Big Pharma Increasing Spending, Still Not Reducing Drug Costs

Logical and rational thinking would lead one to believe that a company under constant scrutiny by its end-users and the government would lay low and not try to draw attention to themselves, right? Unfortunately, logical and rational thinking isn’t exactly Big Pharma’s strong suit.

Already embroiled in controversy over outrageous drug pricing that has bubbled up to the President of the United States, the world’s largest drug makers and the industry’s leading trade group are doubling down. According to a report on Bloomberg.com, Big Pharma’s spending in the first quarter of 2019 nearly set a new record.

The Pharmaceutical Research and Manufacturers of America trade group, also known as PhRMA, spent nearly $10 million in the first three months of 2019, up from the $6.03 million spent in the same period last year. This year’s figure is just shy of the record high it spent in 2017.

At the drug maker level, a veritable “who’s who” of manufacturers were all included on the list of those who increased first-quarter spending over what they spent in the last quarter of 2018. If there’s a drug maker you can name, there’s a good chance they made the list. Here’s just a few: AstraZeneca, Bristol-Myers Squibb, and Merck. One other company on the list of those who increased spending, Novartis, saw its total rise by 450%.  

Executives from influential drug makers like AstraZeneca, Eli Lilly, and Pfizer have appeared before the Senate on multiple occasions in recent months, drawing ire from politicians who have expressed interest in revamping the entire drug supply chain. While our country’s two major political parties disagree on many issues, lawmakers on both sides of the aisle have an indicated in interest an enacting some sort of change to help patients hampered by high costs.

President Trump and his senior aides have proposed new guidelines intended to both lower costs and remove ambiguities surrounding the costs, though there has yet to be any significant changes to occur.

Eli Lilly appeared to buckle under the pressure when they announced they would begin selling a cheaper version of its insulin drug named Humalog—but the drug is still selling for more than $137 per vial, about half of the normal list price. And while any sort of reduction is a step in the right direction, even the members of Congress viewed it as little more than a PR stunt and a way to maintain its foothold in the insulin market. Eli Lilly is one of three manufacturers (Sanofi and Novo Nordisk are the others) who dominate the $27 billion segment, and they have since the drug debuted in the early 1920s.

When the Trump administration threatened to impose mandates that would force Big Pharma to include list price information in its TV advertisements, manufacturers proactively proposed an alternative that focused on building landing pages online to allow consumers to seek out pricing information for drugs. What it turned into was a confusing maze of clicks that provided more confusion than clarity.

There have been many suggestions made that the government’s intense interest in the pharma industry is similar to the role it had in cracking down on Big Tobacco in the late 1990s. There were tons of lawsuits filed, fines paid, and new restrictions added to reduce the number of tobacco users through education around the effects of its use.

Here’s hoping that watershed moment in the case against Big Pharma happens soon.

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