Pharmaceutical rip-off

Arthur Caplan

February 09, 1993|By Arthur Caplan

THE pharmaceutical industry in the United States is getting away with extortion.

The latest example of how drug companies rip off the public is the Upjohn Co.'s decision to jack up the price of Depo-Provera.

Depo-Provera has been on the market for some time as a cancer drug. It cost $12 a dose. Last October the Food and Drug Administration cleared Depo-Provera for use as an injectable contraceptive. Upjohn quickly raised the price to $34 a dose.

Since a woman using Depo-Provera as a method of contraception needs to get an injection about once every three months, that works out to a yearly cost of about $134. It is curious that the new price set for Depo-Provera works out to roughly what women already are used to paying for a year's worth of birth control pills.

Upjohn officials justified their price-gouging by arguing that the company is entitled to recoup its costs for the research and development that resulted in a new contraceptive option for women. But this is sheer sophistry. The bulk of the research done on the value of Depo-Provera as a contraceptive was done many years ago. The drug has been used as a contraceptive in many nations for decades. There is no reason for suddenly jacking up the price other than that the company knows what women who use existing contraceptive drugs already are used to paying.

The story of Depo-Provera is just one element in an incredible tale of profiteering, greed and avarice. The Senate Special Committee on Aging reported in 1991 that during the 1980s, when the general rate of inflation rose by 58 percent, prescription drug prices rose a whopping 152 percent.

A prescription that cost the average American $20 in 1980 cost $53.76 in 1991.

If those numbers don't make you want to take an aspirin, try these reported in a September 1992 report from the same Senate committee for drugs sold in the outpatient pharmacy of a large urban hospital:

The price of insulin made by E.I. Lilly rose from $5.05 a dose in 1990 to $7.25 in 1991, an increase of 44 percent.

Captopril, a heart drug made by Bristol-Myers, cost 61 cents in 1990 and 85 cents in 1991, an increase of 39 percent.

Albuterold inhalant for asthma made by Glaxo cost $3.50 in 1990 and $5.95 in 1991. Glaxo enjoyed a 70 percent increase in one year.

Lest you think the appetite for ridiculous profits has been sated, consider what it will cost you if you need to get a year's worth of Merck's new drug, Proscar, for your prostate cancer -- $1,095. Astra's new drug Foscavir for viral eye infections runs $21,000 a year.

A single dose of Centoxin, a new antibiotic, will set back you or your insurance company a minimum of $3,000.

If you suffer from migraines, Glaxo's new drug Sumatriptan might help but only if you are prepared to shell out $100 per shot. A dose of the Novacompany's new treatment for leukemia, Pergamid, probably will be in the neighborhood of $1,100.

Whenever these numbers are questioned, the pharmaceutical industry starts to huff and puff that the cost of providing a wide variety of choices of medicines and drugs is not cheap. Moreover, they say, drug prices only account for a tiny fraction, less than 2 percent, of the overall amount Americans spend on health care.

It is true that it is very expensive to bring a new drug into the market. And it also is true that getting a handle on drug prices is not going to do much to slow the overall health care cost juggernaut.

But no other nation in the world gets stuck with a tab anywhere near the size of the one we pay. We pay 62 percent more for the same drugs than a Canadian would pay and 50 percent more than the average European. There is no reason why except that these other nations regulate the prices of drugs and we do not. We simply are paying too much for our medicine.

Our costs are so high that for many patients a choice of medicines and drugs is a cruel illusion. Price control must be a central feature of President Clinton's promised health-care reform plan.

And the price of Depo-Provera would be as good a place as any to start.

Arthur Caplan is director of the Center for Biomedical Ethics at the University of Minnesota.

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