The real war on drugs
Published July 12, 2004

There's one experience that I think all Americans share: paying too much for health care and prescription drugs. Certainly, there are some lucky souls with great health coverage, or with enough money to spare, who have yet to feel the pinch of these skyrocketing prices, but it's only a matter of time. Employers can no longer afford to subsidize the full cost of their workers' health coverage; in the next few years, the ever-increasing prices will be be passed on to the consumer. Co-pays will rise, and there is no end or relief in sight.

A recent article in the Tribune (Drug prices skyrocket, July 1) revealed that drug companies had raised their prices at three times the rate of inflation; this situation is getting out of hand.

Let's take an example, shall we? I'm going to break out some conversion math here, but bear with me. In the late summer of 2003, I was suffering with some terrible eye allergies. I was prescribed eye drops called Zaditor (the ever-amusing naming of drugs is a topic for another column). When I went to the pharmacy, I was informed that there was no generic equivalent, and my co-pay for brand name drugs is $60. I went ahead and paid, but let me tell you, I didn't refill that prescription.

$60 might be OK if the bottle I got lasted for several months. It didn't. It was a 5 milliliter bottle that lasted me two weeks. The idea was to use these drops all year long, which would be $1,560 out of my pocket. For eye drops. More math coming at you: 5 milliliters of a water-like substance weighs about 5 grams. So 1 gram of my eye drops cost me $12. The (rough) current price of gold is $14 a gram; that's right, my eye drops cost nearly as much as gold. To put it another way, we complain when the price of gas reaches $2 a gallon, but the price of my eye drops was $45,420 a gallon. That is not a typo.

Now, I will freely admit that there were other options for me. As I said, I stopped using the eye drops, and it's quite possible that my doctor could have found an alternate drug that would work for me and cost less. Still, even if I could pay just $20 per bottle, that would be a heck of a lot of money. What if the drug was the only thing keeping me from a heart-attack or other certain or even eventual fatality? Then I wouldn't have had a choice.

Now here's the real kick in the face: the exact same drugs--exactly the same and manufactured in this country--would cost me 30 to 80 percent less in Canada. A lot of people are considering setting up systems for American consumers to re-import American drugs from other countries, like Canada, where the difference in cost is so great that even the added inconvenience and shipping charges are worth the trouble. Does this strike anyone but me as utterly stupid?

Now it's time to talk about what we can do about this. There are several proposals floating around, some of which appear more reasonable than others. On the far end of the spectrum is complete medical coverage for all Americans. Though this would be ideal in many ways, plenty of other countries have reached the point where their state-sponsored health systems are grossly overloaded. Nevertheless, among developed nations, the United States ranks at the back of the pack in the health of its citizens, a deplorable lapse considering the quality of care available to those who can afford it. Obviously, despite the difficulties, state-run systems can achieve real results.

More realistically, there are several plans that would allow the government to negotiate on behalf of seniors and the uninsured. The idea is to fix the disparity between the purchase price of drugs for individuals versus the government and other preferred vendors; a private person may pay as much as twice what the government pays for prescription drugs.

The industry complains that this would sharply reduce their income, leading to a possible shortage of funds for research and development; this seems unlikely for two reasons: first, lower costs will likely mean more people will buy prescriptions; second, the drug industry makes profits more than four times greater than most similar industries as a percentage of gross income. Moreover, as a percentage of profits, they spend far less on R&D than many other companies; they can afford to keep finding new drugs, and--how's this for a change?--the people who need them will actually be able to buy them!

Of course, the real problem here is the industry. Drugs are not being created to benefit the general population, but to drive up profits. Because of the unnecessary culture of secrecy surrounding drug production, no one has any real idea how much it costs--research and development included, of course--to manufacture prescription drugs.

I don't want to imply that the companies don't deserve to profit off their innovations. On the other hand, I'd never buy a Honda Civic for $45,000, because I know that it didn't cost Honda more than $15,000 to make the car; I shouldn't have to endure a similar markup on drugs, no matter how hard they are to make. It's time this madness came to an end.