Pharmaceutical Companies Taking America to the Edge of Financial Disaster


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Big Pharma defends their prices by stating that they need to recover their research and discovery costs. Although no one is denying that companies have a right to recover research costs and turn a profit, but everyone would also agree that they should turn a reasonable profit.

The research and discovery private sector layout for Sovaldi were in the area of $300 to $400 million. Even if you stretch this to $500 million, in the first year alone, sales of this drug reached an unbelievable $12.4 billion. That’s billion with a B. This means Gilead recouped their costs within just a few weeks. Let’s not forget that much of the research was already footed by the US government, aka, you and I, folks, John. Q. Taxpayer.

If America had a rational drug pricing system, these private investors would be able to earn a very reasonable rate of return for their super successful drug. Even 5 to 10 times their investment would be a well-earned investment return that everyone would feel was fair and reasonable. However, at $84K, this means investors are receiving a return of about 40 times their initial investment. Is that type of return reasonable or fair to the American people?


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One of the problems with this drug is that, by law, those who are in state Medicaid programs, which are health care programs for the elderly, disabled, or poor, are legally required to pay for any drug that has been approved by the FDA. Although Medicaid gets about a 23 percent discount on all drugs, this is still a far cry from a reasonable price. Prisoners, also, are going to be given this treatment. As you can see, the outrageous price on this one drug could lead to the financial ruin of America.

There is a Washington advocacy group, Campaign for Sustainable Rx Pricing, that has devoted itself to objecting to the cost of this medication and they are pressuring Congress to look into how Gilead Sciences reached such an outrageous price for this drug.

Some are hoping that other drug companies will come out with copycat drugs, which will drive the prices down. Also, once the backlogs of persons who currently have Hepatitis C are treated, the demand will also go down, forcing prices to diminish. But these are merely hopes and speculation, friends. Big pharmacy will continue to force the American people to work hard to provide them with huge, overinflated profits, as long as Congress allows them to get away with it.


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