There was the $600 Epi-Pen and the $750 cancer pill. Then, the drug-company executive arrested for securities fraud and, most tragically, the mounting death toll in the opioid epidemic.
The last 18 months haven't been good for the pharmaceutical industry, at least not from a public-relations standpoint. President Donald Trump, who met with drug company CEOs Tuesday, currently has a higher approval rating than the makers of prescription drugs, collectively derided as Big Pharma. Only 9 percent of Americans believe they care about patients more than profits, according to a new Harris poll.
Now the drug companies are fighting back with a stirring campaign called "Go Boldly" that attempts to remake their reputation from that of shameless profiteers.
In a television ad, images of children, health-care workers, researchers and patients flash by, while a man somberly reads from Dylan Thomas' most famous poem "Do Not Go Gentle Into That Good Night." On the screen are these words: "When an indomitable will to cure pushes researchers to find the unfindable and cure the uncurable, today's breakthoughs become tomorrow's medicines. For all of us."
The message is clear: Death and disease are the bad guys here; drug makers are the good guys, protecting the public from what Welsh poet Thomas called "the dying of the light."
But many Americans believe there's a different divide, and it's patients versus the pharmaceutical industry. Polling by Gallup consistently finds Americans with a negative view of drug companies; most recently, in 2015, only 35 percent of people had a positive view of the companies that provide the pills, capsules and fluids that 60 percent of us take.
Public pressure has resulted in some price cuts, and in the latest earnings reports, some pharmaceutical company earnings were lower than expected. But that's unlikely to appease Trump, who has said drug companies are "getting away with murder" and told CEOs Tuesday that their "astronomical" prices have to come down.
Nor will a few price reductions appease Americans who live in, according to an article in The New York Times, "the most expensive place in the world to get sick."
Pharmaceutical companies say drugs are expensive because they take years to develop and test. Of course, they also spend billions on advertising and lawyers. (One website that proposes to serve as a watchdog of the industry is run by a law firm that specializes in litigation over drugs and medical devices.)
Are drugmakers the noble defenders of humanity, as the "Go Boldly" campaign suggests, or "prescription thugs," as one filmmaker has said? With the Trump administration set to make drug pricing a priority, this is a conversation that will get louder in the coming year. These are five questions that will drive it.
Is 'Big Pharma' the villain?
To some people, Martin Shkreli is the face of Big Pharma. He’s the former CEO of Turing Pharmaceuticals, which raised the price of Daraprim, a drug used by cancer and AIDS patients, from $13.50 to $750 per pill — a 5,000 percent increase. He’s been charged with securities fraud and was recently suspended from Twitter for harassing a female writer. But he’s most famous for saying he should have raised the price of Daraprim even more than he did.
“No one’s proud of this. But this is a capitalist society, capitalist system and capitalist rules. My investors expect me to maximize profits,” he has said.
Other drugmakers have tried to distance themselves from Shkreli. “I think it is really important to our industry to make it clear that he is not us," said Ken Frazier, the CEO of Merck. We are a research-based pharmaceutical industry.”
That’s the image the Pharmaceutical Research and Manufacturers of America want to project in their new campaign, which is heavy on the research of new drugs and light on the selling. The group has more than 50 members, which represent a variety of sizes and profitably, according to John LaMattina, writing for Forbes. Their most recognizable members include Merck, Pfizer, Novartis and Johnson & Johnson.
Now locked out of the club, Shkreli is going after drug companies with a new website he calls Pharma Skeletons, which lists price increases by other companies.
How much should an Epi-Pen cost?
After Turing hiked the cost of Daraprim, another company, Imprimis Pharmaceuticals, stepped forth with an alternate version of the drug that cost $1 a pill. Its CEO and founder, Mark Baum, said the drug costs very little to make, and the low price returns “an ethical profit,” according to a report by CBS News.
Another recent controversy involved the cost of an Epi-Pen, a potentially lifesaving device for people with severe allergies. Manufactured by Mylan, it delivers a dose of epinephrine, which can keep people exposed to an allergen from going into anaphylactic shock. In 2009, it cost about $103 for a package of two. By 2016, the price had risen to $608.61.
