
The United States contributes 42% of the revenue of the entire world for pharmaceutical drugs each year. Why is this important one might ask? The United States is only 4-5% of the world’s entire population, so how is it that the United States contributes to so much of the pharmaceutical revenue?  Pharmaceutical companies are controlling the money of consumers in the U.S. and are monopolizing drugs that are critical for some people to survive (Belk). The drug market has gone so far as to make people feel like slaves or hostages to their pharmaceutical companies. The current United States drug market manipulates consumers to spend hundreds of dollars on pharmaceutical drugs that are vital to their health. The U.S. pharmaceutical market should expand to other countries and open up government negotiating in order to lower the prices which will benefit the market for the affordability of the consumer. 

The pharmaceutical market is unlike any other market because the consumer’s life relies on the product that they seek, which allows the producer, or company, to inflate the price because they know the buyer has no other choice but to pay whatever it takes to get the drug. Certain drugs only have one or two suppliers because they are for specific diseases that are significantly different from the rest, so the consumer only has one producer to choose from. The consumer then in turn gives the producer all of the power in that specific drugs market. (Edwards). Companies trick consumers in more ways than just market control, they also randomly increase drug prices. According to CBS News, the anti-malaria drug Daraprim, a drug that used to cost $13.50 per pill now costs $750 per pill (Thompson).  Daraprim is one of many examples of pharmaceutical price inflation. The drugs that are extremely expensive can cost as little as a couple of dollars to make. The price hikes can occur over night or can be seen over a longer period of time such as a year (Edwards). No matter when they occur, they come as a surprise to the consumer but they have no choice but to pay for the drug. 

The Epi-Pen is a prime example of the pharmaceutical price hikes. The Epi-Pen is used to treat anaphylactic shock in people who are allergic to certain things like shellfish or bees. According to Aaron E. Carroll, “Epinephrine is very, very cheap. Even in the developing world, it costs less than a dollar per millimeter, and there’s less than a third of that in an Epi-Pen” (Carroll). Carroll also states that the Epi Pen has to be replaced every year in order for the drug to work effectively. The Epi Pen was originally sold at $57 compared to around $700 today. Both of these prescription prices are much higher than the production price of the Epi-Pen which is about $8.02 per prescription (Carroll). The Epi Pen displays the abuse of power because it is so cheap to make but because of the high demand the company saw the opportunity to make a profit. The raised price has benefitted the Mylan CEO’s salary directly jumping from $2,453,456 in 2007 to $18,931,068 in 2015 (Popken). When the CEO of Mylan was asked about the high prices she explained that the consumer has to pay more because they are charged for insurance and the out of pocket cost of the Epi Pen. The CEO did not mention exactly where the profits from the consumers were going and why the prices have been raised so high. In a solution to the high prices the CEO offered coupons and patient assist programs rather than lowering the cost of the drug (Mangan). Personally, I require an Epi-Pen due to my shellfish allergy and I face these absurd prices first hand. For me to find out that the hundreds of dollars my family spends on my prescription is used for the CEO’s personally benefit and that all I’m offered is a small coupon in exchange is disgraceful. The Epi Pen is one of many examples of the corrupt pharmaceutical market and how the companies aren’t doing much to help. 

The prescription drug market can be controlled by many factors in the producer-to-consumer process including the pharmaceutical companies, the pharmacy, and the need for the product. Large drug companies can play a role in the need for the drug through advertising. The advertising causes for high demand of the product because the consumer thinks that they need the drug. Alongside the advertising, different pharmacies charge higher prices depending on their market share (Chen). According to an analysis by Jihui Chen, “pharmacies with a larger market share are more likely to charge a higher price (with a lower cost) and thus earn a higher margin than those with smaller market shares” while also stating that “independent pharmacies have the highest average prices and margins” to describe the price variations of the drug market (Chen). Throughout Chen’s findings he concluded that the more demand there is for a drug, the less price dispersion there is and the higher the drug prices. Therefore, the drug market fluctuates based on demand but it does not go in favor of the consumer. Once the consumer shows interest in a product the prices goes up and so does production. 

