On February 8, 2024, the CEOs of Johnson & Johnson, Bristol Myers Squibb, and Merck were challenged by the U.S. Senate HELP (Health, Education, Labor, & Pensions) Committee to disclose their reasonings for the outrageous drug pricing in the U.S. They discussed the role of PBMs, patents, free market apprehensions, advertising budgets, and concerns regarding how Medicaid and Medicare can cover these expensive drugs. Amidst the heated conversations, Sen. Bernie Sanders confronted the Big Pharma CEOs with a powerful, and resonating, statement: “Your lifesaving drugs mean nothing to millions of Americans who cannot afford them.”

Naturally, Big Pharma’s response was the recurring narrative that their commitment and investment is focused on “Research & Development”. While R&D is necessary to advance the potential for upcoming and currently listed medications, the term is also often used as a scapegoat for where profits are being allocated while little to no proof is required for that spending.

The Senate countered this claim by highlighting the exorbitant amount of money that they are also spending on advertising costs, patent extension and lawsuits, and shareholder profits. As an example, Sen. Chris Murphy pointed out that Johnson & Johnson allocated $17 billion toward stock buybacks and dividends while only dedicating $14 billion to R&D efforts.

Backpedaling, Big Pharma then points the blame on the traditional PBMs, stating that the actual cost of medications have not increased substantially, rather it’s the PBMs that are hiking up the prices and taking more than the lion’s share. While some fault might lie with the PBMs, both parties are complicit in the action. These conversations are ineffective and do not lead to any tangible solutions. So, in a situation where everyone is complacent, everyone is making money, and no one’s bottom line is being impacted, why are they even involved in this conversation? The problem is that the user of the service and the payer of the service have been taken out of the dialogue.

If you want to solve this, talk to the people who are in the middle of all of it. As an advocate for affordable healthcare solutions, particularly in the prescription drug space, I would start with significant fundamental changes to the unchecked spending of pharmaceutical advertising and the corrupt relationship between PBMs, the manufacturers, and rebate programs.

Reducing Advertising Costs

The United States is one of only two countries in the entire world that allows for pharmaceutical drug advertising. The amount of exposure that Americans get to these advertisements is overwhelming. Nielsen estimates that, on average, 80 pharmaceutical ads air each hour on television. And not only are audiences inundated with clever and hopeful marketing messages, they are being guided to medications that can charge significant amounts of money despite having insurance coverage.

This doesn’t even begin to touch the surface of how Big Pharma’s ad spend can manipulate the media companies, influence consumer behavior, and more. Big Pharma has surpassed $8 billion spent on advertising annually and their primary goal is not to help the consumer, but to sell the product. Think of the medical advancements that could be made if that money was redirected into actual R&D.

Eliminating Rebate Programs

PBMs negotiate formulary placement and in doing so extract bribery from Big Pharma with rebates. Express Scripts, CVS, and Optum control 80% of the entire population’s access to drugs so if the manufacturer’s drug is not on one of their formularies, a third of the U.S. population does not have access to available medications. Formularies should be based upon clinical effectiveness and value, not bribery. If a drug works better than another drug, then it should be on the better version of the formulary because of its efficacy. They are not negotiating drug prices; they are negotiating rebates.

In my opinion, Congress should stop allowing rebates to exist at all and make them just as illegal in the healthcare industry as they are in many others. You cannot pay for performance in any other industry but somehow healthcare, specifically the PBM world, has found a loophole. Traditional PBMs would lose their minds if they had to give up rebates because everything they do is dependent on them as they add significant value to both customers and shareholders.

Moving Forward

In short, there is a lot that needs to be done to reign in the unprecedented spending of Big Pharma, but the fact that our government is beginning to take note of public outcry is promising. We’re here to convince leaders to bring the right voices to the table.

We have to get the government and the media out of Big Pharma’s pocket. I would love it if SHARx didn’t have to exist and that Americans had affordable access to life-saving medications no matter their income but until that becomes a reality, we’ll keep fighting the fight and continue advocating for those who need us.

The post The Solution to High-Cost Drug Pricing in the U.S.: Having the Right Conversations appeared first on SHARx.

