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Everyone loves to hate Martin Shkreli, and that’s appropriate, but the smirking “Pharma-bro’s” high-profile price hikes are only one example of how Big Pharma is gaming our medical system and turning capitalism into cronyism.

As Senator Rand Paul put it in a recent tweet “Big Pharma manipulates the system to keep prices high. It is not capitalism, and its big government, and we’ve got to fix it.”

He’s right — medicine can do no good if the people can’t afford it. So how do we understand and correct the gouging that Americans are suffering at the hands of Big Pharma?

Gouging in the Post Name-Brand Era

You've probably heard of drugs like Lipitor, Nexium, Plavix and Advair. These were some of the most widely prescribed medications during the early 2000s. Collectively, Americans spent nearly $310 billion on the top ten name-brand prescription drugs alone. It was obvious that we were being had.

Along came the generic drugs to save the day. With patents for these cash-cow medications expiring, other companies gained the right to manufacture them and, potentially, make them available at a more accessible price point. To some degree, that has happened. The problem is that prices are still elevated to a level that is uncalled for, except to line the pockets of pharmaceutical company execs.

Drugs for male hormone replacement, low testosterone, or mental conditions like depression and insomnia are aggressively prescribed. Manufacturers of these high-cost generics are even paying for “rigged” white-papers and studies that are presented as medical precedent to promote the effectiveness of pills that offer no advantage over older, cheaper solutions. Take, for example, the drug Cosmegen, which is used in cancer treatment. In the current FDA policy, Cosmegen costs $1,400 per injection. Overseas, it goes for between $20 and $30.

The Import Relief Law

The Department of Health and Human Services (HHS) is supposed to provide oversight for issues like this. There are laws that explicitly grant the HHS power to punish companies that "knowingly and intentionally" overcharge customers, just as Senator Paul suggests. And yet, it’s not hard to find even more examples of this going on. It’s like Big Pharma and the government are working cooperatively.



These laws are called Import Relief laws, but you might not know that because they have gone almost entirely unused in the era of modern medicine. The FDA maintains that Americans can't trust drugs imported from most foreign countries, but a look at just how stringent these laws are should raise questions even for the uneducated customer.



Drugs cannot, for example, be imported from Canada, a country with famously effective healthcare. The FDA maintains that it’s only safe to use drugs manufactured in the USA. However, that entire concept is a ruse. Twenty-five percent or more of drugs labeled as American-made are synthesized in foreign factories inspected by the FDA, and 80 percent of the active ingredients used on U.S. soil are imported. In other words, concerns about safety are greatly exaggerated.

Further undermining the safety issue is the fact that the FDA allows for the use of imported drugs when there are shortages of drugs made in the USA. What we have here is a gentleman’s agreement between the government and Big Pharma. Big government, just as Paul suggests.

Holding Trump to His Promise

During his 2016 campaign, Donald Trump touted that he would take action to punish drug makers who marketed their wares at exclusive prices. Effectively, he promised to put the Import Relief law to use. So far, that hasn’t happened.

Trump has been a vocal enemy of Barrack Obama’s Affordable Care Act, also called “Obamacare,” and in September, the HHS, under Trump’s instruction, delayed the rollout of additional rules that would have fined companies up to $5,000 per instance of overcharging.

Will Trump have the courage to stand up to Big Pharma and follow through on his claims? Like many campaign promises that came from the politically unorthodox president, he never stated exactly how he would go about this. Certainly, the many middle-class voters who supported Trump on the campaign trail, or still do, aren’t looking for higher drug prices.

Cronyism and High Prices Prevail

Not surprisingly, all that we’ve seen from Trump’s administration to-date is more lip service on an issue they could choose to actually address. Not only could he enact one of several laws that allow the government to spread patents around and flood the market, but the government could even buy out drug makers.

While the latter idea might sound radical, it could free up the minds behind new drugs to create without the impetus of how much a drug will retail for. Instead, all that matters would be how much a drug is needed. Wouldn't that be a good thing?

*(Image credit: Chris Potter/ ccPixs.com/ flickr)