Overregulation is killing competition in the pharmaceutical industry. Rather than letting markets work, companies are essentially allowed monopolies that drive prices to astronomical heights. Take anti-venin for example. Chances are you’re not going to be bitten by a poisonous snake or scorpion but, if you are, that’s just the first bite. The next one is out of your wallet.
Here’s how it works. You get bitten, you go to the hospital because you don’t want to die. You are injected with 4-6 vials of CroFab (the recommended starting dose), and it saves your life with few of the side effects that used to plague anti-venins. Then you get the bill. It turns out that the wholesale price for that medicine is more than $3,000 per vial. Once they get enough in you to save your life and you pay the consumer price? Let’s hope you aren’t stuck with a price tag of nearly $68,000. It’s happened before.
It should be good news for bite victims, then that there’s something new on the market- Anavip.However, pharmaceutical regulations are such that competition isn’t likely to bring the prices down significantly. Anavip seems less expensive at $1,220 per vial but, with a recommended initial dose of 10 vials, the price is pretty equal.
Robin Feldman, a professor at University of California, Hastings College of the Law in San Francisco, who specializes in pharmacy law told NPR “When we allow a system of perverse incentives to flourish, this is the result we get.” It’s the generic drugs which really bring down drug prices, and bureaucracy is making it just about impossible for anti-venins to enter that market.
In the U.S., even when the FDA approves another drug, the maker can manipulate the patent process to keep competitors out. A patent allows a drug manufacturer to claim ownership of certain product information and bar others from making, using or selling a drug based on the protected content for 20 years. This gives manufacturers a powerful edge – they can sue potential competitors for patent infringement.
“The most creative activity in the drug company should be in the lab, not in the legal department” says Hastings law professor Feldman, paraphrasing a former FDA commissioner.
One solution? The 340B medical drug pricing plan which provides life-saving medications cheaper for lower-income Americans at no cost to taxpayers. At Banner Health in Arizona, scorpion bites are more common than in other parts of the country, and their 340B pricing program saves lives without breaking the bank.
Page Smith, director of Banner’s 340B program, explains: