Expect More From... the Fair Market!

All of us are familiar with the devastating health stories can be heard daily from our national news sources to the neighbors we share in our community. You may have participated yourself in raising money for those who are sick through a spaghetti dinner fundraiser or organized a GoFundMe page. In fact, GoFundMe has a dedicated “How To” page for assisting cancer patients pay for their chemotherapy and other associated life-saving medical needs. Why is this work-around needed in a developed country? One main theory is that the market can bear the cost of these drugs is simply not “fair.” If a fair market existed, why would close to two-thirds of all bankruptcies be tied to medical bills? We will tackle the topic of why “the market is bearing the costs” from our series building on New York Times reporting.

Starting with the basics, what is a fair market? The definition stops me in my tracks. According to Merriam-Webster “A price at which buyers and sellers with a reasonable knowledge of pertinent facts and not acting under any compulsion are willing to do business.” Patients and self-insured employers paying for medications do not have reasonable knowledge of the facts. They did not go to medical school, and they are not allowed to self-prescribe. In fact, a key source of the publics’ drug information comes from the drug manufacturer’s advertising. (We will not digress into why drug advertisement to the public is illegal in all but two developed countries and likely to only be permissible in the US soon.) The point being, patients and self-insured employers must rely on their experts. The experts must be willing to maintain the integrity of data and clinical recommendations to create a reasonable unbiased set of facts to create a fair market. Patients may choose not to follow their provider’s orders, but typically are compelled to do so to restore their health. I would argue that if your child or loved one is sick, you would move mountains to follow the treatment plan your doctor ordered. It is imperative that the self-insured employer only partner with vendors who do not compel them to only use their vertically integrated business channels. Vendor partners responsible for deciding which drugs are covered or not, and where patients are allowed to purchase their drugs or not leverage steep penalties to compel patients and plans to adhere to their strategic business goals. The experts, and associated vendors they use, must not be conflicted or serving their own stakeholders to maintain a fair market.

Now that we know what we need to create a fair market environment, a reasonable knowledge of facts and free will to choose where and how you do business, let’s investigate how the market bears the costs of necessary goods. One side of the aisle composed of drug company executives argues that multi-million-dollar price tags are justifiable when comparing the burden of disease to the cost on the patient and society. The countering side of the aisle is comprised of population health and pharmaceutical law experts demonstrating how unreasonable these drug costs can be for extending life. They look at medications in the same perspective as other life necessities such as utility companies.  Regulations must exist to keep those who control essential commodities from exploiting the general population. They even go as far as to debunk the drug company executives’ leading argument that such prices are required to fund future medicinal breakthroughs. Numerous academics have found no relationship between the amount a drug company charges to the amount they fund for research. In fact, for the costliest therapies, the government provides numerous financial incentives to offset R&D costs. Taxpayer dollars are also funding government sponsored plans. Therefore, the reality is that we continue to see drug launch prices at extraordinary amounts since the market continues to find a way to pay the bill. The market must simply say no to misleading truths and say no to unfair business compulsion practices.

What’s the solution? They already exist! Anti-kickback and anti-trust regulations must be enforced on the pharmaceutical companies just as they are on all other businesses. There is no reason to reinvent the wheel. Apply the same standards to medicine as we do for all other market sectors. Experts setting medical standards and those with prescriptive authority should be prohibited from receiving any direct or indirect payments for influencing a drug’s utilization. Promotion of generics and low-cost alternatives should be included in head-to-head trials demonstrating a new brand’s value over existing therapies to make it to market. Branded products should not receive more public education and promotion than those off-patent.  The answer is staring us in the face. It’s time to look in the mirror and act. The market is not bearing the cost, patients are just figuring it out on their own.