Health Column: Why pharmaceuticals cost so much |

Health Column: Why pharmaceuticals cost so much

Phil Mohler, M.D.
Free Press Health Columnist
Drugs and Money
Getty Images/Ingram Publishing | Ingram Publishing

The pharmaceutical industry, like all for-profit businesses, (and nonprofits, as well) are in the business of making money and that’s fair! In 2013, the operating profit margin for the pharmaceutical industry was 22.5 percent — the most profitable major industry sector in the economy. What is not fair, however, is the undue advantages that the federal government has provided and continues to provide the pharmaceutical industry.

In 2006, Big Pharma received a huge windfall when the Bush administration created part D of the Medicare program (the part that pays for drugs). The concessions received by the drug companies were huge; the government agreed not to bargain with them on the price that Medicare would pay for drugs. It is estimated that the government could save about $112 billion over 10 years if Medicare had the right to negotiate drug prices, like the U.S. military and the Veterans Administration do.

Secondly, our federal governments’ attempts to unnecessarily protect us from dangerous, rogue drugs results in our inability to buy mail-order drugs from other countries, particularly our Canadian neighbors. Canada, Israel and several other European countries have great track records for marketing high-quality pharmaceutical products. In 2006, patented drugs cost about 70 percent more in the U.S. than in Canada. In 2011, the difference was 100 percent!

Big Pharma defends direct-to-consumer advertising in our country as a way to “educate the public” about important medical conditions. This is drug marketing at best, and disease mongering at its worst. We know that if you watch a TV ad for a pricey new antidepressant tonight, you may want to talk to your doctor next week about your sad feelings and perhaps a trial of the new wonder drug. Studies show that up to 50 percent or 60 percent of the time, physicians bow to patients’ requests for specific medications — appropriate or not! The governments of New Zealand and the United States are the only two first-world countries that allow pharmaceutical companies to market directly to the public.

Finally, the major pharmaceutical companies have been extremely effective in prolonging the patent lives of their drugs. Federal drug laws are full of loopholes that allow Big Pharma to extend a patent for a mirror image drug of an old product, indications for kids or a new dosage form. Recently the makers of aerosolized medications had to change their propellants because they were creating a hole in the ozone. Prior to this change, albuterol-metered dose inhalers, available generically, cost about $10. Albuterol is the life-saving rescue medication for asthmatics. When the propellants got changed, a new patent was issued for each new inhaler. Now there is no generic albuterol inhaler and the brand-name products cost $40-$50 per inhaler.

My take: There are no quick, easy answers to this conundrum. To protect yourself, continuously reevaluate the medications that you are taking with your physician. Do you really need them? Is there a generic substitute available? Fortunately, generic medications are available for about 85 percent of our needs. I would have no concerns about taking or prescribing medication obtained from a Canadian pharmacy.

These are my opinions and may not reflect those of my employers, Rocky Mountain Health Plans and Primary Care Partners.

GJ Free Press health columnist Dr. Mohler has practiced family medicine in Grand Junction for 39 years. He has a particular interest in pharmaceutical education. Phil works part-time for both Primary Care Partners and Rocky Mountain Health Plans. Email him at

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