Ethan Chiu: To Mitigate Inflation, End Big Pharma
Healthcare is like dark humor. Not everyone gets it. If Connecticut continues allowing pharmaceutical companies to charge excessively predatory prices for medication, Connecticut will end up alone with the worst wealth and health inequity in the US—dead last in the triple aim of healthcare: cost, quality, and access. Currently, the Kaiser Family Foundation found that 80% of Americans see prescription drugs as excessively expensive, and more than 75% would like to see drug price caps following inflation. Even worse, 3 in 10 Americans cannot afford their life-saving prescriptions, and a study from The Lancet found that at least 68,000 Americans die every year as a direct result of not having any health insurance coverage, and hence are unable to afford prescription drugs. By implementing prescription drug price caps, these tragically high poverty and death rates caused by lack of healthcare access will be a calamity of the past.
Access is a critical issue that would be alleviated with prescription drug price controls. Many people will simply stop purchasing a medication if it becomes unaffordable, losing a critical component of their medical care. The National Bureau of Economic Research found that increasing the out-of-pocket cost of a drug by $10 lowers adherence to the medication by 23% while increasing the mortality rate by 33%. In the current market, some companies have marked up essential drugs like insulin by more than 5,000%, leading many diabetic patients to their deaths (NPR). By setting price controls at the average price consumers pay out of pocket for a drug in line with inflation, Connecticut could make drugs more affordable. This would help alleviate income inequality, especially as many with unstable or part-time employment cannot access prescription drug coverage through their employer. Thus, they must pay exorbitant out-of-pocket prices based on manufacturer-set prices preceding the typical discounts that pharmaceutical companies provide to negotiated provider health plans.
Many employers who hire part-time or offer temporary positions have an incentive for supporting drug price caps. Drug price caps will increase the likelihood of their workers obtaining critical medication and improving their health. In turn, healthy workers are more productive, contributing more efficiently to the company. This also applies to healthy workers who have family members affected by health conditions and difficulty affording treatment. Given that there is a cumulative strain on familial resources caused by sick family members, allowing family members to focus on their jobs rather than caring for their sick loved ones frees up valuable labor. From the perspective of the employer, West Health Policy Center finds that drug price caps would save employers $200 billion over six years from increased worker efficiency and health.
Price caps would increase the quality of one’s overall medical care. Currently, prescription drug costs compose a large portion of total healthcare costs for both patients and providers, lowering the availability of funds to support other critical components of one’s medical care. Thus, reducing drug costs can increase available funds, allowing more money to be spent on better quality care that a patient might need. Furthermore, doctors would be able to prescribe patients the best available drugs without being constrained by affordability concerns.
In terms of monitoring, Connecticut should ensure that pharmaceutical companies are accountable and price gouging is eliminated. In line with making pharmaceutical companies accountable, Connecticut should ensure that companies are transparent with what factors into drug prices, facilitating public scrutiny over drug costs. Additionally, Connecticut should implement meaningful consequences for violations of transparency requirements, enforcing data oversight.
While some claim drug price caps would inhibit medical research by lowering profit incentives, the federal government already funds one-third of medical research through the NIH, and most private research funding only perpetuates patent monopolies by making “me-too” drugs similar to existing ones rather than novel therapeutics. Given these circumstances, Connecticut could step in and increase research funding by utilizing the extra $200 billion in funds from implementing price caps to further boost biomedical innovation while maintaining low drug prices.
While some prefer the government to stay out of industry pricing, the private pharmaceutical market sets its own prices, and will perpetuate unaffordability. Pharmaceutical companies have a primary responsibility to their shareholders, and thus do not prioritize the end user, the medical patient. Many of the current pharmaceutical drug affordability programs from private companies are ineffective and lacking substance. Patients are often forced to undergo arduous negotiations for loan forgiveness, and those cases are often unsuccessful.
Professor Jennifer Huer, JD, Senior Director at the Solomon Center for Health Law and Policy at Yale Law School, says, “the cynic inside me says I do not know if we can do that at this point. But, if the gov’t were to regulate drug pricing and present restrictions to lobbying, that may help.” Ultimately, while it may be a band-aid solution to completely reforming the US healthcare system, pharmaceutical price caps are a necessary first step toward improving the US healthcare system and ensuring that patients can access the medicine they need.
Currently, however, prescription drug price control bills are halted in both the Connecticut General Assembly and Congress, given undue pressure exerted by powerful pharmaceutical lobbies. Given the convolution of positive effects that would come from pharmaceutical price caps, especially in an era marred by skyrocketing inflation, these pharmaceutical drug price control bills must be revived and passed with urgency.
Ethan Chiu is a first year at Yale University in Grace Hopper College
