Six Pharmaceutical Industry Practices That Will Make Your Blood Boil

What a dose of honesty from a pharmaceutical CEO might look like

A few years ago, I posted the cost of a one-month supply of my daughter’s oral chemotherapy drug to Facebook. The drug, everolimus, retailed at about $12,000 per month according to GoodRx, a site that allows people to “comparison shop” for medications and provides coupons for deep discounts on some drugs.

I checked the price of this drug today and it’s roughly $16,000 for that same one-month supply, regardless of the dose. That’s a 30% increase in price within the last four years.

Everolimus is manufactured by Novartis and goes by the brand name of Afinitor. It’s indicated for the treatment of various advanced stage cancers. It’s also used to prevent organ rejection for transplant patients. In my daughter’s case, she took the drug to treat inflammatory myofibroblastic tumor, an exceedingly rare cancer that started in her liver and spread to her abdomen and lungs.

She also took the drug to prevent organ rejection because she had a liver transplant when her initial tumor was discovered.

Thankfully, my insurance covered the drug. Even so, I think it’s important to be aware of how much that drug — and others like it — costs. Some hoop-jumping was necessary for us to get this drug approved, and that’s an understatement. Even though I knew it was likely an expensive drug, it was still shocking to see the total cost of a thirty day supply

Most of the time we have no idea how much prescription drugs cost and this is hurting us — our economy, our healthcare system, and the people who these drugs are meant to help.

At the time I posted the cost of the drug, one of my Facebook connections was a research scientist at a biotech company whose flagship product treated multiple sclerosis. She responded to my sticker shock by posting two common pharmaceutical industry talking points.

First, she parroted the maddening statistic that it costs over two billion dollars to bring a new drug to market, and that doesn’t include all the “failed” drugs. So, high drug prices are necessary to fund innovation. Actually, the prevailing talking point on the cost to fund a new drug is 2.7 billion dollars, a figure that’s based on a study put out by Tufts Center for the Study of Drug Development in 2014. The 2.7 billion dollar figure has more recently come under scrutiny.

In 2017, the Journal of the American Medical Association (JAMA), published the results of a study that found research and development costs for new cancer drugs are much lower than previous estimates, with the median cost of a funding a new drug at just under $650K. That may sound like a lot, but consider this statistic: “The revenue from the sales of four new cancer drugs was more than 10-fold higher than research and development spending.”

The other issue my (former) Facebook friend noted was that predators like Martin Shkreli — the guy who hiked up the price of a drug that treats toxoplasmosis from $13.50 to $750 per pill — are the exception rather than the rule. She posted this in response to someone who mentioned Shkreli in my increasingly-contentious Facebook thread.

I was very upset at this woman’s defense of big pharma (or, in her case, big biotech) and ended up blocking her on Facebook. At the time, I’d been going through the nightmarish process of trying to get everolimus approved for my daughter as a last ditch attempt to save her life — and it had not been an easy process.

My opinion on the matter was (and still is) the following: for those of you who work in pharma or biotech and happen to be connected to someone on Facebook who has a child with cancer, don’t try to justify the shockingly high cost of chemotherapy and specialty drugs. Tell your lies to the media. Tell them to yourself. Spray paint them on the side of your yacht, but keep them far away from me.

The entire experience made me wonder what it would be like if a pharmaceutical CEO was honest for once, and fully disclosed some of the sketchy business practices that are accepted practices in an industry that has the power to save people’s lives. Here’s what I envision that disclosure might look like.

Dear Patient,

In the interest of transparency, I am submitting a list of six business practices we plan to implement that will likely impact you in the coming months. All of these practices are routinely employed in the pharmaceutical/biotech industry. Thus, I am following standard protocol, so don’t shoot the messenger!

Take, for example, BioGen — a company who raised the price of its blockbuster product Avonex twenty-one times in the last decade (an average of 16% per year). This is astounding when you consider that Avonex, a drug that treats multiple sclerosis, was approved in 1996 and demand has declined every year for the past ten years. This may be a burden to you, but it’s a boon to Biogen’s shareholders.

In an attempt to emulate BioGen’s incredible success, we plan to do the following in 2020:

Raise prices on pretty much everything

We will initiate at least one significant, arbitrary and life changing (for you) price increase (of about 6.3%) to our entire suite of products in the next year. For some of you, this may pose a barrier to obtaining your medicine. While this may usher in your demise, please take comfort in the fact that price increases are essential for innovation. They provide an ongoing pipeline of critical life-saving products to the endless supply of people who can afford (through good luck or good insurance) to pay anything we feel like charging.

Side note: we’re going to drastically increase the prices of our most coveted and effective products (even if they’ve been around for decades) capitalizing on the fact that there’s no regulatory system in the U.S. to control prices. But don’t worry, we’ll have some copayment assistance programs in place (see below), plus we’ll offer discounts to the insurance companies we’re partnered with. Of course, you only benefit from these rebates and discounts if you have insurance, but you knew that already, right?

Inflate prices on new drugs

Each new successful product we roll out will cost 9% to 15% more than anything you’re paying for at the moment, regardless of whether it offers any benefit(s) to what you’re already using. I’m sure you can appreciate the business aspect of charging a premium for the products you depend on to keep you or a loved one alive (even if, technically, they don’t offer any improvement over what you’re already using).

Mask the actual prices of our drugs so we can keep overcharging

In an effort to provide some financial relief for customers who may not be able to afford high co-pays and deductibles, we’ll create co-pay coupons to mask the true price of our drugs. These coupons are great for us for two reasons: they actually increase the volume of prescriptions by 13% to 19% and we can use them as a tax write-off. They also allow us to keep charging unsustainably high prices. So, it’s win, win, win (for us)!

As a big important pharma CEO, I’m going to make a ton of money this year

I’m going to give myself a pay package that includes six million dollars in total compensation, slightly above the industry average of 5.7 million in 2018. This is a modest sum compared with some of the top CEOs in the industry, who easily make three times that amount. Making life saving products while keeping shareholders (myself included) happy is hard work. I’m sure you’ll agree that I’m worth it.

We’re going to dump nearly as much money into marketing as we do into R&D

My industry, collectively, will spend nearly $6 billion dollars annually to market prescription drugs directly to consumers. Thus, you can rest assured that the giant rate hikes I’m foisting on you will help me expand my market, earning my company even more money. Once again, I’m taking a page from other leaders in big pharma and biotech, who spent nearly $30 billion dollars on promoting drugs to physicians and consumers in 2016. What do you expect? Lifesaving medications aren’t going to sell themselves.

I realize it may take you some time to adjust to these policy changes and it saddens me to think that we may lose some of you as customers. But, I have an obligation to my shareholders and a commitment to free market capitalism. Please feel free to direct any questions or concerns to my secretary (she has excellent health insurance, by the way).

A pharmaceutical industry CEO

A version of this story was originally published on

Occasional poet. Writer of sad essays. Novelist. Birder and amateur photographer. I enjoy trees.

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