Skip to content

Congress, stop groveling at feet of Big Pharma, set our people free

Ortbals Headshot 1 1 16By ALAN J. ORTBALS
    Sometimes I read things that just burn me up. A case in point was a recent article in The, an Irish Internet news publication, regarding a company called Gilead Biopharmaceutics Ireland.
    You’re probably saying, “Jeez, Al, get a life,” but let me explain. Gilead Biopharma is a subsidiary of Gilead Sciences, a giant, American pharmaceutical company headquartered in Foster City, Calif. It boasted income of more than $32 billion last year.
    A good chunk of that $32 billion came from sales of a drug called Sovaldi, which has been very effective in the treatment of Hepatitis C, a deadly blood infection that destroys the liver. In the U.S. Sovaldi sells for $1,000/pill and the regimen, which is a daily dose for nearly three months, runs $84,000. That’s here in the U.S. In Canada, it costs $55,000. In Egypt, it’s just $900 for all 84 pills.
    Sovaldi is not an anomaly. Daraprim, a drug that treats a common parasite, recently jumped in price from $13.50 a tablet to $750. The price of EpiPens used to counteract allergic reactions to things like peanuts recently jumped from about $100 to nearly $700. Most recently, Valeant Pharmaceuticals acquired the drug Calcium EDTA used to treat lead poisoning and raised the price from $950 to $27,000.
    The fact is that Americans pay by far the most for prescription drugs in the world. Canada spends about 60 percent of what we do per capita for prescription drugs; the U.K., less than half. While most of the drugs are developed in this country, you’d think it would be the other way around.
    But Americans are the proverbial fish in a barrel as Congress has sided with Big Pharma and against the citizens.
    You might suggest that an easy solution for patients would be to buy their drugs on line from foreign countries. For example, a 30-tablet supply of the drug Abilify costs $199.70 from an online Canadian drugstore, but $711.83 if ordered at your corner Walgreens. One 10 capsule dose of Tamiflu sells for $112.20 in the U.S. but less than $50 in Canada. These are 2013 prices so the differential is probably even more dramatic now.
    But, not so fast! Under the Prescription Drug Marketing Act of 1987, it is illegal for anyone other than the original manufacturer to bring prescription drugs into the country. Thanks, Congress.
    Perhaps even more unbelievable is when Congress passed the Medicare Modernization Act of 2003, creating the Medicare prescription drug benefit known as Part D. It prohibited the Medicare administration from negotiating prices with pharmaceutical providers. Congress to Big Pharma: Charge whatever you like.
    That’s right. We can’t negotiate prices and we can’t buy them anywhere else. Where are all those champions of a free market economy in Congress? Groveling at the feet of Big Pharma and their geyser of lobbying dollars.
    Going back to Gilead Sciences, you’ve heard of tax inversions where an American company engineers a purchase by a foreign company so that it can claim residency in a low tax nation. Pharmaceutical companies don’t even have to go to that length because the value is in the patent. So, Gilead, sold its patent for Sovaldi to one of its Irish subsidiaries because Ireland’s corporate tax rate is just 12.5 percent. The joke’s on the Irish, however, because Gilead didn’t even want to pay the 12.5 percent so they had their Irish subsidiary sell the patent to its Bahaman subsidiary where the tax rate is zero.
    As I write this, the outcome of the election is not known but regardless there will be a new president and a new Congress. I know that there are bigger problems: tackling the national debt, reforming the tax code and fixing Social Security and Medicare, to name a few, but those are thorny issues that will take time to resolve. On the other hand, the only thing preventing us from getting the jackboot of Big Pharma off our throats is that our congressmen are afraid to stand up to them.
    We should hold their feet to the fire and demand change. Congress, do what’s right instead of what’s easy. Free Americans to buy prescription drugs from foreign providers and allow the Medicare Administration to negotiate drug prices. Your constituents will thank you for it.
    Alan J. Ortbals is president and publisher of the Illinois Business Journal. He can be reached at or (618) 659-1977.

Leave a Comment