With another day, another headline arrives revealing the arrogant, out-of-touch nature of the pharmaceutical industry. Fortunately, this time, the outrage arrives from overseas. Specifically, the UK Independent reports that Aspen Pharmaceuticals, which you might remember for such hits as economically blackmailing the Italian government via its monopoly power over certain drugs, is up to its old tricks again. This time, leaked internal emails show the company celebrating its purchase of five generic cancer drugs because, to quote them, “price increases are basically on line with European target prices (Leukeran, a bit higher!)… Let’s celebrate!”
And just how much were the price increases that prompted this Snidely Whiplash-esque missive? Well, according to the Independent, some drugs saw their prices increase some 40 times over or, in percentage terms, by 4,000 percent. Coincidentally, this is the same amount that Aspen demanded the Spanish health minister allow in yet another instance of monopoly-powered blackmail. Points for consistency, one supposes.
But perhaps you’re confused. Wasn’t this a price increase on generic drugs? Even if the intellectual property laws in Europe permit such a thing, surely it couldn’t happen here, right? And fortunately, thanks in large part to the existence of the generic drug lobby itself, you’d be right that this particular set of abuses probably couldn’t cross the pond. Nevertheless, the episode is notable more for what it reveals about the pharmaceutical industry’s larger pricing policy agenda than anything else. Indeed, there are two main reasons that conservatives (and Americans generally) should still find the news alarming.
Firstly, for conservative purposes, this episode gives the lie to the idea that the pharmaceutical industry is somehow opposed to price controls or socialized medicine. Truthfully, it loves both…provided it gets to set the terms for them. After all, without the more expansive monopoly power over generics granted in European markets, this kind of abuse would swiftly be met with a market correction as other generic manufacturers simply produced versions of the same drugs at cheaper but equal quality, as would likely happen here.
Instead, as the cases of Italy and Spain also demonstrate, any price controls become simply a method whereby pharmaceutical companies can assert their power over the citizenry and their elected representatives, nothing more. And if you think socialized medicine like the U.K.’s National Health Service (NHS) doesn’t permit this kind of abuse to happen to an even greater degree, well, I have four words for you: third party payment problem. Google it, if you like, but if you ever wondered why Big Pharma is such a big fan of Obamacare… well, wonder no longer. Bottom line: If pharma were allowed unilateral power over U.S. policy, it would look far more like the socialist, regulation-heavy policies that permitted this abuse in Europe than like a free market where competition among firms is completely free, and off-patent drug formulae are treated like recipes.
Secondly, and this is the most important point, this episode is yet another data point proving that the route for pharma’s sky high profits runs directly through the exploitation of cancer patients. As Health Affairs has noted, contrary to industry spin, increased drug prices do not originate with increased research and development costs. Rather, the drugs that see the most price increases tend to be the ones that vulnerable patients can least do without. Cancer patients are the metaphorical mother lode. As such, it should come as no surprise that Aspen increased the price specifically of generic drugs that treat cancer, such as the aforementioned Leukeran. They know where most of their bottom line comes from.
This “soak the cancer patients” approach becomes particularly revealing, when you consider some of the most retrogressive policy causes that pharma has signed onto. It is, for example, an open secret that one major reason the industry wants to gut the little-known 340B drug pricing program is that it stops them from gouging poor cancer patients. In other words, the only price control the industry doesn’t like is one that is (ironically) fully voluntary and pro-consumer.
Further, the desire to turn the generic drug market into a similar staging ground for monopoly power is highly revelatory when you consider Big Pharma’s dishonest crusade against the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act, which tightens up the process by which generic manufacturers can purchase samples of drugs that have gone off-patent. After all, when other companies can obtain an off-patent formula and make the same drug for less, you can’t get away with 40-fold price increases.
Therefore, while American consumers should thank their lucky stars that Aspen’s abuses don’t transfer easily into the U.S. regulatory environment, they should also take the episode as a reason to be vigilant and demand that their elected representatives hold pharma’s feet to the fire. Otherwise, high drug prices will continue to be a cancer on the body politic and one for whom our supposed healers will absolutely refuse to produce a cure on their own.
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