Down with Pharmaceutical Costs
Navigating Healthcare

Hepatitis C officially has a cure: Sovaldi.

It is a powerful drug capable of healing the 150-200 million hepatitis C sufferers around the world. This pharmaceutical discovery entered the market in 2014 and was listed on the World Health Organization’s List of Essential Medicines. Though Sovaldi has the power to save countless lives, the question is: how much are people willing to pay?

Currently, the prescribed 12-week course costs around $84,000. Though this cost seems absurdly exorbitant, Sovaldi’s price doesn’t come close to being one of the highest price tags for pharmaceuticals — many exclusive medicines cost more than $375,000 per treatment. Although the big pharmaceutical industry has made amazing research breakthroughs over the years, these innovations are not available to the general American public. Drug prices are continually soaring in the United States, making it nearly impossible to financially cope with illness.

Interestingly, though Sovaldi racks up a huge bill in America, the same 12-week course only costs the equivalent $900 in India. Nexium — the 24-hour heartburn relief pill — costs upwards of $200 per course in the United States, but it costs only what comes out to $23 in the Netherlands. Pharmaceuticals are markedly less expensive in other developed and developing nations; it seems America is the only country that suffers from overly inflated drug prices. Brand-name patented drugs are up to 40% more expensive in the United States than in other countries.

In foreign nations like India, the United Kingdom and Canada, the government regulates the prices of medicines based on their therapeutic benefits. This keeps costs in affordable ranges. In the United States, however, pharmaceutical companies have the upper hand. Once the Food and Drug Administration approves a drug for public use, it grants companies a 20-year patent, which prevents other corporations from producing generic versions of the drug until the patent expires. Although this system encourages and rewards pharmaceutical development efforts and has produced an unparalleled drug discovery ecosystem in the United States, it hurts patients. Patents prevent free market competition and allow drug producers to grossly overcharge patients. When a particular drug’s patent expires, its ludicrous cost is lowered up to 80% via the production of generics.

In addition to patent-driven cost increases, the U.S. health insurance system also plays a role in the overinflated pharmaceuticals business. If no competing drugs exist in the market, American insurers must accept the price set by big pharmaceutical companies. If competing drugs exist, insurance companies receive more negotiating power and are able to reasonably lower manufacturing costs for patients. However, Medicare — the nation’s largest health insurer — is government-owned, and thus by definition is not allowed to negotiate pharmaceutical prices with companies. Because the nation’s largest consumer of medications has no bargaining power, there is no incentive for manufacturers to lower costs.

When big pharmaceutical companies are asked why drugs are so outrageously priced in the United States, they respond with the following phrase: research and development.

The FDA subjects potential drugs to a rigorous authentication process, and clinical trials can cost companies hundreds of millions of dollars. According to the big pharmaceutical industry, U.S. drug prices are adjusted to cover money previously spent on R&D. While foreign nations regulate drug prices and thus limit pharmaceutical profit, Americans have to raze their pockets to compensate. However, according to a 2010 study conducted by the Tufts Center for the Study of Drug Development, reported R&D costs are unverifiable, and there is no evidence that lower prices in other industrialized countries cheat companies of recovering R&D costs.

Clearly, the American pharmaceutical industry needs to adjust to meet the needs of everyday citizens. As a nation, we are prioritizing company benefit over the common man. I concede that incentivizing pharmaceutical companies to continue innovating is wildly important; the United States is constantly discovering new research breakthroughs because the United States promises big profit to pharmaceutical innovators. However, this system is harming our sickest patients in the process. The financial burdens of being ill in the United States are atrocious — the annual price for an average cancer drug costs well over $100,000.

As a nation, we desperately need to lower medication costs. One way to do so would be instituting price caps on pharmaceuticals. Another way we can slash the price is by shortening the pharmaceutical patent that new drugs receive: limited-length patents would allow generic medication to enter the market earlier and, therefore, bring down costs.

In the past decade, big pharmaceutical companies have developed unimaginable medications for society: we have drugs for cystic fibrosis, for certain types of cancer, for HIV. The next step is to make these pharmaceuticals affordable for the sick, so that patients can actually make use of these advancements.

Nikita Deshpande is a sophomore in the College. Navigating Healthcare appears every other Monday on

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