The elderly are affected most when it comes to the cost of prescription drugs. They use drugs often to treat chronic illnesses that come with age, such as diabetes, heart disease, high cholesterol, high blood pressure, arthritis, and other ongoing conditions. However, with fixed or limited incomes, the elderly also find it difficult to pay for this.
Dr. Marcia Angell, a faculty member at Harvard Medical School and a former editor-in-chief of The New England Journal of Medicine, noted in 2004 that facts from recent years showed that about a quarter of seniors either stretched their prescriptions by taking medications less often than prescribed or did not purchase prescription drugs at all because of elevated costs.
Angell decried the huge price mark-ups by pharmaceutical companies as well as the quality of clinical research—even though reported in respected medical journals—because of how the pharmaceutical industry pressured scientists into compromising scientific information in exchange for financial rewards.
Mark-ups from $15-$750 per pill
In late 2015, a Reuters news report stating that the CEO of a major pharmaceutical company, Martin Shkreli, was summoned to appear before a congressional committee concerning the drug prices he charged the public. The article said Shkrel iinflated one drug’s price per pill from under $15 to $750. (The pill cost one dollar when Shkreli’s company acquired the drug.) Shkreli is facing fraud charges.
Prescription drugs create an industry generating more than $400 billion annually. Angell notes that in the early 2000s, the ten pharmaceutical companies in the Fortune 500 had greater profits than the other 490 companies combined.
In the early 2000s, the ten pharmaceutical companies in the Fortune 500 had greater profits than the other 490 companies combined.
–Dr. Marcia Angell
While pharmaceutical companies tout their research and investments in the development and testing of innovative drugs, the reality is that large portions of their expenditures are in advertising and marketing. Beyond this, their products are not particularly innovative. Angell asserts that most pharmaceutical companies spend far more money on “me-too” drugs, namely drugs with a very small difference that do the same things as other available drugs. The real research, development, and innovation occur at academic institutions and at the National Institutes of Health—not in big pharmaceutical company laboratories, Dr. Angell says.
Laws grant pharmaceutical companies exclusive domains
Laws favorable to the drug companies allowed for government-sponsored research, which previously was in the public domain, to be patented and licensed to drug companies, thus giving them profit-driving exclusivity. Other laws expanded patent expiration time so that a drug company could maintain a monopoly longer than in previous times, keeping competition low and prices high.
The situation has not changed much since the early years of the new century. In 2015, according to The New York Times, prescription drug prices rose 12% and mark-ups on life-saving drugs were huge.
There are various proposed solutions. Some argue for government price controls to rein in pharmaceutical companies; others urge a streamlined FDA drug approval process to allow the entry of more drugs in the market to spur competition; and others opt for a required research and development investment by the high-profit pharmaceutical companies; others advise giving Medicare more bargaining power to negotiate drug prices. Some say more government influence is the answer, while others say the opposite.
Whatever the solutions, and the solutions to be implemented – if they work – it is the concern of everyone who cares for or who will become a senior dependent on medications for health and survival.
The volume of medicine use worldwide is projected to be 4.5 trillion doses by 2020, at a cost of about $14 trillion.
Pharmaceutical use and costs are a global concern. The 2015 IMS Institute for Healthcare Infomatics report, “Global Medicines Use in 2020,” notes that the annual volume of medicine use worldwide is projected to be 4.5 trillion doses by 2020 at a cost of about $14 trillion. These are significant increases over comparable 2015 figures: a 24% increase in dosages and 29-32% in expenditures). One third of the world took one dose of medicine per day in 2005, but by 2020, more than 50% of the world’s 7-plus billion population will be taking at least one dose per day.
The United States leads the world in spending on medicines. Of the total global expenditures on medicines, 63% is from the United States. Expenditures on medicine are expected to reach $560-$590 billion in the United States by the year 2020. Although some costs are offset by discounts, rebates, and government subsidies, the numbers remain staggering.
Seniors constitute the fast-growing demographic unit in the world. They are the largest consumers of pharmaceuticals. Marcell, even with her cynicism about the pharmaceutical industry and its stranglehold on the medical world, said legislators at the state and national levels cannot ignore votes. Seniors are a huge and growing element of the population, and they take their voting duties seriously. Therefore, elderly persons needing medications are not totally helpless before the powerful pharmaceutical industry. They can vote on related legislation and have an impact.
Angell, Marcia. (July 14, 2004). The Truth about the Drug Companies. The New York Review of Books. Available at http://www.nybooks.com/articles/archives/2004/jul/15/the-truth-about-the-drug-companies/?pagination=false&printpage=true.
Pollack, Andrew. (September 20, 2015). Drug goes from $13.50 a tablet to $750 overnight. The New York Times. Available at http://www.nytimes.com/2015/09/21/business/a-huge-overnight-increase-in-a-drugs-price-raises-protests.html.
The New York Times. (September 23, 2015). Should the Government Impose Drug Price Controls? The Opinion Page. Room for Debate. Introduction. Available at http://www.nytimes.com/roomfordebate/2015/09/23/should-the-government-impose-drug-price-controls.
Aitken, Murray & Kleinrock, Michael. (November 2015). Global Medicines Use in 2020. Summary and Key Findings. The IMS Institute for Healthcare Informatics. IMS Health Incorporated. Available at http://www.imshealth.com/en/thought-leadership/ims-institute/reports/global-medicines-use-in-2020.