The exact cost of making the device is unknown, but some experts say it probably costs $30 or less to produce.
After months of complaints, Mylan announced in December that it would offer a generic version for $300. In a statement, the company blamed the American health-care delivery system for the cost, saying, "pharmaceutical pricing is too far removed from the patient at the pharmacy counter and not designed for today’s increasingly consumerized healthcare system."
In a CBS News report aired in January, Mylan CEO Heather Bresch said that despite the list price, 90 percent of people who obtained Epi-Pens last year paid $50 or less. That's because people pay different amounts based on what kind of health insurance they have, and hospitals pay different amounts. Mylan received $274 out of the $608, Bresch said.
Who gets rich off my child's Amoxicillin?
Where did the other $334 of profit from the Epi-Pen go? To "other players in the supply chain — middle men, including pharmacy benefit managers, or PBMs," CBS reported.
In some cases, doctors make money off the drugs they prescribe. A ProPublica examination of doctors' income and prescribing patterns showed that doctors who prescribed more name-brand drugs often received payments from the pharmaceutical and medical-device industries.
"Nationwide, nearly 9 in 10 cardiologists who wrote at least 1,000 prescriptions for Medicare patients received payments from a drug or device company in 2014, while 7 in 10 internists and family practitioners did," NPR reported last year.
And it appears that drug companies are spending more money on doctors than on research. The Washington Post reported that in 2013 Johnson & Johnson spent $17.5 billion on sales and marketing, compared to $8.2 billion for research and development.
The trade group PhRMA, however, notes the high costs of bringing a drug to market. On average, it takes 10 years and $2.6 billion to produce a new drug, and only 2 out of 10 drugs earn more money than it cost to develop them, PhRMA says.
Do Americans take too many drugs?
America's appetite for drugs is well-documented. We spend more than $1,000 per capita on prescription drugs every year, the most in the world. As Valerie Paris explained on PBS, that's partly because so many Americans are obese and plagued with that condition's accompanying health problems. We also have high rates of diagnosis compared to other countries.
"Prices in the U.S. for brand-name patented drugs are 50 to 60 percent higher than in France and twice as high as in the United Kingdom or Australia," Paris reported. "That’s because in many countries, government agencies essentially regulate the prices of medicines and set limits to the amount they will reimburse; they may only agree to pay for a drug if they feel that the price is justified by the therapeutic benefits."
The opioid crisis has given America fresh cause to examine the use of prescription drugs, and many analysts say both doctors and drugmakers are to blame. That is resulting in legal action against them.
The city of Everett, Washington, recently sued Perdue Pharma, the manufacturer of OxyContin, alleging that the drugmaker's quest for "large and obscene profits” resulted in an epidemic in the city, near Seattle.
And last year, a jury awarded $1.4 million to a St. Louis man who became addicted to opioids. Jurors agreed that the doctor who had prescribed more than 37,000 pain pills within four years had committed malpractice.
What's the solution?
Doctors are starting to prescribe fewer opioids, and drugmakers are likely to be gun-shy about drastic price hikes after the events of the past few years. With drug prices so much in the news, however, it's likely that states will take action, as Vermont did last June when it passed a law requiring drugmakers to justify price increases.
On the federal level, Trump has said he wants the federal government to be able to negotiate with drug companies over prices, and to have more drugs manufactured in the U.S. It's estimated that 80 percent of ingredients in the drugs that Americans consume is made in other countries. While the Food and Drug Administration still has oversight over imported drugs, it inspects foreign manufacturing facilities, on average, every 11 years, compared to every two years for domestic plants, according to USA Today.
But the president on Tuesday that he wants to reduce some of the FDA regulations that extend the amount of time it takes to bring a new drug to market, a task that will fall to the new FDA chief, yet unnamed.
Prescription medicines account for about 17 percent of the average American's health care spending, according to a report published in August in the Journal of the American Medical Association. "Although prices are often justified by the high cost of drug development, there is no evidence of an association between research and development costs and prices; rather, prescription drugs are priced in the United States primarily on the basis of what the market will bear."
To bring down the costs, the authors concluded, policymakers must address the monopoly caused by patents and FDA approval and shorten the amount of time before generics can hit pharmacy shelves.