In the last half century, American life expectancy has increased by over ten years for both men and women. The President’s Council of Advisors in Science and Technology partly attributed this groundbreaking achievement to innovative medicines, treatments and cures developed by the industry. For instance:
Biopharmaceutical companies have also developed medicines that have extended the lives of patients with terminal illnesses, limited the number of costly and time-consuming hospital visits, and provided much needed relief for painful and uncomfortable symptoms. Critics of the biopharmaceutical industry often fail to point out that these remarkable achievements.
Spending on prescription drugs has actually declined in recent years, but there are a number of other factors driving out-of-pocket costs higher. For starters, insurance companies are shifting a higher share of health-care costs to their patients. Since 2006, deductibles have skyrocketed by 300 percent, and the amount patients pay for coinsurance has nearly doubled. Insurers and pharmacy benefit managers also keep the bulk of the savings offered by drug makers in the form of rebates or other discounts. And hospitals markup prescription drugs by almost 500 percent.
Bringing new treatments to market is enormously expensive and time-consuming. The average cost to develop a new prescription drug exceeds $2.8 billion, and the process takes more than a decade. Just 10 percent of the new treatments that make it to Phase 1 of the Food and Drug Administration’s exhaustive testing process are ever approved. And just two out of every 10 new treatments approved ever generates enough revenue to recoup the money spent to develop it. Additionally, many drug makers offer rebates and other big discounts to significantly lower patients’ out-of-pocket costs for these new medicines. That explains why more than nine out of every 10 publicly traded biopharmaceutical companies don’t earn a profit.
Safety is the biggest concern. Other countries don’t observe the same strict safety and testing standards that we do in the U.S. Four former heads of the Food and Drug Administration warned that importing drugs from other countries would “harm patients and consumers and compromise the carefully constructed system that guards the safety of our nation’s medical products.” Current FDA Commissioner Scott Gottlieb raised similar concerns in a 2016 piece in Forbes. Gottlieb further noted that imported medicine “wouldn’t be much cheaper than drugs sold inside our closed American system.”