The price index for brand drugs has nearly tripled since 2008. The average price of Humira and Xarelto in the U.S. is more than double the price than in the UK. Not only are U.S. drug prices more expensive than other countries, but they also continue to increase exponentially, despite political pressure from Capitol Hill. In mid-November of 2018, Pfizer announced they will raise the prices of 41 drugs. The pharmaceutical industry spends the most money on lobbying congress, nearly 40% more than insurance, the second biggest lobbyist group. Political influence is a major factor for the persistent drug price problem, as legislation becomes harder to pass and implement.
Are generic drugs the solution? Generic prices have decreased since 2008, compared to the sharp increase in brand drugs. Generics combat the problem by providing a cheaper alternative. However, pharmaceutical giants limit the power of generics through patents. Let’s get back to Humira. Humira is protected by a portfolio of over 100 patents, which makes a generic version impossible. Hassan Zreik, Co-Founder of Visrex states, “These layered patents limit competition in the industry, which leads to a monopoly on drugs that could save lives. This is the problem with the pharmaceutical industry. Manufacturers are too comfortable on top because they can limit competition with ease, which allows them to set any price they choose.” At the end of the day, this affects everyone in the United States, whether they have insurance or not.
The biggest sector affected by this ‘monopoly’ in the pharmaceutical industry, is the uninsured population. Uninsured patients must pay the whole cost of the medication if they elect to fill the prescription. Some patients may not fill the prescription because they cannot afford the outrageous cost of the medication, which could be a life-saving treatment.
The insured population is also affected by the high drug prices. Insurance premiums and co-pays increase as a result of the high prices. Ultimately, the insured patient is paying for the price increase on those medications. The co-pay reflects the general trend in prices, which is trending upwards. Ali Zreik, Co-Founder of Visrex states, “A patient could pay more for the co-pay than the actual cost of the generic medication, because the co-pay is set to reflect both brand and generic reimbursement.” So why not pay cash for medications that are cheaper than the co-pay? Legislation. As stated above, the top 2 biggest lobbyist groups are pharmaceuticals and insurance. The white house has expressed concern regarding this issue and is pushing for legislation to increase transparency.
Innovation is necessary in order to address the growing drug price problem. Legislation to increase transparency and limit the use of patents is important in controlling the rise of drug prices. However we must utilize technology and innovation now, to make the industry more efficient, which will in turn target high drug prices. Visrex plans on releasing a direct-to-consumer feature, which will allow patients to purchase drugs at wholesale price directly from the platform. Hassan Zreik states, “Our goal is to allow everyone in the industry to access our platform, from the manufacturer down to the consumer. Direct-to-consumer will save patients a ton of money on their prescriptions, especially those who cannot afford the current upcharge and insane prices on medications.” The Zreik brothers are leading a change that is necessary for the pharmaceutical industry. The solution to this seemingly everlasting problem is complicated. Innovation, such as Visrex, directly address the problem and is a step in the right direction.