I’ve spoken many times about my children’s genetic condition known as Cystinosis. Having children with an illness is stressful enough, but it is made more stressful by the cost of the medication needed to treat their illness. A few years ago, the manufacturer of their medication was acquired by the company Horizon Therapeutics. Learning more about Horizon’s rise within the pharmaceutical industry was enough to make me sick!

Horizon got their start in 2015 and in a relatively short period of time has racked up a collection of crucial drugs worth billions of dollars without ever licensing a product it invented. How they did it serves as a great example of the brokenness of the drug industry. Click here to read more about the rise of a company worth billions that never made a single product.

On the Market

When Horizon acquired the manufacturer of my children’s medication, the price of the drug increased by 50% in a short amount of time – from $50,000 to $75,000 a month per child. They are able to charge these ridiculous prices because the reality is that people with Cystinosis must take the drugs needed to treat it or they likely will not live past the age of 10.

I am disgusted that this company and its leadership has made so much money on the backs of people like my family. However, I am actually glad they were acquired because things can only get better from how it works currently.

My Own Experience

In addition to the exorbitant costs, to make matters more difficult, the drugs that my children take are limited distribution. This means only one pharmacy in the entire country can fill their prescriptions and, in my case, it is a big 3 PBM owned specialty pharmacy. As a parent, I do not have a choice as to which pharmacy I can go to, and I can tell you from experience that service is not important to the pharmacy I am forced to use. I am not picking on this particular pharmacy as I have used 3 of the 4 largest specialty pharmacies in the country and the experience was just as awful each time.

In some cases, I get placed into what is called a bridge with my manufacturer and they use a special pharmacy (the same pharmacy that would be used if I were eligible for PAP) to send me my children’s medications.  This normally happens when the pharmacy screws up so bad, my children will run out of medication without intervention.

When using this special pharmacy, I have delightful experiences and am envious of those who get to use them on a regular basis.

The Rise of SHARx

Companies similar to Horizon were my motivation behind why I began SHARx.

Drug companies and manufacturers make millions and billions of dollars by jacking up the prices of their medications. Most people attempt to pay for their medications until they can no longer afford to. Many employers are faced with this same dilemma. With insurance, employers are forced to find ways to pay for that one person that costs more than everyone else combined. At SHARx, we recognize that you cannot “insurance your way” out of this problem. It is not working for employees or employers.

Addressing the Now with the SHARx Solution

SHARx’s mantra is to solve the problem now before you face it head on. We live in a very broken system, and it is only a matter of time before an employer is faced with making those tough decisions. Even if an employer is not currently dealing with these issues, it is likely what the future holds. The average price of a new medication is rising dramatically. Employers must be prepared for when they eventually feel the sting of high drug costs.

People make the best decisions with the information that they have been given. Unfortunately, many people using the broken insurance system have not been given the information needed to make sound decisions. That is where SHARx steps in to let people know that it does not have to be this way. For me, I once was the broker. I was coming from the top down, but becoming well-versed in the industry has made me realize the importance of coming from the patient up. After all, that is where the process starts and ends.

Applying Business to Medicine

I have half a million reasons that illustrate how pharmaceutical giants do not really care about the people using their products. It is frustrating to see how companies like Horizon exploit people like my children for financial gain, yet they use their faces in their advertising. These are young children who suffer every day from a disease they did not ask for and are being used as marketing subjects. They want people to believe that as a company they care about the people taking their medications and desire for them to get better. However, they really want people to take their drug as much as possible for as long as possible. 

If you ever ask big pharma why they charge so much, their answer is always about their research and development. Though, when you poke holes in that facility of an excuse, the answer becomes ‘because we can’. They exponentially recoup their investment. It is really about ROI, not R&D. Essentially, they applied business to medicine. 

Stop Playing the Game

SHARx wants to help people who do not have a seat at the table with the drug companies and insurance giants. Too many people are being forced to play games, by companies like Horizon, that they cannot win because they are in the system that beats them down and wears them out. They are tired and not speaking up has become the norm. We want to change this narrative and disrupt the corrupt system. Our goal is to stop the game and liberate the member from the system that was never built for them.

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