of these players can recognize this problem, we can look into the future of the pharmaceutical industry with hope and optimism.

Annika Srivastava is a staff writer for Oswego East High School’s online news magazine the Howl

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