Drugs cost more here because they cost so much less elsewhere. But without the profits from pricey American sales, there just wouldn’t be any new drugs or treatments developed.
When I was very young, my mother lost her right leg, above the knee, to arteriosclerosis, or circulatory problems, to put it in the most basic terms. I have a few fuzzy memories of her with two legs, or walking without crutches, but that's all. I admired the hell out of her because she didn’t let it stand in the way of her living her life.
Hers was a life filled with occasional and serious bouts of phantom pain — the feeling amputees have that their missing limb is still there. For my mother, we only knew she was having these because it was accompanied by severe pain, stabbing pain, that would have her flinching, crying and leaving the room. It was a hopeless feeling, both as a kid and as an adult, to offer her help, knowing nothing would do. Many a bargain was offered to God to stop mom’s pain, but only time — too long a time — took care of it.
My mother’s health was never good. The circulatory issues that took her leg brought pain before the amputation and after. They required an artificial artery from her shoulder to her hip on her left side, which likely saved her other leg.
As she aged, there were other issues. Let’s just say she was the world's worst diabetic. At the age of 40, her doctor told my father it was unlikely she’d live to see 50, given all her problems. Yet she ultimately passed away from an infection after surgery a month shy of her 78th birthday.
How did this minor medical miracle happen? Science advanced rapidly from the time of her first problems. New prescription drugs were created that gave her a fighting chance.
Behind my parents’ bathroom mirror was a veritable pharmacy’s worth of drugs for everything from cholesterol to extreme pain. Actually, it might have been better stocked than a pharmacy, because she never ran out. After she passed away, it took multiple grocery bags to carry all the pills she had to the local police department for destruction.
I was grateful for every pill and for every company that had created it. These medicines helped keep my mom alive decades beyond what would have otherwise been possible, all while keeping her pain at bay.
This is why I found it personally satisfying when I started working on health policy at the Heritage Foundation, with a focus on prescription drugs. I learned all about how long it took to bring a new drug to market and the astronomical cost associated with new drugs. I learned about formularies, pharmacy benefits managers, how insurance companies interact with them, and how government did too.
I also learned about how the federal government really, really wanted to control prices, the way much of the rest of the world does — and just how disastrous that would be for sick people like my mother.
We get new drugs before much of the rest of the world. Delays in other western countries can last months as they use the tools of government to wrangle for significantly lower prices for new drugs than the manufacturer and the market can bear.
Eventually, these other countries get their way. They pay less than we do because they’re smaller, so it’s rarely a fight worth having; and because the alternative is to have these other countries steal their intellectual property and license manufacture of the drug themselves. Pharmaceutical companies are left with the choice of something or nothing. They choose something, because even if the overseas price doesn’t cover the cost of developing the drug, it can at least claw back more than the marginal cost of manufacture. Meanwhile, the drug manufacturers lean on the American consumer to pay even more to make up the difference.
In short, the main reason drugs cost more here is that they cost so much less elsewhere.
The problem is that, without the profits from pricey American sales, there just wouldn’t be any new drugs or treatments developed. Drug companies aren’t charities. When the Biden administration threatened to impose a 95 percent excise tax on any drug company that refused to “negotiate” prices with them, that was bad enough. Now Biden has gone a step further, threatening to steal patents if they won’t play ball on prices, the way other countries do.
Drugs developed with at least some taxpayer dollars could be simply taken and given to other companies for manufacture. And it’s doubtful that it would end there. Once you accept a concept in policy or law, it’s almost impossible to put that genie back into the bottle. Such a move would kill innovation.
Either of these proposals would be a disaster for the public. As a child of someone kept alive through medicine, trust me when I say you don’t want this. You can hate “Big Pharma” all you want, but if you or someone you love ever needs them — and pray that they or you live long enough to need them — you will be grateful that they exist.
If you want to lower prices, consider cutting red tape to lower research and development costs. But no new drugs will exist if these companies are hammered with price controls and punitive taxes.
Derek Hunter is host of the Derek Hunter Podcast and a former staffer for the late Sen. Conrad Burns (R-Mont.).
