Affordability and accessibility. These two words defined the health care reform movement in 2010, which culminated in the Affordable Care Act (ACA). Yet the effects of the legislation have fallen far short of expectations as a comprehensive cost-saving reform package. While the ACA has certainly reduced the rate of growth of health care costs, the per capita cost of healthcare has continued to increase; in 2012 the per capita cost was $8915, compared $8411 in 2010.
Part of this persistent rise in healthcare costs is due to the continued high prices of prescription drugs. During ACA negotiations, the pharmaceutical industry contributed $80 billion towards the ACA by expanding the Medicare discount to 23.1% from the original discount of 15.1%; in return, the administration agreed to forego centralized drug price negotiations in the bill. As a result, in addition to mandated health insurance and thus the rising number of persons seeking healthcare, the pharmaceutical industry is predicted to generate an additional $10-35 billion in profits over the next decade. Effectively, the ACA has brought big pharma thousands of new customers who will continue to pay non-negotiated drug prices, resulting in increased profits for these corporations without significant savings for the general population. In fact, prescription drug costs accounted for 12.6% of health care costs in 2014, up from 2.5% in 2013; this leap can be attributed to newly patented prescription medicines.
The road to a new drug is long and expensive–a new drug has an estimated price tag of $1 billion, from conception to marketing (this number comes from a pharmaceutical funded study. Independent investigators say this number ranges closer to between $50-186 million http://www.doctorswithoutborders.org/article/rd-cost-estimates-msf-response-tufts-csdd-study-cost-develop-new-drug). To recoup costs, corporations turn to the patent system. Patents give owners exclusive rights to the product, which allows them to charge high prices, creating a limited monopoly. In the US, drug patents last 20 years. This means that for 20 years after the patent is filed, there are no cheaper, generic versions available to consumers. While this allows corporations to recoup their investment costs and to generate profit, it prices life-saving medications out of reach of most ordinary citizens, if not for the aid of the government or insurance companies. Perhaps this is expected of an industry where illness is good for business, but when that industry is the most profitable industry in the world, it is clear that the biomedical research and development system is broken.
Gilead’s Sovaldi is just the most recent case. Sovaldi was approved by the FDA in 2014 and is the most effective hepatitis C treatment, with a cure rate of 90%. Unfortunately, in the US, a treatment regimen of this drug costs $84,000. The VA, home to one of the largest hepatitis C populations in the US, is predicted to spend $1.58 billion by October on Sovaldi to treat 41,000 HCV-infected veterans; the entire 2015 budget for hepatitis C treatment was $700 million. Still, another 179,000 untreated veterans remain, and, at current prices, will cost an additional $7 billion. Senator and Democratic presidential primary candidate, Bernie Sanders has called on lawmakers to allow the VA to break the Sovaldi (sofosbuvir) patent, given the exorbitant cost to treat our veterans. It is unconscionable that a cure for such a difficult and devastating disease is so unaffordable and inaccessible to those who need it the most.
UAEM was founded on principles of affordability, access and innovation. We strive to promote access to medicines and medical innovations through changes in the norms and practices around academic patenting and licensing of new technologies. As students and researchers at universities, our work will become the basis for medications and drugs that universities and pharmaceuticals will ultimately patent, negotiate, license, fight and ultimately monetize to bring the medicine to market. We have an obligation to ensure that the products of our work are available and distributed equitably, and can reach those who need them.
The current system of research, patents, big pharma, and high drug prices is unsustainable in the US. We need to reinvent how we research and develop medicines, vaccines and devices as well as how we price these technologies for consumers. Alternative drug development models, such as open-source collaborations, have shown enormous savings; the Drugs for Neglected Diseases Initiative (DnDI), for example, has developed six new medications in 9 years for US$160 million. Savings during drug development will translate to direct savings by consumers. Furthermore, allowing the government to act as a centralized drug price negotiator will further drive down prices. Evidence from other OECD countries shows that nations with centralized drug negotiations and national health care systems do not share the same high per capita cost of health care as the US does. The government can only negotiate in this way if they have the bargaining power of a national, single-payer healthcare system. Furthermore, a single-payer system will save $116 billion annually in reduced prescription drug prices alone, and a total of $592 billion annually, which is enough to cover the remaining uninsured 44 million people.
Consumers do not care about the fights over patent law, research models, health care law minutiae or any number of intricacies that can envelope the fight for affordable medications. They care that they are able to purchase the medicines they need at a reasonable price. While the ACA has improved access to health insurance and doctor’s visits, it does not go far enough to fully contain healthcare costs. High prescription drug costs still plague many Americans, and the government still does not have adequate power to combat high prices on life-saving medicines. UAEM believes we need bold new pharmaceutical industry reform in the 21st century to ensure equitable access. Researchers are already exploring alternative models of drug development. It is time for us as a nation to stand together and enact a fully functional and effective single-payer national health care system with the bargaining power to negotiate with pharmaceutical companies. UAEM and SNaHP share the core belief that that people should not live shorter, sicker lives simply because they are unable to afford medical care. We are proud to stand with SNaHP as an ally for a single- payer system in the fight to provide affordable access to medicines and healthcare for all.
Jamie Ponmattam is a fourth year medical student at Case Western Reserve University School of Medicine in Cleveland, Ohio and a member of Universities Allied for Essential Medicines (UAEM).