Prescription Drug Prices in America

Sen. Bernie Sanders  on Monday accused pharmaceutical companies of pushing prescription drug prices so high in the United States that thousands of Americans die every year because they cannot afford life-saving medicine. In a speech to the American Public Health Association, Sanders detailed a proposal to make medicine more affordable and accessible by reforming how drug innovation is rewarded.

Sanders' bill would eliminate market exclusivity for new drugs and instead offer cash rewards from a "Medical Innovation Prize Fund" for new products that improve health outcomes. By eliminating monopolies and allowing generic competition as soon as a new drug enters the market, prices on drugs would fall dramatically, saving taxpayers, employers and consumers more than $200 billion per year, a savings far greater than the $80 billion prize fund that would be financed through public and private insurers savings. 

An example of how American consumers pay dramatically more under the current system is an HIV/AIDS drug called Atripla. A prescription in the United States costs more than $24,000 per patient per year, yet the U.S. government buys the FDA-approved generic version for programs in developing countries for only $192 per person per year.  Another example is the AIDS antiviral drug Tenofovir. The average retail price in the United States is $908.21 per month. The same drug sells for $5.40 for a month's supply in South Africa.

Under Sanders' proposal, patent holders no longer would be given monopoly rights to control the manufacturing and sale of products. Instead, patents would serve as a claim on eligibility for the cash rewards given for new inventions. Drugs developed without patents also would be eligible for the prizes.

The measure effectively would put an end to deceptive marketing practices that exaggerate benefits and understate harmful side effects. It also would reduce waste by drug companies that spend huge sums developing copycat drugs that are of little medical value.

By making prescription drugs more affordable, the measure would help reduce the number of Americans who die every year in the United States because they lack health insurance. The number now stands at 45,000, a 2009 Harvard study calculated. 

Today, more than 50 million Americans have no health insurance. Another 29 million are underinsured, often lacking drug coverage. The health reform law Congress passed two years ago will extend coverage to 31 million uninsured Americans but still will leave 23 million with no health insurance. 

"Nobody here would deny the importance of fostering and rewarding innovation in medicines, but we have got to find a way to do it that eliminates indefensible pricing barriers that lead to health care rationing, unnecessary suffering and premature death," Sanders said.