White House Plan To Reduce Drug Prices... Is To EXTEND Patents?

from the that's-not-how-it-works-at-all dept

While Congress is still doing its thing to try to make the US healthcare system an even bigger laughingstock around the world, the White House is apparently considering an executive order targeting high drug prices. Of course, it handed this power over to Joe Grogan, a (very recent) former lobbyist for a giant pharma company, Gilead, that has been at the center of some controversy over its highly priced drugs. Grogan is apparently leading this effort despite not having an ethics waiver, which means he's supposed to recuse himself from these discussions, rather than lead them. But, you know, that's not happening in the swampy, swampy waters of Washington DC. So just what would Grogan suggest as a way to lower drug prices? How about extending pharmaceutical patents? Yes. Extending.

The documents reveal behind-the-scenes discussions influenced by the pharmaceutical industry. Joe Grogan, associate director of health programs for the Office of Management and Budget (OMB), has led the group. Until March, Grogan served as a lobbyist for Gilead Sciences, the pharmaceutical company that priced its hepatitis C drugs at $1,000 per pill.

To solve the crisis of high drug prices, the group discussed strengthening the monopoly rights of pharmaceuticals overseas, ending discounts for low-income hospitals and accelerating drug approvals by the Food and Drug Administration. The White House declined to comment on the working group.

In what world does anyone with even the slightest economic knowledge think that extending/expanding monopoly powers would bring prices down rather than up? Want to know one of the reasons why drugs are so crazy expensive right now? It's because those monopoly rights have already gone way too far. If you want lower prices, you want competition in the market, not monopoly suppliers who know they're dealing with major health issues -- and the willingness of insurance companies to pay through the nose.

You can criticize all sorts of things about the way healthcare is handled in this country, or how drug prices are determined. But, it's impossible to see how anyone with a straight face could possibly claim that increasing patent rights would lead to lower prices. Of course, the argument here is effectively that by making patent powers greater overseas, the big pharma companies can milk foreigners for higher drug prices... which would make it easier for them to drop drug prices at home. Here are the details from the report:

Extending the patent life of drugs in foreign markets to “provide for protection and enforcement of intellectual property rights.” This will ensure “that American consumers do not unfairly subsidize research and development for people throughout the globe.”

Except, raise your hand if you think that drug companies would voluntarily lower drug prices in the US, just because they can now also price gouge sick people in other countries? Yeah, didn't think so. If you want to lower drug prices, the way to do it is to cut back the monopoly powers of Big Pharma so that they're actually forced to compete more. This isn't a theoretical or academic claim. Just look at the price of drugs after one goes off patent. They immediately drop. Want cheaper drugs? Ditch the patents and watch the market do its thing.

Filed Under: drug prices, drugs, enforcement, joe grogan, omb, patents, pharmaceuticals
Companies: gilead sciences


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  1. icon
    PaulT (profile), 22 Jun 2017 @ 12:05am

    Re:

    "Of course, now your drugs will come from people equivalent to the DMV"

    As opposed to people who will happily raise the price by a factor of several thousand, secure in the knowledge that you still have to pay for it no matter the cost? Who will screw you and your family over in a heartbeat if it improve this quarter's profits? I think many people will accept that.

    Also, what is it about "American exceptionalism" always seeming to imply "exceptionally bad"? You seem convinced that having healthcare systems similar to the ones present in every other developed country will inevitably lead to communism or anarchy, even this has not happened anywhere else. You seem obsessed with spreading your brand of democracy across the globe, you convinced that anything that the resulting democratic government touches will inevitably fail. It's a very strange mindset some of you have.

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