Inside Big Pharma

Treatments for hemophilia could soon top $1.5 million a year.
A drug for childhood leukemia recently debuted with a price tag of $475,000. Prescription drug prices as a whole have risen faster than other health care costs, and generic drugs some- times cost more than branded ones.

In her new book, Drugs, Money, and Secret Handshakes: The Unstoppable Growth of Prescription Drug Prices (Cambridge University Press, 2019), Professor Robin Feldman untangles just how the pharmaceutical market became so warped. Feldman, who directs the school’s Center for Innovation, has published three previous books, including Drug Wars: How Big Pharma Raises Prices & Keeps Generics Off the Market (Cambridge University Press, 2017).

In the new book, Feldman argues that key players in today’s broken system are pharmacy benefit managers, middlemen who negotiate prices with drug companies and set coverage terms for patients. These brokers are sup- posed to secure good deals for consumers and insurers, but in reality, neither government auditors nor private insurers know the details of their contracts with pharmaceutical companies. This setup, Feldman argues, has reduced competition among drugmakers, curtailed innovation, and created distorted incentives to steer patients toward more expensive medication.

Fixing this system requires upending existing incentives, according to Feldman. One solution she proposes is reforming the patent system so that it encourages innovation rather than “churning and recycling” existing drug formulations.

Feldman believes that the current climate provides an opening for change. “This is an important moment historically, given the fact that patients are feeling this amount of pain and frightened about being able to afford their medications,” she said. “There is an opportunity to act if we take it.”

Still, Feldman acknowledges that battling Big Pharma won’t be easy. And if we can’t muster the political will necessary to curb skyrocketing prescription prices? “Perhaps we should reach for anti-anxiety medication,” she writes. “At least today, it’s a mere $1,285 for 30 tablets.”