Edited By Kevin Connolly
Published: September 14, 2017
Last Modified: February 25, 2021
This page features 14 Cited Research Articles
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As David Mitchell stared at his full-body X-ray, he knew he could never look at such images again.

David Mitchell
David Mitchell, founder and president of Patients for Affordable Drugs

“It was too ugly,” Mitchell recalled. “I have holes in my bones — in my skull, in my pelvis, in my arms.”

Doctors diagnosed Mitchell with an incurable blood cancer called multiple myeloma in November 2010. Although there is no cure for multiple myeloma, the disease is treatable with very expensive drugs.

“Right now, I’m on a two-drug combination,” Mitchell said. “I get it in a five-hour infusion dose, and every time they give it to me, the retail price is $20,000. I will have this two-drug combination 22 times over the course of a year, which means that $440,000 worth of drugs — literally — is keeping me alive.”

But, drugs don’t work if people can’t afford them, said Mitchell, whose medication is currently covered by insurance.

“This experience of having multiple myeloma has brought me face-to-face with the challenges people confront trying to deal with high drug prices,” he said.

Mitchell and his wife, who is also a cancer survivor, launched Patients for Affordable Drugs on February 22, 2017. The national patient organization focuses on amplifying the voices of patients and mobilizing patients to support policy changes that will lower drug prices. In just six months, Mitchell and his team collected about 8,000 patient stories.

“These are stories that come from every region of the country — people with all sorts of different diseases. We hear this over and over again — people who are choosing between food and drugs, people who are choosing between paying rent and drugs.”
David Mitchell, who has testified before the FDA and congress regarding drug pricing

Across the nation, people who require daily medication are cutting their pills in half or skipping doses because they can’t afford to take the full dose, Mitchell said. People with Type 1 diabetes are trying to manage their disease with diet and exercise and waiting until their blood sugar spikes dangerously before giving themselves insulin. People with rheumatoid arthritis are in terrible pain and can’t take the full dose necessary to manage their pain because the drugs are too expensive.

“We had one woman who wrote a story and said, ‘I really have to consider whether I should just give up the fight and stop taking the drugs because if I keep taking the drugs, I’ll bankrupt my family,’” Mitchell said. “The stories are excruciating, and people are angry and upset, and they don’t understand how this could be happening to them in the United States of America.”

David Mitchell receiving IV treatment
David Mitchell receives an infusion as part of treatment for multiple myeloma, an incurable blood cancer

U.S. Drug Prices by the Numbers

More and more Americans are finding the cost of drugs to be unreasonable while less and less are saying prescription drugs have improved their lives, according to a 2016 Kaiser Health Tracking Poll. The poll also found:

In 2015, 62 percent of Americans
said prescription drugs have made their lives better — down from 73 percent in 2008.
An estimated 77 percent of Americans
in 2016 said drug prices were too high compared to 72 percent in 2015.
And a large majority (78 percent) of Americans
say there should be a limit on the amount drug companies can charge for high-cost drugs for illnesses like hepatitis or cancer. (As of May 2017, a 30-day supply of Gilead Sciences hepatitis C drug Harvoni cost $87,800, an increase of $13,800 from 2016.)
Distressed flag

Overall, brand-name drug prices in the U.S. have increased 98.2 percent since 2011, with the average price of prescriptions climbing 16.2 percent in 2015 alone, according to Express Scripts.

And patients with commercial health insurance are paying 25 percent more in out of-pocket expenses for branded prescriptions than they did in 2010, according to IMS Institute for Healthcare Informatics.

What’s worse: prescription drug prices are increasing dramatically even though the drugs’ ingredients often times stay the same. Although the FDA is charged with ensuring drugs are safe and effective, the federal agency has no legal authority to regulate drug prices.

“Physicians strive to provide the best possible care to their patients but increases in drug prices – without explanation — can affect their ability to offer patients the best possible drug treatments.”
American Medical Association President Dr. Andrew W. Gurman in a 2016 press release

Competition Is Key

A number of factors affect drug pricing in the U.S. A major contributor is generic competition.

“Over the last decade alone, competition from safe and effective generic drugs has saved the healthcare system about $1.67 trillion,” FDA commissioner Scott Gottlieb said in a June 2017 statement. “When generics are dispensed at the pharmacy, the immediate savings to each of us are clear.”

FDA generic competition and drug prices chart

In the U.S., when a new drug (brand-name drug) comes to market a company gets exclusivity for a period of time so that it can make money and be repaid for the investment it made in research and innovation. But, at the end of that exclusivity period, branded drug companies are supposed to allow generics — or copycat drugs that are deemed as safe and as effective — to come to market so that competition drives the price down.

“Data indicate that consumers see significant price reduction when there are multiple FDA-approved generics available,” FDA spokeswoman Sandy Walsh said in an email to Drugwatch.

In fact, generic prices can be as much as 90 percent less than brand-name prices, according to the Federal Trade Commission (FTC).

“The first generic competitor’s product is typically offered at a 20 percent to 30 percent discount to the branded product,” FTC spokeswoman Betsy Lordan said in an email to Drugwatch. “Subsequent generic entry creates greater price competition, with discounts of 85 percent or more off the price of the branded drug.”

Drug Companies ‘Game’ the System

The generic drug approval process is governed by the Hatch-Waxman Act. Congress enacted the act in 1984 to make sure consumers would have access to lower-cost generic drugs while still preserving incentives (patent protection and market exclusivity) for companies to make new drugs.

Since the act’s inception, however, some branded companies have used different strategies — including conduct that violates the antitrust laws — to delay generic competition and effectively extend their marketing exclusivity.

As of May 2017, the FDA identified some 150 drugs that could have generic competition but do not, which means patients are paying more for the drugs.

“We know that sometimes our regulatory rules might be ‘gamed’ in ways that may delay generic drug approvals beyond the time frame the law intended, in order to reduce competition,” Walsh said. “We know that high drug prices have a direct impact on patients — too many Americans are priced out of the medicines they need.”

“Although widespread introduction of generic drugs has saved Americans hundreds of billions of dollars in drug costs, some companies have exploited the ability to delay generic entry through abuse of government processes.”
Betsy Lordan, FTC spokeswoman
Big Pharma Competition Banner 1