Not only should reform come to pharmaceutical companies and the drug market, but also to insurance companies as well. Large drug companies make countless excuses as to why they charge high prices and have no problem taking insurance companies down with them. Pharmaceutical companies charge high prices but claim that insurance companies are the problem because they do not cover the extreme drug cost for the consumer. Drug companies look for any chance to defend themselves like claiming they need money for research of new products, alongside the tax money that is given for research by the consumer (“Is There A Cure For High Drug Prices”). As a prescription drug consumer, I am angered by this because my family already pays the $700 dollars for my prescription which is claimed to have money go towards research, while also paying taxes to contribute to the research fund. Why do we need to pay these excessive prices that are going to “research” when there is already tax money being collected for this sole purpose? Insurance is there to prevent the consumer from facing the high prices but insurance companies do everything they can for their share of the bargain. Unfairly, “The only way left for insurers to provide coverage for a drug but maintain their profit margins is to reduce how much insurance coverage—and thus protection from high prices—they offer to a consumer” resulting in increased deductibles and monthly premiums (“Is There A Cure For High Drug Prices”). Insurance companies also stop covering certain drugs leaving it up to the consumer to pay out-of-pocket costs. For my Epi-Pen prescription, it is barely covered by insurance so most of it is paid for by my family directly. Insurance company premiums take a toll on United States citizens, while the patents of drug companies affect the health of people worldwide. 

Patients who are suffering from diseases in other countries, like Africa, cannot receive the medication they need because of the patents placed on valuable drugs, making them pricey. Patents place restrictions on the production of pharmaceutical drugs and allow companies to become monopolies because they are the only one allowed to produce the drug (Edwards). In Ellen ‘t Hoen’s TedTalk over medical patents, she compares the patents on drugs to the development of airplanes in order to help the audience understand the problem at hand. When the Wright Brothers were creating airplanes they patented many parts of the plane which prevented other companies from being able to create airplanes, causing a disruption in the development of the airplane. The Wright Brothers conflict was resolved by the United States government when they stepped in and opened up the patents to other countries. In the same way this goes for pharmaceutical drugs; if a company patents a drug then no other company can make it, creating a monopoly over this one drug. Many patients in Africa cannot receive treatment for AIDS because they are not able to afford the necessary drug due to patents. Ellen ‘t Hoen argues that if patents are not opened soon then the world is going to face a larger drug crisis. Hoen looks towards governments in order to provide reform to patent aspect of the drug market, like what was done with the Wright Brothers (Pool Medical Patents, Save Lives). Countries around the world are reevaluating patents in order to provide patients with proper treatment, and the United States should tag along. 

The United States government created a plan for lowering prescription drug prices, called Plan D, but the power of government negotiating has been stripped away because people thought that Plan D would slow pharmaceutical innovation. With Plan D, the government has the ability to negotiate Medicare prices which also effects Medicaid drug prices. Through this plan of action, seniors would also receive full coverage of their prescription drugs. If the government had negotiating power they would save around $15 billion dollars each year, which is the most significant savings yet. In fact, the government’s ability to negotiate on behalf of Medicare and Medicaid saves the consumer money and also tax payers money because they contribute to the health funding (Conti 966). If the government was able to negotiate with pharmaceutical companies for all consumers in the United States, then the consumers would be able to afford the care they need causing the overall health of the nation to improve. All prescription drug users in the United States should be entitled to the same prices. Plan D should be the next step in lowering the drug prices and the hold on this plan needs to be removed in order to benefit the consumers in the United States. The government should be regulated to negotiate, but also leave room for the pharmaceutical company to have money for the cost of the drug, research, and other expenses. Once Plan D is back up and running then the government should push towards making the price negotiation and reduction luxury available to all. Personally, as a consumer, I would prefer to see government regulation in order to get my $700 prescription for a lower price. Being told that one does not have a cure or treatment for their disease because it is too expensive is unfair to the patient. Multiple factors go into reforming the drug market and the United States government can play a key role in restoring order. 

