Magazine

Getting Feverish about Drug Prices


Your remarkable article, "Drug prices: What's fair?" (Cover Story, Dec. 10), is one of the few probing journalistic attempts to grapple with the dilemmas of affordable medications and research financing. The marginal cost of manufacturing pills (after the research is performed and the factories built) has generally been very low cost. But with patents, mergers, and efforts to hold back generics, drug prices are not determined by anything close to a free market.

It is sad to see artificially high prices restrict the use of the many medications that are needed--especially with 70 million Americans lacking drug coverage and millions more insured badly. Private cost controls would cut drug use further, and they might even hamper research.

The latest data show that per capita drug spending here is the world's highest. As we outlined recently in Senate testimony, a prescription drug peace treaty could rely on public action to lower prices and raise volumes to buy all the additional drugs needed to fill all Americans' prescriptions, at an annual incremental cost of perhaps $9 billion, while protecting drugmakers' profits and while channeling dollars from marketing and copycat research into breakthrough research.

Alan Sager and Deborah Socolar

Directors, Health Reform Program

School of Public Health

Boston University

Boston

You ask: "Drug prices: What's fair?" Whatever the market will bear.

Fred Dent III

Baton Rouge, La.

The U.S. is one of the few countries that doesn't place government-controlled price restrictions on drugs. This makes for an uneven playing field, in which insurance companies and patients support the profits and research of the pharmaceutical industry, while the world reaps the therapeutic benefit--at considerably lower expense. International pharmaceutical company self-regulation of drug prices would be a step in the right direction.

William Hummel, M.D.

San Diego

A large but hidden part of the problem is the pricing of generic drugs. Typically, they cost 20% less than the name brand--just enough to qualify for most insurance plans and not enough to roil the big manufacturers. But it is still far more than the actual costs of production. In theory, with research and development costs amortized, the cost of many drugs should just be pennies. Brand manufacturers could themselves take the lead in the low-cost manufacturing (and selling).

Don Hutchinson

Sudbury, Mass.

Big Pharma may spend billions on advertising to consumers, but it knows its bread and butter comes from physicians writing prescriptions. Some companies resort to blatant bribery--and get caught. Others offer lavish, all-expense-paid vacations to resorts under the premise of a "product launch," along with expensive "promotional materials." I certainly don't fault pharma companies and doctors for making money, but if they agreed to curb these practices, drug prices would surely be lower.

Wanda Opdyke

South Plainfield, N.J.

What companies would jump through all the expensive hoops that the Food & Drug Administration has instituted to bring a new drug to market just to break even or make a small profit? Not many. The truth is that pharmaceutical companies want the payoff from their investment in drug research, and U.S. investors (especially venture capitalists) want stock returns in their portfolios. That is why the American people and the U.S. government tolerate the health-care industry being run as a business. Ultimately, high drug prices--and high profits--are good for the economy.

R.J. Myer

Temecula, Calif.

The intellectual-property protection granted to drug companies should require payment of a fee that would be based on the actual sales of the patented item (usually a drug) during a first period of its commercial use. The proceeds from this fee should be collected in a fund that would finance the required service--vaccinations, medical care for the poor, or basic research at universities. The fee would apply only to those patents that are actually commercially used, and would be due after they are commercially used for a long enough period of time. Such a fee can avoid potential problems of patents whose owners visualized no commercial use at the time of filing, such as the gene-sequencing patents.

Nicholas Georgakopoulos

Carmel, Ind.

It was inspiring to see an article about drug costs utilize the input of pharmacists. Recent pharmacy graduates have all completed some coursework in the discipline of pharmacoeconomics. Many complete additional residency and fellowship training. It is time for the American health system to recognize the important contributions of pharmacists in the care of patients and the management of drug costs.

John Michael O'Brien, Pharm.D.

Bethesda, Md.

Medicine works only if used properly. Misuse of prescription drugs costs the health-care system $1.25 on top of every dollar that is spent on medication. Often the remedy for misuse of prescription drugs is only more prescription drugs. Community pharmacists can help reduce many of the misuses. Considering the $100 billion annual cost of prescription drugs, it is clear that there is a great deal of room for improvement.

Craig L. Fuller

President & CEO

National Association of

Chain Drug Stores

Alexandria, Va.

Our system of health-care economically rewards "disease management" rather than "health promotion." That's backwards! Increasingly, health-care resources will be consumed by our aging population, the very folks who can least afford the high prices. Physicians, insurers, and administrators must design benefit plans with a conscience: down-regulate unnecessary drug utilization (and the attendant cost of drug misadventures in the elderly) while fully funding appropriate nutritional and pharmaceutical therapy.

Michael D. Levin

Health Business Strategies

Clackamas, Ore. In "E-biz is flunking out on campus," (e.biz, Dec. 3), you quote Raphael Amit, director of the Wharton Electronic Business Initiative as saying: "E-biz is not something separate." Then comes your snide comment: "Now he tells us." This is truly a case of the pot calling the kettle black.

During the bubble period, BusinessWeek was totally sucked in by the dot-commers. You completely lost your objectivity. Your reporting skills were reduced to slobbering over companies and "entrepreneurs" that were promoting untenable business models. Shame on you: You should have known better. And because so many people rely on your insights, you must bear some moral responsibility for their investment losses when the bubble burst.

Please return to the kind of analytical insights you are capable of generating, e.g., the excellent summary of the issues in "The Microsoft case: Tying it all together" (Legal Affairs, Dec. 3).

Louis W. Stern

Kellogg School of Management

Northwestern University

Evanston, Ill. Stephen Wildstrom's article "Bringing the stacks to the students" (Technology & You, Dec. 10) gives the impression that Questia Media's digitized book collection is a revolutionary way for college students to research papers. Wildstrom should have visited a few academic libraries to see how they've changed--any one of them will have an array of electronic databases that will put Questia to shame.

Librarians are tech-savvy, human search engines who are highly skilled at finding information on the Internet or teaching students how to use electronic databases effectively. Students who subscribe are probably paying for something they can get at their academic library as part of their tuition.

Steven J. Bell

Director of the Library

Philadelphia University

Philadelphia It's a telling commentary that teaching becomes a popular career choice of the well-educated only when they can't find work elsewhere ("Going to the head of the class," Social Issues, Dec. 10). The 2 million teacher shortage that is forecast to develop over the next decade is largely confined to math and science. Candidates with these areas of expertise will be easily marketable outside the teaching profession once the economy revives. When that happens, there will be a mass exodus.

Walt Gardner

Los Angeles


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