Drug Price Showdown Time for Chairman Bernie Sanders
By Ralph Nader
January 27, 2023
It is showdown time. Senator Bernie Sanders, new chair of the Senate Health, Education, Labor and Pensions Committee versus Big Pharma.
The self-described “democratic socialist” from a safe seat in Vermont has long been a Big Pharma nemesis. He has issued detailed critiques of what others have called a “Pay or Die” industry coddled by Congress that provides huge tax credits, free government-developed medicines, and free, with few exceptions, unbridled power to charge what their monopoly markets can’t bear.
Americans are charged the highest drug prices in the world. U.S. drug companies feed off taxpayer subsidies yet are under no reasonable price controls even for those new drugs they get free from the National Institutes of Health (NIH).
Senator Sanders has taken busloads of Vermonters to Canada to buy the same medicines sold in the U.S. at much cheaper prices just over the Canadian border. During his presidential campaigns, he assailed high drug prices and supported single-payer or full Medicare-for-All. The latter, he has told the pro-single-payer group, Physicians for a National Health Program, is off the table. Astonishingly, he is not going to push it. That leaves the drug companies on which to focus his power.
Big Pharma is ready for Bernie’s thunderous denunciations. As witnesses, Pharma executives play humble rope-a-dope and exude courtesy. Their 500 full-time lobbyists outnumber the members of the Senate, and Big Pharma’s backup brigades of corporate lawyers, propagandists and local chambers of commerce add to the power imbalance. They’ve survived Congressional table-thumping for decades by both Democrats and Republicans, knowing that it is largely all theatre.
The three drug companies – Eli Lilly, Novo Nordisk and Sanofi – that control the price of insulin, have withstood verbal blast after verbal blast by candidates campaigning for public office. They’re still jacking up their price, 1,100% since the 1990s, even though it’s the same product and is sold in other wealthy countries for a fraction of what Big Pharma bills Americans in the U.S. Still, uninsured or underinsured people who need insulin have to pay, but are so hard-pressed they often ration their supply of this essential drug. Up to 1 in 4 people with Type 1 diabetes ration insulin. There are fatal consequences to such rationing.
The bosses of these three companies – Eli Lilly, Novo Nordisk and Sanofi – are not ready to budge.
Nor are other giant drug companies ready to disturb their subsidized and anticompetitive business model. This model includes finding tricky ways to continually extend their monopoly patent period, taking control of the comparable generics, spending more on advertising and marketing than on research and development for which they get a generous tax credit from Uncle Sam, taking good care of key physicians who tout their products and gaming the insurance industry that in theory should be resisting gouging payouts for drugs.
The Inflation Reduction Act partially addresses drug pricing but is so full of loopholes and delays that it cannot be relied on to curb Big Pharma abuses.
Big Pharma is insatiably avaricious. They obstruct incoming free trade of lower-priced drugs while they outsource the production of key medicines to countries like China and India where drug manufacturing plants are poorly monitored by the understaffed U.S. Food and Drug Administration (FDA). Big Pharma has maneuvered Congress into having a large portion of the FDA’s meager budget come from the drug companies with the invisible strings attached. Imagine paying the police who are supposed to be holding you to the law.
There is more. With some Democratic House members joining the Republican legislators in 2003, a bill was passed expanding Medicare’s drug benefits and prohibiting Medicare from negotiating volume discounts with the drug companies. This has cost taxpayers tens of billions of dollars. Thank you, Republican Party – the constant avatar of corporate greed and leaving our country defenseless. For example, no antibiotics are now produced in the U.S. Many come from China. The GOP exhibits both a disregard for national security peril and a lack of patriotism, while it takes campaign cash from the drug goliaths.
The latest outrage comes from a report by the Wall Street Journal that Pfizer and Moderna intend to quadruple the price of their Covid vaccine, once their government purchasing contracts run out, to a range of $110-130 a shot. Bear in mind, both companies have made enormous profits from a government-guaranteed market of tens of billions of dollars. But readers may ask: “Won’t the higher price lead to fewer people being able to afford the vaccines, especially those not covered by insurance?” Correct. Big Pharma doesn’t care.
Moderna is a creature of the government’s National Institutes of Health research and development for the mRNA type Covid-19 vaccine. NIH scientists were in the lead, in collaborating with the scientists at this formerly tiny Boston-based company. The result turned Moderna into a multibillion-dollar firm. One would think being bred to commercial success by the taxpayers would result in some restraint. Not so.
Lives lost, injuries and diseases are at stake. For decades Big Pharma has refined its gigantic profits into an invulnerable racket that is impervious to media exposes, occasional prosecutions and fines, political campaign denunciations and keeping promises of patient relief.
Here is a solution. Since the NIH R&D programs have developed many drugs to the clinical trial level, let NIH proceed to manufacture these drugs in the good old USA and market them through government health programs.
There is a precedent from the Pentagon during the Vietnam War when the second leading cause of hospitalization for U.S. soldiers there was malaria. The drug companies were not willing to invest in developing anti-malarial medicines (not enough profit). The Pentagon set up its own “drug firm” inside Walter Reed Army Hospital and Bethesda Naval Hospital (now the Walter Reed National Military Medical Center). For a tiny fraction of what the drug companies would have charged the government, MDs and PhDs produced three new anti-malarial medicines, plus other medicines, which were positively reported in peer-reviewed medical journals.
So, let’s go, Bernie Sanders. This is “democratic socialism” fostering domestic and national security replacing unpatriotic, greedy “corporate socialism” that abandons the U.S. to communist China, leaving behind the federal safety regulatory watchdogs.
Let’s see how Bernie Sanders can use his staff and public hearings to jolt the Big Pharma toadies in Congress with the rumble from the people who are in dire straits. Senator Sanders, Senator Elizabeth Warren and other compatriots can barnstorm the country and energize super majorities of both liberal and conservative Americans to back their cause since they all bleed the same color.
Otherwise, it’s just going to be the same old song – “There goes Bernie again – baying at the moon.”