Opening the prescription drug market up to other countries for consumers is another solution to help reform the price crisis along with government negotiation. While the United States government is working on Plan D, the prescription consumers in the United States should be allowed to buy drugs from Canada. Currently, it is illegal to buy and import prescription drugs from other countries. In Canada the drug prices are less costly, even as low as less than half the price of U.S. drugs, because their government has the ability to control the prices of pharmaceutical companies (Harvard Health Publications). The drug market system in Canada is what the United States should follow in order to provide reform to the drug market. Allowing consumers to buy drugs from Canada would provide a scare to U.S. pharmaceutical companies and cause them to lower their drug prices in order to win the consumers back. As talked about in this research paper, the companies do whatever it takes to make a profit. If companies lower their drug prices they can eliminate the unnecessary personal profit that is taken from what consumers pay and centralize it more towards research and the actual cost of the drug. The government would have to open up the market to countries like Canada, which is not favored all across the board. Some states individually have considered permitting the purchase of these drugs, but, “The Food and Drug Administration (FDA) has even gone so far as to say they would consider legal action if cities and states defy the ban” (Harvard Health Publications). For this reason, the move to the Canadian market has not occurred yet, but with the help of restrictive laws, the opened market would be successful in lowering drug prices.

Resorting to Canada to lower drug prices can be argued as an unfavored solution because of counterfeit drugs and less money going towards U.S. pharmaceutical companies. From the work of Sally C. Pipes, she argues that, “the scheme would only expose patients to dangerous counterfeits and hamper the development of new, lifesaving medicines in the United States” (Pipes). With the expansion of the drug market, regulation should be placed in order to prevent counterfeit drugs. The goal should be to expand the price range for drugs, not the number of different drugs that are available. Americans would only be permitted to buy drugs approved by the United States that are for a specific disease or is the Canadian version of an American drug. Otherwise, it will be against the law for an American to import unapproved drugs into the United States. When it comes to the development of new drugs and the thought of the lack of new research, United States companies should still have the funding they need to continue making new medications because they are still receiving tax money for research from the government. The pharmaceutical companies receive funding from taxes for research alongside the inflated prices that allow for research funding (“Is There A Cure For High Drug Prices”). The companies would not be underfunded and research would be able to continue. There are multiple solutions that could better the medication market for the United States, but in the meantime there are small solutions that can save some money for consumers.

The government and pharmaceutical companies play a significant role in pharmaceutical reform, but the consumer has ways to take matters into their own hands. For ways to save, the consumer should switch to the generic brand of the drug they seek, if it is available, because it is almost always cheaper. The consumer can also look to their insurance provider to switch to a cheaper sufficient drug that is covered under their policy.  Pharmaceutical companies spend an increasing amount of money on advertising in order to convince people that they need a drug, so consumers should make sure that they absolutely need the drugs that they are buying and didn’t just buy them because they sounded beneficial (Harvard Health Publications). Spreading the word is another great way to bring awareness to the problem, which may sound cliché. More angry customers give the company a hint that they either change their prices or lose their business. Lobbying for congressman can be a great way to get political action roaring again. Drug companies should not be allowed to get away with how they manipulate consumers and the start of reform comes from the customers and buyers themselves.

 With all the ways money is sucked out of the prescription consumer’s pocket, there is no surprise that the U.S. contributes to 42% of the pharmaceutical spending worldwide. If the increased CEO salaries and overnight drug price hikes aren’t enough to inspire reform, then what will? Expanding the drug market to Canada, giving negotiation power to the United States government, and a little help from the consumers can shut down the insane drug prices. With reformed prices taxes would be lower when it comes to contributing to healthcare and the overall health of the United States would improve. No person should be without proper healthcare simply because they cannot afford it. Look out pharmaceutical companies, consumers are coming for you. 
