When venture capitalist Martin Shrekli recently bought a pharmaceutical company and repackaged and repriced, by 5000%, an old drug that HIV patients use to treat fungal infection, he set the world of pharmaceutical pricing on fire.
That kind of maverick decision by Shkreil made me, for one, realize how much our wellbeing is at the mercy of market forces that even governments can’t control.
Consumers are increasingly losing touch with decisions about those healthcare services and products we should be able to purchase for ourselves.
As consumers we know very little about how the prices for pharmaceutical products are negotiated. In an age where Google, Amazon and eBay can give us a competitive price on pretty much anything and enable us to determine the worth of a product for ourselves, the lack of information around pharmaceutical pricing seems unfathomable.
Consumers are increasingly losing touch with decisions about those healthcare services and products we should be able to purchase for ourselves. And, in the absence of comparative information, who can blame us for our unrealistic expectations?
It is well known that we want much more than we can afford. In a recent survey that looked at how much monetary value consumers would place on gaining an extra year of life, US respondents said that they would be prepared to pay between $110,000-150,000. That is double the $53,046 that the average US household earns a year.
Because we lack the knowledge about how prices are set we have little capacity to influence pricing. The best we can do is apply our own kind of rationing when we pay for our drugs and for many consumers this amounts to cutting corners. In a study of Kaiser Foundation enrollees over half the respondents had either failed to fill their prescriptions or cut pills in half or skipped doses in an effort to manage costs.
Private health insurance didn’t improve their situation. When study participants had to make copayments or take out coinsurance their adherence became worse.
But while consumers are short on facts they are becoming increasingly proficient at muscle flexing. A massive public backlash on social media forced a back down from Shkreli, showing the dormant power of a spontaneous act of online crowd sourcing.
We have known for some time that the budgets of top 20 pharmaceutical companies are larger than many middle level countries and that these companies can exercise their might through global pricing – an activity that can no longer be achieved by government.
If we want access to realistically priced pharmaceutical drugs globally then perhaps its time to strongarm PharmaBay and Pharmazon to enable us to bargain collectively for realistic prices.