Shocking: Pharma CEOs Bad And Greedy, Actually!
An argument long-beloved by those who consider themselves "the serious people"/"the adults in the room" has come crashing down this week, as a report by the House Oversight and Reform Committee has proven that we sweet summer children (and the ponies we rode in on) were actually totally right all along about obscenely expensive pharmaceuticals. No longer can they pat us on the head, take a deep breath and sigh, "Are you daft? It's not about profits, it's about innovation. If an Epi-Pen doesn't cost $700, if Medicare is allowed to negotiate prices, the pharmaceutical companies won't be able to do any research and development and then we will never have any new drugs ever again. They'll take their toys and go home and leave us all to die! Is that what you want?"
That is, of course, not what we want. It's not what anyone wants. But it also sure seemed like it wasn't at all true, given how much pharmaceutical company CEOs get paid and also how much they spend on advertising, not to mention the billions they spend on educating doctors so they know which antidepressant brands can send them on the best cruises. After all, how are doctors supposed to determine what is best for their patients without a giant tower of shrimp and an open bar?
Alas, as it turns out, a much larger percentage of the money you raised on GoFundMe for your insulin is going right into the pockets of executives and investors than into research and development.
"What we have found is shocking," said Oversight Committee Chair Carolyn Maloney (D-N.Y.). "Drug companies are actively and intentionally targeting the United States for price increases, often while cutting prices in the rest of the world."
According to the data crunched by the committee, the 14 largest drug manufacturers paid themselves and investors $578 billion from 2016 to 2020 through dividends and stock buybacks, while investing $56 billion less — $522 billion — on research and development.
On top of that, the report says, some of that R&D money is spent researching ways to suppress competition, such as by filing hundreds of new, minor patents on older drugs that make it harder to produce generics.
"Despite Big Pharma's lip service about innovation, many drug companies are not actually spending significant portions of their research-and-development budget to discover innovative new treatments," Maloney told reporters in a conference call. "Instead, these companies are spending their research-and-development dollars on finding ways to game the system."
"How can Pharma say with a straight face … that lower drug prices for Americans will have to come at the expense of research and development?" House Speaker Nancy Pelosi asked on the call.
To be fair, there isn't much pharmaceutical companies can't say with a straight face, especially if they're manufacturing Botox.
One really fun fact, by the way, is that in addition to paying for "R&D" by paying too much for pharmaceuticals, we also fund it with our taxes. In fact, US tax dollars have funded the research and development of every new pharmaceutical for the last decade. A fun way to think about this is that we pay more for pharmaceuticals than every country on earth and more of our tax money goes to fund health care than any other country on earth and we get basically nothing in exchange for that other than some very rich pharmaceutical and insurance executives.
We're suckers, but we're okay with that, apparently. Because paying out the ass for literally everything means that we have more "choice" than people in other countries have. While they just have to pay nothing or very little for all of their healthcare costs, we get to pick which insurance company we want to hear say, "Sorry, we don't cover that" (unless our employer picks it for us). Freedom!
This research comes out as Democrats are pushing for the Senate to pass HR3, the Elijah E. Cummings Lower Prescription Costs Now Act. which would allow Medicare to negotiate prices and also regulate the prices of certain pharmaceuticals in general, prohibiting companies from charging American consumers more for them than they charge people in European countries. It's not super clear how that would work in a free market healthcare system (other countries negotiate as one large insurance group, as Medicare would be able to do), but hey, it's worth a shot.
Additionally, Biden is reportedly signing an executive order today related to pharmaceutical pricing.
Via Washington Post:
The order will direct his administration to work with states to devise plans to import medicines safely from Canada, where they are sold at lower prices — an idea long endorsed by many Democrats and embraced by former president Donald Trump over the objections of the pharmaceutical industry.
Canadians, however, will not be too happy about that one, as they do not actually have endless amounts of drugs and are currently in the midst of a shortage themselves. There's something a little crass about mooching off of Canada so Americans can feel like they're not actually doing any socialism themselves, but whatever. It's probably the best we can do.
The president also plans to direct the "Federal Trade Commission to promote the availability of generic drugs by banning pharmaceutical manufacturers from paying their generic counterparts to delay entry of lower-price versions of medications into the market," which is a much more sustainable and effective way of doing things than "We'll just take all the drugs Canada responsibly negotiated for!"
While this report may not actually lead to the passing of a bill that will lower pharmaceutical prices — the Senate would need, at the very least, all 50 Democrats to vote in favor of it, including the one whose daughter was the one who raised the price of the Epipen to $700 in the first place, and that just seems unlikely — it may at least help to chip away at the sincerely held beliefs some people have about pharmaceutical companies and "innovation," which could someday lead to things actually changing. Because that would be super nice.
Wonkette is independent and fully funded by readers like you. Click below to tip us!
Robyn Pennacchia is a brilliant, fabulously talented and visually stunning angel of a human being, who shrugged off what she is pretty sure would have been a Tony Award-winning career in musical theater in order to write about stuff on the internet. Follow her on Twitter at @RobynElyse